Lessons in property rights from New London’s plight


Shelter Islanders, more than the average American it seems, take an interest in government decisions that impact individual property rights. Island neighbors will let the Zoning Board know when a variance request encroaches on their perceived property rights, to be sure. Legislating an affordable housing protocol for this community took years and multiple, often impassioned public hearings. The recent Dark Skies legislative effort by the town showed that even the shielding of a glaring light will meet with opposition if it is perceived as an unnecessary government intrusion into private property.


While we focus on local rights issues, those rights can contract and expand, often uncomfortably, in the federal courts. The rights of every American homeowner took a hit when the U.S. Supreme Court ruled in 2005 that the city of New London, Connecticut had the right to seize homes adjacent to a Pfizer corporate complex for a proposed economic development project. The Supreme Court decision, Kelo v. New London, spurred 43 states to change eminent domain legislation to better protect homeowners’ rights should local governments be tempted to take property on the promise of big economic returns.


Last month, Pfizer announced it will close its New London facility. The land where the Kelo home once stood is an abandoned lot adjacent to what will soon be an abandoned business complex. The Supreme Court upheld the taking because New London had established that its overall plan for the property would “provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue.” 


One of the reasons cited for Pfizer’s departure from New London, announced after the company merged with Wyeth Pharmaceuticals, is the end of a sweetheart tax deal that allowed Pfizer to pay on only 20 percent of the assessed value of its property. Pfizer’s tax bill is set to more than quadruple in 2012.


No economic returns will ever be realized by the taking of the Kelo home. The City of New London has lost millions in unrealized taxes and now has lost, not gained, 1,400 jobs.


New London’s legal opponents argued that the taking was not in the public interest but for the private benefit of Pfizer and, therefore, unconstitutional. Although the Court did not vindicate them, reality did.


This cautionary tale has no happy ending but many lessons. Local government can never guarantee economic returns fueled by private commerce and should never take land against the will of a private homeowner based on that pie crust promise. The Supreme Court justices should have known better. We hope they do now.


Another moral of the story: your Constitutional rights are only as certain as your local government officials — be they New London city council or Shelter Island Town Board members — consider them to be.