new york state assembly public hearing on eminent domain, transcript, 11/4/05

EN-DE REPORTING SERVICES 212-962-2961

NEW YORK STATE ASSEMBLY

PUBLIC HEARING

ON

EMINENT DOMAIN

ASSEMBLY STANDING COMMITTEE ON JUDICIARY, ASSEMBLY STANDING COMMITTEE ON CORPORATIONS,

AUTHORITIES AND COMMISSIONS, ASSEMBLY STANDING COMMITTEE ON LOCAL GOVERNMENTS AND ASSEMBLY

STANDING COMMITTEE ON GOVERNMENTAL OPERATIONS

Assembly Hearing Room 250 Broadway, 19th Floor New York, New York Friday, November 4, 2005 10:40 a.m.


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COMMITTEE MEMBERS: ASSEMBLYWOMAN HELEN WEINSTEIN, Chair ASSEMBLYMAN ROBERT K. SWEENEY, Chair ASSEMBLYMAN RICHARD BRODSKY, Chair ASSEMBLYWOMAN ROANN M. DESTITO, Chair ASSEMBLYMAN DANIEL O’DONNELL ASSEMBLYMAN CHARLES D. LAVINE ASSEMBLYMAN MARK WEPRIN ASSEMBLYMAN ROGER GREEN


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LIST OF WITNESSES MICHAEL CARDOZO NYC Corporation Counsel . . . . . . . . . . . . . . 8 LISA BOVA-HIATT, Deputy Chief NYC Corporation Counsel . . . . . . . . . . . . . . 19 KATHRYN WYLDE Partnership for New York City . . . . . . . . . . . 61 SCOTT BULLOCK Institute for Justice . . . . . . . . . . . . . . . 84 JOHN ECHEVERRIA Georgetown Law and Policy Institute/NRDC. . . . . . 92 PHILIP WEINBERG, Professor St. John’s University. . . . . . . . . . . . . . . 154 MINDY FULLILOVE, Professor of Psychiatry Columbia University . . . . . . . . . . . . . . . . 157 DANIEL GOLDSTEIN Develop Don’t Destroy Brooklyn. . . . . . . . . . . 189

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4Hearing on Eminent Domain –11-4-05

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CHAIRWOMAN WEINSTEIN: Good morning to

everyone. This is the hearing on the exercise of

eminent domain in New York State. I’m

Assemblywoman Helene Weinstein, Chair of the

Assembly Judiciary Committee. I’m sponsoring

this hearing, along with, on my left, Assemblyman

Brodsky, Richard Brodsky, Chairman of the

Assembly Standing Committee Corporations,

Authorities and Commissions. Also, co-chaired by

Assemblyman Sweeney on my right, Chair of the

Assembly Committee on local governments. These

series of hearings are also co-chaired by Roanne

Destito, the Chair of the Governmental Operations

Committee who, because of scheduling conflicts,

will not be able to join us today. We’re also

joined by one of our colleagues, Assemblyman

Roger Green from Brooklyn.

The central purpose of these hearings is

to examine the various issues raised by the

recent decision of the Supreme Court in Kelo v. 21

New London and whether, in light of this

decision, legislation should be enacted in New

York to further regulate the power of eminent

domain. I think most people know that the

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Kelo 25

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decision reaffirmed the power of local

governments to seize private property for

economic development purposes. The Court also

approved the longstanding role of the State

Legislatures to restrict or expand this grant of

authority. The Committees look forward to

receiving testimony on the issues surrounding the

sovereign exercise of eminent domain, including

application constitutional standards and the role

of local government approval when eminent domain

is used by public authorities or public benefit

corporations. We also welcome testimony

addressing the issue of eminent domain for

purposes of economic development, including the

use of comprehensive development plans and fiscal

impact statements. Further, issues significant

to communities, such as public notice, due

process protections, as well as compensation to

adversely affected parties can be discussed.

We have, in the Judiciary Committee, a

number of bills that further regulate the power

of eminent domain. Some we’ve had before the

Kelo decision, some were introduced following

that decision. I believe on the hearing notice

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the list of those bill numbers is attached. We

also welcome testimony on those specific

proposals before the Judiciary Committee.

I would ask people who are testifying

today – well, first, we will ask the reporter to

swear people in. If that’s a problem, please let

someone at the back desk know. We also would ask

people if, at all possible, to summarize their

remarks so that there is time for interaction

between the people testifying and the legislators

here.

That being said, Mr. Brodsky, do you have

any opening?

ASSEMBLYMAN BRODSKY: I just wanted to

express my appreciation and thanks to you for

your continued vigilance in this. When we did

the first reform of eminent domain two years ago,

it came through your Committee. Your work here

has been extraordinary and helpful.

We are in a very unusual situation.

We’re now at a point in the public discourse

where community activist, in many cases across

the country who are traditionally grass-root

progressive are aligned to the Scalia Thomas

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theory of public purpose, and where major

developers have formed alliances with major

community organizations in ways we never have.

There is enormous confusion about what the law

is, much less what it ought to be.

The purpose of these hearings is to first

get very clear what New York Law is, to

understand what the choices are that we’re going

to have to make, and then to make them with good

speed. I believe the Senate is interested in

doing a bill. And we look forward to the

testimony today, as we did on Monday in Albany.

I would like to thank everybody for being

here.

CHAIRWOMAN WEINSTEIN: With that being

said, we’d like to call our first witness. The

New York City Corporation Counsel, Michael

Cardozo.

MICHAEL CARDOZO, having been first duly

sworn by a Notary Public of the State of New

York, testified as follows:

ASSEMBLYMAN BRODSKY: Mr. Cardozo,

Chairwoman Weinstein gets to be the nice guy, and

I get to say we’d really like the testimony to be

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as abbreviated as you could make it, consistent

with your own satisfaction that you’re getting a

chance to fully express your views so we have

more time to talk among us.

MR. CARDOZO: I will do my best, Mr.

Brodsky.

ASSEMBLYMAN BRODSKY: Thank you.

MR. CARDOZO: As Corporation Counsel of

the City of New York, I am honored to appear

before you today and to share the City’s views on

eminent domain with you.

I’m joined on my left by Lisa Bova-Hiatt,

a Deputy Chief in my office who has principal

responsibility for all condemnation matters

involving New York City.

The Kelo decision has created widespread

fears that the Supreme Court has suddenly given a

license to governments to eject homeowners from

their property. You have already hear testimony

suggesting that out-of-control governments can

now take virtually any property for almost any

reason, and that New York homeowners have no

protections against arbitrary government seizure

in their homes. This is wrong.

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I want to talk to you today for just a

few moments, plainly and calmly, to make three

points. First, Kelo does not represent a

sweeping legal change in New York. In New York,

it has absolutely no effect whatsoever. That is

a critical point, it seems to me, to be

emphasized Second, the citizens of this State

and this City need the power of eminent domain,

including for economic development. And, third,

New York law already regulates and limits the

powers of eminent domain with a detailed and

common sense process that protects all property

owners.

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Very briefly, Kelo was recognized – is

simply a reaffirmation of a power by the Supreme

Court that really predates our Federal

Constitution. It is a power that is used

reluctantly by governments, that is a vital

aspect of sovereignty in order to build schools,

highways, parks, and urban development projects.

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The statute at issue in Kelo, a

Connecticut statute, authorized the use of

eminent domain for economic development. The

Supreme Court did not break any new ground, held

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that the statute was constitutional within

certain parameters. But, as Assemblyman

Weinstein just pointed out, the court also held

that each state was free to limit the power of

eminent domain. And, therefore, the Kelo

decision did not weaken New York’s law, which

imposes far, far greater restrictions on eminent

domain in the Connecticut statute.

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I would suggest to you that to impose

still further limits on the power of economic

domain in New York beyond those already existing

could cripple the power in this State to develop

vital economic growth. And this leads me, and I

think this is a point that also must be

emphasized, to a brief discussion of the

importance of eminent domain, how it is crucial

to the fiscal health of this State. Let me just

highlight briefly the instances of how eminent

domain has helped New York City.

Lincoln Center. A very long time ago

when I was growing up in the West 70’s in New

York, the area just to the south consisted of

increasingly run down buildings and blight. In

the 1960’s the City exercised its power of

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eminent domain, created Lincoln Center for the

Performing Arts and revitalized the entire West

Side area.

Times Square. In the 1970’s Times

Square, one of the great symbols of this State,

became a national showcase for urban blight and

decay. Crime was rampant and the Broadway

theatres struggled to exist in the midst of peep

shows and rundown buildings. With the assistance

of eminent domain, 13 acres in and around Times

Square have been reborn as a tourist friendly

location.

More recently, Metrotech in Brooklyn. In

the 1980’s much of the Brooklyn Bridge area was

blighted and underutilized. In partnership with

a local university, the City, utilizing where

necessary its power of condemnation, transformed

this area into Metrotech, an urban office park

that, in turn, has attracted additional

development activity, including the Marriot

Hotel, the first hotel in Brooklyn since the

1930’s. City statistics show that Metrotech is

responsible for millions of dollars in sales,

property and income tax revenues every year. The

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New York Times has called Metrotech easily New

York City’s leading phased office development

project, second in scale only to the World

Financial Center.

These projects, and many others, could

not have occurred without the use of eminent

domain.

Now, eminent domain is rarely a

government’s first choice. It is costly; it is

time consuming. But it can be necessary to

create a greater good, especially in this State

and this City where we have substantial

protections for homeowners and other property

owners. And this leads me to my final point.

The protections that already exist substantially

and procedurally in New York.

The City does not have a black check,

even if it wanted to, to condemn property for

economic development. I can’t emphasize this

strongly enough. Under New York law, both pre

and post Kelo, neither New York City nor any

other municipality in this State, can condemn

property for economic development purposes unless

it shows that, and I’m quoting from the statute:

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“the area is a substandard or unsanitary area,

or is in danger of becoming a substandard or

unsanitary area and tends to impair or arrest the

sound growth and development of the

municipality.” And this need to show blight is

also required if the Empire State Development

Corporation, rather than a municipality, seeks to

exercise the power of eminent domain.

This blight limitation was not in the

Connecticut statute and it places a substantial

restriction on the power of government in New

York. Unlike Connecticut, neither New York State

nor its municipalities can condemn property

simply because it has an economic development

project in mind. It must show that the property

is substandard or unsanitary.

And aside from this, New York has

substantial protections for individual property

owners. There’s lots of procedural protections,

including some that have recently been added by

Assemblyman Brodsky. Layers and layers of public

review and approval must occur to ensure that all

affected parties are adequately heard prior to

the acquisition.

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In New York City, for example, the public

review process is government by the Uniform Land

Use Review Procedure, affectionately known as

ULURP. And this process includes the filing of

an application by the condemning authority, a

hearing before any affected community boards,

input by the local borough president, another

hearing before the City Planning Commission, and

the right and always the opportunity for the City

Counsel to act. And then, when all of this is

done, the affected property owner will receive

what the court determines to be the fair market

value for his condemned property.

Even the public benefit corporation like

the Empire State Development Corporation,

although not subject to local review in every

instance, is required by statute to consult and

cooperate with local elected officials and

community leaders. It is also subject to

significant procedural requirements in addition

to those set forth in the eminent domain

procedure law. The ESCD must hold public

hearings, must adopt a general project plan, and

then must obtain unanimous approval from the

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public authorities control board before it can

acquire property by eminent domain. And these

procedures, I suggest, foster an open and

transparent process to facilitate the acquisition

of property by eminent domain.

I want to emphasize again that New York

City uses this power sparingly. But it is a

power that is vital to the economic and social

well being of the City and the entire State. And

the power is the product of decades of careful

weighing of the needs of the municipalities and

property owners.

I am not suggesting that the ECPL cannot

or should not be changed; rather, we must be very

careful not to upset the current law’s balancing

of interests, which has served this state and its

residents well. And, therefore, on behalf of New

York City, I urge you to defer consideration of

the various substantive proposals pending before

you and instead create, as Assemblyman Brodsky

and others have suggested, a temporary commission

that will carefully consider the ramifications of

altering the state’s already extensive eminent

domain process.

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That Commission, with input from the

state, including New York City, should examine

existing law, its effectiveness, and fairness

from the perspective of both the individual

property owner and the government, and then make

recommendations for potential change.

Thank you for allowing me to testify here

today. I’d be happy to answer any questions.

CHAIRWOMAN WEINSTEIN: Thank you. Before

we begin, I want to acknowledge we’ve been joined

by Assemblyman Mark Weprin, a member of the

Judiciary Committee here. I have a few and I’m

sure other do also.

Does the City of New York ever use

eminent or has used eminent domain for economic

development purposes without the presence of

blight?

MR. CARDOZO: Absolutely no. The

statute, and I think this is very, very

important. The only authorization that any

municipality, including New York City has, to

condemn property in the economic development area

– I’m not talking about for schools or something

like that. But, if we’re talking about economic

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development, Assemblyman, we only are allowed to

condemn in the event of a finding of blight.

ASSEMBLYMAN BRODSKY: Where do you find

that in the statutes of the Constitution?

MR. CARDOZO: I’d be happy to bring that.

Obviously, as we all know, the City can only do

what it’s authorized by statute. And the only

statute, Assemblyman, the only statute that

allows New York City to take land for what is

loosely being referred to here as economic

development, is General Municipal Law §503. And

Section 503 of the General Municipal Law

authorizes New York City to take land for urban

renewal but only upon a finding that the area is

substandard or insanitary. There is absolutely

no other statutory provision, if we’re talking

about economic development as distinct from

schools or roads or something like that, there is

absolutely no other statutory provision that

authorizes the City of New York to condemn

property.

ASSEMBLYMAN BRODSKY: Does that

limitation flow to instrumentalities of the

government of the City of New York as well?

