April 13, 2004
NEW LONDON EMINENT DOMAIN CASE AND PROPOSED LEGISLATION
By: Christopher Reinhart, Senior Attorney
You asked for information on the New London eminent domain case and how HB 5565 responds to it.
The New London eminent domain case involves a development plan area in New London of about 90 acres on the Thames River, adjacent to the proposed Fort Trumbull State Park and the Pfizer global research facility that opened in June 2001. It includes residential and commercial areas with about 115 land parcels and also includes the closed U.S. Naval Undersea Warfare Center and the regional water pollution control facility.
In Kelo v. New London, the Connecticut Supreme Court considered whether the condemnation of privately owned land by a private, nonprofit economic development corporation authorized to act under a development plan was a public use and whether it violated the federal and state constitutions (268 Conn. 1 (2004)). The development corporation will own the land and lease it to private developers who must comply with the plan. The court ruled that:
1. the redevelopment statute allows a city to acquire and improve unified land and water areas, and this does not limit the city to acquiring vacant land;
2. economic development can be a valid public use;
3. evidence supported the conclusion that the takings were primarily intended to benefit the public interest and not private entities;
4. the economic development plan had sufficient statutory and contractual constraints;
5. the city's delegation of eminent domain power to a nonprofit private economic development corporation was constitutional;
6. taking houses for land to build office buildings was not impermissibly speculative;
7. taking the houses but not a private social club did not violate the equal protection clause of the constitutions; and
8. the trial court gave insufficient deference to the legislative determination of necessity for taking houses on the parcel designated for park or marina support.
As introduced, HB 5565 would have allowed a court to consider methods other than fair market value to assign a value to property when it is taken for economic development purposes by a redevelopment agency. The Judiciary Committee reported out a substitute bill. That version of the bill prohibits a development or redevelopment agency from acquiring real property by eminent domain for a project that will be privately owned or controlled unless the property is vacant, abandoned, or unimproved. By law, the use of eminent domain by a variety of municipal and state agencies and authorities must follow the redevelopment agency procedures. It appears that the bill's changes would apply to those statutes as well.
TIMELINE OF EVENTS IN THE NEW LONDON PROJECT
The court in Kelo summarized the progress of the New London development project as follows.
1. The New London Development Corporation was established in 1978 to assist the city in planning economic development.
2. In January 1998, the state bond commission authorized bonds for Fort Trumbull area planning, to allow the development corporation to acquire property, and to provide funds for creating a state park.
3. In February 1998, Pfizer, Inc. announced it would develop a global research facility on a site adjacent to the Fort Trumbull area.
4. In April 1998, the New London city council initially approved a development plan and the development corporation began holding informal neighborhood meetings.
5. In May 1998, the city council authorized the development corporation to proceed.
6. The state bond commission approved more funds for the development corporation
7. In June 1998, the city conveyed property to Pfizer.
8. In July 1998, a consulting team was appointed for the environmental impact evaluation and to prepare the development plan. They considered six plans.
9. The development corporation board approved the development plan in early 2000 and the city council approved it. The plan received other required approvals as well. The city council authorized the development corporation to acquire property.
10. In October 2000, the development corporation voted to use eminent domain to acquire property from owners who were unwilling to sell their land.
11. In November 2000, the corporation filed condemnation proceedings.
12. In December 2000, the property owners challenged the condemnations.
As introduced, HB 5565 would have allowed a court to consider methods other than fair market value to assign a value to property when it is taken for economic development purposes by a redevelopment agency. Current law requires consideration of the property's fair market value, including evidence of environmental condition and required environmental remediation. By law, a court reviews the value assigned to the property when a property owner challenges the redevelopment agency's statement of compensation regarding the property.
The Judiciary Committee reported out a substitute for HB 5565 on March 22, 2004. This bill prohibits a development or redevelopment agency from acquiring real property by eminent domain for a project that will be privately owned or controlled unless the property is vacant, abandoned, or unimproved. It appears this restriction applies to the proposed use of the land at the time of the taking.
By law, the use of eminent domain by a variety of municipal and state agencies and authorities must follow the redevelopment agency procedures. It appears that the changes in these bills would apply to these statutes as well. These provisions include urban sites remedial action, neighborhood revitalization zones, and community development plans.