How a swanky private golf club fell into the crosshairs of eminent domain. (Hint: It wasn't to build a bridge.)
12:00 AM, Sep 7, 2006 • By DUNCAN CURRIE
North Hills, New York
Deepdale is located in the tony village of North Hills, New York, along a strip of Long Island's North Shore known as the Gold Coast. Founded in 1924 by William K. Vanderbilt II, its most famous members have included Presidents Eisenhower and Nixon, as well as New York City mayor Mike Bloomberg and a bevy of celebrities. The club boasts around 200 current members--by invitation only--and gauges the value of its 175-acre property at over $100 million.
Critics like to mock eminent domain abuse as "Robin Hood in reverse"--taking from the poor to benefit the rich. Not so in North Hills, where the fight for Deepdale pitted rich villagers against even richer golfers. Judged by its real estate prices and per capita income, North Hills, a village of about 4,500 residents, ranks among the wealthiest communities in America. And its location offers a vast array of nearby choices for those wishing to hit the links. According to Sports Illustrated, "There are 20 courses within five miles of the village and 51, including 11 public tracks, within 15 miles."
But Deepdale is the nicest, and most exclusive. Virtually all members reside outside North Hills. Only one, a retired Wall Street businessman named John Wilson, actually lives in the village.
The story of how Deepdale fell into the crosshairs of eminent domain traces back several years, to the tenure of former North Hills mayor John Lentini, a Republican, who served for over a decade. Shortly before his death in 2002, Lentini gave an interview to New York Newsday and gushed over a survey that had listed North Hills as the eighth wealthiest community in the United States. "This is a great community, full of warm people, most of whom are professionals," Lentini said, calling his village "a success story unrivaled in New York State."
Then he divulged his curious strategy for making North Hills even more attractive. "We believe our acquisition of the Deepdale Country Club will be the crown jewel of our municipality and bring us to a new level of North Shore Gold Coast affluence, perhaps bringing us to number one." Deepdale members were alarmed by the comment. Such chatter continued under Lentini's successor, Republican Marvin Natiss. But until recently the talk was just that--talk.
THAT ALL CHANGED in November 2005, when Deepdale received a letter from village attorney A. Thomas Levin. The letter made plain that North Hills was eager to acquire Deepdale via eminent domain. "In order for the Village to obtain information which would assist it in determining the appropriate way to proceed with such an acquisition, and to permit the Village to formulate an appropriate offer as required by the Eminent Domain Procedures Act," wrote Levin, "the Village requests permission for its appraiser to visit and inspect the property."
The thinking apparently went like this: Once North Hills paid "just compensation" for Deepdale, the club would become "public," with membership open only to the 4,500--mostly very wealthy--village residents. Having a ritzy public golf course in town would boost property values (and thus property tax revenues). And the hope of Mayor Lentini--that Deepdale might someday be "the crown jewel" of village life--would be realized. Yet Deepdale would effectively remain a private club, in the sense that membership would presumably be restricted to those villagers willing to pay an expensive fee.
Deepdale members swung into motion, hiring a bigwig Manhattan PR consultant. They also tapped John Wilson, the one Deepdale member who lives in North Hills, as their plaintiff in lawsuits filed against the village. Wilson worked closely with attorneys from the powerhouse firm Wachtell, Lipton, Rosen & Katz. At least one Wachtell partner, Edward Herlihy, was also a Deepdale member, and he took to the Wall Street Journal to denounce the proposed seizure as "reckless" and "illegal."
"The mayor of North Hills wants to use the power of government to condemn Deepdale--whose members are a diverse group of people from all over the country and around the world--to make it an exclusive high-end golf course restricted to people who live in his small village and would be willing to pay thousands of dollars in yearly membership fees," Herlihy charged. "The model is said to be the nearby Village Club of Sands Point, which is owned by that village. There you not only have to pay village taxes but membership dues to join. A full family membership at the Sands Point club costs $18,000 a year. If this is indeed the model for Deepdale, the club would become 'public' in name only but in truth would be every bit as exclusive as any private club."
Mayor Natiss contends that Deepdale jumped the gun. "We never started a proceeding," he insists, adding that North Hills residents deserved a say on the matter and would have gotten one in the form of public hearings and feasibility studies--except that the club took such swift legal action in response to the village's initial letter.
THE IRONY is that Deepdale had only moved to its current location because of eminent domain. The original club was built in Lake Success, a neighboring village. But in the mid-1950s, part of the course was condemned to make room for the Long Island Expressway--the type of "public use" for which the takings clause was originally intended. That's when Deepdale set up shop in North Hills.
Natiss doubts the club is worth $100 million. (He says his office never received an updated appraisal of its value.) But even if it were worth $50 million--or $30 million or $20 million--where would such a tiny village procure those funds? Deepdale members point to Midtown Equities, a real estate group with plans for a massive tract of Ritz-Carlton condominiums in North Hills. The developer had offered to pay the village some $21 million for the project. Many suspected that the $21 million would have been set aside as future compensation for Deepdale.
But North Hills never got that far. The eminent domain clamor spurred Michael Balboni, a Republican state senator from Long Island, to push legislation shielding the club. Balboni, whose district includes North Hills, says he first heard of the Deepdale spat last winter. Mayor Bloomberg in particular expressed his disgust. As Balboni tells it, Bloomberg privately said to him, "This is government-facilitated extortion."
Yet Balboni also felt uneasy about Deepdale's mailing blitz. "I thought the strategy to demonize the mayor was backfiring," he explains. (Balboni and Natiss are friends.) So Balboni teamed up with Democratic state assemblyman Thomas DiNapoli on an especially crafty bill to defuse the controversy. "If you read the bill, you have no idea it applies to Deepdale or North Hills," says Balboni.
Instead, DiNapoli came up with an environmental angle. His legislation barred municipalities from using public funds to acquire land "located within a special groundwater protection area" that was "being used as a recreational facility or open space"--unless the land was already for sale. Deepdale fit both categories. And it was most assuredly not for sale. The measure passed overwhelmingly in both the state Senate and the Assembly this past June.
That meant it was time for Natiss to wave the white golf towel. "I'm a lawyer," says the mayor. "I believe in the sanctity of the law." In a letter to North Hills villagers dated June 28, he effectively abandoned the idea of confiscating Deepdale through eminent domain.
"As Mayor, I have stated repeatedly that the Village would not make a determination about pursuing eminent domain with regard to the Deepdale Golf Club unless a satisfactory financial and feasibility analysis was conducted and extensive public hearings were held, and then only with the approval of Village residents," he wrote. But the Balboni-DiNapoli bill had nixed this option. "While many in the Village would like to pursue legal action to declare the State legislation unconstitutional and to preserve the Village's rights on this matter," Natiss went on, "I do not believe that is the wisest course of action."
A few weeks ago New York governor George Pataki signed the Deepdale bill, formally ending the episode that had thrust North Hills into the national spotlight. It is worth noting that, while New York lawmakers scurried to defend the rights of wealthy golfers, they have yet to pass comprehensive eminent domain reform to curtail the unjust seizure of private homes and businesses. Maybe now they will.
Among high-profile eminent domain cases, the Deepdale row stands out for its perversity--and for the stunning riches of those involved. While club members were able to wage a victorious counteroffensive, most eminent domain victims do not enjoy their resources or political influence. John Wilson, for one, has a newfound empathy for such victims. "It really gave me a better idea of what these people are going through," he says. "It was surreal."
Duncan Currie is a reporter at The Weekly Standard.