Private Property Study Release: 10-7-2009

New Report Documents Widespread Eminent Domain Abuse Across New York State



WEB RELEASE: October 7, 2009
Media Contact:
John Kramer (703) 682-9320

[Private Property] 


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Arlington, Va.—New York is one of the worst states in the nation when it comes to abusing eminent domain for private gain, according to the Institute for Justice, which tracks such abuses nationwide.

The Institute for Justice, which litigated the infamous Kelo eminent domain case before the U.S. Supreme Court, today released a report that documents example after example where government officials across the Empire State used eminent domain not to create projects that would be owned and used by the public—such as a courthouse or post office—but, rather, to create private development that would financially benefit politically powerful private developers.

The report, “Building Empires, Destroying Homes:  Eminent Domain Abuse in New York,” states, “Over the past decade, a host of government jurisdictions and agencies statewide have condemned or threatened to condemn homes and small businesses for the New York Stock Exchange, The New York Times, IKEA, Costco, and Stop & Shop.  An inner-city church lost its future home to eminent domain for commercial development that never came to pass.  Scores of small business owners have been threatened with seizure for a private university in Harlem and for office space in Queens and Syracuse.  Older homes were on the chopping block near Buffalo, simply so newer homes could be built.  From Montauk Point to Niagara Falls, every community in the Empire State is subject to what the U.S. Supreme Court has accurately called the ‘despotic power.’”

A copy of the report is available at:   http://www.ij.org/BuildingEmpires.

In addition to documenting examples of eminent domain abuse across New York, the report also spotlights problems in New York state law when it comes to eminent domain and suggests solutions the courts and the Legislature can implement to ensure everyone keeps what is rightfully theirs to own.

The report warns, “New York law not only makes it easy to condemn property, it actively encourages city agencies to do so.  A variety of incentives are in place to motivate cities to create redevelopment zones, and to invite private developers to use government force to obtain the private properties contained in them, instead of negotiating in the free market.  In this perverse system, city agencies and private developers are actually encouraged to team up together against local property owners.”

There may, however, be hope for New York property owners.  New York’s Court of Appeals—the state’s highest court—will hear a case in Albany on Wednesday, October 14, at 2 p.m. that could finally offer property owners in the state some much-needed protection for the unholy and powerful alliance of tax-hungry government and land-hungry developers.

The case—Goldstein v. New York State Urban Development Corporation—challenges New York’s controversial use of eminent domain to hand privately owned businesses and homes in Brooklyn over to private developer Forest City Ratner as part of the Atlantic Yards development.

The Goldstein case will be the first time New York’s highest court will consider limits on the use of eminent domain since the infamous 2005 Kelo v. City of New London eminent domain case before the U.S. Supreme Court, which allowed eminent domain for private development and sparked a nationwide backlash.  The Institute for Justice, which represented the property owners in Kelo, filed a brief in support of the Goldstein property owners and released a statewide analysis documenting how bad the issue of eminent domain has grown in the Empire State.

“If you own a piece of property in New York, you should care deeply about a case about to be argued before the state’s highest court,” said Dana Berliner, a senior attorney with the Institute for Justice.  “Other people’s land has become just one more political favor to be passed out.  In recent years, New York lower courts have turned a blind eye to the enormous benefits to private developers, outrageous behavior on the part of government bureaucrats, and even blatant evidence that the project will be a miserable flop.  If owning a piece of property is going to mean anything, it is imperative that New York’s high court stop this abuse once and for all.  They have that opportunity with the Goldstein case.”

Eminent domain apologists often point to New York City’s Times Square as the best example of the glitzy success that can be achieved through eminent domain for private gain.  But the government official who headed up that project and who directed the use of eminent domain there recently published a report with the Institute for Justice in which he states, without equivocation, that eminent domain actually caused Times Square to further decline.  Only when government got out of the way to let in true private development, he writes, did Times Square grow into the success story that it is today, said William J. Stern in his April 2009 report, “The Truth About Times Square.”  (For a copy of the report, go to:  http://www.castlecoalition.org/1239.)

“New York is one of only seven states nationwide whose legislature has utterly failed to pass any kind of eminent domain reform in the wake of Kelo,” explained Institute for Justice Staff Attorney Robert McNamara.  “With no hope coming from their legislators, New Yorkers must now look to their courts for protection from an eminent domain system that has flown entirely out of control.”

“The rate of eminent domain abuse in New York is simply staggering,” said Christina Walsh, the Institute’s director of activism and coalitions.  “We have worked with property owners statewide to fight the most egregious abuses, but state and local government officials seem to have no limit on their ability to dream up ways to abuse eminent domain.”

“The right to own your home or your small business is absolutely central to the American dream,” said Chip Mellor, the Institute’s founder and generally counsel.  “New York bureaucrats have been steadily chipping away at that right for decades.  The Goldstein case provides the perfect opportunity for the state to begin reversing that process.”


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