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Testimony of Susette Kelo to the Judiciary Committee of the U.S. Senate |
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| Testimony of Michael Cristofaro to the Judiciary Committee of the U.S. House of Representatives | ||||||
| Excerpts of testimony of former New London Mayor Lloyd Beachy to the Connecticut Legislature's Planning & Development Committee | ||||||
| Testimony of Richard Beyer to the Connecticut Legislature's Planning & Development Committee | ||||||
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Testimony of Thomas Picinich to the Connecticut Legislature's Planning & Development Committee |
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| Excerpts of Justice Zarella's dissenting opinion in the Connecticut Supreme Court's ruling in Kelo v. New London | ||||||
| New London Resolution of December 10, 1765 | ||||||
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Testimony of former New London Mayor Lloyd Beachy: "My first term as mayor was during the year that the NLDC [New London Development Corporation] and the state came along and decided they were going to help us out. Well, I would like to discuss two basic topics where they helped us out. First of all, was this well thought out plan that you've heard so much about and the other had to do with the kind of advisory assistance we got from DECD [CT Dept. of Economic and Community Development]. I would love to be able to provide you with high stacks of minutes from meetings. But what I am going to tell you about are the things that happened in those meetings where you don't take minutes. First of all, within a week of my becoming the mayor in December of 1997, I was invited by Claire Gaudiani [President of Connecticut College and wife of a Pfizer executive], who had recently become president of the NLDC, and met with her in her quarters up at Connecticut College where she took two hours to tell me about her hopes and dreams for New London which were essentially embodied in a big four-foot-square chart of the Fort Trumbull area, that had colored circles on it. I have since referred to that as the big balloon chart. Each colored circle had represented whether it was to become offices, or parking or housing or whatever. Then in February, three months later, why we had an announcement. We met over at Pfizer [in Groton, CT] in the dark of night, and George Milne [Pfizer’s local president] flew in by helicopter from New York where he had met with the board of directors and he announced that they were going to go ahead and build in the area next to Fort Trumbull. Interestingly, he had the same chart up there. With the balloons, and each balloon had a color that was coded to what they were going to do. Then when we made the grand announcement, we went out on the Cross Sound Ferry about a week or two later, and I got to make my speech as the mayor. And so I mentioned the fact that this was going to be a wonderful opportunity to rebuild that neighborhood. I did not get [a] great reception on that from the other members of the state delegation that were sitting on the podium with us. The problem really is that this grand ordained plan had preconceived conclusions. And as you've already heard [from previous New London speakers], what shall we call it, the results of all the public hearings were known before we ever even got started. We knew where we were going to put the housing, we knew where we were going to put the offices, we knew where we were going to put the hotel. But we went through what I call a sham. . . . The other thing that I would like to speak to is the assistance that we got from DECD. This advisory assistance consisted of essentially every action the city took was the result of paperwork presented to us principally by Rita Zangari, who was Mr. Abromaitis' deputy. She would come and meet with [City] Council in executive session before our meetings and hand us resolutions we were supposed to pass. We didn't have a chance to make any changes. In fact, we were told they weren't to be changed. The matter finally came to a head. I spoke to Mr. Brown, the city manager, and said I would like to go to Hartford and meet with Mr. Abromaitis [DECD Commissioner] and other people. So he arranged a meeting and we went to Hartford. We had a meeting there with Jim Abromaitis, Rita Zangari, Art Roche was there from DEP, DPW was there and a number of other people in the room. We had about a 2 hour meeting, I wasn't real satisfied. Toward the end of the meeting I finally said to Mr. Abromaitis, I said what role does the city of New London have to play in this development? Mr. Abromaitis said, I'll never forget this, I can quote it to you, “Mr. Beachy, you have to understand, it's our money we're going to do what we want with it.” This is what happened in New London, CT. This was not a public process, this was a process that was stuffed down our throat by the State of Connecticut by people who decided they wanted to go for the money instead of taking care of our citizens. . . . What you have to do, is you have to get eminent domain out of Chapter 132. It's that simple. We can do economic development in communities as long as you don't do that. The last point I would like to make is they forced us to take two properties out of the Fort Trumbull [MDP] area because it was across the street from Pfizer. Pfizer made a deal with those property owners, everybody walked away happy. It can be done by the private business agencies that want to do business. Those that don't want to do business will come to the city and try to get a good deal. So I think you look at 132. You've got about three or four sentences you can pull out of there, and the party is over and we are safe again in NL . . . . . I questioned whether we should even be in executive sessions. Rita would come down and we would go into executive session, she'd hand us the motions. There was one time they didn't even cut the header off, they had the . . . fax number of the lobbyist who had drafted the legislation. This stuff was brought to us from Hartford. So you've got to do something to keep that sort off thing from happening. The municipality has to retain control of the project. . . . We were given the plan to approve, the plan was developed by NLDC with a number of consultants doing the work, and it went to the state for approval before we even saw it." |
