Tuesday, March 18, 2008

Why David Paterson should appoint a state commission on eminent domain

That overhyped front-page banner headline last Friday in the conservative New York Sun, Paterson Could Derail Development: Opposes Use of Eminent Domain, put an issue on the table that accidental Governor David Paterson probably doesn't want to touch right now.

After all, his last public statement on the issue was more than two years ago and he has more pressing issues on the agenda than fighting the Columbia expansion plan in Harlem or the Atlantic Yards project, which is likely why he has said he won't change course on AY.

That said, there’s a logical, constructive, and politically safe step he could take. It would honor the sentiments he expressed in 2005 but at the same time not alarm those who want to make sure that governments retain the power to exercise eminent domain for true public use.

He should establish a Temporary State Commission on Eminent Domain to address questions like the extent of eminent domain abuse in the state as well as a revised definition of public use, an issue at the heart of the Atlantic Yards eminent domain case.

Consensus recommendation

Such a commission was a key recommendation of a Special Task Force on Eminent Domain appointed in November 2005 by the New York State Bar Association in the wake of the U.S. Supreme Court's controversial Kelo vs. New London decision, which upheld use of eminent domain for economic development.

The recommendation was first included in the task’s force interim report, approved in August 2006, some 30 years after the state's Eminent Domain Procedure Law was established. It's also in the final report, finished in July 2007 but approved by the association’s House of Delegates and Executive Committee last month. (There's been no press coverage outside the New York Law Journal.)

The report is generally quite cautious in its recommendations, as I explain, and doesn't mention Atlantic Yards. Perhaps a commission could offer additional recommendations grounded in research. It also could draw on some lessons from the Atlantic Yards case, in which, for example, the state scoffed at claims that the area around the project footprint was recovering, while the attorney for the petititioners in the case challenging the project environmental review pointed out that the state had done no market analysis.

It stated:
A Temporary State Commission on Eminent Domain should be established. The Kelo decision and the publicity it engendered have focused attention on the complex legal, economic and constitutional issues surrounding eminent domain. While this Task Force may indeed make additional recommendations, and is continuing to study topics such as defining public use, the appropriate level of judicial scrutiny, just compensation, and others, we believe legislative proposals for a Temporary State Commission on Eminent Domain make sense. Resolving these issues will best be accomplished through study by a variety of stakeholders to assure that all viewpoints are represented.


The idea for a commission has been on the table for more than eight years. As attorneys M. Robert Goldstein and Michael Rikon wrote in a 12/29/06 column for the New York Law Journal, "the Condemnation, Certiorari and Real Estate Committee of the Real Property Section of the New York State Bar Association on 1/27/00 urged the creation of a temporary commission to update and moderning eminent domain law."

Leadership needed

In February, I asked Task Force Chair Patricia Salkin, Associate Dean and Director, Government Law Center of Albany Law School, about the potential use for the new report and prospects for such a commission.

The Interim Report was sent in 2006 to the chairs of the relevant committees in the Legislature, she responded, “but that was at a time when there appeared to be more interest in the issue. It is more likely that this report will be available passively (on the web) for anyone interested, and that the Government Relations Department of the State Bar will use it to guide any comments they are asked to offer on any proposed legislation in the future.”

“It would be good for a Temporary State Commission to be created to revisit the law now more than 30 years old,” she added. “It was not in the Governor's State of the State Message so unless advocacy groups try to push this as an agenda item, I don't see it happening in 2008.”

This month, however, we have a new governor. Last Friday, Goldstein and Rikon asked in a New York Law Journal column, Where Is Temporary Commission on Eminent Domain?"

Even with a safe move like a commission, Paterson could start making his mark.

1 comment:

  1. Appointing a commission can be a political punt that treads political water and wastes time.

    Appointing a commission without a concurrent moratorium would not be good. New York needs effective reform and there is ongoing abuse that needs to be prevented now.

