Connecticut College Magazine · Winter 2006


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A response to ´The Battle of Eminent Domain´ from CC´s former president

A response to ´The Battle of Eminent Domain´ from CC´s former president
Former Connecticut College President Claire Gaudiani ´66

In a letter to the editor, former Connecticut College President Claire Gaudiani ´66 shares her perspective on the battle of eminent domain as a board member of the nonprofit New London Development Corporation. She served as the volunteer president of the corporation for five years and remains on the board.

By Claire Gaudiani

Dear Editor,

The New London story was conveyed to the American public by the highly professional public relations power of the highly conservative Institute for Justice in Washington, D.C. That was their right to do and they had the funds to do it. The New London Development Corporation (NLDC) didn´t do any PR. The State of Connecticut had forbidden the corporation from spending money for PR. So, NLDC didn´t react publicly. Consequently, the full story has never been carried in the national press.

Stan DeCoster´s article [“The Battle of Eminent Domain,” Winter 2006] was mostly balanced except for inaccuracies due mostly to a misunderstanding of the facts. So, I will address these first, along with some facts for letter/e-mail writers, and close with a paragraph of personal reflections.

NLDC was not created by the city government. The NLDC was resurrected in 1998 after almost 15 years of dormancy by a highly diverse group of local citizens, including business, political, and non-profit leaders, doctors and teachers. Its board and membership recognized that the local government was not going to concentrate on the economic needs of the community to the extent NLDC members considered necessary. Without such concentration, taxes would just keep going up and services and quality of education going down. However, the article is right in that NLDC had done little before the 1998 Fort Trumbull project. But why is this? Simple. No money.

What made it possible for the NLDC to do something in this case was state funding that NLDC received when its first effort to bring new business to the city resulted in the decision of Pfizer to put its new $300 million building downtown in the fort area and not place it on a green space off I-95 in either Connecticut or Rhode Island. This decision was good for all taxpayers in Connecticut. Just the income taxes paid by the Pfizer employees in New London created a $26 million tax flow per year to Hartford. In less than six years, these funds paid off the state´s investment in upgrading New London´s very unhealthy waste-water treatment facility, its road improvement to the Pfizer facility, its environmental improvement of the Navy base at the fort and the refurbishment of Fort Trumbull as a state park, and other expenses, including the generous settlements on property transfers.

This is how cities recover and states remain able to do their share of “providing for the general welfare,” as it says in the Constitution, without going bankrupt. It is cooperation at all levels that creates a “hand up and not a hand out,” especially to poor communities.
NLDC´s primary focus was to relieve poverty in the city. As long as property taxes are the source of funds for pre-K to high school funding, poor cities will have poor schools, which stops the American dream from happening to a growing portion of Americans. This hurts our economy AND our record of social justice.

The article does state that most individuals sold willingly. Scott Sawyer´s comment that most were elderly and that they said, “… just get me what you can,” is misleading. In the first place, he did not represent the very large majority of the individuals. His representation has been limited almost exclusively to those few who chose the litigation path. There are two other key points about the fort area. One was the low percentage of owner occupied structures, and the second was the significant amount of disinvestment (inner city, landlord permitted decay) that was evident in the area. In short, the place was run down. Period. To paint another picture today is flat wrong.

Most facilities were rented, and renters got an excellent settlement as did owners. Some owners were renting out three and five and more apartments. Most were in pretty poor condition. Some owners had just moved to the area. [Homeowner Suzette] Kelo had bought her house in 1997. She kept that house during litigation but bought another in a nearby city in 2001 and has bought at least one other since! The “little people” in the New London story were and are the poor kids in the schools, 75 percent of whom, in 2000, came from families on federal assistance. How does their community give them a break? Who is their advocate?

