Need to boost New London's tax base lost in fight over eminent domain
New London — A spotted leopard.
That's how an expert witness described the 15 properties that were the subject of Kelo v. City of New London when the case was first tried in state Superior Court in 2002.
Of more than 90 properties on the Fort Trumbull peninsula, the owners of 83 had agreed to sell as part of a state-funded, multi-million dollar redevelopment. Seven owners controlling 15 properties resisted and filed suit.
"What my witness was talking about, the spotted leopard, was you got spots here, here, here and here, and you're gonna tell a developer, 'OK, now you go work around those buildings,'" said attorney Thomas J. Londregan, who represented the city at the time and partnered with counsel for the then-New London Development Corporation to defend the plan to take the remaining properties by eminent domain.
"My regret is the timing of the lawsuit so far down the road, with so many property owners committed before someone said, 'OK, we're going to a judge,'" Londregan said, reflecting recently on the case that would be tried in both the Superior and Connecticut Supreme courts before finally being decided by the U.S. Supreme Court in 2005.
The city prevailed when its right to take private property for economic development benefitting the community was upheld. But that victory was lost in the swell of public opinion siding with the Fort Trumbull property owners who were forced to sell their homes and commercial properties, creating a sore in New London that has festered ever since.
"We won, but we were battling the court of public opinion. It was frustrating," said attorney Edward B. O'Connell Jr. of Waller, Smith and Palmer, who handled real estate transactions for the NLDC when it executed the city's Fort Trumbull Municipal Development Plan. The plan called for virtually clearing the peninsula and rebuilding on it to generate more tax revenue for the city.
It was a confluence of events that forced the development plan in the first place, Londregan said, and those events were forgotten or distorted once the city and NLDC resorted to using eminent domain to take the remaining Fort Trumbull properties.
When the federal government relocated the Naval Undersea Warfare Center (locally called the Sound Lab) to Newport, R.I., in 1996, it left the 32 acres it had occupied on the 90-acre peninsula to the city and said the property was to be used for commercial development. Two years later, Pfizer Inc. agreed to build its $300 million global research headquarters on the former New London Mills site, adjacent to Fort Trumbull.
At that time, the state also was planning a $25 million investment in a new state park on the banks of the Thames River at the site of the fort itself, a masonry fortification built in the mid-1800s. The park, coupled with the Pfizer plan and the vacated Sound Lab property, gave reason for city and state officials to look more closely at the Fort Trumbull area, Londregan said. One of those people was then-Gov. John G. Rowland, who had been investing in the state's urban centers, and had offered the city, through its New London Development Corporation, an additional $70 million to make over Fort Trumbull.
In February 2000, city boards and agencies and the City Council approved the Fort Trumbull Municipal Development Plan, a proposal that would bring major change, but heartache, too, to New London.
When the seven hold-out Fort Trumbull property owners filed their lawsuit to keep their properties in December 2000, much of the rest of the peninsula had been bought up and some of it bulldozed.
"When the lawsuit was filed, we knew we would have to deal with it, but by that time, we had told 83 of the 90 property owners we need your property for this type of development and we paid them money," Londregan said. "Could we now go back to those 83 people and say, 'Whoops, we changed our mind and we're going to try and incorporate the properties that are left into our plan?' "
$70 million incentive
What got lost in the eminent domain fight, said city and NLDC supporters, is the reason redevelopment of Fort Trumbull was proposed in the first place.
Tax-poor New London was desperate for an infusion of revenue that a renewal of Fort Trumbull conceivably could inject into the city's grand list. The plan included space for a Coast Guard museum, residential units, a hotel and conference center, marina, offices and an expansive and public walkway along the river. Monies would be used to relocate an existing metal recycling business and to modernize the city's sewer plant, which was notoriously stinky. Brownfields would be remediated, drainage improved, and new roads, sidewalks, streetlights and utilities installed.
"How often does a state come and offer you $70 million? How often does a major pharmaceutical company of international renown decide to build within your borders, and how often does a military base close and offer you 32 acres of commercial land?" Londregan asked, explaining that was the situation in 1999 as frustrated taxpayers took one municipal budget after another to referendum in an effort to thwart tax increases.
But the lawsuit, as it wended its way through the courts, elicited an anti-eminent domain firestorm. Susette Kelo, the lead plaintiff, and the two-bedroom pink house she had bought in 1997 at 8 East St. became the poster child of what would be described as the country's most important property rights case in a half-century.
"Mrs. Kelo was the grabber," O'Connell said. "She was the one everyone was interested in. If you are sitting in Chicago, the one you are going to connect with is the one whose property is being taken. No one wanted to hear about tax problems, no one wanted to hear a long explanation from the city about why this was happening."
If the city and NLDC were caught off guard when the property owners filed suit, they were equally surprised when the plaintiffs appealed the split decision of the Superior Court judge to the state Supreme Court. Judge Thomas J. Corradino ruled in March of 2002 that the city and NLDC could take four of the 15 properties to make way for a proposed bio-tech building, but not the other 11, which were located on land slated for state park support and parking.
The city and NLDC were ready to live with the Corradino decision, Londregan said, but the seven plaintiffs stood in solidarity and took their case to the state Supreme Court where, in a 4-3 decision in March 2004, the right of the city and NLDC to take the properties by eminent domain was upheld.
