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Act now to eliminate private-benefit eminent domain

Letter from MCHC Board Member Shirley Kressel to MA Joint Judiciary Committee

March 12, 2010

To the Joint Judiciary Committee
Massachusetts State House

Re: H. 1778 An Act relative to eminent domain takings
Sponsored by:
Martha M. Walz 8th Suffolk
Denise Provost 27th Middlesex
Stephen L. DiNatale 3rd Worcester
Patricia D. Jehlen Second Middlesex
Michael J. Moran 18th Suffolk
Christine E. Canavan 10th Plymouth
Bradley H. Jones, Jr. 20th Middlesex
Michael F. Rush 10th Suffolk
Richard J. Ross 9th Norfolk
James B. Eldridge Middlesex and Worcester
Robert L. Hedlund Plymouth and Norfolk

This letter is in support of H. 1778.

Massachusetts is one of a handful of states that has taken no action to restrain eminent domain after the Supreme Court’s 2005 Kelo decision finding eminent domain for private use constitutional. It seems self-evident that forcibly taking property from one owner and giving it to another for financial gain is unfair — even un-American. Yet our legislature seems reluctant to take up the Court’s suggestion that states may enact their own restrictions. The reason is a lingering — but mistaken — belief that eminent domain is an indispensable tool for economic development and tax base enhancement.

But the opposite is true. The evidence has been clear since 1964, when Martin Anderson, then with MIT/Harvard’s Joint Center for Urban Studies, published a book titled The Federal Bulldozer, an analysis of the economic impacts of eminent domain as used in urban renewal. He provided clear documentation that in the years since private-benefit eminent domain became government policy in 1949, it had cost the taxpayers hugely more than it produced, and boded to remain a liability for the foreseeable future. Indeed, Boston is today still pock-marked with several hundred acres of land taken, cleared and held tax-exempt by the Boston Redevelopment Authority, land where people and businesses would have supported vibrant community life and paid taxes for these forty or fifty years. Eminent domain drove out residents, broke up communities, and decimated the small-business base.

In 2008, a Wall Street Journal editorial (attached) discussed a report by a private organization, the Institute for Justice, which found no discernable hindrance to economic activity from the restriction of eminent domain, even in states implementing the strongest reforms after Kelo. The Journal agreed: projects that can’t stand on their own shouldn’t be propped up by the taxpayers.

In 2009, William J. Stern, who ran the New York State Urban Development Corporation’s Times Square redevelopment project, wrote a report (summary attached) revealing that eminent domain “delayed development, added tremendous cost, and was unfair and inefficient,” and was fraught with corruption.

It is logical that eminent domain — like other unfair public subsidies – would have negative effects. First, this kind of government intervention props up bad business plans and encourages over-blown, risky projects that would be weeded out by the private markets, often leaving the city to clean up a big mess. Aside from the empty lots scarring the city, Filenes, Columbus Center and North Point are three recent grandiose local plans that were given all sorts of land, regulatory and tax favors, only to collapse of their own over-reaching weight. Tenant flight and building neglect began in the Fenway ten years ago, when a large swath of the neighborhood was declared blighted (or “potentially blighted”!) because the Red Sox team owners wanted to relocate the ballpark and fill its current site with profitable towers. Read Nicole Gelinas’s story (http://www.city-journal.org/2010/20_1_eminent-domain-abuse.html) of the Atlantic Yards project in New York, where decay and disinvestment are the result of “a half-decade’s worth of government-created uncertainty, which stopped genuine private investment in its tracks.” Pfizer, the corporation for which the City of New London seized and destroyed Suzette Kelo’s home and neighborhood, recently decided, “Never mind,” and moved out of town altogether, showing again, as the Wall Street Journal put it, “the futility of eminent domain as corporate welfare.” (http://online.wsj.com/article/SB10001424052748704402404574527513453636326.html)

Eminent domain costs the taxpayers money up front in takings compensation, and then for unpredictable periods of time in the loss of taxpaying properties. It destroys organically evolved communities and tries to replace them wholesale with artificial aggregates of buildings and people that don’t function cohesively. And it end-runs the competitive markets, engendering corruption, cronyism, and influence-peddling. Eminent domain is bad government and bad business.

Private development managed to proceed for centuries before property was taken from one person for the benefit of another. As Stern learned from his Times Square experience, “There was no shortage of developers willing to acquire property the old-fashioned way – through the private market.”

In today’s climate of economic distress, it is difficult to resist the lobbyists’ fear-mongering argument that we mustn’t lose any tool that could stimulate the economy. But the facts on eminent domain liberate you to do the right thing.

Please act now to eliminate private-benefit eminent domain; pass H 1778. Further, at the Constitutional Convention on July 29, please approve a constitutional amendment. As the Wall Street Journal concluded in its Kelo story: “If there is a lesson from Connecticut’s misfortune, it is that economic development that relies on the strong arm of government will never be the kind to create sustainable growth.”

Shirley Kressel
27 Hereford Street
Boston, MA 02115

Joint Judiciary Committee

Click here for contact info for individual committee members

Contact info for the Committee staff:

House Staff:
Room 136, State House, Boston, MA 02133
House Staff Telephone: (617) 722-2396

Senate Staff:
Room 416B, State House, Boston, MA 02133
Senate Staff Telephone: (617) 722-1639

Members appointed to the committee:
Creem of First Middlesex and Norfolk- Chair
Baddour of First Essex – Vice-Chair
Candaras of First Hampden and Hampshire
Hart of First Suffolk
McGee of Third Essex and Middlesex
Tarr of Essex and Middlesex

O’Flaherty of Chelsea – Chair
Speranzo of Pittsfield- Vice-Chair
Fagan of Taunton
Garry of Dracut
St. Fleur of Boston
Fernandes of Milford
Clark of Melrose
Dwyer of Woburn
Gregoire of Marlborough
Evangelidis of Holden
Webster of Pembroke


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