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“nor shall private property be taken for public use without just compensation.” I intend to provide you some insight into my experience with the “just compensation” part of the Takings Clause. Justice O'Connor wrote that "Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner." I have lived under that banner for almost eight years now, and it is not a place any American should be forced to be. For almost five of those years a private entity, appointed by themselves and beholden to no one other than their Pfizer masters, has held title to my land. They have no plans for that land. I did. I expect you to see that my property is returned to me. In 1994, along with a business partner, I purchased two properties in the Fort Trumbull neighborhood, 49 and 41 Goshen St. We saw a potential for these two houses and the neighborhood and city as well. Obviously, Pfizer saw that same potential, but they controlled considerably more politicians than we did. That is why I no longer own that land. Some of the significant details of my dealings with NLDC are outlined below. I will not have time to provide the entire story, but will submit my full comments in writing. • You will learn that the intimidation of owners and acquisition of properties began long before any of the mandated planning steps and approvals required under Chapter 132 of state statutes. • You will learn that my partner's attorney, David Condon, became NLDC's attorney. I have been unable to learn when he and his firm (Waller, Smith and Palmer, P.C.) were first retained by NLDC and the City of New London, nor how he is not committing a gross conflict of interest in representing the same city for which he is the president of the Board of Education. How can an elected municipal official in Connecticut be allowed to benefit financially from that same municipality? • You will learn that Stephen Percy, an NLDC executive board member, also was a principal in The New England Real Estate Group, which coordinated the forced acquisition of all the Fort Trumbull properties. Again, why is this legal under Connecticut statutes? • You will learn that NLDC essentially bought up almost all the local appraisers, making it impossible for property owners to be justly compensated. In a December 1997 letter quoted below, the president of the New London Development Corporation, who was the wife of a Pfizer executive, discussed Pfizer’s “requirements” for locating in New London. The following month the effort to acquire my properties began. And the month after that the announcement of Pfizer’s plans was made public. Any fool can see that one of Pfizer’s requirements was that the surrounding neighborhood be obliterated. As Justice Clarence Thomas phrased it, this was: "suspiciously agreeable to the Pfizer Corporation." As Justice Sandra Day O’Conner put it: “any boon for Pfizer or the plan's developer is difficult to disaggregate from the promised public gains” I speak for each of the plaintiffs when we thank these two justices and each of the others who ruled to protect our Constitutional rights, not the power of the government and their corporate allies. This is what happened to me: Year One: On January 23,1998 I met with Hamilton Lee and Jane Walsh, two realtors retained by the NLDC. They made an offer written on an "option agreement" for $95,100 for 49 Goshen St. and $74,300 for 41 Goshen St., a total of $169,400. They stated that if I did not sign the option agreement the properties would be taken by eminent domain. I discussed this with my business partner and we both felt we really had no choice but to find a means of negotiating with them. Part of the option agreement, Section 12 (a) states: Seller further agrees to be responsible for the first $20, 000.00 of the remedial [clean up] cost and 50% of any costs thereafter Today we know the NLDC knew of land contamination, but no resident had this knowledge in 1998. This was yet one more attempt to force us to pay as much of their freight as possible. January 23, 1998 - after meeting with my partner we felt backed into a corner and he was willing to take a loss due to personal issues associated with an imminent divorce. A counter offer was written and faxed to Soundview Associates, which operates under a partnership known as The New England Real Estate Group Ltd. Soundview was one of five local firms conglomerated together as TNEREG. We requested $235,000 for both properties, as we were resigned to taking a loss since we felt backed into a corner and were told we had no other alternative than eminent domain. We felt we had to start the negotiation somewhere to at least get to the point where we broke even. We will now never break even and have lost hundreds of thousands of