New London, Connecticut

The situation that sparked the now infamous U.S. Supreme Court decision inKelo v. City of New London, which permits local governments to use eminent domain for economic development, exemplifies just how redevelopment projects fail to meet their promises and expectations.

Nationwide attention has focused on a small patch of land overlooking the Thames River, a parcel with a handful of homes and businesses on less than 2 acres of the City’s proposed 90-acre project.  The City acquired and bulldozed approximately 30 acres for the project, some of which it obtained by threatening and actually filing eminent domain actions.[1]

The City’s redevelopment plan began in early 1998 when pharmaceutical giant Pfizer announced it would build a $270 million research facility in a town facing financial decline.  Unbeknownst to Susette Kelo or her neighbors, the City had already reached an agreement in which the New London Development Corporation (a private entity) would meet Pfizer Corporation’s requirements and find a developer to build, among other things, a luxury hotel for the company’s visitors, expensive condos for its employees and private office buildings.  The Fort Trumbull neighborhood, where Susette and several of her neighbors lived, was to be condemned and replaced with an unidentified form of “park support.”[2]  The other parcel where people still had homes was slated for the building of private offices that the proposed developer itself admitted would not be built anytime in the foreseeable future because there was no market for them.[3]

This is a classic example of City Hall justifying its use of eminent domain by promising taxes and jobs—and failing to deliver on its promises.  In fact, while the City estimated the project would generate between $680,544 and $1,249,843 in property tax revenue,[4] not a single penny in additional taxes has been collected.

Under the terms of the agreement, the NLDC would own the land located in the development area but lease it to private developers for $1 per year.[5]

Now, eight years later, the City has nothing to show for a neighborhood it destroyed with threatened and filed condemnations.  Today, vast empty dirt fields span acre after acre where New London’s grand plan was to be constructed.  The City’s failure to implement its redevelopment cannot be attributed to some of the homeowners’ decisions to fight to save their properties; the City could have built everything it planned on the 30 acres of land it already owned.[6]  Meanwhile, the City has wasted up to $73 million in state money allocated for the redevelopment, not including years of foregone taxes.[7]