News & Commentary
The Goal Is Freedom: Extortion in Port Chester
January 5, 2007
by Sheldon Richman
Sheldon
Richman is the editor of The Freeman
and "In brief." The
least appreciated form of tyranny in the United States goes by the names
"redevelopment" and "government-business partnership." While everyone knows
about the threat of development-oriented eminent domain, thanks to the 2005
Supreme Court decision in
Kelo
v. New London (pdf), local tyranny goes much deeper than the "mere"
taking of property in order to give it to another private party.
A case
out of Port Chester, N.Y., illustrates the danger. In 1999 the Village of Port
Chester and the development firm G&S Port Chester agreed to embark on a
$100 million 27-acre redevelopment project in which dilapidated buildings would
be torn down in favor of stores, a movie complex, and other amenities. Under
the agreement the Village government gave G&S sole authority to obtain
properties in the project area both through negotiation and eminent domain.
Only G&S can build there, and any profits from the project belong to the
developer. (See the
Christian Science Monitor story
here.)
This smells bad enough already, but it gets worse because Bart Didden,
who owns property that is partly in the project area, wants to build a CVS
drugstore. The local Village planning board said okay, but under the
redevelopment agreement G&S has veto power. Rather than vetoing the plan,
however, G&S made Didden an offer: You can build your store if you fork
over $800,000 or make G&S a 50 percent partner.
When Didden balked,
G&S threatened to have his property condemned and to build a Walgreens
drugstore there instead. Didden called the developer's bluff, and before he
could blink, the Village moved to condemn his land. Didden went to federal
court to stop the abuse, but the case was dismissed at the district and
appellate levels because, the courts said, he filed too late. Now the Institute
for Justice (IJ) is trying to get the case before the U.S. Supreme Court. The
Christian Science Monitor says it could be the "next big test of the
power to seize property." The Court was to decide today it if will take the
case.
"Constitution-Free Zone
If the Supreme Court declines, says IJ lawyer Dana Berliner, "it would
mean that every redevelopment area in the country would be a Constitution-free
zone. Any taking, no matter how private, would be OK as long as it was in those
areas."
Village officials defend G&S, maintaining that in return
for developing the area, the developer was assured all the profits from the
project. If Didden were allowed to proceed, the agreement would in effect have
been changed. "A contract is a contract," says Mark Tulis, attorney for the
Village.
There's just one problem:
Didden was not a consenting party
to the contract. The Village made commitments on his behalf without his
permission. So G&S's ability to threaten condemnation if Didden refused to
pay up is an outrage, all the more so because it was bestowed by the
government.
This sort of thing is all too typical. Local planning
entities and politically connected developers have been running roughshod over
property rights for years. It has become so common that it's hardly
controversial anymore. It's just the way things are done. Most people think
economic development couldn't happen without such practices. (See Steven
Greenhut's
Freeman article
"Central
Planning Comes to Main Street" and George Leef's
"Kelo v. City of New London: Do We Need
Eminent Domain for Economic Growth?" [pdf].)
There's a word for
what's going on in Port Chester, and
Didden
does not shrink from using it: "My case is about extortion through the abuse of
eminent domain; it is about payoffs and government run amok. It took me years
of hard work to buy that property, pay off my mortgages and really feel like I
own it. How dare the Village of Port Chester and this developer threaten me in
this way."
How dare they, indeed?
©2005 Foundation for Economic Education. All Rights
Reserved.
http://fee.org/in_brief/default.asp?id=1018