    Perhaps a tenable compromise would be a moratorium on any private-owner-to-private-owner abuse the commission did not itself review and act upon to thereafter exclude from the moratorium. Care should also be taken about treating The New York State Bar Association Task Force on Eminent Domain with too much deference. The New York State Bar Association Task Force on Eminent Domain is supporting significant aspects of the current status quo and appears dangerously insensitive and uninformed about the highly undesirable practices to which developer-initiated, developer-driven eminent domain predictably lead.

    To get a quick flavor of the kind of abuse that is going on of which the Task Force seemed quite unaware see:

    Columbia Pulls a Kelo
    New York Sun
    Op-Ed
    By MICHAEL WHITE
    December 20, 2007
    http://www.nysun.com/article/68407

    It is good that the Task Force advocates measures toward transparency and it is good that their measures would have held the supremely abusive Atlantic Yards to a higher standard that it did not meet, but unless the Task Force recommends much more comprehensive and tough-mined reform the door would still be wide open to serious abuse. A determined Ratner with an abusive project like Atlantic Yards might only wind up with a megadevelopment somewhat more judicially bulletproof.

    The Report of the New York State Bar Association Task Force on Eminent Domain committee seems in many ways to be almost an apologia for the status quo. Most importantly, the first recommendation starts off by saying that "(e)minent domain should not be restricted to specified public projects" which in the vernacular of the report is a recommendation that eminent domain should continue to be used for "economic development" projects (see the report’s legislation chart). Then of course there is the second recommendation that the powers of UDC/ESDC (less important, the MTA is also mentioned) should not be restricted by allowing for local government authority to restrict its powers.

    Again, the task force just doesn’t understand the abuses to which our New York style developer-initiated, developer-driven eminent domain predictably leads.

    Let me stress again: Sophisticated, money-flooded, New York style developer-initiated, developer-driven eminent domain predictably leads to many varieties of extreme abuse.- The Task Force endorses the further use of eminent domain for "economic development" (the practice which so concerned people when Kelo was decided) but they do not then appreciate the inherent dangers that come along with this or associated protections that might be needed as a consequence.

    The Castle Coalition and Justice Institute would tell you that forcing private-to-private owner transfers through eminent domain for "economic development" is so inherently abusive that the only proper reform is to prohibit it. Having suggested the alternative, the writers of the report do not seem to have a true boots-on-the-ground appreciation for abuses going on in New York State nor any inkling that any such abuses should be prevented. Atlantic Yards is the poster child for abuse and there are many parallels with ESDC's coordination fo activities with Columbia in West Harlem.

    - A careful reading of the Kelo case sets forth many abuses that justices likely believe should not be allowed when eminent domain is used for economic development.
    (See my comment with 10 criteria on your February 3, 2008 post: Http://atlanticyardsreport.blogspot.com/2008/02/have-courts-affirmed-significant.html) -

    Looking at Kelo for suggested dividing lines to prevent abuse, the following presents itself, much of which involves concern for sequencing so that plan will not be developer-initiated or developer-driven. Of the below, about all the Task Force report really supports doing is more elaborate procedures and perhaps no more than going through the motions of more comprehensive planning:

    1. Ensuring that the eminent domain is after a "careful and extensive" court "inquiry" where "the development plan" WAS NOT, either:
    a. "of primary benefit to ... the developer," or
    b. "only of incidental benefit to the city."
    2. There shouldn't be discernable evidence of "impermissible favoritism."
    3. Similarly, there should be "evidence that" the government "reviewed a variety of development plans and chose a private developer from a group of applicants rather than picking out a particular transferee beforehand."
    4. There should be "the substantial commitment of public funds by the State to the development project before most of the private beneficiaries were known." And "(t)he identity of most of the private beneficiaries were unknown at the time the city formulated its plans."
    5. Eminent domain should be "in the context of a comprehensive development plan meant to address a serious city-wide depression."
    6. At the risk of repeating, Justice Kennedy a second time states a test that "Benefitting" the developer should not be "the primary motivation or effect of this development plan."
    7. The "government's actions" should be "reasonable and intended to serve a public purpose."
    8. "The projected economic benefits of the project" should not be such that they can "be characterized as de minimus" and "the purported benefits" should not be "trivial or implausible."
    9. The government should comply with its "elaborate procedural requirements that facilitate review of the record and inquiry into the city's purposes."
    10. "(T)ransfers should not be suspicious."
    11. "(T)he procedures employed" should not be "prone to abuse."

