Little Pink House… Continued
About a year ago, Cato ran the story of the Little Pink House in Connecticut. The government bulldozed a small community to make way for a public/private partnership with Pfizer. One woman fought it and lost in the Supreme Court. The local government argued that the increased tax revenue and local jobs would be a “higher” public use and so took hers and her neighbors’ houses through eminent domain.
Well, Pfizer has now decided against developing the site and is moving the jobs elsewhere:
Pfizer, the huge drug company, has announced that it will be leaving a large research complex in New London, Connecticut and moving several hundred jobs to nearby Groton. Such belt-tightening in tough economic times would normally draw little criticism. In this case, however, it should.
Recall that Pfizer played a central role in getting New London to seize the homes of local residents who lived adjacent to the Pfizer site. Pfizer, according to accounts, wanted that mixed residential area, called the Ft. Trumbull section, to be leveled and replaced with an upscale development that would include a five-star luxury hotel, top-tier condos, and private office space for Pfizer’s suppliers, workers, and visitors. Now Pfizer is leaving New London “high and dry.”…
New London officials argued that greater tax revenues would be produced by the revitalization and, therefore, some public good was done by the restructuring of the Fort Trumbull area. Kelo and the Institute for Justice pointed to such a contention as ominous for all homeowners, since local governments could almost always imagine a “higher use” to which individual residential properties could be put.
Unfortunately, the Supreme Court found in favor of New London and against Kelo, but the case produced a firestorm of protest across the country, leading over 40 states to more tightly control eminent-domain abuse…
Pfizer even received special tax treatment, paying only one-fifth of the usual property taxes for the first 10 years of occupancy of its research site…
That brings us to the latest development: Pfizer is moving the research jobs elsewhere.
The city probably will not “get back” its tax forgiveness. State tax monies from Connecticut used to entice New London to revitalize have been expended. Local businesses that depended upon Pfizer and the development for patronage are now looking at financial decline. What remains is a barren undeveloped site where homeowners once kept their homes with pride.
It is a sad story of local governments drawn into projects by the promise of large state grants. The grant then allowed them to accede to the special demands of large enterprises like Pfizer for tax breaks and special treatment. What is even sadder is that in their rush to redevelop, these same local governments bulldozed the fundamental rights of their own constituents and, then, their “business partner,” Pfizer, cast them aside whenever it chose to do so. Ms. Kelo has a perfect right to say “I told you so.”
Bulldozed in New London: The Latest on Kelo and Eminent Domain, EGPNews.com, Dr. John A. Sparks, January 14, 2010, http://egpnews.com/?p=15324.
This significant power is not very well tracked: http://www.gao.gov/new.items/d0728.pdf.