dollars in fighting this. Keep in mind that no appraisal had been done by anyone hired by us, so we had no objective value for the property. We only knew we had $250,000 invested, not including our labor, which was extensive. We were resigned to accepting a loss, as there appeared no way to fight these forces. February 04, 1998 - I received a letter from Waller, Smith & Palmer, P.C. signed by Attorney David Condon, acting on behalf of my partner, requesting a dissolution of my business partnership. He claimed Flanagan Associates (an appraisal firm) believed the fair market value of 41 and 49 Goshen Street to be $101,000. As this was only 40% of what we had invested already, not counting our labor, and we were not in the practice of burning money, I am certain this appraisal was illegitimate. We have not been able to learn the date NLDC retained Waller, Smith and Palmer. I will emphasize that in 1998 New London was and still is proximate to the world’s two largest casinos, which generated a huge housing demand, greatly appreciating property values in the region. The majority opinion from the Connecticut Supreme Court states: In January, 1998, the state bond commission authorized bonds to support planning activities in the Fort Trumbull area [of the city] and property acquisition to be undertaken by [the development corporation] in support of the project . . . In February, 1998, [Pfizer, Inc. (Pfizer) ] announced that it was developing a global research facility on the ... New London Mills site which is adjacent to the Fort Trumbull area. In April, 1998, the New London city council gave initial approval to prepare a development plan for the Fort Trumbull area and the [development corporation] began holding informal neighborhood meetings regarding the [development plan] process. In May, 1998, the city council authorized [the development corporation] to proceed under chapters 130, 132 and/or 588 ( l ) of the [General] Statutes. You should note that in January, when I was first pressured into selling my property, not one public discussion of this so-called plan had been conducted, this was all done behind closed doors. Not one public revelation had been made that Pfizer planned to come to New London. But further in the Supreme Court’s opinion, it is revealed that: The term "requirements" was contained in a December, 1997 letter from Claire Gaudiani, the president of the development corporation, to George Milne, the president of Pfizer's research division. In this letter, Gaudiani had stated that the development corporation was "pleased to make the commitments outlined below to enable you to decide to construct a Pfizer Central Research Facility in New London. . . . In order to achieve these goals, it will be necessary to relocate the Calamari Bros. scrap dealer, upgrade utilities and infrastructure, and acquire a number of surrounding properties." The conclusion of the letter states that the development corporation "will work with you to refine this proposal to meet Pfizer's requirements." March 24,1998 - Our accountants faxed our current property investment to NLDC’s realtor Jane Walsh at Anchor Associates for her review. This was proof of our real estate investment, and reported that we had spent over $250,000 by that date. March 30,1998 - New England Real Estate Group wrote that the NLDC has empowered us to offer you $169,400 for both properties. The same price they had offered two months earlier. They anticipated demolition and construction to begin in April, and informed us that it will be a dirty and busy place for the next several years. Signed by Jane Walsh and Hamilton Lee. April 22, 1998 - NLDC invitation to neighborhood meeting at Harbor School. This was the first effort to explain the plans, offer input or explore options. Three months after NLDC’s first effort to acquire my property. NLDC sought to acquire the properties first, and conducted the required process after the fact. September 02, 1998 - NLDC invitation to neighborhood meeting at Harbor School. November 18, 1998 - New England Real Estate states Pfizer is not the buyer, the NLDC is. Signed by Jane Walsh, cc James Mahoney of the NLDC. January 15, 1999 - Letter from Barbara Perry [New London tax assessor] - notification of mandated property revaluation. She agreed that the NLDC’s use of the original tax assessment was illegitimate because the property at 49 Goshen was never reassessed after we had completed renovation. Year Two: February 17, 1999 - NLDC letter stating they realize the real estate market is starting to increase and they want to make a fresh start with property acquisitions. Contact New England Real Estate Group to have appraisals done. Signed by Stephen Percy. May 19,1999 - Jim Dunn wrote that NLDC is prepared to pay $64,000 for 41 Goshen and $152,000 for 49 Goshen Street, a total of $216,000, 27.5% higher than the original offer. May 19, 1999 – I forwarded a counter offer to sell at $266,600. I added: to call when you are ready to give an honest and fair offer. Note: The 41 Goshen Street tax appraisal value is $153,300. Thus we were taxed at a value 2.4 times the NLDC’s offer. Year Three: Aug or September 2000 – A number of appraisers told me they could do a fair market appraisal based on the highest and best use of the land, but I learned that all had a conflict of interest because they had all worked for the state, city or NLDC. They also informed me they would like to give me a fair appraisal, but they could not because they still wanted to work in this state. Out of all the appraisers I interviewed (out of close to 30 different