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MR. CARDOZO: Unlike upstate IDAs,

Assemblyman, the only power for condemnation that

could be exercised by New York City is by New

York City itself.

ASSEMBLYMAN BRODSKY: The IDA of the

City of New York has no power of condemnation?

MR. CARDOZO: That’s correct. Section

917 of the General Municipal Law specifically

accepts New York City IDA from the powers that

upstate IDAs have.

ASSEMBLYMAN BRODSKY: On this particular

point –

MR. CARDOZO: Yes.

ASSEMBLYMAN BRODSKY: Are there any

other instrumentalities of the City of New York

that have the residual power under state statute

to exercise eminent domain?

MR. CARDOZO: I believe not.

ASSEMBLYMAN BRODSKY: Could you do a

more complete search?

MR. CARDOZO: Sure. But I knew this was

an issue that concerned you, based upon a

conversation you and I had a couple of weeks ago

and I have looked at that. I’d be more than

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happy to confirm that to you.

ASSEMBLYMAN BRODSKY: Is it not true

that other authorities of the State of New York

which do operate within the City are not

constrained by the blight limitation?

MR. CARDOZO: Ah –

ASSEMBLYMAN BRODSKY: ESDC for one?

MR. CARDOZO: No. ESCD has exactly the

same blight limitation. I would call your

attention to – I’d be happy to give you the

citation – of the unconsolidated – ah, Section

6253 of the Unconsolidated Laws limit the power

of the ESCD.

ASSEMBLYMAN BRODSKY: Is the same true

for the MTA?

MR. CARDOZO: I’m not familiar with –

MS. BOVA-HIATT: The MTA can only acquire

property for transportation purposes.

CHAIRWOMAN WEINSTEIN: We need you to be

sworn in.

LISA BOVA-HIATT, having been first duly



MR. CARDOZO: The MTA, as I was reminded

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by Ms. Bova-Hiatt, can only condemn property for

transportation.

ASSEMBLYMAN BRODSKY: Is it true for the

School Construction Authority?

MR. CARDOZO: Yes.


–

MR. CARDOZO: The School Construction

Authority condemns property for schools.


– it condemns property where a school is

involved. If there’s a multi-use building, would

you find that there would be a limitation there?

MR. CARDOZO: Well, it can be an issue.

But the statutory authority of the SCA is for the

purpose of schools.

ASSEMBLYMAN BRODSKY: And with respect

to other state authorities which have similar

broad grants of authority, have you done the

review to see whether their condemnation powers

are limited by this blight assessment?

MR. CARDOZO: Yes. There have been, in

special certain instances there have been special

state statutes passed, for example, I think the

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original World Trade Center statute, which did

not have that limitation or the New York Stock

Exchange statute. That was pursuant to a special

statute. But as a matter of general grant of

power by the state, I believe my statement is

correct.

ASSEMBLYMAN BRODSKY: I didn’t mean to

interrupt. I’ll get back to my questions.

CHAIRWOMAN WEINSTEIN: To get back to the

issue of blight. At our hearing in Albany there

was some suggestion that since most of the

current definition of blight is by court

interpretation, that perhaps there would be some

advantage to have a statute that more clearly

spelled out what is blight for the purposes of

eminent domain. Do you have any thoughts on

that?

MR. CARDOZO: I think we would have to be

very careful about that. And the reason I say

that is this. As we know, in the General

Municipal Law, in Section 505, does define

substandard or insanitary area, along with, I

think, Section 502 which defines it a little bit

more precisely. It does spell that out. As you

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note, there’s been a number of court decisions.

To start legislating in this area, again,

I think is simply going to, therefore, produce

lots and lots of litigation. I think that when

we have a statute that’s been on the books for

probably 30 or more years with court

interpretations on it, it really is probably

better to leave that lapsed rather than try to

reword the statute and then produce additional

litigation. On the other hand, I would suggest

that that would be an appropriate topic for a

temporary commission to take a harder look at.

CHAIRWOMAN WEINSTEIN: When New York City

does, and you mentioned a few projects in New

York. I guess Metrotech would be the economic

development one. When New York does use its

eminent domain powers in relation to economic

development, is it always done subject to a

comprehensive economic development plan?

MR. CARDOZO: Yes. Under the relevant

statutes, again, if you look at Section 505, I

believe it is of the General Municipal Law, there

is a requirement that there been, I think it’s

called an urban renewal plan that is prepared and

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has to be reviewed and goes through the lengthy

ULURP process. Inevitably, that will also, of

course, mean an appropriate environmental review.

CHAIRWOMAN WEINSTEIN: Another issue that

was raised in Albany that has been raised is the

– and that appears in many of the legislation

that’s before our Committee is the issue of, I

guess you would call it a super payment or above-

market value. Mr. Brodsky’s bill has 150 percent

above market value for private residence when

eminent domain is for economic development

purposes. Assemblyman Tokaz’s (phonetic) bill is

125 percent. I think there maybe other bills

that have other dollar figures. I was wondering

if you could comment on that concept of what

impact enacting such a payment above market value

would have in proceedings, the City’s proceedings

in relation to economic development. Also, there

was some comment made that to enact a statute

that would allow or that would require a

municipality to pay above-market value might be

in violation of the Constitution, Article 8,

Section 1, I believe it is. So, if you could

address those various issues relating to

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compensation above market value.

MR. CARDOZO: Sure. I’ll try to keep

them all in mind.

I think you have to start from the

philosophical point. Economic development

limited by the blight limitation, we believe, and

I think it’s long established in this state, is

beneficial to the City and the State. We have to

have the ability, in appropriate instances, to

economically develop. If you look at the

projects I listed, and I’m sure you’re more

familiar than I, there are projects around the

state all of which have benefited the state in

giving a revitalization to areas that would not

have otherwise have happened.

Every time we’re going to potentially

make a change into the economic – into the

condemnation statute, we have to be careful to

keep in mind what we’re trying to achieve. And

it seems to me what we’re trying to achieve on

the philosophical level is to be sure there’s

appropriate protections to the affected property

owner, to be sure that the affected property

owner is receiving just compensation – and I’ll

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come back to that in a moment – and at the same

time, not losing sight of the purpose that we’re

doing it for when the benefit of the entire state

or the entire state. So, if, in fact, one makes

this more costly to the state, which goes to the

150 percent or some concept like that, what you

are obviously doing is potentially increasing the

cost to the taxpayer of engaging in the economic

development as limited by blight. And,

therefore, if you put too much of an additional

cost factor imposed on the state to do that, you

are, as a practical matter, making it more

difficult and therefore less likely for that to

occur.

Now, certainly the affected taxpayer

should receive just compensation. And that is

obviously what the law has long required. The

cases that are pointed out, and it seems to me

from a policy point of view this is right. The

compensation should be fair and just to the

taxpayer – excuse me – to the taxpayer or the

government on the one hand and the property owner

on the other hand. And to, therefore, increase

the amount by say 50 percent that the property

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owner would otherwise receive, you are benefiting

the property owner to an extent much more than

expected, but you are penalizing the taxpayer and

I think it is potentially very dangerous to the

ultimate goal that we’re trying to achieve. So I

would be very, very hesitant to increase the

compensation beyond the well established rules

relating to how you calculate fair and best use

point.

As to the constitutional issue that you

referred to, we’ve only had a brief opportunity

to look at that. I think a serious question is

raised on the constitutionality. I certainly

don’t feel comfortable as I sit here today to

give you my definitive opinion on that.

CHAIRWOMAN WEINSTEIN: Mr. Sweeney.

ASSEMBLYMAN SWEENEY: I’m just curious.

In New York City the process that you use for

taking property, at any point during that process

is there any elected official who’s required to

sign off on it, formally sign off on it?

MR. CARDOZO: Not just any elected

official. When New York City engages in the

condemnation process for the kind of purposes

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that we’re talking about, economic development is

limited by blight. It must go through, first,

the ULURP procedure. And let me very briefly

give you a thumb nail sketch of what that is.

What that means is that after the

appropriate urban renewal plan has been filed,

first the community board, after appropriate

notice, all the kinds of notice, including

personal service on the affected property owners

as suggested by Mr. Brodsky’s bill of a couple of

years ago. After the public has been notified,

there is a public hearing by the community board

which must make a recommendation. Then, the

relevant borough president and, in certain

instances depending upon the nature of the

borough board, has a right to submit its

recommendation, i.e., modify, yeah, nay. Then,

after the community board has had its say and

recommendation and the borough president has

weighed in, the City Planning Commission holds

another hearing, and then it votes up or down on

the proposal. But that’s not the end of it.

The City Counsel, under the City Charter,

has the absolute ability to consider every single

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urban renewal project. It must, if it’s an urban

renewal project, then the City Counsel, in its

time limit set out in the charter, the City

Counsel itself must then vote whether or not to

approve, disapprove, et cetera, the

recommendation that has come to it. Even in

areas where it might not have the mandatory

discretion, in urban renewal projects it does.

It must make the vote. In other more limited

projects, it has the right to call the particular

project up for a vote. Then, following the City

Counsel decision the Mayor has his veto powers on

that.

So, the answer to your question, Mr.

Sweeney, and if I’ve gone on too long I

apologize, is you got community board approval,

you got borough president approval, you have the

City Planning Commission, and ultimately you have

the City Counsel.

ASSEMBLYMAN SWEENEY: All of them

mandated?

MR. CARDOZO: Yes.

ASSEMBLYMAN SWEENEY: To act?

MR. CARDOZO: Yes. By Section 917, I

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believe it is, of the Charter.

ASSEMBLYMAN BRODSKY: Can I ask another

question?

Does the ULURUP process apply to a

condemnation or to a land use change pursuant to

a condemnation? If you were to do a

condemnation, per say, with no other actions

taken, would ULURP apply?

MR. CARDOZO: ULURP would not apply – I’m

sorry.

MS. BOVA-HIATT: ULURP does apply.

MR. CARDOZO: I misspoke. ULURP is

required for any acquisition of real property by

the City of New York.

ASSEMBLYMAN BRODSKY: And its agencies?

And its IDAs?

MR. CARDOZO: Yes.

MS. BOVA-HIATT: Yes.

MR. CARDOZO: An IDA does not have, as I

said before, condemnation authority in New York

City.

ASSEMBLYMAN BRODSKY: We’re going to

have to sort this one out. But I appreciate your

testimony. Thank you.

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ASSEMBLYMAN GREEN: I want to get to the

issue of compensation because I think one of the

things that was articulated in the Supreme Court

decision, I think particularly by the minority

and I think it resonated with the number of

people, is the issue of a corporation where the

state or city gives power, issues power by

eminent domain, executes power of eminent domain

for the purpose of a corporation that then takes

property from an individual homeowner or someone

that might be owning both either manufacturing

space or commercial retail property. You’re

saying that you would be concerned about the

prescription in Mr. Brodsky’s bill, payment above

market value of 150 percent that it would impact

upon the taxpayers?

MR. CARDOZO: Yes.

ASSEMBLYMAN GREEN: All right. What then

if there was legislation that really essentially

mandated that the corporation which would be

receiving profits in out years were in fact

developing some sense of reciprocity, a

prescription in which out of their profits they

would pay the property owner and their heirs

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back? Because I think what we’re dealing with

here is not only the immediate impact but also

issues of generational wealth that have been

essentially impacted upon.

MR. CARDOZO: I understand the question,

Assemblyman. But I think it really becomes the

same issue because when a private developer, as

you referred to, might be involved in a project,

a private developer is going to take a look at

this. There are obvious risks involved. Some of

the various governmental approvals might not

occur. While we can all talk about the

successes, there certainly have been failures.

So the private developer is taking a risk. And

so, if you’re saying, in effect, the 50 percent

won’t come from the government but under some

kind of formula it would be paid for down the

road by the private developer, I think you have

the same concern. I think you are going to then

be over compensating the property owner, because

he should get fair market value, and you are

imposing a deterrent for the private developer to

make an agreement that he’s going to redevelop

this area and, therefore, you’re going to make it

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far more difficult for the government to engage

in the kinds of projects that we’re talking

about.

ASSEMBLYMAN GREEN: I know it will be

more difficult. I guess what I’m getting out is

how do we balance the whole issue of property

imperative with moral imperative of protecting

generational wealth, particularly among property

owners. I guess to me I think that is something

that we should consider. In fact, in my bill

that’s what we would do. We would not put the

burden on taxpayers but on the corporation given

the fact that they have made certain, many of

them will have made certain projections,

particularly to their shareholders, of profits

that they will in fact be seeing in out years. I

would suggest that perhaps those profits should

inure to the benefit of those property owners, as

well as the heirs of the property owners.

MR. CARDOZO: I understand the point. I

think we have to be careful not to think that the

property owner, the private developer is the “big

bad guy” so we can say government and taxpayers

you won’t pay this and the ultimate private

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developer will. Because I think the private

developer, in your phrase, is really the person

who is implementing the municipality’s plan. So,

if in fact it’s going to be potentially more

costly to the private developer, what you’re

doing is you’re decreasing the incentives for him

to take these risks, and you’re making it,

therefore, more difficult for the City to engage

in the kinds of projects that we’re talking

about.

CHAIRWOMAN WEINSTEIN: Assemblyman Weprin

and then Mr. Brodsky.

ASSEMBLYMAN WEPRIN: Just quickly, Mr.

Cardozo. Good to see you.

MR. CARDOZO: Nice to see you.

ASSEMBLYMAN WEPRIN: Thank you for being

here today.

I just wanted to ask you about the gist

of your argument is that there are enough

protections in the law currently that we

shouldn’t fear the Supreme Court ruling, that

currently New York law allows for enough

protections. And then you talk about creating a

temporary commission to consider the

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ramifications. Could you elaborate on what you

think that commission would be? And, indeed, if

your position is that things are okay now, is it

just like a commission for the sake of being

there as sort of a stalling tactic to sort of

punt on the issues so it sort of goes away?

