The New London Case: WHAT DEERFIELD BEACH CITIZENS CAN DO TO PROTECT THEIR HOMES - 06/30/05

Homeowners in Deerfield Beach are understandably concerned about the U.S. Supreme Court decision in Kelo v. New London. The majority embraced a broad interpretation of the concept of "public use" as it pertains to a state's power of eminent domain.

People who own property within a redevelopment district may have special cause for concern because the fact that the houses targeted in the New London case were to be taken pursuant to a comprehensive plan for redevelopment was a supporting point in the Court's opinion. (It was not a random taking.)

Presumably, properties in a CR area would be of greatest interest to developers and public development agencies, although the decision can be applied conceptually to almost any property within or without a CR area, as well as to personal and intellectual property.

The New London, Connecticut, case set off a wave of editorial criticism and calls for legislation. Property rights advocates hoped that the Court might go in a different direction with this case because the constitutional limits on the use of eminent domain for economic development, if any, had been obscured by the evolving "public purpose" doctrine.

Addressing the Supreme Court decision, Florida Attorney General Charlie Crist stated that Florida law affords greater protection of property rights than Connecticut. "Under Florida law, only if property is designated as a blighted area can it be taken through the extraordinary power of eminent domain for redevelopment, and then only if it would primarily serve a public purpose."

Crist said that "eminent domain is not available in Florida if the benefit to a private party is the paramount purpose of the project. While it is usually true that every new business, manufacturing facility or industrial plant will provide some benefit to the city in which it is located, under Florida law these benefits to the public are not sufficient by themselves to allow for the taking of private property. [emphasis added]

"Florida law allows for the taking of private property for redevelopment purposes only where there exists a substantial number of deteriorated structures, economic distress or danger to life or property, as well as other additional requirements. In short, an area must be proven to be 'blighted' before government can begin the process of taking private property for private redevelopment."

States have the inherent power to take private property for a clear public use, such as roads, schools and parks, which are generally publicly-owned facilities. Roads, education, parks and water supply are legitimate governmental functions. "Public purpose" became the key phrase as the Court held that eminent domain could be used to acquire rights-of-way for public utilities and railroads, which are usually privately owned entities in the United States. It was the only practical means. There have always been tensions in constitutional law between the needs of commerce and personal liberties.

"Public purpose" was further extended when governments got into slum reclamation. Redevelopment of blighted areas could serve a public purpose, the courts said, even when the property would eventually be transferred to another private owner. An example of this would be slum converted to affordable housing that could be purchased by low-income people.

The only thing that distinguishes the latter example from the New London case is that the reclamation in New London was not of a slum, by any common definition, but a well-kept middle class neighborhood; and not for the specific benefit of the residents of the neighborhood, but for the building of an upscale hotel project. Local officials decided this served a "public purpose" because it would create jobs and additional revenues for the city.

The prevailing jurisprudence holds that the definition of a slum or blighted area is a legislative determination, not a matter for the courts. There is no constitutional basis for saying that a tenement slum in an urban area is a slum and that Deerfield Beach is not.

So once the Supreme Court allowed cities to use eminent domain to reclaim "slum" areas, it opened the door to virtually any project aimed at economic development. States and local authorities had the power to decide what projects would be useful to their jurisdictions. Moreover, there is no operable constitutional distinction between a scum-bag slum lord and a hard-working middle class person like Mrs. Kelo -- both own property that local governments decided could be put to better use for the "public good."

Those who defended the rights of property owners in the New London case argued that there are valid distinctions based, for example, on the probability that the hoped-for public benefits would actually occur. Obviously, the prospects for any reclamation project or any project for which property is taken for a clear public use, let's say a road, are different from a business venture which entails most of the usual business risks. Unless a public road goes from nowhere to nowhere, there is a good chance the road will be used by the public. But the supposed public benefits of building a hotel on Kelo's land is less assured. Unless the hotel is profitable and sustainable as a business, the projected economic benefits will not be realized and Kelo and her neighbors will have been deprived of their homes for no actual "public purpose."

