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‘Kelo’ Revisited

Properties were seized and a neighborhood razed in the name of ‘economic development’ that never came

Feb 10, 2014, Vol. 19, No. 21 • By CHARLOTTE ALLEN
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Still, my visit to New London on two subfreezing days in January revealed that the story of the Kelo case was something more than the story of a particularly nasty and overbearing abuse of either eminent domain or government power in general. It was also a tragedy, with all the classical Greek elements: hubris, turn of fortune, cathartic downfall, and possibly the “learning through suffering” that Aristotle in his Poetics argued was the point of tragic drama. Possibly but perhaps not likely: During the five years since Pfizer left New London, the city has placed its hopes in two more grandiose plans for Fort Trumbull and its environs that never materialized, and it may be poised to embark on still another. The story of the Kelo case is in part the story of a city so desperate, so economically beleaguered, that it was willing to try anything to bring a few more residents, a few more revenue dollars into its boundaries.

"You have to understand that the case was seen in a very different way on the local level from the way it was seen on a nationwide level,” Daryl J. Finizio, 36, Democratic mayor of New London since 2011, told me in an interview in his office in New London’s City Hall. The Beaux-Arts City Hall, completed in 1912, was, like most of the other buildings along State Street, New London’s main commercial strip leading downhill to the Thames, opulent in conception and almost irredeemably decrepit after more than a century of straitened finances and daily wear. The four elegant Corinthian columns that rose to span most of its meticulously carved three-story granite façade contrasted with cracked tile floors, chipped wall-paint, and stained marble moldings inside.

“On the local level the case was about taxation and corporate development,” Finizio, a lawyer who taught at Boston’s Northeastern University, said. “Then, when it got to court, it became a matter of constitutional law, of limits on government power. There, it was not a debate about what was debated about here: economic development, lower taxes, and corporate growth. There were a lot of people on the south side of the city who were tired of paying high property taxes, and they felt that something had to be done. My response to that has always been: If your taxes are too high, you need a smaller house. You don’t have a right to bulldoze someone else’s house.”

All of Connecticut’s larger cities​—​not just New London but New Haven, Bridgeport, and Hartford as well​—​have serious economic problems, but New London may well be the worst off of them all. Its very geography seems to have conspired against it. It is only 11 square miles in area, and almost half of that is water. Settled in 1646, it lost all its potential for suburban expansion in 1801, when the farmers on its outskirts voted to form their own 33-square-mile town, Waterford, which now, with a population of 19,000, surrounds New London on all landward sides. Thanks to its natural deepwater harbor, New London boomed during the 19th century, when it was America’s second-largest whaling port after New Bedford, Massachusetts. Whale-oil wealth shaped the city. Its Latin motto, blazoned in a vivid mosaic on the vestibule floor of City Hall, was Mare Liberum (“the free sea”), accompanied by an image of a proud Yankee clipper in full sail. The whaling captains and the merchants and manufacturers who prospered alongside them crammed New London with oversize, often magnificent Victorian houses. The cone-shaped Gothic Revival spires and finials of some 33 stone churches built during that sea-going century still pierce the sky. The imposing Episcopal church downtown, St. James, constructed in 1853 out of sienna-colored rusticated freestone, boasts glorious Tiffany-glass windows.

The last whaling ship sailed out of New London in 1909. After that, the city had a brief flourishing as a manufacturing center, but most of the mills closed down during the Depression. Following World War II serious decline set in. The postwar construction of the I-95 expressway along the East Coast split New London in two. In another postwar demographic trend, homeowners began moving out to the suburbs, which often meant Waterford. Retail shopping followed them, to newly constructed malls alongside I-95, mostly outside the city limits, eroding the downtown tax base and killing off downtown stores. Swaths of stately Victorian houses turned into peeling-paint rentals.

