New York is one of the worst states in the nation when it comes to abusing eminent domain laws, according to a new report released by the Institute for Justice, a nonprofit, libertarian law firm in Virginia.
The report comes at a time when the New York State Court of Appeals is hearing an eminent domain case, Goldstein v. New York State Urban Development Corporation, in which the plaintiffs argue that eminent domain is being used unconstitutionally for private purposes. Under the law, eminent domain is only supposed to be used for public benefit.
The case pits opponents of Atlantic Yards, a 22-acre mixed-use commercial and residential development project planned for Brooklyn, against several economic development agencies as well as New York City Mayor Michael Bloomberg, former Gov. George Pataki and Bruce Ratner, the developer spearheading the project. The plaintiffs include homeowners and businesses; the proposed Atlantic Yards would include a basketball arena for the New Jersey Nets.
According to the Institute for Justice report, called “Building Empires, Destroying Homes: Eminent Domain Abuse in New York,” the use of eminent domain to create private developments is widespread in New York. The organization hopes the Court of Appeals will rule in favor of the plaintiffs in the Goldstein case and revolutionize the state’s eminent domain law in the process.
But Patricia Salkin, director of the Government Law Center at Albany Law School, said that is unlikely to happen because a landmark 2005 U.S. Supreme Court decision, Kelo v. New London, found that eminent domain can be used for private development. That case pitted homeowner Susette Kelo against New London, Conn., which wanted the property for a multimillion-dollar private development that included residential, hotel, conference, research and development space and a new state park that would complement a new $350 million Pfizer pharmaceutical research facility. Kelo lost, but the project never came to fruition and her property is now a vacant lot.
Salkin said that over time, the meaning of public use has expanded, and now, projects that are not owned by a public entity but have some sort of public purpose, such as generating tax revenue, removing blight and creating jobs, are valid uses of eminent domain law.
Salkin was critical of the Institute for Justice. “Their facts are not always right,” she said. “I don’t agree with their assessment of New York. They want every eminent domain case that goes before a high court to be used as an opportunity to make inroads to change the law in some respect.”
Eminent domain allows the government to take private property — with monetary compensation — with or without the consent of the property owner.
Salkin attended the oral arguments in the Goldstein case and said the judges indicated that the issue of whether eminent domain can be used for private projects had been settled. But other issues are likely to be explored, including the question of whether Atlantic Yards provides the proper amount of affordable housing, required because the project is in a designated urban renewal area.
“Over the past decade, a host of government jurisdictions and agencies statewide have condemned or threatened to condemn houses and small businesses for the New York Stock Exchange, The New York Times, IKEA, Costco and Stop & Shop,” the Institute for Justice report says. “An inner-city church lost its future home to eminent domain for commercial development that never came to pass. Scores of small business owners have been threatened with seizure for a private university in Harlem and for office space in Queens and Syracuse. Older homes were on the chopping block near Buffalo simply so newer homes could be built. From Montauk Point to Niagara Falls, every community in the Empire State is subject to what the U.S. Supreme Court has accurately called a ‘despotic power.’ ”
The report also mentions Albany’s plans to redevelop the Park South neighborhood. The area was designated an urban renewal area, giving the city the power to seize property via eminent domain.
It also talks about Schenectady’s plan to seize the Foster Building on State Street after the owners declined to accept the price offered by the Metroplex Development Authority.
“There’s a frightening frequency with which this happens,” said Robert McNamara, a staff attorney at the Institute for Justice. “New York stands almost alone in its disdain for property owners.”
McNamara said the Institute for Justice believes that the taking of property through eminent domain is “a terrible thing” but recognizes that municipalities have the legal right to do so for public property, such as roads and buildings. What the organization considers unconstitutional, he said, is taking property through eminent domain and giving it to private developers.
“The government does not have the right to take property away from one person and give it to a second person just because the government likes the second person better,” he said.
McNamara said other states, such as Florida, have passed laws making it clear that eminent domain is not supposed to be used for economic development purposes.
“Unlike a lot of other states, New York could make procedural changes,” he said. Right now, “the law is stacked against property owners.” He said that New York is one of only seven states that failed to pass any kind of eminent domain reform in the wake of the Kelo decision.
Now, he said, the Court of Appeals has a chance to change that.
Carol LaGrasse, president of the Stony Creek-based Property Rights Foundation of America, said that after the Kelo decision, the state legislature considered several bills that would have helped property owners, but none were passed. In particular, she liked the idea of creating a property rights ombudsman who could serve as a go-between for property owners and state agencies.
“Nothing was done,” LaGrasse said. “[Government] has gotten bolder and less respectful of people and what they cherish, namely their families and their homes.”