The fact that no such distinctions apparently exist in federal constitutional jurisprudence does not mean that states and local governments cannot establish limits on the use of eminent domain for economic development or, for that matter, for clear public uses. Furthermore, what are "permissible" uses of eminent domain and "abuse" of the eminent domain authority is partly a matter of public perception which may be a catalyst for political action. In the end, the Kelo v. New London decision notwithstanding, voters can remove local and state governments that are perceived as abusing the rights of citizens.

The only reason that Mrs. Kelo is facing confiscation of her property in New London and a property owner in Hollywood, Florida, is facing condemnation proceedings against his building to make way for a condominium project in its CR area, is that redevelopment plans have been made which may require, and political authorities in those towns are willing to use, eminent domain to implement them. Redevelopment plans in New London, Hollywood and Deerfield Beach were not brought down from a mountain engraved on stone tablets by messengers of God, but were drafted and approved by elected public officials.

When the CR plan was developed for Deerfield Beach and the CRA established, there was little vocal public opposition to it, but there could have been. CRAs are supposed to be created for the reclamation of "blighted" neighborhoods plagued by crime and disease (i.e., slums), and the main beneficiaries of redevelopment, as we understand the law, are supposed to be the residents of the neighborhood. Was this a description of the beach area?

The public had no direct say-so in the approval of the CRA plan, but acquiesced. This is probably the history of most of the CRAs established in the beach towns.

On the other hand, many people like what has happened in the beach area partly as a result of the CR plan. They've given little or no thought to how beach residents have been affected or to the long-term implications of short-sighted policies for the rest of the community. It has yet to be seen whether the decision in the New London case or the Hollywood matter will galvanize public opinion in a different direction against aggressive government-sponsored redevelopment whose success depends on strong-arm tactics, such as direct confiscation of property or confiscatory taxes.

There is a clear difference between a land use change which occurs "naturally" by the forces of economics and redevelopment that is politically inspired and enforced through instrumentalities like the CRAs.

This having been said, there may be ways to protect the rights of homeowners whose houses are in harms way. Citizens' Bills of Rights could be incorporated into local charters, or into state laws and constitutions, prescribing limits to eminent domain authority by local redevelopment agencies. Redevelopment policies could be reformed so that the use of eminent domain is not part of the plan and, of course, pro-development officials who support eminent domain to achieve narrow economic development goals or special interests could be put out of office.

Most of the redevelopment which has occurred since 1999 in Deerfield Beach could have happened without a CRA or CR plan, anyway. Eminent domain has not been used, so the issue of using it in the way seen in the New London case is hypothetical. Still, we can think of possibilities based just on the known plans for the CR area in Deerfield Beach.

The Reason Foundation is a "nonpartisan public policy research [group that] promotes choice, competition, and a dynamic market economy as the foundation for human dignity and progress." Its stated "mission is to advance a free society by developing, applying, and promoting libertarian principles, including individual liberty, free markets, and the rule of law." The Reason Foundation has produced a useful study of redevelopment policy entitled Eminent Domain, Private Property, and Redevelopment: An Economic Development Analysis. The authors are Samuel R. Staley, Ph.D. and John P. Blair, Ph.D.

As suggested on this web site, public redevelopment policy which sets its sites to changing land uses in an area is a form of central economic planning. Central planning, whether its purpose is to direct land uses or the production of goods, is an economic system not consonant with "choice, competition, and a dynamic market economy." It should come as no surprise that when redevelopment authorities operate under a sort of Hegelian idealism in which political institutions become indispensable instruments of progress, property rights are redefined and subjugated to larger social goals. This is in essence what has happened in the evolution of eminent domain law. For this reason, the Kelo v. New London decision may serve as a kind of wake up call and stimulate reform in the way local and state governments approach the issues of growth and redevelopment.

Staley and Blair's paper for the Reason Foundation recommends that urban policymakers "focus on the achievable, not grand visions for change, transformation and redevelopment" as a step toward reformation of redevelopment policy. This web site would take this idea further and propose that the city get out of redevelopment altogether and refocus on the fundamental responsibilities of municipal government to protect the health, safety and welfare of the community.