individuals), only one agreed to do a fair appraisal for me and said he refused to work for the NLDC. He said he did not agree with the practice of seizing private property and did not want his name associated with it. NLDC insisted that if I wanted to challenge their appraisal, I had to enlist a MAI certified appraiser. Numerous appraisers I spoke to informed me that this was unnecessary, and I later learned why they had insisted on this. I was informed by several appraisers that NLDC had held a secret meeting in New London for all MAI certified appraisers in the RI, CT and MA area who might wish to bid on any of NLDC’s business. They were told at that meeting that everything that transpired within was not to leave the room. Coincidentally, only New London MAI certified appraisers wound up receiving NLDC’s business. All the residents were told to contact either Miner and Silverstein or Flannagan Associates, the two local firms which did all of NLDC’s appraisals. It is my understanding that the other appraisers were kept out of the picture by giving them other local and state appraisal work. To me, this is clear evidence that this was all orchestrated out of Hartford. I was able to retain one appraiser who was not intimidated by the NLDC or the state, and he did a thorough appraisal and based the valuation on the highest and best use of the land. His appraisal came in at just under $500,000. This cost me close to $2,000. As NLDC insisted, I also retained one of their two anointed appraisers, F. Jerome Silverstein. This cost me around another $1,500, and his valuation of the two properties was $257,600. October 3, 2000 - Letter from David Goebel of NLDC, notice of intent to acquire and proposal to purchase 41 Goshen St. for $64,000 and 49 Goshen St. for $152,000, the same $216,000 as almost a year and a half earlier, reflecting none of the rapid escalation of real estate values in the region during the massive local casino expansion boom. Why I bothered obtaining two appraisals is beyond me, because it obviously had no effect on the NLDC’s offer. October 10, 2000 - David Goebel of NLDC sent letters to our tenants informing them the NLDC has initiated the process to purchase the building which you occupy at 49 Goshen Street. The building is part of the MDP. The letters gave notice of eligibility for relocation assistance. This was prior to the seizure of the property, and an effort to harm us financially by chasing out our tenants. Eventually, I learned they had managed to get one of my tenants to pay his rent to them, rather than me, by offering him a reduced rate. October 20, 2000 – Another appraiser who I had hired told me he would provide an honest appraisal. After I paid him a $750 deposit, he told me on the phone that he could come in well above the NLDC’s appraisal since he was very familiar with that area. He also told me he would not be in business if he could not provide non-biased appraisals. Before he wrote up the final report, he told me over the phone that he had reached a valuation of the property which was, in my opinion, ridiculously low. He told me that if there was nothing in writing, there was nothing that could be subpoenaed, he would do me a favor and not provide a finished report. Since his firm had already spent more time than the $750 would cover, he wound up keeping the deposit of $750 and stated they could not complete an appraisal with our best interest in mind. To me, this was obviously another appraiser in cahoots with the NLDC who was scamming me out of my money. October 14, 2000 - Known date on which Waller Smith and Palmer states in a letter that they represent the NLDC. The actual date may be much sooner than this. At this date they sent a letter to my attorney. Never revealed this fact prior to this point. October 25, 2000 – My attorney received eminent domain papers from Waller Smith & Palmer signed by Edward B. O'Connell. He never informed me of this fact, claimed he misplaced the papers among others on his desk. The letter from O’Connell stated the property was being seized for a sewage pumping plant. [A later letter subsequently stated this was an error, and corrected this.] December 7, 2000 - City of NL signed NLDC application for demolition permits on 41-49 Goshen Street December 8, 2000 - NLDC locked us out of 41 Goshen Street. Vehicles were spotted taking items from the house where we had approximately $10,000 worth of tools and building supplies stored: Red Truck, Lic#602-CEG and Gray Altima Lic#VL1315. Susette tracked down one of the vehicles and the man admitted to entering the property in preparation for demolition and that he was a subcontractor for Sordoni Skanska Construction . Sordoni first arrived in this region to construct a building for Pfizer in Groton. I called the police to report the theft of my possessions, and they threatened to arrest me for trespassing on my own property and refused to take a report from me as to what was stolen. At this point (due to my attorney’s either negligence or collusion) I was unaware the property had been condemned. But this is moot because NLDC would have needed to go to court and evict me prior to their entering the property by kicking in the door and stealing my possessions. Several weeks later, I was forced to terminate my relationship with that attorney. To date, I have lost hundreds of thousands of dollars thanks to my experience with the NLDC. My legal costs are only around $6,000, thanks to the Institute for Justice’s free representation. Almost all other eminent domain victims are not so fortunate. Today, with 6 units between the