The city’s low-income minority population surged; the city is now 28 percent Hispanic and 17 percent black. The median household income in New London is $44,000, 38 percent lower than the state average of $70,000. The unemployment rate is a sky-high 12 percent, and the percentage of poverty-level households is more than double the state average. The public schools are regarded as some of the worst in Connecticut. As if that weren’t enough, New London’s prime location astride I-95 has made it a regional base for narcotics traffickers ferrying their wares to New York City some 120 miles south and to Rhode Island and Massachusetts up north. Police raids on heroin and cocaine rings run by Dominican immigrants are a staple of New London news. NeighborhoodScout, a housing-search firm, has listed New London as the 35th most dangerous city in America because of its high crime rate.

By 1990 the state of Connecticut had declared New London a “distressed municipality,” and the intervening 24 years have done little to change that image. State Street downtown is a long row of handsome and mostly empty storefronts. The once-luxurious Mohican Hotel, designed in 1898 by William H. Tuthill, the architect of New York’s Carnegie Hall, closed in 1971 and is now apartments for senior citizens. The main thriving businesses in downtown New London seem to be taverns, tattoo parlors, and, because a Connecticut Superior Court district is headquartered in New London, law offices. The city has no lack of prestigious institutions: historic churches, three colleges including the U.S. Coast Guard Academy, and the Lawrence+Memorial Hospital, affiliated with Yale. All are nonprofits, however, meaning that they pay no property taxes. Indeed, more than 50 percent of the land in New London isn’t on the tax rolls. That has tended to concentrate the city’s tax base into its single upscale residential neighborhood, the blocks of spacious and spiffily landscaped 19th-century houses clustered around Ocean Park Beach at New London’s far southern tip. As might be expected, many of those residents have long resented having to pay for the operations, including massive social services, of a city they believe has been poorly managed and runs perpetual budget deficits.

Since the 1970s New London has struggled, usually futilely, to bring in new business ventures​—​or failing that, federal and state subventions​—​to shore up its precarious balance sheet. Because there has always been a paucity of vacant land in this tiny, thoroughly built-up city, the new ventures have often involved using eminent domain to seize and -demolish existing Victorian-house neighborhoods. Several blocks’ worth of Victorians just east of downtown New London met the bulldozer during the early ’70s to make way for a large-scale federally subsidized housing project. The visually unattractive apartments quickly became a crime-infested no-man’s land whose violence spilled over into downtown streets. Another group of felled Victorians made way for a failed industrial park. Michael Cristofaro’s parents, Pasquale and Margherita Cristofaro, who had emigrated to New London from Italy just before their son’s birth in 1962, saw their first house and all its neighbors leveled via eminent domain in 1971 because the city of New London had plans to build a seawall on their properties. The land sat vacant for five years and now houses a nondescript office building. So desperate for revenue was New London in 2010 that the city council voted to sell half of the city’s attractively designed but indifferently maintained 18-acre Riverside Park on the banks of the Thames to the Coast Guard Academy next door in order to raise a badly needed $2.9 million. Only a citywide referendum in November 2011 managed to save the park by a hair’s-breadth 19 votes. 

It was in this context​—​this mix of fiscal and economic destitution, hopes of somehow turning New London around at last, and a tradition of trigger-happiness when it came to eminent domain​—​that the city latched upon Fort Trumbull during the late 1990s as the site that could produce its salvation. When I called Wesley Horton, the Hartford lawyer who represented both the city and the NLDC before the Supreme Court, he directed me to a concurring opinion in the Kelo case by Justice Kennedy, which described “a comprehensive development plan meant to address a serious city-wide depression.” Horton said, “This was a poor city. It was desperately poor. The plan wasn’t developer-driven. The city didn’t even have a developer until it came up with the plan. New London was trapped in a problem that’s peculiar to New England. There aren’t any suburbs in New England.”

Fort Trumbull is physically separated from the rest of New London not just by geography but by a railroad line, part of the Amtrak and freight routes from New York to Boston, that marks its western boundary. The “Fort” of Fort Trumbull, on the southern end of the peninsula, had been a Revolutionary War site, sacked by British troops led by Benedict Arnold in a bloody battle in 1781 that burnt down most of the city. A headquarters for Union troops during the Civil War, the fort was ideally positioned with a stereoscopic view of the Thames mouth and the city of Groton right across the river. Much later, after World War II, Fort Trumbull served as the site of the Naval Undersea Warfare Center until that base was closed in 1996.