MR. CARDOZO: No. I don’t think so. I

think the Kelo decision has certainly raised

concerns. And I don’t mean to sound like I’m

dismissing every concern out of hand. But, for

example, I think we learned a couple of years ago

that the procedural protections in the

condemnation area could be improved in terms of

notice, and so that was adopted. There are some

IDA concerns upstate that have been raised. The

points that Assemblyman Green was just raising,

well, my initial reaction is that I don’t agree

with him. It would seem to me that a

dispassionate look by people who deal with

condemnation and development issues over time

with a commission composed of people from across

the state who deal with this might suggest that

some modest adjustments might be appropriate.

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ASSEMBLYMAN BRODSKY: Thank you. Thank

you, Mr. Cardozo, for scowling an, I think,

thoughtful testimony.

MR. CARDOZO: Thank you.

ASSEMBLYMAN BRODSKY: In many ways I

think I tend to agree with you. We’re unclear in

a lot of areas. We’ve mashed a lot of stuff

together. The exception, as I understand it,

applies only to housing and economic development.

It does not apply to the exercise of eminent

domain for other purposes.

MR. CARDOZO: Such as a school or roads

or transportation or something like that.

ASSEMBLYMAN BRODSKY: A new City Hall.

Whatever it may be.

MR. CARDOZO: That is correct.

ASSEMBLYMAN BRODSKY: Okay. So we are

properly looking at economic development, but we

do have other concerns with respect to its use

more broadly.

Second of all, I’m just still unclear

about the extent to which the blight exception

applies to the various agencies and sub-agencies

of both state and city government. We’re going

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to be taking a look at that. I assume you’ll do

a more thorough review and we can talk.

MR. CARDOZO: Actually, I just made a

note to myself. I’d be more than happy, and this

is probably the wrong forum to both talk to you,

or your counsel, or to, in effect, give you

perhaps a detailed letter with citations.

ASSEMBLYMAN BRODSKY: We accept. Fine.

Third of all, it is clear that in spite

of all that, regularly our large economic

development projects, those restrictions have not

withstood. They are abandoned in the breach as

it were. That the World Trade Center legislation

or the Stock Exchange, those requirements were

left behind.

MR. CARDOZO: Well, of course whatever

legislation may ultimate come out of this

particular hearing, nothing will prohibit the

State Legislature down the road from passing some

additional piece of legislation such as happened

in the Stock Exchange.

ASSEMBLYMAN BRODSKY: I understand our

powers are not limited in that way. I would

assume then, however, that your point to us would

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be we should never do that again.

MR. CARDOZO: I certainly don’t claim to

know all the intricacies of what compelled the

State Legislature in the – I guess it was the

70’s or 60’s with respect to the World Trade

Center and more recently in the Stock Exchange.

ASSEMBLYMAN BRODSKY: When was the Stock

Exchange deal done? Do you remember when?

MR. CARDOZO: I think the legislation was

the late 1990’s.

ASSEMBLYMAN BRODSKY: Well, that’s

fairly recent.

MR. CARDOZO: That’s right. I just don’t

want to claim knowledge because I was doing

something else at the time.

ASSEMBLYMAN BRODSKY: You defended the

blight exception as a stall yard element of

restrictions.

MR. CARDOZO: Yes. Absolutely.

ASSEMBLYMAN BRODSKY: Under what

circumstances should we abandon it?

MR. CARDOZO: Mr. Brodsky, I think the

exigencies at the time that the state faced were

such that at the time after weighing the relevant

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factors I assume that the Legislature decided

that they wanted to not have a blight limitation.

ASSEMBLYMAN BRODSKY: I think you’re

right. But my question to you is under what

circumstances would you recommend that we abandon

the blight protection issue?

MR. CARDOZO: I’m not prepared to answer

that at this moment. But I think that the blight

limitation has served the City and the State

well. And so I’m suggesting to you that we

should be very careful before we alter the blight

limitation. If you’re asking me under what

circumstances we should eliminate the blight

limitation, I’m really not prepared to answer.

ASSEMBLYMAN BRODSKY: On what

circumstances should we eliminate it or limit it?

I’ll give you both verses.

MR. CARDOZO: I think I would not change,

as I indicate in my testimony, I would not change

the blight limitation. I think we have

appropriate protections in the law on blight

limitation. If you’re asking me under what

circumstances it should be softened, loosened,

what have you, as I sit here today I’m not

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prepared to answer that. If there’s a particular

issue that I gather happened in the 1970’s for

the World Trade Center and people felt was true

in the Stock Exchange –

ASSEMBLYMAN BRODSKY: Would you gather

your thoughts and let us know what those might

be?

MR. CARDOZO: If I have some additional

thoughts. And, by the way, I think that, in

response to Assemblyman Weprin’s question to me

that may well be something that the temporary

commission could take a look at.

ASSEMBLYMAN BRODSKY: But I’m asking for

your views.

MR. CARDOZO: I’d be happy to give them

to you.

ASSEMBLYMAN BRODSKY: And clearly, what

we’re talking about is not a statewide phenomena;

it only applies to New York City, as you

mentioned in your own testimony. The blight

restrictions.

MR. CARDOZO: No. I specifically said

that ESDC, which has statewide power in this area

–

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ASSEMBLYMAN BRODSKY: IDAs outside the

City can operate without the blight restriction.

MR. CARDOZO: I don’t believe that’s

correct.

ASSEMBLYMAN BRODSKY: I believe it is.

MR. CARDOZO: Well, why don’t we add that

to our list of things to have a further

discussion about?

ASSEMBLYMAN BRODSKY: We will. Which

brings me to a couple of basic questions.

In my vocabulary blight is Latin for poor

people. Can you explain under what circumstance

we should not, if the overall good of the city

and economic development load is called upon, why

we should not exercise condemnation power in non-

blighted areas?

MR. CARDOZO: Well, I think one of the

reasons you have the blight limitation is to be

sure that you are not simply condemning property

in a particular kind of neighborhood that is

otherwise perfectly economically viable. If -

ASSEMBLYMAN BRODSKY: But if an economic

project is large enough –

MR. CARDOZO: Can I finish?

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ASSEMBLYMAN BRODSKY: I just want to

focus my question and you can answer it later. I

want to focus the question. I’ll give you

whatever time you need to answer it. I don’t

mean to interrupt you. But I do understand what

the purpose of the blight exception is. The

question is why should there be a limitation that

says the city may only bring economic development

to areas which are otherwise known as poor or

blighted areas?

MR. CARDOZO: You’re making an equation

that I don’t agree with, between poor and

blighted. If it’s a low income neighborhood, for

example, that is not blighted, that’s not

environmentally damaged, that’s not vacant,

doesn’t have a lot of problems, the fact that

it’s a low income neighborhood would not mean it

is blighted and, therefore, this limitation as it

exists now would prevent condemnation. If, in

fact, the neighborhood is run down, vacant

buildings and things of that nature, abandoned

lots, dangerous and so forth, then it’s

economically blighted. But I would not agree

with you that blight equals a poor neighborhood.

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ASSEMBLYMAN BRODSKY: You don’t see a

correlation?

MR. CARDOZO: I recognize that it’s more

likely than not that the economically run down

neighborhood that has the attributes I just

referred to may predominantly be occupied by

people who are not in the upper economic

eschalance. Think of the Lincoln Center area.

The blocks in the 60’s in the 1970’s that

ultimate led to Lincoln Center. Presumably, as

we look at things historically, that was a

vibrant neighborhood. It became rundown.

Buildings became dilapidated. Lots of crime.

Lots of environment problems. And it led to it.

But the fact, and I really think this is an

important point. The fact that a neighborhood

has low income people in it does not, per say,

mean it is blighted.

ASSEMBLYMAN BRODSKY: I take your point.

But my point is why should the sacrifice of

contributing your home to the common good for the

overall economic benefit of the City be limited

to areas which not all blighted areas are poor or

not all poor areas but blighted, but all blighted

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areas are poor. And why should a middle –

MR. CARDOZO: I don’t agree with that.

ASSEMBLYMAN BRODSKY: Why should Park

Avenue escape from the notion that if we can site

a usually beneficial economic development project

there, why should they be excused from that

contribution?

MR. CARDOZO: Let me point out. Times

Square was not all poor when the whole urban

renewal process began in the 1970’s. You had

certainly Broadway theatres. They were

struggling but they were not, per say, poor.

ASSEMBLYMAN BRODSKY: Let’s take Park

Avenue. Why should Park Avenue be excused

legally from being considered for a project which

in the overall would benefit the people of the

entire City?

Ms. Wylde will have her chance to testify

in a moment. I’m sorry.

MR. CARDOZO: Because the limitation is

that the government should not be able to willy

nilly simply say, and this is the distinction, I

think, between the Connecticut law that was at

issue in Kelo and the New York law. Simply 25

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because the government decides, yes, this is a

perfect middle income or high income area, but we

think we can get more tax ratable if we change

it, that’s balancing the public interest and the

rights of property owners against the government.

The government has made the decision that’s not

a good enough reason to allow a condemnation.

ASSEMBLYMAN BRODSKY: Why don’t we just

balance it in the particular case? Why excuse

them from responsibility as a matter of law?

MR. CARDOZO: Well, what would the

standard be?

ASSEMBLYMAN BRODSKY: The standard would

be it’s got to be a really good project. Here’s

a really good project.

MR. CARDOZO: Then you’re suggesting

making it, I would think what you’re suggesting

is then you’re making it easier for government to

condemn property whenever it says here’s a really

good project.

ASSEMBLYMAN BRODSKY: I view that as a

political comment, Mr. Cardozo, not as a comment

about whether or not people, by virtue of the

overall income levels of their neighborhoods

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should be legally excused from participating.

MR. CARDOZO: Well, because I think, Mr.

Brodsky, I didn’t intend it to be a political

comment. What I intended it to be is that

there’s a balancing of interests, and this goes

to some of my earlier responses. There’s a

balancing of interest that lies at the core of

the issues we are talking about. And the balance

of the interest is the rights of the property

owner to receive fair compensation to know that

if the property is condemned he’s going to get

fair compensation. It’s the right of the

government and the taxpayers to say, in certain

instances, we want to be able to develop this

because we do want to have economic development

going forward. And the balance that has been

struck in this state, and it has served as I

suggest to you well, is to not give a blank

check, as arguably was the case in Kelo, not give

a blank check to the government, not force the

private homeowner or landowner to have to fight

the government in court on all these issues, but

instead require the government not just to think

it can make more money in the particular area,

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but to show that the area is blighted.

ASSEMBLYMAN BRODSKY: I’m still not

clear as to why they should be excused as a

matter of law if the project is good enough.

MR. CARDOZO: Good enough, I guess, is

good enough in the eye of the beholder. And I

think then in any particular instance, any

particular government says I think this is a good

project, you are imposing a very, very

substantial burden on –

ASSEMBLYMAN BRODSKY: Rich people.

MR. CARDOZO: on various people. Yes.

I’m sorry. You said rich people?

ASSEMBLYMAN BRODSKY: Rich people.

MR. CARDOZO: I’m sorry. I misheard you.

Because it could be a perfectly appropriate

neighborhood that is fine, middle income, low

income, or high income. I don’t think we want to

have and I think that the history of this state

is such, we don’t want to have, as we have in

Connecticut, the ability of the government to

make that decision.

ASSEMBLYMAN BRODSKY: Obviously we have

a – I’m deeply uncomfortable with the blight.

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What you view as a protection, I view as a

targeting mechanism. I don’t know if one of us

is right or wrong right now, but it’s something

we need to think about. I have two other

questions.

Do you not see a distinction that we

ought to take into account when property is

transferred not to public ownership but back to

another private owner? Do you not see that there

is distinguishable social, legal, and community

impacts that ought to be factored into the

process?

MR. CARDOZO: And the reason, I guess, is

just an extension of what Mr. Green was asking

me. Let me just respond to that hypothetical.

Let’s assume there’s no private developer

in the mix today and the government decides

today, give me the benefit of my hypothetical,

with real blight, the government decides to

condemn with the hope that later on it’s going to

be able to find a private developer. If it

condemns on day one under the proposal the

government is going to have to pay that money.

And then, maybe it’s going to be able to entice a

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private developer to come in. It’s not going to

have to do this all itself. And if the

government has to say to the private developer, I

don’t have to pay 50 percent of the profits, you

do, I think you are going to deter that kind of

project.

ASSEMBLYMAN BRODSKY: That maybe worthy

of deterrence at that point. If we are, as a

government, going to take someone’s home not for

the conventional public purpose but for the

purpose of transferring it either immediately or

in the foreseeable future to a private party, you

do not see that that raises distinguishable legal

and social matters?

MR. CARDOZO: I don’t. Because I think

if you want to have economic development with

government as the engine for that, instead of

having to require the private taxpayer to pay the

government for that we all benefit by the ability

of the government to have that tab picked up by

the private developer who will be taking the risk

at the same time. And to say to the private

developer you’re going to have to pay

substantially increased compensation, it is going

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to be a deterrent to the economic development. I

know I’m repeating myself, but that is what I’m

saying.

ASSEMBLYMAN BRODSKY: And in the context

of this discussion where that private developer

benefits from the ability of the state to use its

extraordinary powers to save someone’s home, it

does not seem to me, again this is a matter of

philosophy, that we are way off base in saying if

you’re going to make a profit as a result of the

actions of the state then the people from whom

the property was taken should, I guess in some

way, share in that profit.

MR. CARDOZO: There’s an assumption that

he’s going to “make a profit”. Conceitedly, he

may make a profit. And he’s also taking a risk.