two buildings, we would be earning over $50,000 a year net after taxes and expenses. We carried no debt on the properties, but NLDC’s actions have clouded the title to the land, prohibiting us from using them as collateral for loans on additional properties. NLDC’s concerted efforts to chase my tenants out, and the uncertainty of the process has meant that since the end of 2000 the taxes on the property have probably been higher than the little rent I have been able to collect. Almost five years ago, NLDC deposited $216,000 in the courthouse for the properties, money we can neither retrieve while the litigation is in process or earn interest on while it sits there. The $216,000 is considerably below just the costs of renovations, even without any return for my labor. If I had been dumb enough to accept their first offer, I would have gotten 27.5% less. I was told we “overinvested” in a neighborhood too few others had been willing to invest in because of the broken sewage plant the city allowed to fester for too many years. Pfizer arrived, the plant was repaired, and we were ordered off our properties. I began by saying I would provide details about how just compensation was denied me. Along the way, my due process rights were trampled as well. Rowland, Herschl and all the rest got caught elsewhere for committing the same crimes in other locations. Crimes have victims, and in this case they include not only the seven plaintiffs, but the dozens of others who were chased out ahead of us. Martin Luther King observed that “Our lives begin to end the day we become silent about things that matter.” This subject matters deeply to every citizen. There has been too much silence, not only about the abuses heaped on those seven of us who refused to sell, but also the dozens of others, many of them elderly, who were intimidated out of their homes before us. I challenge you to temporarily put aside any solutions to this problem, and instead focus for now on a comprehensive investigation into what transpired in Fort Trumbull, who took the bribes, and how they abused our civil rights. Rowland went to prison, Peter Herschl (NLDC’s attorney) went to jail, and Peter Ellef (who oversaw the Fort Trumbull project) awaits trial. Unless a complete investigation is conducted and the lessons are learned, I guarantee that other Connecticut residents will again share our fate. Richard Beyer, Pataya Construction Limited Partnership |
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I am Thomas Picinich and I bought my home at 237 Howard Street, New London, in the Fort Trumbull area in 1987. I then spent much time and money restoring it. Per the 5th Amendment, we can not “be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” I was denied due process and just compensation when a Pfizer executive’s wife organized the theft of my neighborhood. I, and many others, are crime victims. Prior to my property being seized, I attended and spoke at a number of public hearings and meetings. Over half the speakers at these sessions requested minor changes to the Municipal Development Plan: that owners who wanted to stay be allowed, and homes moved or exchanged for the planned new condos. NLDC adopted none of these- except to allow the politically powerful Italian Dramatic Club to remain. Those who supported the plan were largely from other towns and in financially beneficial relationships with NLDC. My house was scheduled to be taken for both a four lane Pfizer gateway road enlargement (from two lanes) and some future, unannounced development. While no evidence was presented of a need to widen the road, a letter from a Pfizer executive requested the area be cleared of houses. The two lane road had previously easily handled traffic from the much larger Naval Underwater Sound Lab I received notice and countless broker phone calls that my property would be taken by eminent domain if I did not sell to the NLDC. All pleas for assistance from the city went unanswered, and I was directed to contact the NLDC. The city officials and NLDC were like a mob that wanted my home. I paid a $1,000 retainer to an attorney who promised to assist with finding independent, non-NLDC appraisals. After a couple of months I still didn’t have one. Then, he informed me my house was legally confiscated. All subsequent attempts to contact him with phone calls and office visits went unanswered. I don’t know why he did not get the two appraisals promised- or why he abandoned me. But I have a good idea why. Finally, another lawyer took my case late in the process after I fired the first one. It was difficult to get an independent real estate appraiser- most were co-opted by NLDC. As I was trying to get a fair appraisal, NLDC did several things to lower the value of my property. First, the properties surrounding me that NLDC purchased were left with windows & doors open, lawns uncut, windows broken and a general slum like appearance (This also hurt my efforts to rent my property). My home underwent the same treatment after it was seized. They had workers enter my property who used hammers to punch holes in the walls and countertops, and removed doors from their hinges (under the guise of asbestos testing.) They started removing the shingles from the exterior walls. Against my pleas, this went on while I was trying to obtain an appraisal. Then, I learned NLDC conspired to depress the value of the targeted properties by not including comparable real estate appraisals- any that were purchased in the MDP or on Pequot Avenue in front of and by Pfizer. Although I was located 400 feet from Pfizer