Some of you may recall this case, which went all the way to the Supreme Court and resulted in one of their many controversial 5-4 decisions. But the real irony is in the ending.
Back in 2005, pharmaceutical company Pfizer asked the City of New London, Conn to bulldoze a neighborhood. Pfizer had built a research facility and didn’t want it surrounded by a blighted neighborhood. The land would then be used by developers to build hotels, health clubs, and new condominiums. As one Pfizer executive put it “Pfizer wants a nice place to operate. We don’t want to be surrounded by tenements.” The city was only too happy to agree, doubling down on an 80% property tax abatement they had already given Pfizer to build the facility.
The homeowners in the neighborhood fought back, sparking a legal battle that made it to the Supreme Court. The issue was whether “eminent domain” could be used to benefit private commercial development. The Fifth Amendment allows the government to force people to sell their property, but only when it is “for public use”, such as for building roads, firehouses, libraries, or parks.
But five justices – John Paul Stevens, Stephen Breyer, David Souter, Ruth Bader Ginsburg, and Anthony Kennedy – ruled against the homeowners and the bulldozers tore their homes down. Note that even though three out of five of these justices were appointed by Republicans, they are generally considered liberal (with the exception of Kennedy, who is often the swing vote on many cases).
After that, the story dropped out of the news? So what happened?
Well the great recession happened in 2008. A reporter for the conservative Weekly Standard went back to the neighborhood last month and found an empty 90 acre field with waist-high weeds, entirely uninhabited. The surrounding city is even more desolate than it was. Indeed, Pfizer abandoned their new research facility a year later (only 8 years after they had built it).
The Weekly Standard presents this as a conservative v. liberal tale, and they are not entirely off base. After all, it isn’t very often that I’ve agreed with every last conservative justice on the Supreme Court. But I think it is more complicated than that. It is also about greed, as the redevelopment was strongly supported by rich homeowners in New London, who hoped that building upscale hotels and condos would widen the tax base and thus reduce their high property taxes. It is also a story about the politically powerful — the only building spared from the bulldozer was a private social club for eastern Connecticut’s political elite.
To me, the biggest problem was something I’ve harped on before. Giving huge tax breaks to big businesses to move to a city (in the name of creating jobs) is a complete waste. It ought to be outlawed. Big businesses don’t create jobs, so all this does is move jobs from one place to another, while at the same time bankrupting cities.
Government is not always the answer, but Reagan was also wrong, it is not always the problem. Government should do what it does best, which is create good infrastructure. The jobs will follow.
However, I really do think the liberals on the Supreme Court got this one wrong. But I’ve always claimed that I am a moderate.