He’s taking a lot of risk. And if what you are

doing is making it more difficult for these

projects to go forward, you’re making it more

likely that the government is going to have to

pay that and, therefore, the taxpayer is going to

have to pay it itself. You’re making it,

therefore, more likely that these projects will

not occur, and I don’t think you want to do that.

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ASSEMBLYMAN BRODSKY: I would

characterize my views differently. I would

characterize my views as saying that there is

something different in the transfer of private

property to the state in condemnation and then

back to a private person. And that in the

sharing of the burden it seems to me that right

not the aggrieved homeowner or business owner is

not in effect fairly compensated, although he or

she may be justly compensated. And we’re going

to try to, I think, extend that. I thank you for

your patience and for the thoughtfulness of your

answers.

CHAIRWOMAN WEINSTEIN: Mr. Green.

ASSEMBLYMAN GREEN: Yeah. I just have

one other question. One of the areas that I’d

like to raise is the question of when the state

exercises eminent domain for a developer and the

developer cancels or fails to complete the

development project, which has happened in the

past, do you think our current laws provide

enough safeguard with respect to that issue? And

this has happened in the past. And I cite, for

example, Baruch College in the Atlantic Yards

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complex across the street from Atlantic Yards.

It was supposed to have been built over 20 years

ago. The state executed eminent domain. A

number of homes were taken. The project never

came into fruition and as a result the state

actually created blight. What safeguards should

we have in law to protect ourselves from that

occurring again in the future?

MR. CARDOZO: As I understand the

question is you have a plan, it’s planned to have

an economic development, and for whatever reason,

despite everyone’s best intent, it never comes to

being. I suppose in some respects that’s similar

to a piece of property that is denominated on a

map as a park or a future park or a future

school, but it’s never there.

I wouldn’t put the private developer

necessarily as the ogre. Because even if the

government was doing that, frankly, you could

have exactly the same problem. Again, if you

exercise – if the property owner receives, if

it’s condemned, if the property owner would

receive just compensation. If this is a problem,

and I understand the citation of examples, maybe

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that’s something that the temporary commission

should take a look at. But if the property is

condemned, the property will have received the

fair and just compensation.

ASSEMBLYMAN GREEN: I understand that.

But it gets at the heart of what was the initial

intent of many of these projects, which was

overall community and economic revitalization.

And what I’m suggesting is that in some cases

there’s an execution of eminent domain, property

is taken, property is torn down, and what is left

there is additional blight. And so the question

is do we need additional safeguards to ensure

that that doesn’t occur?

MR. CARDOZO: And, as we all know,

unfortunately government starts on a project and

doesn’t finish it for a variety of reasons.

ASSEMBLYMAN GREEN: Market pressures,

blah, blah, blah.

MR. CARDOZO: The economy goes into the

dumps or something like that. We certainly want

to prevent that, and maybe we should take a look

at that. But as far as the individual property

owner is concerned, as distinct from the overall

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problem this creates, as long as the property

owner has received fair and just compensation, I

don’t see that as a problem for the property

owner. I can understand it if you

unintentionally created, to use your word, a

blighted area, that’s something that we could

take a look at.

CHAIRWOMAN WEINSTEIN: A quick question.

While we talk about blighted areas, obviously

you discussed vacant lots, buildings with lots of

vacancies, otherwise kind of run down buildings.

When there’s a plan – just correct me if I’m

wrong. My understanding is even in areas where

there’s a plan for economic development, as part

of a plan they may be blighted areas contained

within that area, but the eminent domain law can

be used with the blighted provision for

properties that aren’t in fact blighted that are

within that contemplation of that economic

development area.

MR. CARDOZO: I think what you’re

referring to is – okay. We would all agree that

the overall area is blighted, but there may be

particular pockets, if you will, a block, or a

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building, or what have you, that might not, if

you were just looking at that block, might not be

blighted. And this obviously, and this goes back

to a decision of the Supreme Court in the 1950’s.

If the government makes the decision that if we

just, in effect, exempt Block A or Block B, it

may not be feasible to have the overall

development project. And if we’re going to start

excepting out a block or two, first of all, you

may run into the danger that that might some day

become blighted and therefore affected. And, so

if you’re going to try and upgrade the whole

area, inevitably there may be some incidental

consequences on a particular building or a

particular block that per say is not blighted.

CHAIRWOMAN WEINSTEIN: And for the

purposes of public use the blighted definition is

not a requirement.

MR. CARDOZO: Public use for schools and

–

CHAIRWOMAN WEINSTEIN: A school or road.

MR. CARDOZO: That is correct.

CHAIRWOMAN WEINSTEIN: And what about

situations where there is a road connecting two

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shopping centers where clearly the benefit, while

the road itself is a public use and a public road

but the benefit is the economic development to

the private businesses in each of the respective

shopping centers. Do you see any distinction

there?

MR. CARDOZO: I think we’re going to get

into almost impossible line drawing. I have no

doubt that long before I was involved in this,

when the New York State Thruway was built it was

a lot easier to get to places, and there were a

lot of people whose businesses undoubtedly

benefited. And when you build a road and you

improve a road and it’s easier to get from Point

A to Point B, people in that area are going to

benefit. They’re all going to be incidental

benefits. Yes. When you extend the Thruway in a

particular area the people at the other end of

that road are probably going to benefit. But I

don’t think that changes the analysis.

ASSEMBLYMAN BRODSKY: I think there was

a misunderstanding. You’re not testifying that

the condemnation powers of the City are limited

to the blighted area.

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MR. CARDOZO: No.

ASSEMBLYMAN BRODSKY: Once there’s a

finding of blight in an area they can condemn

much more broadly than just the blighted area,

not just within the zone.

MR. CARDOZO: As long as the condemnation

is within the approved project. So if the urban

renewal project says it’s 20 blocks, and if Block

A within that 20 block per say is not blighted –

ASSEMBLYMAN BRODSKY: I’m not talking

about within the zone. You may go outside the

zone, is it not true?

MR. CARDOZO: No. For abutting property

outside of the urban renewal? It has to be

within – if you’re talking about for economic

development purposes, Mr. Brodsky, in order for

the City of New York to exercise its right of

condemnation it must have been approved, the

overall project must have been approved. So, if

you have a project that’s ten blocks away outside

of that project, we could not condemn that.

ASSEMBLYMAN BRODSKY: Take a bull’s eye.

You have a bull’s eye 100 yards wide that is

blighted.

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MR. CARDOZO: Right.

ASSEMBLYMAN BRODSKY: You are not

restricted in your condemnation power to that

circle. You may extend it to 1,000 yards in

circle. I’m pretty sure I’m right on this one.

If you can argue that the outside area is

threatened. I think there’s a Court of Appeals

case. A Yonkers Development Authority case.

MR. CARDOZO: If we’re talking about the

City of New York my understanding is, first of

all, the ULURP process requires the filing of an

urban renewal plan and that plan will denominate

the geographic area that’s part of the plan.

Assuming that you go through all the hoops and

that plan is approved, the power of condemnation

could be exercised by the City of New York within

that geographical limitation.

ASSEMBLYMAN BRODSKY: Putting aside the

questions of holes within the blighted area, that

plan could be much wider than the blighted area.

MR. CARDOZO: Yes. I’m sorry. I would

agree.

ASSEMBLYMAN BRODSKY: And you could

condemn anywhere within the plan area.

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MR. CARDOZO: You can condemn within the

plan area. Yes.

ASSEMBLYMAN BRODSKY: So you can condemn

non-blighted areas as part of an overall plan if

at the core of the problem is a blighted area.

MR. CARDOZO: I thought that’s what I was

saying to the Assemblyman. I thought your

question was if it’s not within the plan, if it’s

outside the scope of the plan, then you could not

condemn.

CHAIRWOMAN WEINSTEIN: Mr. Green has a

question. But I first want to acknowledge that

we’ve been joined by two other members of the

Judiciary Committee. On my far right is

Assemblyman Danny O’Donnell, and next to him

Chuck Lavine from Long Island.

Mr. Green.

ASSEMBLYMAN GREEN: Yes. My very last

question. Let’s say that the City and State

initiates an economic development plan with a

developer and the developer as part of the

footprint of this project purchases, let’s say,

98 percent of the properties in the footprint and

then the state moves to execute eminent domain,

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the state would actually be executing eminent

domain on the properties that the developer

himself has already purchased.

MR. CARDOZO: I’m not sure I follow that

last sentence. You said the developer had

purchased the properties.

ASSEMBLYMAN GREEN: Yes. I said that the

state and city initiated an economic development

plan, and that as part of that the developer went

forward and purchased most of the properties

within that footprint. Let’s say 92 percent, 98

percent of the property. The state afterwards

executes eminent domain.

MR. CARDOZO: Why would it do that?

CHAIRWOMAN WEINSTEIN: Only on the

properties –

MR. CARDOZO: It would exercise eminent

domain on the properties that the developer did

not purchase.

ASSEMBLYMAN GREEN: Executes eminent

domain in the footprint, which would include

properties that he didn’t purchase and properties

that he did purchase.

CHAIRWOMAN WEINSTEIN: You would only

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exercise eminent domain on properties where there

weren’t building buyers.

ASSEMBLYMAN GREEN: Not necessarily. If

I read the law correctly it is very possible that

if, in fact, properties have been purchased

within the footprint of an economic development

plan and the state executes eminent domain that

that could in fact impact on properties that were

purchased by the developer.

MR. CARDOZO: I guess that’s

theoretically possible. I’m not sure the reality

–

ASSEMBLYMAN GREEN: I guess what I’m

saying is how would we safeguard – should there

be some clarity in the law that creates

essentially like a firewall that would –

MR. CARDOZO: I’m not sure that I

understand. You’re increasing the cost to the

municipality. I’m not sure who you’re

protecting. If the developer goes out and buys a

piece of property from someone and the state or

the city would then condemn that property, I

don’t quite know why that would happen and I

don’t know who we’re protecting in your

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hypothetical. I guess I’m just not following it,

sir.

ASSEMBLYMAN GREEN: Okay.

CHAIRWOMAN WEINSTEIN: Thank you very

much.

ASSEMBLYMAN BRODSKY: We appreciate your

testimony.

MR. CARDOZO: Thank you.

CHAIRWOMAN WEINSTEIN: And we look

forward to receiving some follow up on that.

Our next witness is Kathryn Wylde,

President of the Partnership for New York City.

ASSEMBLYMAN BRODSKY: Ms. Wylde,

welcome. It falls to me again to say if it’s

possible to summarize your testimony.

CHAIRWOMAN WEINSTEIN: You only have

three pages. Go ahead and read it.

MS. WYLDE: That’s okay. I’ll summarize.

I was more interested in some of the discussion

than my paper.

KATHRYNE WYLDE, having been first duly



MS. WYLDE: I’m Kathryn Wylde. I’m

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President of the Partnership for New York City.

I was interested in many of the points raised

because for almost 40 years, more than 35 years,

I’ve been involved in community affordable

housing, economic development primarily in the

five boroughs of the City of New York. And I

think what’s missing from the conversation and

from the discussion of the Kelo case and I’m

really glad that you took the initiative to have

this hearing, unlike the U.S. House of

Representatives which managed to overwhelmingly

pass a change in the law that will profoundly

affect cities all over the country, yesterday,

if, in fact, the Senate goes forward with it,

without a conversation with the people who have

spent the last 40 years working on the revival of

urban areas that we almost lost during the 60’s

and 70’s.

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And I think at this point it’s hard to

remember that the tool kit that has been put

together over the 40 years to leverage private

reinvestment into communities that had no

economic base, this is just part of that tool

kit. The use of economic domain for economic

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development purposes to control the speculation

that’s created when government decides, the

private sector’s speculation that’s created when

government decides they want to take an action in

the public interest to basically improve the

economy, to eliminate blight. That sets off a

chain reaction of speculation that only the

threat of the power of eminent domain can

control.

There are a number of other examples I

can give you because I’ve been involved in many,

many specific projects over the years where

eminent domain was a small piece of a much larger

puzzle that involves long range planning and

thinking through development.

Some of the issues that were raised

earlier, in particular Assemblyman Green who has

long experience in Brooklyn. I think that the

urban renewal and condemnation got a bad name

when it was a function of following the federal

urban renewal law during the 50’s and 60’s in

order to create public housing and other large

public project, mostly public housing. The

federal government had enacted urban renewal

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where they gave powers of condemnation and they

gave funds then supposedly to rebuild. Well,

they pulled the plug on the funds in the 70’s.

And so it left the city with a large number of

urban renewal sites that were vacant, derelict,

where people couldn’t get financing. Sometimes

they were condemned and held by government.

Often times they weren’t even condemned; they

were just held off the market.

So, it’s a complex issue that has a

history that is difficult. I think, though,

since that time in the 70’s that local

governments and the state, to some extent, but

particularly cities, large cities, have used this

as an indispensable part of the process of

rebuilding.

We, in urban development, have a mantra

that you renew cities or you die. We’re usually

building on second or third generation sites.

And when we do projects of significant scale, we

have to assemble sites. The power of

condemnation is the tool that we use. As a

component of that project it’s absolutely

essential to the City’s future, its urban

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development program, its continual renewal in

regeneration. It has to be used judiciously.

And my experience in New York, and I’ve been

involved in dozens of these cases, mostly for

affordable housing and economic development, my

experience is they are done carefully, they are

done thoughtfully, they look at every parcel with

inter-zone and make a decision with the community

in terms of whether it should be subject to

condemnation or left out of the condemnation

plan. It’s not an all or nothing situation.

Now, I also think a complicating factor

concerns of people in rural areas, and the

farmlands in particular, about use of

condemnation by the state. And I think that’s

something that we, as an organization, would not

oppose taking a hard look at. I think there are

other issues, and the conversation about having a

commission to kind of sort through these is a

very positive one. But it’s very hard to come in

if you haven’t spent a career in housing and

economic development, it’s hard to come in and

understand sort of how this framework of

public/private relationships have been put

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together and how they have served the public

good. And I think it would be useful to go

through that exercise and to see where, for

examples, property that’s hanging out there under

condemnation shouldn’t be able to come back into

the marketplace.

