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April 15, 2010
Mayor Battles Vornado in Boston
The Wall Street Journal
by Christina S.N. Lewis
Here's an unlikely twist — the mayor of a big U.S. city using the threat of eminent domain against (mega)developer blight!
Real-estate mogul Steven Roth is widely respected as the chairman and driving force behind Vornado Realty Trust.
But not in Boston.
The city's mayor, Thomas Menino, sent a scathing letter to Mr. Roth last month in which he threatened to have the city seize a major development site from a Vornado-led group for failing to build there in a timely way.
The mayor's threat represents a new front in the use of "eminent domain," a legal process under which private owners can be forced to sell their property to a city or state to make way for a project in the public interest. The tactic is often viewed as a bane to small, private owners and a boon to cities and developers. But in this case, Boston is threatening to use the process to force a developer to build—and being hailed by the public for it.
Roth has admitted publicly letting past project sites lie fallow in order to force cities to up their subsidy offers.
The New York Observer quoted Mr. Roth as saying at a lecture at Columbia University, "Why did I do nothing? Because I was thinking in my own awkward way that the more the building was a blight, the more the governments would want this to be redeveloped, the more help they would give us when the time came."
Mr. Roth also said that he was waiting for the "price to go up a lot" before he built, according to the article.
...The controversy doesn't appear to have hurt Mayor Menino. He turned a former political liability into a gain, and the public and local businesses are now backing his unconventional approach.
NoLandGrab: Here's hoping that Menino is sincere, and that this isn't all some charade to further line Vornado's pockets. In fairness to the Boston mayor, it does sound like he's serious.
Posted by eric at April 15, 2010 12:56 PM