Tag: 480.00 Acres

The Nets Finally Win!

Unfortunately, that win comes as another blow to property rights:

The last major obstacle to a groundbreaking for the $4.9 billion Atlantic Yards development in Brooklyn fell Tuesday when New York’s highest court, the Court of Appeals, dismissed a challenge to the state’s use of eminent domain on behalf of the developer, Bruce C. Ratner.

Mr. Ratner, whose 22-acre development has been delayed for three years by a flurry of lawsuits, the collapse of the credit and real estate markets and a glut of luxury housing, plans to begin selling tax-free bonds next month to finance the development’s cornerstone project: an 18,000-seat basketball arena for the New Jersey Nets at the intersection of Flatbush and Atlantic Avenues near downtown.

Given the high-profile nature of the would-be new tenants of the land, this is the most famous property rights case currently being litigated, but it’s the same ol’ story: rich company wants land on the cheap, company gets the government to seize the land, property owners lose their land for the benefit of another private party for a decidedly not public use.

And, as I allude to in this post’s title, this loss comes to the 0-13 New Jersey Nets. (Even the Redskins can win a game without getting the government to bail them out!)

And while the story goes on to promise all this new office space and buildings to go on the newly acquired land, we know from recent experience that a successful deal doesn’t automatically trigger the jobs and benefit promised. To give you an idea what the rest of Brooklyn is looking like:

If construction begins in the coming weeks as expected, Atlantic Yards will stand out in a city where 530 different construction projects are stalled, sitting lifeless and without adequate financing in virtually every neighborhood.

One would think that if there was such a guarantee of money to be made, investors would be funding one of those 530 other projects in the city.

And if you think a brand spanking new stadium is more likely to bring in business to the immediate area, just ask the shop owners around the new Yankee Stadium how business was this year – when that team put up the best record in baseball and won the World Series. (NB: Go Red Sox!)

In any event, Cato continues the fight for the Fifth Amendment’s Takings Clause. We filed a brief in a case coming before the Court next week, Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, which can be found here; and just yesterday filed a brief urging the Court to consider 480.00 Acres v. United States, which you can read here.

HT: Jonathan Blanks

A Special Kind of Eminent Domain Abuse

In federal eminent domain cases, the “scope of the project” rule requires that in determining “just compensation” under the Fifth Amendment’s Takings Clause, any increase or decrease in property value caused by the federal project be disregarded.  As it turns out, the federal government had discussed the idea of expanding Everglades National Park for over 30 years, and also induced the local government to enact tougher zoning standards that decreased the value of the property that was to be taken for this purpose.  This type of behavior is a special kind of eminent domain abuse called “condemnation blight.”

The Everglades-related federal actions forced Gilbert Fornatora to watch the value of his South Florida property decline until the federal government finally condemned it – and paid him much lower compensation than he would otherwise have received.  Then, once condemnation proceedings began, the government manipulated the hearing schedule by front-loading ill-prepared owners who lacked counsel, thereby setting a low valuation precedent that would then be applied to the later parties with representation, like Fornatora.  The Eleventh Circuit sided with the government, so Fornatora petitioned the Supreme Court to review the case.

Cato filed an amicus brief supporting this petition, arguing that property owners have virtually no “scope of the project” protection if they must prove that the government’s sole or primary purpose for pre-condemnation action was to depress property values for later eminent domain proceedings.  A more workable test, consistent with due process, is merely to require evidence of a nexus between the government’s actions and the depressed property value.  The Court should also hear this case to ensure that just compensation proceedings comport with the due process, equal protection, and general fairness standards the government is required to follow in a variety of other settings.

The Court will be deciding early in the new year whether to hear the case, which has the ungainly name of 480.00 Acres of Land v. United States.