When I started in housing and community

development there was almost no place in the City

of New York outside the luxury areas of Manhattan

where you could build a house or rent an

apartment or you could see a house or rent an

apartment for more than it cost to build. We had

no private market functioning in the City in the

60’s and 70’s. We have a robust one today, and I

think that’s made people forget that it’s not

necessarily always going to be this way. That,

in fact, our economy is very cyclical. The

future of our City depends on constant private

investment and rebuilding. We don’t have enough

public money to the job alone. We have to

leverage private money. And this is just part of

the tool kit by which we do that in economic

development. And I hope that the work that you

are doing to examine this issue will ratchet up

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to the national scene so that we can get the

Senate before it takes precipitous action.

ASSEMBLYMAN BRODSKY: Did you say up?

MS. WYLDE: Down. Sorry. Washington is

down. Down to the federal government. So that

the Senate will provide some consideration of our

package of really urban redevelopment tools

before taking an action.

Thank you.

CHARWOMAN WEINSTEIN: I just have a

question before I call on some of my colleagues.

You mention in your testimony the procedure here

in New York, ULURP, the various levels of

government, and Corporation Counsel also talked

about, that have to give their approval prior to

the use of eminent domain here in New York City.

As we heard from testimony in Albany,

particularly of an RDA’s Act, there is no – or

when you’re taking for public use by a state

agency the local government, the local elected

officials do not have sometimes either the

ability to vote their approval up or their

disapproval or even have any official say in that

proceeding. Would you support changes or would

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you recommend based on your experience changes

for outside, areas outside of New York City

similar to some of the procedures that are

required here in New York City?

MS. WYLDE: My own bias is that land use

and development are profoundly local decisions.

So I think that New York City’s model is a good

one. I’m not familiar enough with what kind of

abuses exist outside of New York City to be able

to respond to that.

I can’t recall a situation in which New

York State has come in and used its powers in New

York City without a home rule invitation, the

friendly condemnation invitation from the City.

CHAIRWOMAN WEINSTEIN: I think the

thruway is probably one of those examples.

MS. WYLDE: I was thinking economic

development. I don’t think I can comment

further.

Assemblyman Weprin.

ASSEMBLYMAN WEPRIN: This may not be what

you’re prepared to answer. Can you describe what

it was the House passed, the law that the House

passed?

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that they were trying to undo the Kelo decision,

and they said that if a community uses the power

of eminent domain for economic development

purposes, to condemn property that they will pull

their federal economic development funds for two

years, essentially.

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ASSEMBLYMAN WEPRIN: If they use it in

any way, shape or form?

MS. WYLDE: For economic development.

CHAIRWOMAN WEINSTEIN: Mr. Brodsky.

ASSEMBLYMAN BRODSKY: Ms. Wylde, I

didn’t want to get into a long debate, a longer

debate with Mr. Cardozo than was his necessary.

But his read of the statutes and mine don’t

comport. The MTA’s ability to condemn, for

example, although they say it’s just for

transportation purposes, there’s case law in the

state that says the raising of revenue for the

transportation system is a transportation

purpose. So, theoretically, if one wanted to

build, let’s say, oh, a stadium on the west side,

one could have the MTA – the MTA could have used

condemnation power to do that arguing that the

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proceeds to them were a transportation purpose.

So, I do not accept yet, and we don’t

know what the law is. No one knows what the law

is yet in the state. That’s problem one. But I

do not accept that the protections in place in

New York within the City are adequate.

I do take your testimony to say, however,

that no change in law is needed now.

MS. WYLDE: No. I think –

ASSEMBLYMAN BRODSKY: Aside from the

commission.

MS. WYLDE: it’s worth discussing. One,

as I say, I plead ignorance on the implications

throughout New York State. And I think that the

issue that Assemblyman Green raised about how

long properties can hang out there is a

legitimate one because neighborhoods change and

I’ve experienced enough in neighborhoods where

the property hanging out there while one

bureaucracy after another didn’t go forward with

plans, has had a depressing affect and has done

anything but contribute to economic development.

I think it is worth looking at the whole area

and looking at it from a statewide perspective.

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And, if as you say there are state authorities

that have the ability to come into New York City

and its neighborhoods and exercise those powers

in areas that are not strictly limited to their

public infrastructure purpose, I think that’s

wrong.

ASSEMBLYMAN BRODSKY: You heard my

colloquy with Mr. Cadozo about the virtues and

defects of the concept of blight. Do you see any

reason to excuse Park Avenue from being at least

put into an equation about relative costs and

benefits. Should they, as a matter of law, never

be subject to condemnation for purposes of

economic development?

MS. WYLDE: The problem is I don’t think

it’s a matter of law; it’s a matter of economics.

I can’t imagine a scenario –

ASSEMBLYMAN BRODSKY: It is a matter of

law now and my point is it ought to be a matter

of economics. Right now –

MS. WYLDE: I wouldn’t disagree with you

on that. I think it’s a matter of economics, not

law. It would be irresponsible for the City to

use taxpayer dollars if it wasn’t resulting in

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significant appreciation and just the cost and

limitations. The fact is it’s very limited what

the government can put in in terms of public

resources into these projects. They have to

leverage private dollars. And if you’ve already

got highest and best use, what are you doing?

ASSEMBLYMAN BRODSKY: I’m not sure it’s

an academic theory. If you go up Park Avenue as

far as the hospital corridor or the museum

corridor which have potentials to expand in areas

that could bring economic growth. Right now, the

City of New York, the state theoretically can’t

do it. I think that’s an interesting insight

into what we mean by the word blight.

MS. WYLDE: It is.


CHAIRWOMAN WEINSTEIN: Mr. O’Donnell.

ASSEMBLYMAN O’DONNELL: Back to the land

uses local issue. My concern about the Supreme

Court decision is primarily about the question of

what is a public benefit and whether or not

somebody, a private for-profit group of some sort

has the power to claim that whatever that is

drives that. So in the local part of that in my

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district that has to do with Columbia University.

And what Columbia University is trying to do is

holding the possibility of taking the eminent

domain pieces of Harlem, claiming that they’re

blighted. The ULURP protections that exist do,

in fact, create a process by which the community

gets to participate. But in the end it’s really

not about what the local community people feel.

It becomes a much larger issue than that.

Obviously a local community board can vote no on

any ULURP application it wants, and those votes

are regularly ignored at the upper levels of

government and those votes are regularly ignored

in the City Council, as well.

To follow up on Richard’s question about

blight, what does blight mean and when is blight

blight? And when you are talking about Manhattan

you have experienced the evolution of what these

different neighborhoods are. Ten years ago some

people may have argued that the meat packing

district was blighted. Twenty years ago somebody

would argue that Dunbow was blighted. Now,

they’re the hottest, hippest places to be. I

don’t even have expensive enough clothing to go

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out there. Okay? So that evolution took place

without the assistance of eminent domain, without

the assistance of the government –

MS. WYLDE: Oh, you see that’s where I

would disagree. The idea that Dunbow would have

come back without the use of eminent domain in

downtown Brooklyn and the revitalization of the

Brooklyn Quarter I think is just not right.

ASSEMBLYMAN O’DONNELL: Well, I mean

that’s an interesting question because I happened

to work there at the time. I was a downtown

Brooklynite for almost a decade. That area, from

my experience the process was very slow but it

began a very long time ago. Some of the same

economic engines that New York City has and its

need for artists and art space and a variety of

things drove the beginning of what Dunbow now is.

You are certainly correct that without the

other components to it it may have not become

what it is. But the concern is about what and

how blight gets to be defined and who gets to

define it. Particularly when you’re talking

about people’s homes, you’re talking about people

who have for 20 or 30 years lived in communities

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and suffered through the difficulties of what

that meant. In Dunbow or Manhattanville that was

not decent access to a good grocery store,

they’ve overcome that or pushed through that.

And then they learn that now that they succeeded

in doing that, they run the risk of having an

entity come along and say, by the way, that

beautiful rent stabilized apartment that you have

is no longer available to you because not a

government, a private institution has decided

that its needs are greater than your needs.

I would like you to, just if you can, to

briefly address that particular conflict knowing

that there’s not a right or wrong answer here.

But I am interested in your perspective.

MS. WYLDE: I think my perspective is on

longer term cycles. And the fact that our

economy is relatively good right now means that

we’re less willing to make hard decisions about

land use. But I do think that over time, if you

would have – the issues look differently, the

individual projects look differently depending on

what you think the need is for it. To me, what

we’re talking about is when you look at a

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blighted condition you’re talking about what are

the long range needs of the City and how is this

land in this location contributing and then you

balance private and public interest. And I think

that under the system that has evolved in New

York City with the various changes in our City

Charter, where we have the City Council voting on

every one of these decisions and we’ve got a

process that forces open review, usually involves

a year environmental process with a whole

parallel set of hearings there, I think we have a

very complete and good process in New York City,

I’m not speaking of the rest of the state, for

New York City for making these decisions when the

City undertakes a neighborhood economic

development plan.

It’s important to point out in Columbia

if the City and the City procedures don’t support

what they want to do, they don’t have the right

of condemnation. They really have to come and

plead their case to the City. Then it’s a public

sector decision.

ASSEMBLYMAN O’DONNELL: Yeah, but the

problem I have is that in reality those local –

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the most local level, which are the community

boards in New York City, that those decisions and

the processes that the law mandates are followed

but their opinion is regularly ignored. And I

don’t mean ignored like, oh, gee, we don’t think

you’re the right things. It’s like we don’t even

care that you did it. And so as the person who

used to chair those ULURP hearings, knowing that

it was to some degree a horse and pony show

because no matter how a unanimous vote in

opposition to a ULURP at a community board was

rarely given anything more than a glance by the

people who are making the larger decisions and

looking at the 50 year plan or whatever else it

may be.

So, I guess what I’m saying is I,

personally, agree that the procedures are in

place but I am troubled because I know that at

the local level those firmly held positions based

on sometimes very, very important principles are

often ignored by the great planning minds who

presume that they know better.

MS. WYLDE: But they’re political as well

as planning minds that get a vote on this. And I

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think we’ve had the experience in the last year

or two in New York City where we’ve seen that the

process does have some balance and local voices

can be heard. I feel that our land use process

is pretty good. I think that it is worth looking

at the issues you’re addressing, particularly in

the context of what’s going on nationally. But

in terms of the resolution of the kind of issues

you’re talking about, I don’t think eminent

domain, I mean, I don’t think that’s the issue.

You’re talking about more fundamental charter

issues.

CHAIRWOMAN WEINSTEIN: Assemblyman

Brodsky. Assemblyman Green.

ASSEMBLYMAN GREEN: Yes. The same

question that was placed before Mr. Cardozo I’d

like to hear your take on it. This gets back to

the flash point issue in Kelo, which is

essentially the state executing eminent domain,

the property being turned over to a corporation

and then how do we get at a fair and just

compensation for property that was taken from a

private property owner. I guess the issue of

fair compensation, reciprocity, and possibly even

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reparations is something that keeps coming into

my head. What I mean is or what I’m concerned

about basically is whether or not we should have

a prescription in law that essentially provides

fair compensation for property owners and the

heirs of property owners where profits are taken

from the corporation to arrive at that fair

compensation.

MS. WYLDE: Typically, it’s a public or

not-for-profit corporation often that is the

custodian of the property for decades before

there may be private developers that come in to

work on it. So, I just don’t – my experience of

how the process actually works is only in

exceptional cases.

ASSEMBLYMAN GREEN: Times Square.

MS. WYLDE: Well, in the case of Times

Square, no. That was in a public entity for a

long period of time. Fifteen years before you

started having individual negotiations for

developers to come in. There’s just no way to

project in most cases. I think the projects that

are top of mind – Atlantic Yards now, for

example. Where you’ve got a developer in place,

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that’s an unusual situation, not the typical

situation.

ASSEMBLYMAN GREEN: But that was also the

case with Kelo, correct? In New London,

Connecticut.

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MS. WYLDE: It may have been. I don’t

know. But I don’t think that was the issue.

ASSEMBLYMAN GREEN: I think it was one of

the issues.

MS. WYLDE: I don’t think you can – if

you ratchet up the cost of the economic

development project you probably will simply

ratchet up what the public has to contribute to

it. I don’t think there’s any way on these long

term major development projects that you can

project and somehow bring more to the table

because you just don’t know what’s going to

happen. These are projects that are built

usually on a phase basis over decades in terms of

the large ones. And there’s just no practical

way that you know where the markets going to be,

what are the resources, what’s going to happen,

who’s going to ultimately be in the driver’s seat

because that often changes several times. I

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mean, you’re really relying on government to

carry out a plan over years that the – there’s no

private player to attach it to.

ASSEMBLYMAN GREEN: But let’s say, for

instance, in the case of the Atlantic Yards

project where the developer obviously had to go

back to his investors, his shareholders and to

articulate the projected profits that would be

made as a result of this project. Correct?

MS. WYLDE: He has to go to his banks, to

his shareholders, to his board and project

profits. But those are projections and they

depend on a whole series of things happening or

not happening. And if you add an additional

expense into those projections the chances are

that that will be passed along in some way, shape

or form, if it’s a public mandate to the public.

ASSEMBLYMAN GREEN: But if the law has a

prescription that essentially says that the

developer, the private corporation should provide

fair compensation from their profits to property

owners where the state has taken those profits,

wouldn’t they not project that in their proposal

and put that before their shareholders?

