May 24, 2006

Kelo’s Crunch Time Looms in New London — Part 2 (to the Tune of $946,000)

Filed under: Economy,Taxes & Government — Tom @ 5:22 pm

NOTE: This has been carried to the top for the rest of the day because of the importance of the topic.

This is the latest in a nine-month series of posts about what is happening to the real people impacted by the Supreme Court’s Kelo eminent domain decision. Many people do not know that the standoff in New London, CT, that gave rise to the decision has never been resolved. The plaintiffs are still in their homes; the city and its “independent” development corporation are still trying to get them out. The drama continues.

Summarizing Part 1 earlier today: As of early May, the battle between the Kelo holdouts and the New London Development Corporation (NLDC) was at this point:

  • The NLDC had an “offer” on the table to let the holdouts stay but to pay rent for the rest of their lives, which the holdouts summarily rejected.
  • The NLDC and City council had rejected an offer by the holdouts to allow their homes to be physically moved to adjacent land.
  • The NLDC, assuming it can raise $30 million in an undefined “fundraising drive,” got the deal they coveted for a Coast Guard Museum and adjacent hotel on property not belonging to the holdouts.
  • The Connecticut Legislature did nothing to address eminent domain reform before adjourning in early May.

The only two remaining rays of hope for the holdouts were a change of heart by the NLDC or action by Governor Jodi Rell.

On May 15, any hopes for local resolution disappeared (New London Day link no longer available without subscription), as the City Council and the NLDC went the hardball route, as indicated in the bolded paragraphs:

Council Gives Fort Trumbull Residents A May 31 Deadline
After Then, Settlement Offer Is Off The Table

The City Council voted Monday to withdraw settlement incentives for the six parties whose Fort Trumbull properties were taken by eminent domain if they do not come to terms by May 31.

The city has remained at an impasse with the six remaining plaintiffs in the Kelo v. City of New London case since the U.S. Supreme Court decided the case last June, upholding the city’s right to use eminent domain at Fort Trumbull in a controversial 5-4 decision. Since then, the former property owners, led by Susette Kelo, have remained in possession of their properties while the city owns them.

Monday night was the City Council’s last meeting before the May 31 deadline it previously set for a resolution of the impasse. In a three-part resolution recommended by City Law Director Thomas Londregan, the council recommended that all monies offered by Robert Albright, who is charged with conducting settlement negotiations, be withdrawn as of May 31.

The council took off the table as of May 31 its “offer to forgive past-due real estate taxes, claims for use and occupancy and claims to collect rent from third parties.” That would make the former property owners liable for $946,143 in such fees if no resolution is reached by May 31.

The council voted to notify any third-party tenants of the former property owners that as of June 1, the tenants should pay rent to New London rather than any of the plaintiffs.

The resolution passed 5-2 with no discussion from any of the councilors.

….. “They don’t realize this is a property issue, not a money issue,” said Michael Cristofaro, whose father, Pasquale Cristofaro, is one of the former property owners.

“This is the right to own your property and the right to sell it when you want to,” Cristofaro said following the City Council’s vote.

….. “It’s not for sale.” he said.

The City Council vote followed a public comment period during which resident after resident urged councilors to return property titles to their former owners.

“Are you going to make New London the most permanently infamous user of eminent domain?” David Hayes asked. “Just return the property titles.”

In a New London Day article on the 17th (registration required; paid subscription required after article is more than one week old), it is clear that nerves are frayed on both sides:

….. If the city could wait for 30 years for a resident to die, said Cristofaro, “Why can’t they give back the deeds? If they’re willing to move the houses and give everyone life tenancy, doesn’t that tell you they don’t need that land?”

….. But (New London Mayor Beth) Sabilia said she has heard from others who have a different point of view.

“Quite frankly, I’m hearing from a lot of people that are honestly reluctant — even afraid — to come to the City Council and say, “Just be done with it. People are just calling and saying you guys are hearing from the same 10 people over and over again,” she said.

“I’m also hearing nobody but these people get to live in the city for free. $946,000 is not a small amount of money for the city of New London.”

….. All in all, it seemed clear Tuesday that the residents of Fort Trumbull would not be intimidated by the May 31 deadline.

“Death,” said Matt Dery, a longtime Fort Trumbull resident, “is the only deadline I can’t live with.”

Maybe the holdouts aren’t intimidated, but they seem to be down to one option: some kind of reprieve from the governor. This past Monday, they went to the state capital in Hartford to draw more attention to their plight, and did get a bit of a response:

With a May 31 deadline looming, a group of New London homeowners on Monday urged Gov. M. Jodi Rell to step in and protect their property in the long-running eminent domain dispute.

The residents, who live in the city’s Fort Trumbull neighborhood, said they are being forced to accept a financial offer from the city or face eviction. They gathered Monday at the state Capitol, holding a sign that read: “Please Gov. Rell, return the titles. Do what is morally right.”

“This outrageous act cannot happen. The city does not need this land for development,” said Scott Bullock, an attorney with the Virginia-based Institute for Justice, which represents the Fort Trumbull homeowners. “Hopefully these people will be able to stay in their homes that they love so dearly.”

In a written statement Monday, Rell said she is directing the Department of Economic and Community Development and mediator Bob Albright to redouble their efforts to reach a resolution between the homeowners and the New London Development Corp., or NLDC.

“This situation has gone on far too long — too long for the city of New London and too long for the remaining Fort Trumbull occupants,” Rell said.

Where this all goes if the deadline passes is not at all clear, though a Hartford Courant article makes this point:

Bullock said it is not clear exactly what action the city council will take after the May 31 deadline. Homeowners by law must be given 90-day notice before they can be evicted from their homes. The next city council meeting after the deadline passes is June 5.

So as you enjoy your weekend holiday, spare a thought and perhaps say a prayer for the Kelo holdouts, who by late next week or shortly thereafter may be not be out of their properties, but may be out of legal options.

UPDATE: This appears a bit speculative, but in his post back in February reacting to the “rent” offer, Andrew Langer at Langrrr’s Liberty Blog suggests what NLDC’s real motivation might be:

Just got this – with the question, “If New London knows that they don’t need the land and the residents can stay, then why do they want to seize it anyway and force Mrs. Kelo and others to pay rent?”

The answer is two-fold: First, the city has already seized the land. What would have to happen now is some sort of re-conveyance to the original owners (which shouldn’t be too hard, since I don’t believe any money has actually changed hands).

But second, and more importantly, the city knows that once the Pfizer plant moves in, Kelo et al will have prime pieces of real estate on their hands, which they can deal with as they choose. But if the city holds onto this land, the value shoots up and the city can charge outrageous market-based rents, so that Kelo et al will have to move – and then the city can sell that more-highly-valued land to a developer interested in those prime lots.

This presupposes that the holdouts, if they ever agreed to a rent deal, would actually agree to allow unlimited annual increases based on market value. I doubt it, but have e-mailed Andrew to see what else he knows.

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