Even during its heyday​—​probably the 1920s, when more than 150 families lived there, and it was a close-knit Italian neighborhood​—​the Fort Trumbull area was never much to look at. “Working-class” was the delicate way that Cristofaro phrased it to me. The fort itself had been a tumbledown ruin for decades, and much of the rest of the peninsula was marred by defunct manufacturing operations that had despoiled their grounds with rubble and pollutants. The 24 waterfront acres where Pfizer built its research facility in 2001 had been a demolished linoleum plant. Nearby was the Calamari Brothers Co., an equally unaesthetic scrap-metal junkyard. The city of New London had placed its sewage-treatment plant on the peninsula, a cesspool-level facility that smelled like .  .  . raw sewage.

Still, even though the Fort Trumbull neighborhood had dwindled to about 75 families by the late 1990s, they were poor but proud, and their properties could scarcely be called “blighted.” Many of the houses had been in the families that owned them for generations, and their elderly owners kept tidy lawns and gardens. Pasquale Cristofaro had lovingly landscaped his yard with rhododendrons and other ornamental shrubs and plantings. The elder Cristofaros eventually moved while retaining title to the house, but “my oldest brother raised his three kids in that house,” said Michael Cristofaro. “And then my second-oldest brother lived there with his two kids. It was a kind of starter house for my family.” Susette Kelo bought and fixed up her pink house directly across the street from the fort in 1997 because she was enthralled by its majestic view of the Thames. There were solid neighborhood businesses: a bakery, a market, a deli, a grinder shop and restaurant (owned by another of the Kelo plaintiffs, Billy Von Winkle), a body shop. There was also a church.

The plan to convert this unprepossessing patchwork into an upmarket venue for tourists and condo-dwellers was a three-way operation involving the city of New London, the NLDC, created by the city in 1978 but mostly dormant until the late 1990s, and the state of Connecticut. The governor at the time, John Rowland, was a Chris Christie type: a Republican with the common touch who had succeeded politically in an overwhelmingly Democratic state. (Rowland’s political career came abruptly to an end when he went to federal prison in 2005 for having state contractors do free work on his home.) Rowland was an enthusiast for redevelopment, and it was he who pushed through the state’s $78 million worth of support for the Fort Trumbull project. Veteran investigative reporter Jeff Benedict, in a thoroughly researched 2009 book about the Kelo case, http://www.amazon.com/gp/product/0446508624?ie=UTF8&camp=213733&creative... ">Little Pink House: A True Story of Defiance and Courage, argues that there was a fourth shadow player: Pfizer, which implicitly exacted the total transformation of Fort Trumbull as a condition for moving into New London. The idea was that Pfizer executives and the scientists who would be visiting the research facility would be the primary beneficiaries of the hotel, the conference center, the condos, and the generally upgraded neighborhood.

In a footnote to his majority opinion in Kelo, Justice Stevens rejected this contention, reiterating that the “development plan was not intended to serve the interests of Pfizer, Inc., or any other private entity, but rather to revitalize the local economy by creating temporary and permanent jobs, encouraging spin-off economic activities and maximizing public access to the waterfront.” Still, it couldn’t help but be noticed that a Pfizer executive, George Milne Jr., head of the company’s research operations, was a board member of the NLDC. Or that David Burnett, husband of the NLDC’s chairman, Claire Gaudiani, then the president of Connecticut College, one of New London’s three institutions of higher learning, worked under Milne at Pfizer. In a 2001 interview with the Hartford Courant that he undoubtedly later regretted, Burnett said, “Pfizer wants a nice place to operate. We don’t want to be surrounded by tenements.”

Using the state funding supplied at Rowland’s behest, the city of New London modernized its sewage-treatment plant to remove the stench and did a thorough cleanup of the linoleum-plant site. The fort got restored and its site turned into an attractive state park. The Calamari junkyard sold out in 1998 and moved to Essex, Connecticut. “It’s a gorgeous piece of property,” Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut, pointed out during an interview in his office in Waterford. Sheridan believes that New London made the right decision in accommodating Pfizer “despite all the mistakes that were made in the past​—​the public wasn’t given sufficient time to raise a lot of issues. New London is the biggest winner of all. That property was highly polluted, with the scrapyard and the old linoleum plant. Between Pfizer and the state government, they made it clean and usable.”