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MS. WYLDE: They would. It will simply

take out some of the community benefits you’ve

negotiated, some of the affordable housing you’ve

negotiated. It’s not like more money is going to

be generated. So you’ve got a fixed amount of

money that’s going to be generated over the site

over time and no one knows what that is up front.

You do your best projections. You negotiate a

deal that your investors will support. But you

can’t project those numbers. And if you’re going

to try to negotiate something like that, all I’m

saying is the pie is this big because everybody’s

got their own view of the pie. I’m not saying

what it will ultimately be, but the projection on

the part of all of the participants, they’ve

decided what the pie is, they’re dividing it up

with community benefits agreements, and if you

want to compensate more for the land owner, which

very often is not – which most often, in my

experience, is not a private homeowner but is

somebody who has other uses on the site or has

been holding the site inspect because they bought

it because they heard the government was going to

do an urban renewal plan, if you want to give

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them 150 cents on the dollar, I’m just saying

it’s going to come out of some place else.

CHAIRWOMAN WEINSTEIN: Thank you. Thank

you for your testimony today.

Next we have a panel with John Echeverria

from Georgetown Law and Policy Institute and

Scott Bullock from the Institute of Justice.

ASSEMBLYMAN BRODSKY: We’d like to limit

the witnesses to five or ten minutes of direct

testimony so there’s more time for questions.

MR. BULLOCK: I will just be submitting

that and will be summarizing my testimony.

CHAIRWOMAN WEINSTEIN: Why don’t you

begin then? We’ll let you begin first after you

get sworn in.

JOHN ECHEVERRIA, having been first duly



SCOTT BULLOCK, having been first duly



CHAIRWOMAN WEINSTEIN: Mr. Bullock, why

don’t you begin? We can look at Mr. Echeverria’s

remarks while you start. We can multitask here.

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MR. BULLOCK: Thank you very much. My

name is Scott Bullock. I’m Senior Attorney with

the Institute for Justice in Washington, D.C.

And thank you for the opportunity to testify

today. I want to talk briefly about the Kelo

case and what I think should be the Legislature

in New York’s proper response to the decision,

and then will be submitting written testimony

with some more specific comments on some of the

legislative proposals shortly.

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The Institute for Justice, where I’m an

attorney who represented the property owners in

the landmark case of Kelo v. New London, I argued

that case before the Supreme Court and we

represented the property owners from the trial

court up to and including the U.S. Supreme Court.

And I’m happy to report that they’re all still

in their homes and enjoying the homes that they

know and love so dearly and we are fighting hard

to allow them to hold onto their homes, despite

the loss in the court.

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They are true American revolutionaries.

They have touched off a controversy now and have

put into the public eye an issue that had been

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bubbling for a number of years, but it’s not put

to the national perspective that it has been

placed in now as a result of the Court’s

outrageous Kelo decision. 5

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I think one would be hard pressed to find

a Supreme Court decision that has generated such

uniform outrage across the country and across the

political spectrum. Polls are overwhelmingly

against what the court decided in the Kelo case.

And, thankfully, Legislators throughout the

country are responding to this and looking

seriously at changing their laws. As one of the

speakers previously mentioned, just last night in

Washington, the U.S. House of Representative

overwhelmingly voted to strip federal funding for

cities that use eminent domain for private

development and to show the range of support that

stopping eminent domain has, the Congress passed

that. The House of Representatives passed that

376 to 38. So it was clearly a bipartisan effort

across the political spectrum to end eminent

domain abuse and to essentially show Congress’s

strong disapproval of the

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Kelo case. 24

In Kelo, the Court held that private 25

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economic development alone is a public use and

that the Fifth Amendment provides very little, if

any, protection to property owners to face the

loss of their property for private economic

development. In the words of Justice Sandra Day

O’Connor, the specter of condemnation now hangs

over all property. A Motel 6 can be taken for a

Ritz Carlton. Any home can be taken for a

shopping mall. Any farm can be taken for a

factory. Those aren’t hypotheticals that Justice

O’Connor was talking about. Those are real world

examples that we documented in a report that we

did just a couple of years ago called Public

Power/Private Gain, where we documented over

10,000 instances of real or threatened private to

private condemnations of property. And

unfortunately, New York is a state that

desperately needs eminent domain reform because

the power is abused in this State.

Like Connecticut, New York allows eminent

domain simply for private economic development,

even in the absence of a finding of blight. That

needs to be changed. That needs to be addressed.

And we encourage the Assembly to pass

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sustentative, not cosmetic, eminent domain

reform. And I think an excellent place to start

to look at a serious proposal is the legislation

that just passed the U.S. House of

Representatives last night. It is solid

legislation that truly does address the problem.

What it does is it defines economic development

and says, essentially, the Assembly was going to

pass something like this. That eminent domain

cannot be used simply for the generation of more

tax revenues or job creation or the

revitalization of the economy. It prohibits that

outright, which is what the court allowed for in

the Kelo case. In the federal legislation it

just says that if a city does this they’ll lose

their federal funding. But if it was legislation

in New York, you could simply prohibit these

types of takings.

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The other thing that the legislation does

is it puts a real definition to blight and what

are blighted areas. And can the government

condemn property that is truly blighted or is it

an example, as blight laws have been abused in

the past where the government is simply trying to

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get property for economic development and abusing

the blight laws by saying that a particular

neighborhood is blighted even though it would not

meet most people’s definition of a blighted

neighborhood. The federal legislation defines

blight. It allows it for properties that are

falling down, that are truly in disrepair that

the community wants to revitalize, but it does

not use it simply as a tool to gain property for

private economic development.

So I would encourage this Committee and

other members of the Assembly to look at the

federal legislation that was passed that can

serve as a model, I think, for eminent domain

reform throughout the country.

I would just like to add a couple of

thoughts in response to some of the matters that

I heard or in response to some of the things that

you hear when people address the Kelo decision

and about why defenders of eminent domain think

that this is necessary to preserve in something

that the government should not change.

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First of all, eminent domain for private

economic development is simply not necessary.

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The former speaker here said that eminent domain

was simply one of the tools that they used in the

past for private economic development. And I

think it’s important to point out that changing

the law to prohibit the use of eminent domain for

private economic development would not in any way

undercut the myriad ways that government has at

its disposal to encourage economic development,

to incentive cities and other municipalities to

do economic development projects, to even have

public/private partnerships. Simply the one

thing that they cannot do which a vast majority

of Americans are opposed to is to take property

from one private owner and hand it over to

another private owner. Not only should that be

prohibited under the Constitution, unfortunately

the court got that wrong, most Americans find

that concept deeply offensive and it should stop.

But the good news is that eminent domain in a

vast majority of these cases is simply not

necessary. Economic development happens in this

country every single day without the use of

eminent domain and it will continue if the

Legislature prohibited the use of eminent domain

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for private economic development.

One of the most interesting books that I

saw in preparing for the Kelo case was a book

that was cited actually by the other side in the

briefs that were filed before the court, and it

was a book called Architectural Holdouts. And it

was a book about building in New York City,

perhaps the most densely developed area in the

country, if not the world. And it showed how

people can develop even if there is some

recalcitrant holdout that might be trying to stop

something. There are possibilities of doing

this, because the response you always here is

what about the holdout. Typically, that’s not a

real problem. And if people want to hold onto

their homes or hold onto their small businesses,

economic development can happen. And this book

actually demonstrated that in something like New

York and actually the holdouts had led to some

pretty interesting architectural designs and

pretty innovative ones, as well.

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The last point that I want to leave with

you today and I think it’s important to

underscore is the problem with simply changing

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eminent domain procedures or allowing for more

hoops for the government to jump through if

they’re going to do an eminent domain project, is

that it does not really help the property owner.

Because in most of these cases we’re talking

about homeowners or small business owners that

simply cannot afford to fight an eminent domain

action. You know, often times defenders of

eminent domain abuse will say, well, if the

procedures weren’t followed or something happened

and the private developers had too much

influence, well the property owners can just

challenge that in court and get their day in

court.

After working on these cases for years

and being involved in dozens of cases, I know

that a vast majority of property owners simply

cannot afford the expense of fighting an eminent

domain action. The costs of the legal battle

will quickly exceed the value of the property and

often times people throw in the towel even though

they don’t want to give up their property or give

up their business simply because they cannot

afford the massive legal expenses that go in to

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holding onto your property because they have to

pay a lawyer out of pocket. And the Institute

for Justice, even though we try to help as many

property owners as we can fight eminent domain

abuse, we can only take on a very small fraction

of the overall eminent domain cases that happen.

And we are the only organization that actually

litigates these cases in court. So that’s

another reason why it is very important for the

Assembly to pass substantive eminent domain

legislation that stops something that a vast

majority of Americans oppose.

Thank you very much.

CHAIRWOMAN WEINSTEIN: Thank you.

MR. ECHEVERRIA: Thank you for the

opportunity to testify. I am delighted to come

up to New York from Washington, D.C. to be here

today. I’m pleased to be testifying not only on

my own behalf, but on behalf of the Natural

Resources Defense Council. And in accordance

with Assemblyman Brodsky’s injunction, I will try

to be very brief.

I know essentially nothing about New York

law. I’m not familiar with many of the acronyms

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I’ve heard today, so don’t ask me about any of

those subjects. I pretend to know something

about the takings issue of eminent domain, and I

will try to speak generally about those issues

from my – from a national perspective on this

issue.

I want to very briefly address four

topics. One is the Kelo decision. Secondly, I

want to talk about the rationales for the use of

eminent domain and the benefits of the use of

eminent domain. Thirdly, I want to talk about

the understandable concerns that the use of

eminent domain raises and the policy solutions

that that suggests. And, finally, I want to very

quickly tick off some general ideas I have about

how the eminent domain process can be reformed to

address the very legitimate public concerns.

First of all, let me start with the

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Kelo

decision.

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It is popular in some circles to attack

every judicial decision for which a politician

disagrees as an example of outrageous judicial

activism. Unfortunately, the Kelo decision is

Exhibit A in that phenomenon. Scott described

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the Kelo decision as an outrageous decision. We

were on opposite sides of the case. I thought it

was a wonderful decision. I thought it was

correctly decided, and I thought it was a model

of judicial restraint.

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What the Supreme Court said is the

Constitution does not ban state and local

governments from using the eminent domain power

for economic development purposes. And in

reaching that result, the Court, in every

conceivable sense of the term, acted in a

restrained way. Its decision was consistent with

the best understanding of the language and

original understanding of the public use

requirement of the takings clause. The decision

was consistent with over 100 years of Supreme

Court precedent. The dissenters in the decision

acknowledged that they would have to jettison

prior decisions, including prior decisions they,

themselves, had written in order to reach a

different result. And, most importantly, what

the decision does is it says it’s up to the

Legislatures, up to Congress, and up to the State

Legislators to place what limitations they wish

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has always been and that is how it is after Kelo.

And to describe the

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Kelo decision as an

outrageous judicial interference with the

political process strikes me as just bizarre.

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If anything, if anything, the Kelo

decision actually narrowed the permissible scope

of the eminent domain power. If you look at the

famous

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Berman v. Parker decision, a famous urban

development decision in the 1950’s or a later

case out of Hawaii, the Supreme Court articulated

an enormously differential standard about how

eminent domain power should be reviewed by the

courts. By contrast, in the

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Kelo decision the

court adopted, the majority of the court adopted

a much more skeptical position on how eminent

domain ought to be exercised and emphasized that

an A to B transfer simply for the purpose of

benefiting B is not permissible under the

Constitution, and said that they were willing to

uphold the use of eminent domain, as in the case

in New London, because there had been a very

deliberate process in which there was a plan, in

which the City Council signed off that the City

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was trying to address a real economic need.

Let me talk about why the eminent domain

power is needed. The basic problem is one of the

holdout. I was interested in a recent eminent

domain project in my neighborhood in Washington,

D.C. involving our new stadium. I was curious.

Well, why would you need the eminent domain

power? I went up to the title office and I

pulled the land record for that site. I’m sure

it’s typical of other areas in D.C. and other

areas in New York City and other areas of New

York State with enormously divided property

ownership. And you simply look at those lines on

a piece of paper and you say well if the City,

the State or a developer is trying to put

together a large scale project, trying to get all

those land owners to work together is either

impossible, because there’s going to be one

idiosyncratic person who says I’m not going to

sell at any price, or you’re going to put a few

land owners in the position, after others have

sold out at fair market value, of being able to

extract monopolous profits. In my view, the

eminent domain power, as many others have

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observed for years, is essential in order to deal

with a holdout problem.

Without the ability to deal with a

holdout, cities like New York are placed at an

enormous disadvantage compared to other

communities in revitalizing themselves, and

attracting jobs, and generating tax revenue.

Inevitably, developers, if unable to find

projects in suitable sites in inner cities and

inner suburbs are forced to go to the outer

rings. This is why groups like NRDC are

concerned about this issue, because without the

power of eminent domain we’re going to see more

sprawl development on the outer rings gobbling up

vacant land that ought to be conserved when we

should be concentrating development in urban

areas.

Now, what are the legitimate concerns

that this raises? I think all of us, if we

reflect on it, recognize that our home is not

simply an asset. It’s not simply the price we

can get for it in the open market. It represents

our ticket to membership in a community and all

the associations we have in that community. Our

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neighbors. A familiar place for our children.

Our own sense of personal history. There’s no

question that taking private property is

disruptive and most especially taking private

homes is enormously disruptive.

Furthermore, eminent domain projects

often single out, not necessarily one or two, but

a relatively few number of property owners and

say we’re going to select you for bearing this

burden. So it’s entirely appropriate that the

government pay compensation and, in my view, that

the government think about paying extra

compensation in some circumstances.

So, given the special concerns that the

use of eminent domain raises, it seems to me that

the barrier, in effect, ought to be high, that it

ought to be reserved for great projects, and that

the government should make a special effort to

make sure that landowners whose properties are

taken are dealt with fairly.