and the biggest development in Connecticut- all NLDC comparables were taken around the city and not in my immediate area. This resulted in a $130,000 appraisal from NLDC for my property. My appraiser included the properties NLDC and Pfizer purchased, resulting in a $230,000 valuation for my property. Although I offered to settle by splitting the difference at $180,000, NLDC did little to no negotiating. New London’s 30 day demolition waiting period was waived at NLDC’s request- and my home was rapidly demolished. Although my home was now rubble, I was forced to pay the $1200/month mortgage for two years- while my case was argued in the courts. This gets right to one of the principal due process abuses visited upon me. If I appealed the compensation, I was forced to abandon the money deposited in the courthouse, pay interest on the mortgage for the house, and forgo any interest when I finally retrieved the deposit. Plus pay legal bills. The odds were overwhelmingly with the house, but it was not my house. In the mean time, an adjoining owner’s compensation case went before a judge who decided it was appropriate to include the nearby Pfizer and NLDC purchases as comparables. That owner, in the case of Renshaw v. New London, received a settlement over 70% higher than what NLDC had paid him. He had also been a vocal proponent of the plan, Pfizer and Gov. Rowland on his cable TV show. Go figure. In court, NLDC having just lost the above case, vigorously attacked my appraisals and uncovered one error. My appraiser then testified that it didn’t change the value of the property- but the judge sided with NLDC and my case was closed at their original offering. The adjoining owner had received more for a vacant lot than I did for a 3-family home. Go figure. Two years and expensive legal bills later, I was out both the interest on the mortgage and the lack of any return on the compensation I was finally able to retrieve. This is not due process. In New London, we call this getting screwed. But the worst insult was that the entire plan was a sham. Justice Zarella, in his dissent for the Connecticut Supreme Court, did a superb job of outlining how nonsensical the plan is. The passage of time has only reaffirmed his bleak assessment of the economics (or lack thereof) underlying this alleged plan. But I will go a step further: the REAL plan was simply to level and clear the entire neighborhood, under the direction of Pfizer. Key excerpts from Justice Zarella's dissent are appended to my statement. |
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Excerpts from the dissent of Justice Zarella to the Connecticut Supreme Court's majority decision in Kelo v. New London: Whether the Development Plan Will Result in a Public Benefit In my view, the development plan as a whole cannot be considered apart from the condemnations because the constitutionality of condemnations undertaken for the purpose of private economic development depends not only on the professed goals of the development plan, but also on the prospect of their achievement. Accordingly, the taking party must assume the burden of proving, by clear and convincing evidence, that the anticipated public benefit will be realized. The determination of whether the taking party has met this burden of proof involves an independent evaluation of the evidence by the court, with no deference granted to the local legislative authority. In the present case, the evidence fails to establish that the foregoing burden has been met. [FN22] FN22. In my view, the evidence in the record also is insufficient to establish that the preponderance of the evidence standard has been met. The record contains scant evidence to suggest that the predicted public benefit will be realized with any reasonable certainty. To the contrary, the evidence establishes that, at the time of the takings, there was no signed agreement to develop the properties, the economic climate was poor and the development plan contained no conditions pertaining to future development agreements that would ensure achievement of the intended public benefit if development were to occur. The development plan calls for a hotel and conference center on parcel 1, residential dwellings on parcel *161 2, commercial office space on parcel 3, parking and marina support on parcel 4A, marina and water-related uses on parcel 4B, commercial office and retail space on parcels 5A, 5B and 5C, waterfront commercial uses on parcel 6, and additional office space on parcel 7. Despite extensive negotiations, however, no development agreement, which the trial court described as a "necessary engine to start any development project," had been signed at the time of the takings. In fact, Marty Jones, president of Corcoran Jennison, the designated developer for parcels 1, 2 and 3, testified at a deposition that she could not even predict when such an agreement would be signed, although she was "optimistic" that it would be soon. Without an agreement, however, it is impossible to determine whether future development of the area primarily will benefit the public or even benefit the public at all. Several key project participants expressly recognized the importance of an agreement to such a determination in correspondence regarding the project and anticipated lawsuit. [FN23] FN23. On March 6, 2002, Claire Gaudiani, president of the development corporation, sent an e-mail to several other project participants, including Jones and David Goebel, executive director of the development corporation, which stated: "What became clear during the executive committee meeting with