What goes unsaid in DeCoster´s article, though, is that NLDC held more than 20 public meetings to discuss the Municipal Development Plan as it was going through the planning stages. Massive citizen input occurred. Further public hearings were held, first at Planning and Zoning and later just prior to the City Council vote to proceed with the project. In this latter meeting, clearly a key meeting, many, many citizens came and spoke directly to councilors. Individuals spoke in favor of the project 3-to-1 over those opposed. Quite a resounding citizen vote! The councilors voted to proceed 6-1, reflecting the majority will. We make these decisions by majority vote, as our laws provide. City councilors voted to give NLDC power of eminent domain, not used until the very last few property transfers.

The article also quotes folks, primarily those from the College, saying that “nothing has happened and, therefore, the project is bad.” The Fort Trumbull project is not yet a decade old. Good development takes time. A great deal has already happened and the plan as it is coming together today sports a luxury hotel, new housing, the new National Coast Guard Museum, the Coast Guard Research Station and the potential to capture a sizable share of future Homeland Security presence. There is no doubt that some small amount of taxable money has been lost during the length of time it has taken to move the project along, but what is coming will far outreach anything the old neighborhood could have ever generated. Property values in New London are up — and downtown is looking better than ever. Change is difficult — as we all know.

One student even wrote that there needed to be a “sure-fire” plan in place before demolishing properties, let alone the takings. That is in direct violation of Connecticut law, so it could not be done. This is an example of individuals not knowing the facts or in some cases not wanting to look at the facts. The NLDC followed every jot of the Connecticut law on planning.

The article mentions a backlash against eminent domain nationally. It is spotty. Yes, there has been a backlash in states such as Texas, where land for development is anything but scarce. Still, an exception will probably be made and eminent domain will be used to make it possible to construct a new stadium for the Dallas Cowboys. And, even in Connecticut a local community recently passed an ordinance against the use of eminent domain, but this was a rural community with copious amounts of land for development. Even then, one of the town officials is reported to have said that if someday the need for the ordinance is deemed imprudent, it can be addressed at that time.

Few people are familiar with the plight of New London and its children. The facts are that the children of New London are being victimized by the inability of the community to provide for their basic needs. This inability is driven by the lack of a sound tax base, which in turn is affected by a tremendous amount of disinvestment in existing real estate. This disinvestment was prominent in the Fort Trumbull area, making it a prime area for a makeover. The chance availability of the former Navy sound lab site just enhanced the opportunity at Fort Trumbull. Largely because three colleges and the government hold half of the city´s land, only 50 percent of the property in New London yields taxes (which are needed for the basic services mentioned above). Some areas of the city have suffered from decades of disinvestment. New London is less than six square miles in size. If only three square miles of that property is taxable, how is the community to provide for its children without doing something to increase the tax base? And not by just a little, but by a lot! These are the facts. Responsible management by the local government requires cooperative action.

Refusing all eminent domain says that all property will be frozen in the hands that currently own it, regardless of its condition or its contribution to the community. No cities could evolve and build new hospitals, museums or colleges for that matter with such a strict reading of law. Local communities need to be able to shift ownership after wide discussion and majority votes and appropriate and extra fair remuneration to those displaced by the majority will. That is what our Constitution says.

The state law was carefully minded as the taxpayers of the state were paying for these efforts to strengthen New London´s tax base. The great majority of the Fort Trumbull properties were sub-standard as determined by an independent consulting firm, which performed a property-by-property analysis within the project area. Still, recognizing that this project would be disruptive to those affected by it, a decision was made at the beginning to pay residents the maximum amount for their holdings as permitted by law.

To that end, NLDC had two appraisals done for each property, by two highly respected appraisal firms, and paid the higher of the two resulting values for the property to each property owner. A comparative sales approach was used for these appraisals. This means that the sale price was determined by looking at comparable properties throughout New London. All comparable property sales within New London were considered, which alone would tend to drive the value up for the Fort Trumbull sites because it tended to remove the potential strong influence of the location of the appraised property in such a rundown area.