Finally, let me just briefly comment on

some ideas for how to improve the eminent domain

process. As I said at the beginning, the Kelo

decision invites the State Legislatures and

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Congress to address this issue. And although I

don’t agree with much that the Institute for

Justice says and does, I do think they provided a

public sense in a sense that they’ve case new

light in this issue. Eminent domain has not been

examined the way it should be examined, and I

think it’s entirely appropriate that you’re

holding this hearing and thinking about changes

that should be made.

Contrary to Scott’s position, I think the

primary avenue for reform lies in better process.

In ensuring, for example, that responsible

elected officials review and take responsibility

for the decision to use the eminent domain power.

That the use of eminent domain is not done is

not done in an ad hoc fashion but, rather, is

carried out in the context of a comprehensive

community planning effort, which is both public

and transparent and considered. And, in

addition, that there be an additional requirement

that local communities, much like now under the

Environmental Review Statutes, communities have

to prepared environmental impact statements, that

it would make sense to prepare written analyses

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of the impact of proposed projects on a

community. What are the benefits in terms of

economic development? What are the benefits in

terms of tax revenues? What were the

alternatives to the use of eminent domain? How

many homeowners are being affected? How will

their needs to be addressed?

I think all of those things are

appropriate in the context of use of eminent

domain for economic development purposes, but I

wouldn’t necessarily limit it to that context.

The House bill that just passed said well, if

you’re a utility, if you’re ConEd or if you’re

building a private toll road, well of course we

have no concerns with that. You can just go

ahead and build that. We’re not trying to

constrain that in any way. But the reality is

that a homeowner whose home is taken for a road

or by the utility has concerns that maybe

slightly different when that property is being

turned over to a developer for some major public

project. But they’re nonetheless very serious,

and I think you have to think about reform in a

larger context.

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One of my favorite ideas, and I guess

this goes on sometimes and sometimes not, is to

try to seek ways of separating out the public

review process decision whether or not to do a

project, the decision whether or not to exercise

eminent domain from the process of selecting a

developer. One of the problems in this area, I

think, is too often developers come up with a

good idea and basically enlist the government,

public officials as agents of their private

development plans. We need to reverse that and

ensure that eminent domain is used by public

authorities for public purposes and developers,

when private developers are brought in, and they

bring a lot of skills to the table, are serving

as the agents of the public and not the other way

around.

On the other hand, I’m very much opposed

to the approach which is followed in the House

bill. I’m trying to sort of figure out in an

absolute way permissible and impermissible uses

of the eminent domain power – things that should

be allowed and shouldn’t be allowed.

First of all, as I mentioned, I think we

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need reform across the board. And simply because

it’s a toll road or simply because the utility is

involved, I don’t think we should say we have no

concerns about the taking of private property.

Also, many of the most successful eminent domain

projects today and development projects generally

involve mixed uses, whether they’re public

spaces, private spaces, commercial office spaces,

they’re private residences. We very much, I

think, want to encourage those kinds of mixed

uses. But if you take the approach of saying

well you can take for this purpose, and not that

purpose, but not for others, you defeat the

opportunity to pursue mixed uses.

It’s also, I think, very hard to draw

sensible lines here. The Republican leadership

in Congress seems to be intent on allowing

opportunities for stadiums to go forward. That

may have something to do with the fact that

President Bush made a fortune building a stadium

in Texas, relying on part on the eminent domain

power. But they seem less enthusiastic about,

for example, shopping centers. But in my City,

the Anacostia neighborhood has successfully

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persuaded the D.C. City Council to authorize the

use of eminent domain so the Skyland Mall can be

redeveloped so that the people east of the City

in Washington can have one sit down restaurant.

I have a hard time finding a principle line

between stadiums and shopping centers.

And, finally, if you take sort of the

categorical approach you end up with a sort of

strange phenomenon of saying as long as it’s

publicly owned it’s okay. It’s the private

transfer that we’re concerned about. So then, I

guess, what we’re going to end up with is

publicly owned stadiums and publicly owned

shopping centers. Frankly, I don’t think any of

us want to go in that direction.

I think it’s a complicated question, but

I am inclined to support the notion of a modest

premium, particularly for homeowners who are

affected by takings of private property. I think

there’s a cost involved in that and I think

there’s a potential for abuse. I endorse the

suggestion that Tom Merrill, who authorized the

brief that we filed in the Supreme Court, has

offered which is that the amount of extra

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compensation be key to the tenure of the

landowner in the community. If somebody’s been

there for 30 years, they’re entitled to extra

compensation. If there’s a savvy speculator who

moved into the neighborhood last month, they’re

not.

Then, finally, let me just close with a

suggestion that the idea of a commission, I

think, is a worthy one. Not because it would

delay consideration of the process, but I think

you’d arrive at a much more sensible result.

This is a very complicated issue, and how you

evaluate it really depends on your sense of how

the world works and what kinds of results these

projects produce. Scott cites examples of

individuals who have been traumatized by the use

of eminent domain.

I spoke with a couple of homeowners in

Norwood, Ohio who sold property under the threat

of eminent domain. I talked to a woman named

Donna Lake who sold her property. She had to

sell it, but she negotiated a price and got more

than fair market value. And she said she was

going to name her daughter’s wedding after the

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developer because she was paying with the money

she got from the sale. Plus, she and her husband

were delighted to be living in a quieter

neighborhood than they were before.

Now, the people in Norwood who were

affected by eminent domain apparently largely

supported it. There were some holdouts. Those

who supported it objected to the efforts by the

Institute for Justice to come into the

neighborhood and block the economic development

project by putting up Institute for Injustice

signs on their lawns. Now, I think the story

varies. I think some projects are good. Some

projects are less good. Some people are happy to

have their property taken. Some are indifferent.

Some are very unhappy. But I think we need a

lot more facts and you need a lot more facts to

really make a sound decision about how this

process ought to be reformed.

And I will close with that. Thank you.

CHAIRWOMAN WEINSTEIN: Thank you.

Assemblyman Brodsky.

ASSEMBLYMAN BRODSKY: Mr. Bullock. The

phrase you repeatedly use is private eminent

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domain abuse. How do I know when I see one of

those?

MR. BULLOCK: Well, the term is eminent

domain abuse. We use that really to classify two

types if misuses of eminent domain. One is when

it is used simply for private economic

development purposes, like the situation that was

in Kelo. 9

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ASSEMBLYMAN BRODSKY: What do you mean

by private economic development purposes?

MR. BULLOCK: The taking is for the

purpose of gaining more tax revenue and creating

jobs. And the neighborhood that is targeted it

targeted simply because the government thinks

somebody could make more productive use of this

property than the current owners are making of

it. And that’s one of the things that’s so

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ASSEMBLYMAN BRODSKY: If you’ll help me

out here.

MR. BULLOCK: Yep.

ASSEMBLYMAN BRODSKY: Objection one is

if the purpose of the taking is to increase tax

revenues and creates jobs it’s an invalid taking.

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It’s not just a bad idea, but constitutional

value.

MR. BULLOCK: That was our perspective,

and we lost by one vote at the Supreme Court.

ASSEMBLYMAN BRODSKY: What was the other

reason?

MR. BULLOCK: And the other issue that we

address and that we fight against is what we

called basically the misuse of blight laws. When

blight laws are abused and the real purpose is to

get eminent domain power to do a development

project. The concern is not really about blight.

The concern is getting the property because

under the Berman decision by the U.S. Supreme

Court, if an area is declared blighted, as was

discussed before, then the government can use

eminent domain power to remove people from that

area.

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ASSEMBLYMAN BRODSKY: For purposes other

than economic development.

MR. BULLOCK: Supposedly the purpose in

that instance is to remove blight. That was the

justification behind it. But what’s really going

on is that they want the land for economic

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development.

ASSEMBLYMAN BRODSKY: If a public body

comes in and seeks to create an institution that

creates enormous tax revenues and jobs, do you

object as a matter of constitutional principal?

MR. BULLOCK: If a public institution –

ASSEMBLYMAN BRODSKY: I’m going to give

you two parodies. Syracuse University up in

Northern New York and the State University of New

York, the public college, Syracuse is private –

come to the Thruway Authority and say condemn

this land adjacent to the thruway so we can put a

research center on there. It will create 1,000

jobs and pay enormous tax revenue. Do you have a

constitutional objection if the State University

does it?

MR. BULLOCK: No. Because if it’s a

public use, if the government owns the land –

ASSEMBLYMAN BRODSKY: We’ve got two

separate things here. You said public use and

then you say owns the land.

MR. BULLOCK: Right.

ASSEMBLYMAN BRODSKY: You see a

different under the Constitution. When SUNY does

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it, it’s okay. When Syracuse does it, it’s

constitutionally invalid. Same project.

MR. BULLOCK: Yes, unless it’s authorized

for. If the government owns the land, if it is

being done for a public use then by definition

then it is constitutional. The Constitution

explicitly authorizes that.

ASSEMBLYMAN BRODSKY: So it’s the

ownership transfer that is the constitutionally

offensive act; it’s not the purpose of the

facility. They’re identical facilities. Is that

correct?

MR. BULLOCK: Uhm, well, sure. And this

is the question that the court addressed. And

they went through this. And Justice Thomas’

dissent I think very carefully goes through the

analysis of showing what are legitimate public

uses and what are not. And if the government

owns the property, if it is for a public use,

then by definition it is going to be

constitutionally valid.

ASSEMBLYMAN BRODSKY: If the public

comes in and says I want to build a playground,

it’s constitutionally valid.

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MR. BULLOCK: Yes.

ASSEMBLYMAN BRODSKY: But if they want

to build – if Syracuse comes and says I want to

build a project that creates 1,000 jobs and pays

tax revenues, then that’s constitutionally

invalid.

MR. BULLOCK: Well, if it’s going to – if

it’s owned by a private party and you’re taking

land from one private owner and transferring it

to another private owner –

ASSEMBLYMAN BRODSKY: That’s the heart

of the constitutional defect.

MR. BULLOCK: That’s the heart of the

constitutional defect.

ASSEMBLYMAN BRODSKY: Why is that

relevant in practical terms in any way to modern

life? If you’re trying to restrict the takings

clause to public ownership not public benefit,

why is that good public policy aside from the

victims it may create, which I’ll talk about in a

moment?

MR. BULLOCK: Oh. Leaving aside the

victims, here’s one of the real problems with it.

If it’s limited to public use and true public

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uses or things that are owned by the public or

people have an equal right of access to –

ASSEMBLYMAN BRODSKY: If I may. Excuse

me.

MR. BULLOCK: Sure.

ASSEMBLYMAN BRODSKY: You keep using the

term public use when I thought I heard you say

public ownership.

MR. BULLOCK: Well, the takings clause if

broader. It’s not just public ownership; it’s

public use. And that is why things like

utilities, and railroad and other such

institutions can receive the power of eminent

domain. Because the public has an equal right of

access to the railroad, to the utility line, than

those who have been declared –

ASSEMBLYMAN BRODSKY: And an equal right

of access to that research center. If the public

is not barred in any way that they would not be

bared by SUNY, by the State University. If the

access is exactly what the government would

offer, why is there a constitutional defect?

MR. BULLOCK: I don’t know what you’re

talking about with access. I mean, could any

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private party go into a research center and

obtain office space there?

ASSEMBLYMAN BRODSKY: A private parking

lot versus a public parking lot. Let’s take

that. If the private parking lot takes anybody

it wants to come in and they pay a fee that’s no

good.

MR. BULLOCK: That’s true.

ASSEMBLYMAN BRODSKY: But if it’s a

public parking lot that anyone can go into that’s

okay if you pay the same fee.

MR. BULLOCK: Again, if it’s public

ownership there’s not a constitutional problem.

ASSEMBLYMAN BRODSKY: And my question

back is why is that relevant?

MR. BULLOCK: It’s extremely relevant for

this reason: public benefit – here’s the problem

with having public benefit. If the justification

is the public benefits that come from economic

development in the form of higher tax revenue and

more jobs, then there is no limit on eminent

domain authority. There is none because the

government can always make the claim that

somebody’s home, somebody’s business would be

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more productive and create more “public benefits”

if it was in the hands of a business or in the

hands of a larger business.

ASSEMBLYMAN BRODSKY: Surely we can deal

with a slippery slope without setting a

constitutional prohibition against anything that

is owned by a private party.

MR. BULLOCK: Well, there can be private

ownership if the public has an equal right of

access to it. That addresses the rail road.

That addresses the utilities.

ASSEMBLYMAN BRODSKY: And the parking

lot?

MR. BULLOCK: Well, the parking lot is

not going to be controlled by public bodies.

That’s another.

ASSEMBLYMAN BRODSKY: And the mall?

MR. BULLOCK: The mall is just privately

owned.

ASSEMBLYMAN BRODSKY: There’s complete

public access. What’s the problem?

MR. BULLOCK: Well, because the mall is

not a common carrier under the law and that’s the

justification for it.

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ASSEMBLYMAN BRODSKY: That’s not a

constitutional justification.

MR. BULLOCK: I encourage you,

Assemblyman, to read Justice Thomas’ dissent in

the Kelo case where he makes a very solid

constitutional argument from history, from text

about the very distinctions we’re talking about

here. It makes absolute sense and it can be

applied in the real world.

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ASSEMBLYMAN BRODSKY: So the standard is

private ownership is okay if it’s a common

carrier –

MR. BULLOCK: Right.

ASSEMBLYMAN BRODSKY: but it’s not okay

if there is equal public access if it is not a

common carrier.

MR. BULLOCK: There’s no public right of

access, typically, to most privately owned

places. And that’s true of shopping malls. And

that’s true of Wal-Mart. And that’s true of

Costco.

ASSEMBLYMAN BRODSKY: If we condition

the exercise of eminent domain on that equal

public access, does that solve your problem?

