No Land Grab

Home economics

Interest has intensified since last June, when the U.S. Supreme Court ruled that officials in a seaside Connecticut city could raze a woman's home to make way for a pharmaceutical research plant.      The court, which long ago affirmed invocation of eminent domain for public works, set a new precedent in Kelo v. New London by approving a private project that officials argued would rejuvenate an economically depressed area.

In Washington, Congress is threatening to cut some forms of federal funding to any local government that uses eminent domain on behalf of a private developer. A bill that passed the House last fall could cost New York City $240 million a year, and other municipalities throughout the state could lose a total of $60 million. The New York state Legislature is also considering clamping down. Assemblyman Richard Brodsky, a Westchester Democrat, has submitted a bill that would reinforce individual property rights. "Nobody who's a victim of eminent domain likes it," Mr. Brodsky says. "After the ability to execute and incarcerate, this is the third-biggest power we give to government."

The Bloomberg administration, which is trying to jump-start dormant or underdeveloped neighborhoods, has a lot at stake in the proposed congressional ban. Land takings are involved in some of the most prominent developments in the city. The list of projects includes the New York Times Co.'s new headquarters on Eighth Avenue, Hudson Yards on the far West Side, Columbia University's expanded campus in West Harlem, Atlantic Yards in downtown Brooklyn, and Willets Point and downtown Jamaica, in Queens.

The little guys

In the Atlantic Yards project in Brooklyn, developer Forest City Ratner has reached deals to buy out many residents and business owners whose property it needs. But Daniel Goldstein, who owns a condominium on a block that Forest City wants to use for a basketball arena, refuses to sell. He says he will hold out as long as it takes to make the point that big developers should not benefit at the expense of individuals.

A locksmith who was displaced in Times Square by the New York Times project says that business has dropped in his new location two blocks away. Taghi "Teddy" Pazooki says his relocation cost him $60,000. He resisted the state's offer for seven months but finally settled for $14,000. After paying lawyers' fees and taxes, Mr. Pazooki was left with $4,000. Lisa Bova-Hiatt, deputy chief corporation counsel for New York City and the lawyer who handles all eminent domain takings, concedes that the process can be unpleasant. "Nobody wants to have their property acquired through eminent domain, but [government] always has the right to take it for a valid public purpose," Ms. Bova-Hiatt says. The process here has built-in safeguards, she says.

These protections include the requirement that the city successfully argue that an area is economically blighted before it seize land and turn it over to a private developer. A Kelo-type seizure could not happen in New York, she says. Ms. Bova-Hiatt argues that the use of eminent domain has resulted in enormous public good over the years. For example, she says the MetroTech office complex in downtown Brooklyn began the transformation of a district that was in a downward spiral and helped the borough attract its first large hotel in 30 years.

Many of New York City's most valuable development accomplishments--Lincoln Center, the World Trade Center, Stuyvesant Town, the restoration of Times Square--involved some degree of private pain, Ms. Bova-Hiatt says. "These are not the results of a municipality running wild," she adds. Mr. Victor, of course, believes that his dream of a power plant on the Brooklyn waterfront qualifies as a vital, beneficial project and that it is being blocked only by the city's heavy hand. "I am offended," he says. "Everybody in my industry has seen how I've been treated. None of them wants to come to New York City."

HOW IT WORKS

The nation's founders, having declared their independence from a grabby king, felt strongly about the government's power to seize people's property. The Fifth Amendment of the Constitution makes it plain: The government shall not take private property without "just compensation." Here's a summary of the legal process governing the practice in New York state today. Compensation An independent appraiser is hired to set a price based on the property's present value, not on how valuable it might become.

Urban renewal

When eminent domain is used to create economic development, an independent planner must determine that the area at issue is blighted. Notice The government must serve notice to the property owner. Until 2004, officials could simply place a legal notice in a newspaper. They must now mail a letter directly to the owner. Review under city law City takings go through the Uniform Land Use Review Procedure. Public hearings are held at which anyone, including the property owner, can testify, though each person's testimony is limited to three minutes. Ultimately, the City Council, and sometimes the mayor, must approve the taking.

Review under state law State actions go before the Empire State Development Corp. and the Public Authorities Control Board. The latter includes representatives of the governor, Senate leader and Assembly speaker. Both ESDC and the control board must hold public hearings.

Court review After a taking by the city or the state is approved, property owners can object that they are not being offered enough. Objections are heard by the Appellate Division, a panel of state Supreme Court judges who review the public hearing testimony and make a final decision. No live testimony is allowed, and there is no jury.