    Beyond the legal, there is the substantive. The Task Force report doesn't have any analysis that acknowledges that condemnation for economic development often works out, as a practical matter, to be bad urban planning.

    Here is a list of suggestions for appropriate reforms that would be needed if we continue to use eminent domain to force private-to-private-owner transfer for "economic development" purposes. The reports skips making nearly any parallel suggestions.


    1. Restrict use of the threat of eminent domain.- - (The Task Force report never mentions this or its abuse though it mentions "threats" many other times in other contexts.)
    2. Prohibit pre-existing relationships between private owners who will get benefit from condemnations and the government entities expected to carry them out and allow discovery in the courts about it. - -
    3. Prohibit so called gag-order, non-disclosure, (and tout-for-the-project) “omerta” agreements. - - (These never existed until developer-driven condemnations and they interfere with transparency and the scrutiny people say we should be giving these transactions)
    4. Create protections against situations where developers are donating funds or otherwise benefitting politicians and public officials responsible for making decisions about the forced transfers of land contemplated.
    5. Reimburse all the transaction costs incurred by private owners confronted by any attempted use of eminent domain to transfer their property to another private owner. - - (The Task Force report discusses reimbursing relocation expenses.)
    6. Require full value compensation for those whose property is taken away. - - (Jane Jacobs did s good job pointing out why the compensation currently paid isn't full value. Though the report doesn't recommend similar reforms, the report points out that other state's reform efforts involve measures like setting compensation at 150% of "market value" to address this problem.)
    7. Require that realization of speculative increases in value due to up-zonings be paid to the original owner.
    8. Prohibit Use of Eminent Domain in Neighborhoods that are already naturally Unslumming (even though they may still be poor).
    9. At a minimum require a rigorous open bid process.
    10. Make eminent domain pursued through misrepresentations actionable fraud. - - (Ratner gets a lot of milage misrepresenting that he is only building over the rail yards.)
    11. Require urban renewal plans to be renewed in order to maintain effectiveness. - - (The report actually does deal with this one!)
    12. Change the operative presumptions for court review of public Agency Actions. - - (See: Wired Deals- http://dddb.net/php/latestnews_Linked.php?id=1271 ) (This is a core concern in the Kelo case and a very appropriate one since the government gets to decide on who gets the land but the government teams up with the developers in these deals.- There is no neutral reviewer.)
    13. Eliminate back-door side-stepping of process and protections. - - (The report addresses by recommending the opposite which means continued abuse of the sort we have seen. It's #2 recommendation is that ESDC stay in the condemnation bushiness and can therefore continue to override ULURP)
    14. Prohibit use of eminent domain for private commercial development where the public doesn’t concur with the purported “public good.”
    15. Specifically allow that property taken by eminent domain or its threat can always be retrieved by eminent domain in the future. - - (Ratner has abusively agglomerated huge swaths of land by abusing the threat of eminent domain. There shudl eb a two-way street here allowing the public to recover from his abuses.)

    - By reiterating that virtually none of the above is addressed in the Task Force’s thinking, I believe makes case that the we should be looking for much more rigorous analysis and proposals that the task Force has offered.

    - By saying that none of the above is currently protected against in New York, I think makes that case that a moratorium on eminent domain in New York State is in order, just as Governor Paterson once called for. Since abuses are ongoing, appointing a commission without a moratorium will not serve.

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