the [development corporation] yesterday morning [is] that we absolutely posi[tively] need a fully signed and executable set of documents, including the real estate agreement, by May [1]. The importance of this fact to the law suit is apparently very high." The same sentiment was expressed by Goebel in an e-mail sent to Jones, among others, on March 27, 2001, when he stated that "concluding the development agreement prior to the start of the Institute law suit will go a long way to deflate the argument that property is being taken with no plan in place. In fact, we feel this is crucial." Corcoran Jennison also realized the importance of a signed development agreement when Jones testified in a deposition taken on June 22, 2001, that she had received communications from others involved in the project that such an agreement should be in place prior to commencement of the trial in order to demonstrate that the project was moving forward. **597 Nevertheless, some minimal evidence was admitted as to the terms of a "proposed" agreement, [FN24] and, insofar *162 as those terms provide for the leasing of parcels 1, 2 and 3 to Corcoran Jennison by the development corporation at a rate of $1 per year for a term of ninety-nine years, they appear to be more beneficial to the developer than to the city. Under the agreement, it appears that the city would be locked into a long-term commitment to a single developer, who then would be in a position to reap substantial financial rewards without a corresponding penalty if the developer does not perform as expected. In addition, the very generous terms of the proposed agreement are indicative of either an extremely weak real estate market or a possible violation of General Statutes § 8-200(b) because that statute suggests that property acquired pursuant to chapter 132 of the General Statutes must be sold or leased to a developer at "fair market value" or "fair rental value ...." Accordingly, the terms of the unsigned, proposed agreement do not appear to be consistent with the long-term public interest.
FN24. The court's knowledge of
the agreement is derived from the very brief document entered into
evidence as plaintiff's exhibit JJJ and the
testimony of various
witnesses and deponents. The document in evidence contains only the
first page of the proposed agreement. That page refers to the acquisition and demolition of properties
by the development corporation, but not to any obligation on the part of
the developer or other terms regarding the leasing of the properties in
question.
Having concluded that there is no reasonable certainty that the proposed public benefit will be accomplished, there is no need to consider whether the condemnations are reasonably necessary to implement the plan. [FN26] I therefore need not address the majority's analysis of that issue. FN26. I note, however, that I disagree with the majority's conclusion that the trial court improperly determined that the takings on parcel 4A were not reasonably necessary because the proposed use was too vague and uncertain. See part VI of the majority opinion. CONCLUSION
. . . the takings of the plaintiffs' properties are unconstitutional
because, in my view, the evidence is not clear and convincing that the
property taken actually will be used for a public purpose. To highlight this concern, consider the following hypothetical. A town is economically distressed and has seen no significant development for years. In good faith, and in accordance with the procedural prerequisites contained in chapter 132 of the General Statutes, the town creates a master plan of development in 1999 that designates an area within the city limits for mixed use development. A marketing study is completed while the plan is being drafted and demonstrates no significant shortage of office space until 2010, no immediate demand for hotel space without a corporate user that will subsidize the occupancy of up to one half of the projected 200 room facility, and no demonstrated demand for up-scale residential units to fulfill local housing needs. Despite this scenario, the town proceeds with the plan of development and settles on the above uses. Further efforts result in a determination regarding the scope of the project and the location and general size of various proposed buildings. The master plan is submitted to a public hearing and subsequently approved by the local governing body. The plan projects that the new development will create between 518 and 867 construction jobs and 1200 and 2300 direct or indirect permanent jobs, and will result in an estimated sevenfold increase in annual property tax revenue. The master plan does not include any minimum standards *170 that the contemplated private developer will be required to satisfy. [FN28] While the taking authority has had numerous discussions with a particular developer, there has been no agreement on the terms of a development agreement. Nevertheless, the taking authority purchases certain parcels of land in the economic development area and takes other properties by eminent domain. No one contends, under this scenario, that the properties acquired by eminent domain are not reasonably necessary for development to occur as provided in the master plan. FN28. Such minimum standards might include a commencement date for the project, a construction schedule, a guaranteed number of jobs to be created, selection criteria for potential developers, financing requirements, the nature and timing of land disposition and a commitment as to the amount received in property taxes as a percentage of assessed value.
