West Harlem

The most famous name in America’s eminent-domain wars belongs to Susette Kelo, the Connecticut woman whose refusal to sell her New London cottage led to a monumental 2005 Supreme Court decision. In recent years, another name has gained widespread notice: that of Nick Sprayregen, a New York real-estate investor and the president of Tuck-It-Away Self-Storage. Since 2004, Sprayregen has been embroiled in a high-stakes legal fight over his West Harlem properties, which include four Tuck-It-Away buildings. He is standing athwart a major private institution that has tried to obtain his land through government coercion.

Sprayregen won a huge victory on December 3, when a state appellate court rejected a 2008 determination by the Empire State Development Corporation (ESDC) that his properties could be seized and transferred to Columbia University via eminent domain. (ESDC is a New York public authority that wields condemnation powers.) In a 3-to-2 decision, the court held that Columbia’s campus-expansion project did not justify the forcible acquisition of land in the proposed redevelopment zone, and that the designation of the target area as “blighted” amounted to “mere sophistry.”

It was a devastating ruling for Columbia. The court dismissed the idea that the school’s project had a genuine “public purpose,” noting that the only truly independent blight study of the relevant West Harlem neighborhood (known as Manhattanville) was not issued until May 2008 — long after the university had purchased the vast majority of the desired property. The redevelopment scheme was never intended to ameliorate urban decay, but rather to enlarge Columbia’s footprint. Indeed, as Judge James M. Catterson pointed out, at the time when Columbia began formulating its plan with city officials, the available evidence suggested that Harlem was experiencing an economic “renaissance.” Catterson also reproached ESDC for withholding various documents from Sprayregen’s legal team; he concluded that Sprayregen was “prevented from creating a full record for review by this Court.” On December 15, the state’s highest court unanimously ordered ESDC to comply with a Freedom of Information Law request and turn over the documents.

Sometime this year, that same court will likely hear a challenge to the Columbia eminent-domain decision. Sprayregen vows to take his case all the way to the U.S. Supreme Court if necessary. “I really feel that I have a certain responsibility to see this battle through,” he says while sitting in his West Harlem office. (Besides Sprayregen, the only property holder still resisting ESDC and Columbia is a gas-station owner.) Sprayregen observes that most victims of eminent-domain land grabs do not have his financial resources, and thus cannot afford to wage protracted legal struggles. He has retained as counsel Norman Siegel, a prominent Democrat and former director of the New York Civil Liberties Union.

Nobody knows how New York’s top court will come down in the Columbia spat; but on November 24, it gave the green light for another controversial New York City eminent-domain action to move forward. In a 6-to-1 ruling that disappointed many local residents, the court said that ESDC could employ eminent domain to condemn various Brooklyn properties and hand them to a private developer, Bruce Ratner, whose “Atlantic Yards” project (if it is ever completed) will include a new arena for the NBA’s New Jersey Nets. ESDC’s condemnations relied on a dubious finding of blight; yet Chief Judge Jonathan Lippman wrote that this finding was “reasonable” enough to pass judicial muster. Blight standards, he added, are “essentially a legislative prerogative.”

Blight is indeed a slippery concept, which is why it can pose such a danger to property rights. The Fifth Amendment’s Takings Clause recognizes that governmental bodies may appropriate private property “for public use,” and it stipulates that they offer “just compensation” to the owners. But the legal meaning of “public use” has evolved significantly over time. As journalist Carla Main writes in her 2007 book, Bulldozed, the exercise of eminent domain for “urban renewal” ventures surged after President Truman signed the Federal Housing Act of 1949 and the Supreme Court delivered its ruling in Berman v. Parker (1954). The Berman decision affirmed that eminent domain could be used to transfer land from one private party to another, assuming the transfer served a “public purpose.”

Then, in the early 1980s, the Michigan supreme court allowed roughly 500 acres of property in the Poletown enclave of Detroit to be seized and given to General Motors. This case “started the ball rolling in earnest on economic-development takings,” says Main, even though the GM factory built in Poletown turned out to be a disastrous failure. “It proved that with enough political will, the little man could be moved out of the way for all sorts of projects intended to jumpstart local economies.” In Kelo v. New London, the Supreme Court upheld the constitutionality of economic-development takings. But Justice John Paul Stevens, who authored the plurality opinion, stressed that “nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power.”

According to the libertarian Institute for Justice (IJ), 43 states have implemented some type of eminent-domain reform since the Kelo ruling. IJ senior attorney Scott Bullock (who represented Susette Kelo) says that, of those 43 states, 22 (including Florida, Georgia, New Hampshire, Oregon, and South Dakota) have enacted “really substantive” reforms that revised statutory blight criteria and curbed private-to-private land transfers. Other states (such as California, Connecticut, Illinois, Missouri, and Vermont) have enacted much weaker reforms.