New London’s City Council had voted to grant to the NLDC the power of eminent domain, and the NLDC began to wield it as a reserve club for Fort Trumbull property owners who did not wish to sell at the prices it was offering for their homes and businesses. (The Fifth Amendment requires that owners be paid “just compensation” for government-seized property, but that can be at the low end of the market.)

The NLDC might have won its case in the courts of law, but it did everything to lose it in the court of public opinion, its critics alleged: having real estate agents harass elderly Fort Trumbull owners on the telephone; showing up on their front porches waving contracts as they were sitting down to their Italian Sunday lunches; in the case of Billy Von Winkle, locking the tenants out of a Fort Trumbull apartment house he owned; trying to extract “rent” from those who resisted on the theory that the NLDC already had title to their properties; and immediately bulldozing the homes of everyone who sold, so as to isolate the seven holdouts psychologically and physically. All these tactics were reported gleefully in the Courant and the Day, New London’s daily newspaper. Cars reportedly started sporting bumper stickers reading “The City of New London took my house, and all I got was this lousy bumper sticker.”

Most galling of all, in Cristofaro’s opinion, the city and the NLDC, while insisting that nearly all of the 90 acres be clear-cut, agreed to spare one property from the wrecking ball: a worn 1922 magenta structure perched on one edge of the tract that hosts the Italian Dramatic Club, a private social club for eastern Connecticut’s political elite. “How about that?” Cristofaro said bitterly as we drove past it. “I call it the ugly pink Quonset hut.”

“The Italian Dramatic Club got to stay, but all the Italians had to go,” Scott Bullock, the lead lawyer from the Institute for Justice in the Kelo case, said in a telephone interview. “These people weren’t NIMBY people. They said: We need redevelopment, but we just want to be part of it. It would have been easy just to incorporate what was already there. They could have built around them. Those properties were on tiny lots​—​one and a half acres in total in two small sections of 90 acres. That’s the trend these days: infill. In the old days you tore down everything, but then planners recognized: Let’s not destroy history. Let’s blend the old with the new. Why did New London stick to the old model? The answer is: They wanted something big and grand.”

After the Supreme Court ruling and the cyclone of negative publicity that whirled about all things New London in its aftermath, a rift grew between the city council and the NLDC and also between the city and Connecticut’s new Republican governor, Jodi Rell, who had succeeded Rowland and didn’t approve of the way eminent domain had been used in Fort Trumbull. At Rell’s prodding and with $4.1 million in state funds, the city paid settlements to the Kelo plaintiffs to get them off their properties without having to undergo another round of nationwide embarrassment by having marshals drag them from their homes. Susette Kelo and the Cristofaros, who held out the longest, got nearly half a million dollars apiece. Kelo was allowed to have her pink house disassembled and then reassembled on a lot in downtown New London as a monument to her struggle. She moved to Groton. The Cristofaro house was bulldozed in 2007, but New London, at Michael Cristofaro’s insistence, placed a plaque on a bluff overlooking the Thames in memory of his mother, Margherita, who had died in 2003, while the lawsuit was pending (Pasquale Cristofaro died in 2009). Michael Cristofaro, who had lived in New London all his life, moved to Waterford.

In the end, though, it is hard to say exactly what the universal denunciation of the Kelo ruling accomplished over the long run. Eminent domain in the name of economic development ought to be dead letter, but it is in fact alive and well. In 2006, a year after Kelo, New York City mayor Michael Bloomberg unveiled the Atlantic Yards Project, a massive mixed commercial/residential/recreational use project, including 16 high-rise buildings, for 22 acres in Brooklyn’s Prospect Heights, an already gentrifying neighborhood that needs no public boost​—​all to be financed in part with some $2 billion in taxpayer aid. The city used eminent domain to demolish well-maintained condominiums over the protests of their residents. Thanks to the real estate collapse, ground was not broken until 2012, and large portions of the project may never be built. In California two measures​—​a ballot initiative and a pending bill in the state senate​—​would, among other things, broaden the definition of “blight” for eminent domain purposes and revive in altered form the state’s local redevelopment agencies, which used to receive up to 12 percent of state tax revenues until California governor Jerry Brown abolished them in 2011. The redevelopment agencies were notorious for their failure to generate actual economic improvement.