Now consider the following
scenario.
Six months after the takings are completed, an interested developer is
located. The developer contends that the economic conditions of the
town and region are such that the project is not economically feasible
unless the development agreement requires the town and the taking
authority to do the following: (1) remediate the environmental
conditions affecting the property, (2) replace the road and utility
infrastructure, and (3) take measures to reduce the risk of coastal
flooding, all at a cost of more than $70 million. Additionally, the
developer insists that the town abate property taxes on properties
located in the development area for a period of years and, rather than
require the developer to purchase the improved property at fair market
value, enter into an agreement with the developer to lease the property
for ninety-nine years for the sum of $1 per year. Furthermore, the
developer agrees to commence construction only after he is able to find
viable tenants for the property or when a particular economic index for
the area indicates demand for the uses, **602 such as when the vacancy
rate for class A office space drops below a certain level. *171 As I understand the majority's view, after according deference to the taking authority, the takings in the above scenario, which occur six months before any of the terms of the development agreement are known, would withstand a challenge by property owners who wish to remain in their homes. I, however, would find the takings to be, at best, premature. The majority has created a test that can aptly be described as the "Field of Dreams" [FN29] test. The majority assumes that if the enabling statute is constitutional, if the plan of development is drawn in good faith and if the plan merely states that there are economic benefits to be realized, that is enough. Thus, the test is premised on the concept that "if you build it, [they] will come," and fails to protect adequately the rights of private property owners. To conclude, I would grant the legislature no deference on this issue and place the burden on the taking authority to establish by clear and convincing evidence that the public benefit anticipated in the economic development agreement is reasonably ensured. This, in my view, cannot be accomplished without knowing initially what the actual public benefit will be. In the present case, it is entirely unknown whether the public *172 interest will be served. There are no assurances of a public use in the development plan; there was no signed development agreement at the time of the takings; and all of the evidence suggests that the economic climate will not support the project so that the public benefits can be realized. The determination of whether the private benefit will be incidental to the public benefit requires an examination of all of the pieces to the puzzle. NOTE - JUSTICE ZARELLA'S "HYPOTHETICAL" ABOVE IS NOT A HYPOTHETICAL, IT IS EXACTLY WHAT HAPPENED IN NEW LONDON. Justice Zarella was joined by Justice Katz and Chief Justice Sullivan in his dissent from the CT Supreme Court's 4-3 decision in Kelo v. New London. Full CT Supreme Court decision available online. |
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At a meeting of a large assembly of the respectable populace in New London the 10th of December 1765, the following resolves were unanimously come into. Resolved, 1st. That every form of government rightfully founded, originates from the consent of the people. 2d. That the boundaries set by the people in all constitutions are the only limits within which any officer can lawfully exercise authority. 3d. That whenever those bounds are exceeded, the people have a right to reassume the exercise of that authority which by nature they had before they delegated it to individuals. 4th. That every tax imposed upon English subjects without consent is against the natural rights and the bounds prescribed by the English constitution. 5th. That the Stamp Act in special, is a tax imposed on the colonies without their consent. 6th. That it is the duty of every person in the colonies to oppose by every lawful means the execution of those acts imposed on them, and if they can in no other way be relieved, to reassume their natural rights and the authority the laws of nature and of God have vested them with. And in order effectually to prevent the execution thereof, it is recommended: 1st. That every officer in this colony duly execute the trust reposed in him, agreeable to the true spirit of the English constitution and the laws of this colony. 2d. That every officer neglecting the exercise of his office may justly expect the resentment of the people, and those who proceed may depend on their protection. 3d. It is presumed no person will publicly, in the pulpit or otherwise, inculcate the doctrine of passive obedience, or any other doctrine tending to quiet the minds of the people, in a tame submission to any unjust impositions. 4th. We fully concur with the respectable body of the populace in all their Resolves made at Windham the 26th November 1765 and published in the New-London Gazette. |
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