Staley-Blair recommend other reforms in public policy which include:

-Providing leadership that is focused and transparent to create accountability.

-Respecting the rights of all citizens, not just those able to access the political process.

-Encouraging voluntary and incremental redevelopment to build a strong foundation for future development by securing property rights for a broad-based citizenry and business community, not those with political access to economic development initiatives.

-Rigorously evaluating blight determinations to limit the arbitrary and often capricious use of eminent domain to serve narrow public and private interests.

These reforms are consistent with the recommendations on this web site for ethics reform, a Citizens' Bill of Rights, and new leadership at City Hall. A couple of points:

In a previous article we wrote: "The key is political reform at two levels. First, a new set of public officials must be brought in who are not influenced by developer and other special redevelopment interests and are willing to take a more balanced or modulated approach to this issue." Second, we stated, "structural reforms" are needed in the CRA and city government.

The conventional wisdom is that the CRA cannot be abolished at this late date and we have adopted this position for the time being, but not necessarily for all time. However, we believe that the administration of the CRA as part of a process of structural reform, including the direction of planning and policy, could be shifted away from developers and special interests to the welfare of the citizens most impacted by the activities of the CRA. We have suggested that structural reform include "Creation of [a] representative body of citizens most directly impacted by new construction at the beach [not to include developers]. This body cannot legally be vested with control of the CRA, but its findings, determinations, and recommendations must be given considerable weight in practice by city officials and the city commission."

We have also recommended "Impact analysis of all proposed construction, requiring all proponents to mitigate directly the impact of their projects as a pre-condition to approval."

Our proposal is not for a House of Lords but for a simple committee of residents who live in the CR area who would evaluate how a proposed construction would impact the neighborhood. We believe that if proponents were required to show how they would mitigate adverse impacts at their cost, it would change the economics of redevelopment enough that developers would be less inclined to plan "overdevelopment" projects and more inclined to conform to the established guidelines.

Reforms along these lines and as suggested by Staley-Blair will not occur, however, without new leadership in city government with a different orientation on the issue. The March, 2005, election resulted in three new faces on the city commission, but not necessarily a dramatic shift in philosophical position with respect to beach redevelopment and other reforms like a code of ethics. The city manager and the mayor form the "pro-development" axis in city government of which Mr. Trinchitella was a member. Gonot has been pro-development generally and Popelsky was also, as a Planning & Zoning Board member. These terms are a bit nebulous, but by "pro-development" we mean a public official or board member who is willing to give considerable latitude to developers in their proposed schemes, resulting in what some people call "overdevelopment."

This web site has eschewed the term "anti-development" because it is not accurately descriptive of any position in the debate. What some people want is development to occur within a reasonable set of rules established to protect adjacent residents and the community as a whole. They want to give citizens a voice in major decisions, to the extent they are interested, especially when city-owned property is involved. They want the rules or guidelines to be stable and not subject to change merely to accommodate a project. They hope that twenty or thirty years from now Deerfield Beach, the beach area itself, will be a nice place to live and to go and not a row of empty storefronts and burned out restaurants.

But the elections of 2005 and the events that occurred after the installation of the new commission with respect to the city manager show how difficult it is to achieve the new leadership and needed reforms which will make it less probable that the city will engage in the future in the type of actions we saw in New London, Connecticut, or in our neighbor Hollywood, Florida. It is clear that the business-developer sector is still the most influential political faction and will no doubt exert extraordinary effort and pressure on the commission to keep Mr. Deetjen as city manager.

Given Deetjen's political style and unprofessional behavior, as well as his inclination to operate secretly, significant reform is not achievable. Within this commission term there will be efforts to reinstate term limits and enact a code of ethics, but these initiatives cannot be assured success if the "pro-development axis" continues to hold sway over the commission.

On the other hand, the impact of redevelopment and the evolving jurisprudence redefining property rights in favor of powerful developer interests could stimulate more political action and citizen initiative for reform. Over the past few years, political action by citizens has been effective in Deerfield Beach.