The Washington-based Institute for Justice, which was representing the Fort Trumbull property owners, already had said it would take the case to the U.S. Supreme Court if they lost in Connecticut, and they did, setting up the high court's 5-4 decision on June 23, 2005, which supported a broad concept of what constitutes a public use with eminent domain. The plaintiffs had argued that developing businesses to spur economic development was not the same as taking property to build a prison or a road.
Wesley W. Horton, the Hartford attorney who wrote the briefs and argued the case on the city's behalf before both the U.S. and Connecticut supreme courts, believes people's anger over the Kelo case has been misdirected.
"It seems to me people are focusing far too much on coming up with a bright line," he said. "If it's for private economic development it's bad, but as long as the city owns it, it's good. If a road was to run through Mrs. Kelo's house, no one would have said a word."
There should be scrutiny whenever condemnation is used to take property, Horton said, even when it's for a more accepted public use like a road or a school.
In the New London case, the development plan for Fort Trumbull was evidence that there was no pretext, he said, proof that the intent was a stronger city tax base.
"The anniversary is a chance for people to reflect on what really is the precedential value of this case, and the precedential value is it put all kinds of restrictions on all kinds of condemnations," Horton said. "So why are we focusing laser-like attention on one kind of condemnation?"
Michael Joplin, who was president of the NLDC for more than a decade, including in 2005 when the Kelo decision was made, said that for the development corporation and the city, Fort Trumbull was always about improving the city's tax base.
"It was quite obvious that the financial structure of the city had to be radically changed and that it was time for real action," he said, adding that the Rowland administration's decision ultimately to pump more than $120 million into the neighborhood was evidence that the state was of like mind.
When the U.S. Supreme Court agreed to hear Kelo v. New London, Joplin recalled thinking, "Oh my goodness, we don't need this. What we need is to change the tax structure of our little town here."
"This case was never about taking from one person to give to another," Londregan said, echoing a similar comment he made the day the high court supported the city's decision to take the properties. "This was not a land grab. It was about New London and its economic survival."
Everything was done according to state law and approved by the City Council, he said, with a blueprint in the development plan for "the substantial and significant public benefits and improvements" that would be gained.
Now, a decade after the Kelo decision, most of Fort Trumbull is barren. Significant public improvements like new roads and sidewalks, streetlamps, improved drainage and brownfield remediation have occurred, but for the most part, the commercial development envisioned hasn't happened. Pfizer did build its global headquarters but then vacated it a decade later, just as the tax breaks it had been granted were expiring, further exacerbating hard feelings.
"It was terrible," Londregan said. "To get a 10-year tax abatement from the state of Connecticut and then you leave 10 years and one day after — I have lost all respect for Pfizer as a corporation. I have very little respect for Pfizer as a company."
Michael Joplin remembered the day he heard that the U.S. Supreme Court had ruled in favor of the city and NLDC. He was at a meeting in Fort Trumbull where a discussion of the proposed Coast Guard museum was underway. (Later, the Coast Guard would decide to build its museum downtown, behind Union Station, not at Fort Trumbull.)
"I was gung-ho to keep moving forward," Joplin said, "but what I didn't realize at the time is that the economic curtain was already on its way down — 2002 to 2004 was the time to pull off the miracle."
If Joplin could change anything at all about eminent domain, it would be to amend the process for appraising properties to include value for emotional attachment. In some cases, he said, he understood why the owners deserved more than the city and NLDC were allowed by law to offer them.
He, and others on the NLDC and city side, would also do a better job of explaining the goals of the Fort Trumbull Municipal Development Plan.
"Looking back, I think that when you do something like this, you really have to work the community at large," he said. "I think many citizens didn't understand we simply couldn't continue like we were, we had to change the financial makeup of the city if it was to function like a city."
"The city's mistake was not hiring a media specialist for publicity," Londregan said. "That's the biggest mistake we made. The city won and got creamed in the court of public opinion.
"If I had to get involved again, I would not hire additional lawyers, I wouldn't hire additional staff, I wouldn't hire a research team, but I would hire a marketing expert for public relations," he said.
"The Kelo decision says you can only take property if there are substantial and significant public benefits and public improvements, and the citizens of New London today, without any significant development down there, have enjoyed substantial and significant public benefits and public uses," Londregan continued. "We have the state park, we have a state-of-the-art sewer treatment plant, we have new roads, sidewalks and sewer lines, new water lines, and we have access to the Thames River, which we never enjoyed growing up here because of the Sound Lab. We couldn't even see the water when we drove down there. Now we have a river walkway all along the 90 acres with public access."
Joplin, while still optimistic about the city's future, had a different view.
"I wouldn't take it back (his time on the NLDC)," he said, "but I do regret the failure. We didn't even come close to what we could have done."
Marking 10 years since the Kelo decision, he said, "I would hope that people would come together and realize that New London still has remarkable potential. And it has financial problems that it can only overcome if everyone comes together."
"I still think that when the economy turns, this will be one of the centerpieces of New London's revival," said O'Connell, who has practiced law in the city for 47 years. "Urban areas are indeed poised for revival and New London will be among the leading urban areas. We have the rehabilitated land, the sidewalks, the sewers, the water, the streetlamps, the drainage — all available for someone who wants to put a project on it. We are ahead of many of our friends in the suburbs, or at least equal to them, and we will be able to compete with them for the almighty property tax dollar."
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