As for New London itself, it seems to be back to something big and grand. The NLDC changed its name at Mayor Finizio’s instigation to the more upbeat Renaissance City Development Association (RCDA), and some members from the Kelo era resigned. In July 2010 the Yale Design Workshop, at the city’s request, unveiled an elaborate schema for Fort Trumbull that included restaurants, offices, art galleries, artists’ studios, a resort hotel, a visitors’ center, a heritage trail, a seafood market, an “entertainment zone,” an indoor athletic facility, and an unnamed “cultural institution,” plus bicycle lanes, water taxis, and a pedestrian bridge to downtown New London. The money for all this was to come from “Private, Local, State, and Federal funds,” according to the Yale team. In July 2012 a development firm, River Bank, selected for Fort Trumbull in 2009, unveiled its proposed “Village on the Thames,” a $24 million, 103-unit townhouse development. As with Pfizer, the city council granted River Bank a substantial tax abatement. In May 2013 Mayor Finizio’s office announced that a scheduled groundbreaking for the Village on the Thames would be postponed, because River Bank had failed to obtain adequate financing. A few days later the RCDA declared that River Bank was in default on its development contract. No more has been heard about the Village on the Thames.

Meanwhile New London’s financial problems have continued unabated. Finizio swept into office in 2011 in a nearly 2-1 victory over his Republican opponent, on the promise of bringing a fresh start to the beleaguered city (he apologized to all the Kelo plaintiffs, calling the decision a “black stain”). But in 2012 voters soundly defeated his first major measure: a 20 percent property tax increase. Recently the Day reported that New London faces a $1.4 million deficit in its current $40.8 million general budget, coupled with further dilapidation in City Hall: a broken steam pipe on the first floor, a five-foot hole in the ceiling of a second-floor office where a sewer pipe ruptured, and lack of hot water in some of the bathrooms, moisture in the basement, and mold growing over some interior walls. 

Finizio’s plans for saving New London seem to be lifted from the pages of Richard Florida’s 2002 “New Urbanism” classic, The Rise of the Creative Class. One of Florida’s theories is that decaying urban cores can turn themselves around by rebranding themselves as magnets for “the creative core”: the hip, the artistic, the poetic, the tech-savvy, and the gay, on the theory that those types generate prosperity by making urban centers fun to live in. A few months ago Finizio endorsed New London’s first-ever gay pride festival, scheduled for sometime later this year, telling the -Courant that it would be an “economic boon” to the city. I also noticed that downtown New London’s Bank Street, running along the Thames waterfront, seemed to be defining itself as a Florida-inspired arts district, with puffy installations filling the windows of the aging storefronts.

For Fort Trumbull, Finizio also has creative-class visions: “tiny houses”​—​those grass-hut-size dwellings on micro-lots that are currently the rage among green types and simplicity buffs. “There are a lot of people concerned with environmental self-sufficiency,” he told me when I interviewed him. “You’re looking at a neighborhood that’s been destroyed in order to satisfy someone’s expensive vision​—​condos, hotels. What hasn’t been tried is a real neighborhood. This would be an opportunity to redo Fort Trumbull as a national first​—​a green, integrated mid-rise community. There would be green tech, LEED-certified buildings, solar power. It would be a green, self-sustaining neighborhood.” Finizio also expressed the hope that the city of New London could ultimately take over title to Fort Trumbull from the RCDA, with its quasi-private status. “There should be direct public ownership of that property,” he said.

More big and grand, I thought. Another New London adventure in eminent domain. Mare liberum. The sea is free. But not Fort Trumbull.

Charlotte Allen, a frequent contributor to The Weekly Standard, last wrote on Silicon Valley.

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