November 30, 2007

Kelo Update: Old Media Ignores Latest New London Development Setback

As an exemplar of a government-run enterprise stuck in the mud, it’s hard to come with a better example than what is happening in the area that was the subject of the infamous Kelo v. New London ruling in 2005. Nearly 2-1/2 years after the US Supreme Court ruled that the city could evict Susette Kelo and other holdouts from their homes, and 17 months after the final settlement between the city and the final two holdouts, very little has been done in the affected area.

The latest setback to substantive progress in the area is significant, and is being totally ignored by the non-local press.

Here are the two major stories and the local paper’s editorial from earlier this week (New London Day links require a paid subscription after seven days):

Nov. 27 (report by Elaine Stoll) — Fort Trumbull Developer Asks For More Time, Misses Deadline
NLDC could claim default, but delay in project more likely

Preferred developer Corcoran Jennison missed an important deadline Monday for its Fort Trumbull peninsula housing development, whose groundbreaking will almost certainly be postponed again.

The firm informed the New London Development Corp. that it needed more time to secure financing for the $18 million project one hour before Monday’s noon deadline for the company for that and other obligations outlined in a Sept. 27 agreement with the NLDC.

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Nov. 28 (report by Elaine Stoll) — Developer Says Lending Climate Reason For Delay
NLDC not yet ready to declare Corcoran Jennison in default

….. Corcoran Jennison attorney Glenn T. Carberry sent a two-page request for a six-month extension — ending May 29, 2008 — for the developer to finance the construction project, now estimated at $19 million. The Boston-based company failed to finalize financing and to sign a contract with a general contractor for the construction of 66 apartments and 14 townhouses on four acres by Monday’s noon deadline, delaying what the NLDC believed would be a December groundbreaking.

“They’re technically in default,” NLDC President Michael Joplin said Tuesday. “We haven’t called them in default. There are other approaches we ought to evaluate and try before we get to that point.”

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Nov. 28 (editorial) — Skepticism Grows
Fort Trumbull developer has to stop raising false expectations and start delivering on promises.

It is understandable that given tightening credit and a changing housing market Corcoran Jennison would need more time to secure financing for its planned housing development on the Fort Trumbull peninsula.

It is not understandable, however, why the inability to get the financing was sprung as an 11th-hour surprise — and disappointment. The firm waited until one hour before Monday’s noon deadline to inform the New London Development Corp. that it could not meet the obligations of a Sept. 27 agreement, including getting financing approved. Surely the developer had to know well before then that it would have trouble getting the needed loan in time. It would have been far better to go public with the financing difficulties sooner.

The word “Kelo” does not appear in any of the three items above — perhaps to assist in avoiding search engine attention (I became aware of this because of an alert I have set up for “Fort Trumbull”).

Note that the neighborhood homes taken as a result of the Kelo ruling are being replaced by ….. apartments and townhouses. As I understand it, more grandiose plans have long since been scaled back.

Considering the firestorm that erupted in the wake of the Kelo ruling, it’s very disappointing to see the lack of any kind of meaningful follow-up media attention. I’m left to speculate why the clear and ongoing lack of progress isn’t news.

Cross-posted at NewsBusters.org.

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4 Comments

  1. I wonder what would happen if Corcoran Jennison ompletely killed the project or went bankrupt. I don’t see how any housing project conceived during the bubble will make it given collapsing real estate prices and a year’s worth of inventory on the market.

    Comment by Scott Kirwin — November 30, 2007 @ 2:04 pm

  2. #1, as I understand it, CJ is a HUGE company and is not about to go bankrupt over this (in relation to their size) relatively minor matter.

    FWIW, the apartment building sector is pretty strong, based on last month’s report on building permits. Don’t know whether that’s the case in CT, though.

    Comment by TBlumer — November 30, 2007 @ 3:21 pm

  3. “…it’s very disappointing to see the lack of any kind of meaningful follow-up media attention”

    Thank you for this meaningful follow-up piece. It’s especially appropriate following John Stossel’s Thanksgiving piece on property rights.

    Comment by Cornfed — November 30, 2007 @ 7:55 pm

  4. #3, Thanks. If the TV subject matter was the same as the \”Tragedy of the Commons\” item at Townhall and elsewhere, that was indeed a tremendous and concise report:

    http://www.realclearpolitics.com/articles/2007/11/the_tragedy_of_the_commons.html

    Comment by TBlumer — November 30, 2007 @ 8:14 pm

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