Eminent domain is not a partisan issue. Indeed, reform bills have been vetoed by governors of both parties: in Arizona (by Democrat Janet Napolitano), Iowa (by Democrat Tom Vilsack), Mississippi (by Republican Haley Barbour), New Mexico (by Democrat Bill Richardson), and Texas (by Republican Rick Perry). The strongest opponents of reform have generally been urban officials (such as New York City mayor Mike Bloomberg), municipal organizations (such as the National League of Cities), and assorted business groups (such as state and local Chambers of Commerce).

New York is among the seven states that have failed to bolster their eminent-domain protections in the post-Kelo era. (The others are Arkansas, Hawaii, Massachusetts, Mississippi, New Jersey, and Oklahoma.) An October 2009 IJ report contends that it is “perhaps the worst state in the nation when it comes to eminent-domain abuse.” IJ estimates that since 1998, more than 2,200 properties in New York have been either seized or threatened with seizure to facilitate private development. These properties are scattered through the state — from Long Island to Niagara Falls — but some municipalities have been serial offenders.

Take the village of Haverstraw, a heavily Latino community nestled on the Hudson River in Rockland County. Haverstraw was once home to the Empire State Chair Factory, whose final president, Andrew Kanner, closed the factory prior to his death in the mid-1990s. The Kanner family wanted to build housing on the vacated property; but the local government enlisted developer Martin Ginsburg and forged ahead with a separate waterfront-revitalization scheme that required the old factory site. After Ginsburg was unable to negotiate a sale agreement with the Kanners, village authorities condemned their property.

In furtherance of Ginsburg’s project, village officials also tried to use eminent domain to transfer a building from private owners to an affordable-housing agency — even though the private owners were willing to develop affordable housing. In June 2007, a New York appellate court ruled against the village, pointing out that “by exercising eminent domain, the Village achieves fewer affordable housing units for its residents and volunteers, whereas by not condemning the site, the Village would realize a greater number of affordable housing units.” This case represented a small triumph for property rights; however, New York lawmakers still need to enact broad safeguards against misuse of the Takings Clause. Their inaction since Kelo has enabled a raft of excesses.

When eminent-domain reform has been put to voters in the form of state referenda, it has proved overwhelmingly popular. The reason is simple: Eminent-domain abuse exemplifies the worst kind of corporate welfare — property rights and free markets are trampled in order to benefit private interests and boost the tax coffers of municipalities.

The reform movement has united an ideologically (and racially) diverse collection of activists and politicians. Recognizing the historic impact of eminent domain on black communities — the people displaced by mid-century urban-renewal projects were disproportionately black — the NAACP co-authored an amicus brief supporting the position of Susette Kelo. After the Supreme Court ruled against Kelo, Rep. Maxine Waters, a black liberal Democrat from Los Angeles, teamed up with Sen. John Cornyn, a white conservative Republican from Texas, to work on federal legislation aimed at curtailing eminent-domain abuse. Few issues in modern American politics have brought together such impressive bipartisan coalitions at the legislative and grassroots levels.

Just look at Mississippi. In early 2009, Magnolia State legislators passed a bill that abolished private-to-private eminent-domain transfers. The vote was 119 to 3 in the state’s house of representatives and 51 to 0 in its senate. The bill was backed by an eclectic mix of organizations, ranging from the Southern Christian Leadership Conference (which was co-founded by Martin Luther King Jr.), to the Mississippi Farm Bureau, to the Mississippi Loggers Association, to Grover Norquist’s Americans for Tax Reform.

Unfortunately, GOP governor Haley Barbour hyperbolically declared that the legislation “would do more damage to job creation and economic development than any government action since Mississippi rightfully began trying to balance agriculture with industry in 1935,” and he unsheathed his veto pen to preserve the status quo. A veto-override measure easily won the necessary two-thirds majority support in the house (the final tally was 101 to 19) but failed to reach that threshold in the senate, where the vote was 28 to 22.

Despite the setback in Mississippi and the dearth of progress in states such as New York, eminent-domain laws have undergone a serious makeover since Kelo. Before June 2005, abuse of the condemnation process was rampant across America. Today, it is far less common, and the worst exploitation is confined to a handful of states that have refused to adopt the proper reforms. As Bullock puts it, “Kelo is a classic example of losing the battle but winning the war.” The war is not over, he adds. But the shift in momentum over the past five years has been remarkable.