Public Power, Private Gain: Rhode Island



Rhode Island is surprisingly aggressive about authorizing condemnations for private parties. Over the governor’s veto, the state legislature authorized an economic development zone with, of course, the power of eminent domain. Smithfield has been condemning property for the benefit of two enormous businesses, Dow Chemical and Fidelity Investments. Some other cities have approved projects that might involve condemning property for private parties, but, according to news reports, no other cities actually went through with a private condemnation from 1998 through 2002. One city, Warwick, actually refused to condemn property for a private developer.



Legislative Actions


In June 2002, the Rhode Island General Assembly voted to override Gov. Lincoln Almond’s veto of a bill creating the first municipal economic development zone in the state’s history. The 80-acre urban renewal area, located in the Arctic section of West Warwick, provides for a redevelopment authority with the power to condemn properties within the zone for private development.613 Update: Within six months of the bill’s passage, the Town Council in West Warwick had already considered requesting that the legislature double the size of the Arctic renewal zone, so that the Town could accommodate a $100-million development proposal put forth by developer Nicholas E. Cambio. The proposed expansion could have led directly to the seizure of homes and displacement of Arctic residents. However, in February 2003 the Council backed off of its plan, opting instead to work within the borders of the zone already authorized by the General Assembly.614


The Rhode Island legislature also recently considered, but ultimately rejected, another change to the state’s eminent domain laws. Introduced in 2001, House Bill 5330 would have provided business owners with additional compensation in situations where the business closes due to condemnation of the property on which it operates.615 The measure died before making it out of the House Judiciary Committee.



Private Use Condemnations



Under a plan first proposed by the Cranston Redevelopment Agency (CRA) in 2001, a tidy, middle-class Cranston neighborhood consisting of 65 households in 31 buildings along Garfield Avenue was slated for demolition to make way for a huge, privately owned shopping plaza and office park development. The CRA would appraise the homes, but if the residents decided not to sell at the prices determined by the CRA, their homes would be condemned. The project’s cost to the City would be an estimated $7.25 million for the acquisition of the buildings and other improvements. Also, the CRA recommended borrowing money to pay for the project, to be offset by the supposedly increased tax revenue from the project.


The CRA’s eminent domain-based redevelopment scheme left many of the targeted residents fearful and angry. Many residents want to stay in their homes. Floyd Kohler, an 80-year old man who has lived in his Garfield Avenue home almost 50 years, could not believe that his city would destroy perfectly adequate, non-blighted houses at a time when there is a statewide shortage of affordable housing. Under the CRA plan, Kohler and his neighbors would simply be left out in the cold. Some residents might be willing to move, but they bristled at the notion that the City was acting as the real estate agent for the developer and that they would not be able to negotiate the amount of compensation.


Even though the mayor and City Council continue to back the proposed Garfield Avenue redevelopment, the City’s own financial woes and lack of replacement housing have forced the City Council to move the project to the back burner for now. According to Councilwoman Paula McFarland, the City’s budget deficits, which have pushed the City’s bond rating to junk status, make the project unfeasible. She and other Council members withdrew their support from the plan in April 2002, but hope to rekindle it when the City is in better financial shape.616



The state Economic Development Corporation (EDC) condemned 12 privately owned properties totaling 40 acres to make way for the expansion of facilities for Dow Chemical and Fidelity Investments. On one of the lots, Joseph Mollo Jr. runs the Breezy Hill Farm Garden Center. Mollo’s family has owned the 11-acre parcel since 1911, and in addition to the profitable garden center, Mollo owns two homes on the property and rents out part of his land. Mollo had no intention of moving; his business did well at his current location, which has better traffic access than any nearby alternate location. Mollo had planned to take the State to court to prevent this unjust taking,617 but now he thinks the only fight he could win might be the battle for higher compensation.


Another of the properties targeted by the EDC for the Dow/Fidelity expansions is Tina’s, a thriving pub which owner Gerald Porcaro does not want to sell. Porcaro has no desire to move, but the EDC has given him little choice. Porcaro estimates that it would cost him at least triple the EDC’s estimate to relocate up the street and fears that he will have to permanently close Tina’s as a result of the condemnation.


In December 2002, the EDC informed Porcaro that he must vacate his property by the end of the month. That meant that he would have to lose out on revenue for New Year’s Eve, college bowl season, and Super Bowl Sunday. For Mollo, time may be on his side as he continues his legal battle to get full value for his 11-acre spread. The EDC has given him until May 2003 to vacate the land, and he is seeking another six-month extension. As of December 26, 2002, neither Mollo nor Porcaro had agreed to settle with the EDC.618



In late 2000, the City entered into an agreement with the Bulfinch Companies, a private developer, to develop Warwick’s station district area with hotels, a conference center, office and retail buildings, restaurants and a movie theater, along with a new Amtrak station.619 Under the terms of the agreement, the City would assist Bulfinch in acquiring 70 acres of property for the development. Bulfinch would first have six months to negotiate with the current property owners, and if, by that time, no agreement could be reached, Warwick would take the land using eminent domain. Bulfinch then would buy the property from the City.620


The negotiation period lapsed without Bulfinch acquiring a single property in the redevelopment district. So Bulfinch asked the Warwick Station Redevelopment Agency to start condemning land on its behalf, because the owners “insisted” on getting more than fair market value for their land. However, on October 30, 2001, the agency voted unanimously not to use eminent domain, after a closed-door meeting with landowners revealed that the extent of Bulfinch’s efforts to negotiate over the 18 months had been to offer them an across-the-board price and then imply that the owners had no choice but to accept or else the City would condemn their land. Michael Grande, chairman of the redevelopment agency, has been critical of Bulfinch, insisting that the company must negotiate in good faith before the agency will consider using eminent domain. The project is still in development, and Bulfinch is still the preferred developer,621 but the City has not authorized eminent domain.


*These numbers were compiled from news sources. Many cases go unreported, and news reports often do not specify the number of properties against which condemnations were filed or threatened.

613 R.I. Gen. Laws § 44-18-30C (c) (3) (2002); Katherine Gregg & Liz Anderson, “Legislature Overrides Veto of State Budget,” The Providence Journal, June 13, 2002, at A1.

614 Zachary R. Mider, “Council Won’t Seek to Enlarge Arctic Zone,” The Providence Journal, Feb. 7, 2003, at C1.

615 See H.B. 5330, 2001-02 Sess. (R.I. 2001).

616 “Agency Hopes to Raze Neighborhood For Redevelopment,” The Providence Journal, Sept. 14, 2001, at C1; Mark Arsenault, “Neighbors Bristle At Proposal To Raze Homes,” The Providence Journal, Sept. 18, 2001, at C1; Mark Arsenault, “Garfield Ave. Land Taking Should Be Shelved, Says McFarland,” The Providence Journal, Apr. 22, 2002, at B1.

617 “Landowner to Fight Condemnation of Property for Business’ Expansion,” AP Wire, May 5, 2002.

618 Neil Shea, “A Look Back A Look Ahead—Two Residents, State Locked in Land Battle,” The Providence Journal, Dec. 26, 2002, at 1C.

619 “Station District Developer Envisions ‘Transit Village’,” The Providence Journal, June 6, 2000, at 1C.

620 Michael Smith, “Deal Puts Station District in Motion,” The Providence Journal, Oct. 6, 2000, at 1C.

621 “Agency Declines to Wield Landtaking Authority,” The Providence Journal, Nov. 7, 2001, at 1C.