This was the basis for the “fair market” value that was offered to each resident. For those residents who responded favorably to the offer at the time, it was sufficient money to purchase a replacement property of like value somewhere else in New London. Some of the individuals took the opportunity presented to move elsewhere, particularly to surrounding towns, where property values are not so high and taxes are considerably lower.

For those properties taken by eminent domain, this was the approach used to determine the sums of money deposited with the court as part of the taking. Today, that money is insufficient to purchase a like property in New London because the property values in New London have risen. Recognizing this fact, the state has agreed to pay a premium to the remaining individuals living in the Fort Trumbull area to assist them in easing the burdens of relocation now.

This entire discussion omits the additional money paid to each resident for the explicit purpose of relocation. All moving costs are paid, all fees required to disconnect and reconnect utilities at the old and new residence are paid, and a homeowner is given an additional flat fee of $15,000, over and above the fair market value of the property and the other relocation costs. If you were a renter in the project area, you would receive up to $4,500in addition to the various relocation costs to assist you with the move.

All in all, not bad. Not that money solves all problems of relocation, but thinking of the greater good of the community and the need to build a stronger tax base to help the real “little people,” I have always believed this to be a very fair settlement process. Unfortunately, those who remained in the project area and chose to fight the taking in court may have a tougher time obtaining replacement property in New London. However, most of this property is rental property, not individually owned-and-occupied structures. Still, everyone still there will benefit by the decision of the state to offer them a premium to move on peacefully.

Another little known fact is that throughout the period of litigation, those owners with rental property continued to rent out the apartments, reaping a great amount of money (one person made over $500,000). The city and state are willing to forget this gain to these individuals, which rightfully belongs to the city as the beneficial owner of the property, again as part of the global settlement.
Finally, let me share a reaction sent to me by one of the NLDC members who read the CC: Magazine article. This person begins by quoting the article: “It says: ´Among the students, I don´t see a whole lot of sympathy for the city of New London in this.´ I believe a part of this feeling, and I cannot quantify it, is that the city has chased the College back up the hill. They have done little, if anything, to make the city a ´college town.´ And, with three colleges in town (who do not pay taxes), taking some advantage of the tremendous disposable income those students possess only makes sense. But, evidently not so to the city leaders.”

This person goes on:
I think that the impact of the NLDC being denied the opportunity to have a public voice in these eminent domain matters has led to the misinformation that prevails in articles such as this. For the most part, the individuals quoted said what they thought, but one can only speak from the basis of one´s own knowledge. If one does not know the facts, one cannot be expected to speak with founded authority. It is merely opinion. And everyone has one. One of the disappointing issues to me is that the individual students at CC who have written papers on this topic have never come to the NLDC for information. I do not know if they took it from the newspaper, or if they had another source, but they are misinformed on the facts. College is supposed to teach you that. It is not the A´s or B´s that the student gets that are important; it is learning how to do research and form meaningful concepts and opinions. If they do not avail themselves of the sources available, and publish an article on a topic, shame on them. Either the college has failed, or they have failed the College.
I include this because the real story of this project is both still unfolding and has never been well investigated. It will be someday. I am glad it has had this airing in CC: Magazine.

I expect to come back to my 50th reunion and stay in the hotel at Fort Trumbull and hear that the New London schools are rated in the top quarter of the high schools in the State of Connecticut. That the job training and parent leadership training programs started by NLDC and the homeowner training and home building for low-income, first-time homeowners that NLDC did were an early part of a turnaround for all the people of New London. I hope by then the improvements in New London´s tax base that NLDC led at Fort Trumbull will be an asset to citizens at all income levels and to Connecticut College as well.

When I was president of the College, I often said that in America, the cities with liberal arts colleges in them should be the first to create opportunity and justice for all of their citizens, poor and rich. These should be the first cities to make the American Dream accessible to all — not just for the already comfortable. Liberal arts colleges have the intellectual forces and the moral ambition to press on to make ideals realizable. I still believe that.

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