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MR. BULLOCK: No. Because they are not

regulated to the extent that utilities and common

carriers are. Because importantly for this like

rail roads and utilities it’s not just the public

access that’s there, but it’s the very close

regulation by public bodies. So, in other words,

utilities can only charge certain rates. If they

want to have a rate increase, they have to apply

for it. And the same thing with rail roads as

well. They were very tightly controlled by

public bodies. Wal-Mart is not a public body.

ASSEMBLYMAN BRODSKY: They’re all

deregulated now. They’re all deregulated.

MR. BULLOCK: Well, interestingly enough,

and possibly, and the law could change on this.

One example of this is in California a utility

company can use its eminent domain power in order

to condemn four utility lines. They said that’s

a legitimate public use. But the utility company

said we want to get into the cell phone business

and we want to now condemn property and lease it

out to cell phone companies, and the court said

that’s not a legitimate public use.

ASSEMBLYMAN BRODSKY: Mr. Echeverria, do

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you want to comment on this?

MR. ECHEVERRIA: I was wondering why I

was here.

ASSEMBLYMAN O’DONNELL: We often wonder

that ourselves, just so you know, when Richard’s

around.

ASSEMBLYMAN BRODSKY: Thank you, Mr.

O’Donnell. I appreciate it.

MR. ECHEVERRIA: There a couple of

things Scott said. One, he said, the evil here

is the government is seeking to generate revenues

and generate jobs. It seems to me as sort of a

breathtaking statement to say when the

government, the elected officials make it their

object to produce tax revenues to pay for

education, to pay for health services. This is

sort of an evil to be confronted. And jobs, even

worse. People are going to get salaries. Beyond

that it’s simply a misrepresentation that Kelo

was exclusively about more revenues and more

jobs. It’s very clear that what the city did was

it selected an area that was adjacent to a

planned site that the Pfizer Corporation was

going to redevelop and dedicate to a research

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facility. They said we want to redevelop this

adjacent area. We want to create a museum. We

want to create a public park space along the

waterfront. We want mixed uses – commercial,

hotel, residential. We have a vision for this

area. And then we’re going to bring a private

developer in who is selected in that instance

after the fact and then implement that vision.

It’s simply incorrect to say that that doesn’t

represent the public definition of a vision and

the public implementation of that in which

private parties were brought in to carry it out.

Whether one can draw a distinction

between things that are public uses and not

public uses – utilities, I think, are a

fascinating example. The owner of the largest

privately owned gas company in America, who

happens to be a staunch libertarian, has

reportedly bragged that his company has never in

its history used the eminent domain power to site

a natural gas facility. That may be Hubertus.

That might be overstating it. Apparently other

natural gas companies don’t feel the same way

because they’ve made sure they’ve gotten an

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exception. But the fact of the matter is that

they can accommodate themselves, too, if you want

to go that way.

I was talking with somebody who was

dealing with the property rights issue in Georgia

and talking to landowners and said what are the

big issues that you face as landowners? How are

your property rights being infringed? They said

our big problem is the utilities. We’ve never

heard of the Endangered Species Act. We don’t

have many wetlands issues. But it’s the

utilities who are running all these slides over

our property. So to sort of say that we’re not

going to deal with that category, that that’s

sort of legitimately exempt from review seems to

me the wrong approach.

Finally, the Supreme Court upheld a

California rule that says under the First

Amendment there’s a right of access to shopping

malls. Because in today’s times, a shopping mall

is sort of our town center. And if you want to

engage in public/political debate, you have to

have to malls. So, in a very real sense there is

a right of access, common access to malls just as

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there is a right of access to –

ASSEMBLYMAN BRODSKY: That would

probably be implemented by the State Legislature

under that decision. That is not an unequivocal

right. That’s limited to where we, on the State

Legislature, say free speech –

MR. ECHEVERRIA: In that case the State

Supreme Court, I believe it was. But it was a

right recognized under state law and it was not

an infringement on the owner’s private property

rights to implement that state law based right of

access to the mall.

I don’t know how you distinguish, again,

stadiums versus malls, but it seems to me that a

mall is, in today’s times, a quintessential

public project.


CHAIRWOMAN WEINSTEIN: Mr. Lavine.

ASSEMBLYMAN LAVINE: Thank you. Mr.

Echeverria, is the Georgetown Environmental Law

and Policy Institute involved in any eminent

domain litigation in the State of New York now,

to your knowledge?

MR. ECHEVERRIA: No.

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ASSEMBLYMAN LAVINE: Oh, okay. Mr.

Bullock, is the Institute for Justice involved in

any eminent domain litigation in the State of New

York now, to your knowledge?

MR. BULLOCK: We are. We are involved in

a federal case that’s before the Second Circuit

that challenged the eminent domain procedures

that the Assembly actually did recently change.

We represent a fellow in Port Chester who had his

property taken for a private development project.

That’s our only current New York case that we

are involved in. But we list, in the report that

I mentioned, Public Power, Private Gain, several

examples of the private-to-private transfers of

property that we’ve been addressing.

ASSEMBLYMAN LAVINE: Now, Mr. Bullock.

Let me just give you an example, and this is an

example of something that’s occurring in one of

the municipalities in my district.

A community development agency, pursuant

to an urban renewal plan, fully vetted before the

community, many years in existence, is procuring

land which would be, I’m sure even under your

definition considered blighted and polluted in

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order to redevelop a creek which has been

polluted for well over 100 years. Now, the idea

is that the community development agency will

procure the property, some of it possibly through

the use of eminent domain and will then enter

into a land disposition agreement with a private

developer. Do I take it that the Constitution,

from your perspective, is being adhered to up

until the moment in time that the land

disposition agreement is signed?

MR. BULLOCK: Uh, I don’t know the

details of the project. I can only comment on it

directly. I think from what you had described

it, a truly polluted area, the government could

rely on its traditional condemnation power in

those instances. The government has always had

the power to condemn properties that were

contaminated, buildings that were dilapidated,

buildings that were delinquent on taxes. The

legislation that we’re talking about would not

change that. So it seems to me that the project

that you had described would pass muster under

the Constitution and under the legislation that

was just approved by the House of Representatives

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last night.

ASSEMBLYMAN LAVINE: Then let me give you

a hypothetical. Let us say that 85 percent of

this area would qualify as being blighted under

your definition but 15 percent would not. And

that 15 percent is located in little bits and

pieces within the confines of the 85 percent.

What then are the constitutional rights as you

view them of the owners of those 15 percent of

the property and the urban renewal plan, in order

to function, requires 100 percent usage of this

chunk of earth?

MR. BULLOCK: Well, it is something that,

again, the legislation addresses. And I think it

is something that I am willing to recognize that

the blighted justification for the use of eminent

domain has been around for a long time. It’s

been with us for 50 years.

ASSEMBLYMAN LAVINE: It’s American troops

returning from Europe after the second World War

who viewed blight here in, for example, the City

of Detroit and said to themselves, not much

difference between portions of the City of

Detroit and Dresden. Fair enough?

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MR. BULLOCK: Absolutely.

ASSEMBLYMAN LAVINE: Okay. That’s the

philosophical basis.

MR. BULLOCK: That was the philosophical

basis for it. And of course I think everybody

would agree, and I think even John would agree

with us, that the urban renewal projects at that

time, even though while largely well intentioned

were in many ways disasters for inner cities. So

that’s another problem that has plagued urban

renewal throughout all of this.

And I agree with Justice Thomas in his

discussion in what is the proper role of eminent

domain and whether it should be confined for

public uses. And I would like to have a

situation where blight is determined on a

property-by-property basis. But –

ASSEMBLYMAN LAVINE: So, let’s assume we

have 15 percent of our 100 percent that doesn’t

qualify for your definition of blight.

MR. BULLOCK: You didn’t let me get to

the but. But, as a compromise measure, in

recognizing that cities do have an interest in

trying to revitalize truly blighted

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neighborhoods, then the House legislation does

address this and makes it so that a majority of

properties would have to qualify for a blighted

designation. I think that was the latest one

that was actually passed, if I’m not mistaken.

But there has to be either a substantial or a

majority of the properties have to meet a

blighted designation. So, in that situation,

even under the reform legislation that was passed

by the House, it would qualify. And what I would

advocate, however, is adding something else which

Connecticut actually has in their urban renewal

statute. If you’re going to have a blighted area

designation, eminent domain could be used to

accomplish that, then there should be a

requirement in the law that the taking of so-

called non-blighted properties in an overall

blighted area has to be essential in order to

accomplish the redevelopment projects. And I

think that’s important language. So then the

burden is on the government to show that the

project will not happen unless we have the non-

blighted properties in an overall blighted area.

ASSEMBLYMAN LAVINE: Mr. Echeverria. How

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is the Georgetown Environmental Law and Policy

Institute funded?

MR. ECHEVERRIA: Largely by private

foundations of various kinds that support our

educational research programs.

ASSEMBLYMAN LAVINE: Mr. Bullock. How is

it that the Institute for Justice is funded?

MR. BULLOCK: The same way. Private

foundations and individuals. Very few

corporations and no developers.

ASSEMBLYMAN LAVINE: Which private

foundations? Can you share that information with

us?

MR. BULLOCK: It’s available on our

website. They range from many different groups

from both the left and the right. But our

primary basis from support comes from

individuals. No one institution or entity gives

us more than six percent of our operating budget.

So it’s very diversified.

ASSEMBLYMAN LAVINE: Thank you,

gentlemen.


ASSEMBLYMAN O’DONNELL: Briefly, just a

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couple of quick questions. Mr. Bullock. Are you

familiar with any circumstances where a private

entity went out and began acquiring a bunch of

property in order to let that property

deteriorate in order, therefore, to qualify for

blight? Do you have that? Were you aware of

that ever happening?

MR. BULLOCK: No. I’m not personally

aware of that. What I think has happened and one

of the problems with blight laws is the blight

designations that are imposed upon certain areas

of the city are open-ended and people feel like

if the government can take my property in a

blighted area, I have no incentive to invest in

it, to maintain it, to do something like that.

So even though it might not be blighted

originally, the blight designation itself

actually contributes to the deterioration of the

neighborhood. And I think that that’s another

problem with the abuse of blight laws.

ASSEMBLYMAN O’DONNELL: Mr. Echeverria, I

want to thank you for your comprehensive

testimony that you provided in writing. You

support one of the bills that I actually have

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proposed to the Assembly, and I can use all the

help I can get to get my bills passed. So I

appreciate that. But let me ask you a question

about a hypothetical in terms of what the

private/public conflict is in some places.

In the area that I referred to earlier,

there are public streets, there is access. You

can drive on them. You can walk on them. You

could even go up and put your toe in the Hudson

River from them if you wanted to do so currently.

A private university wants to extend their

campus to it, which would essentially permit them

to put a fence around that area preventing me, as

a member of the public, from walking on it,

driving on it, or sticking my toe in the Hudson.

Do you find that troubling at all? That in

terms of the public/private debate that this

eminent domain can be used to sort of deprive me,

as a member of the public, from access. Let me

just say I don’t be that they will end up doing.

They don’t want to do that. But they would be

permitted to do that. Is that troubling to you

at all in your viewpoint?

MR. ECHEVERRIA: It is troubling for

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various reasons. I guess most particularly

because there’s a law in legal tradition of

recognizing public rights in waters and public

rights of access to waters. The public generally

owns the water and owns the riverbed. So the

notion that the public is being denied access to

its own property seems to raise special problems

for me.

ASSEMBLYMAN O’DONNELL: Well, but what

the eminent domain – the way it would have to

work is it would have to transfer this property

which currently has public streets on it and

public sidewalks on it, as well as privately

owned buildings, to somebody who had the ability

to put a fence around it and say that’s no longer

a public street, that’s no longer a public

sidewalk, that’s now part of our property and if

you don’t have a proper I.D. card you’re not

allowed to walk here.

MR. ECHEVERRIA: I don’t know the

particulars of the situation or the particulars

of New York law, but other states have said that

attempts by local governments or the legislature

to limit access to public waters may violate the

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public trust doctrine and may go beyond the

legislative powers. It may be that there would

be a basis for challenging an attempt to use the

eminent domain power on that one.

ASSEMBLYMAN O’DONNELL: Thank you very

much.

CHAIRWOMAN WEINSTEIN: Mr. Brodsky.

ASSEMBLYMAN BRODSKY: Mr. Bullock, if

there is an adequate and fair determination of

blight on a particular parcel, do you still have

a constitutional objection to the use of eminent

domain for economic development in which title is

passed to another private party?

MR. BULLOCK: Do I have a constitutional

objection to it?

ASSEMBLYMAN BRODSKY: Yes.

MR. BULLOCK: Under my understanding of

the Constitution I would. But, as I said, I

think that it is a compromise measure because of

the long history of urban renewal programs and

the concern about truly blighted neighborhoods

that we would support legislation that prohibited

the use of eminent domain simply for private

development projects and actually allowed it only

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for truly blighted areas, where the neighborhood

wants to have it revitalized.

ASSEMBLYMAN BRODSKY: Do you understand

the concern that that leaves rich people alone

for the exercise of a Constitutional power? Why

should we do that?

MR. BULLOCK: It’s interesting you should

mention that because I don’t really understand

that argument. Rich people are always protected

from eminent domain. Eminent domain is never

going to be used the wealthiest of neighborhoods.

ASSEMBLYMAN BRODSKY: Should we as a

matter of law forbid it rather than simply just

recognize the practicality? That’s what the

blight theory does. The blight theory says it is

legally impossible to exercise that power in

areas that have wealthy communities.

MR. BULLOCK: Well, not only just wealthy

communities where it’s never used anyway. But it

cannot be used in middle class neighborhoods and

in working class neighborhoods. And I got to

tell you the hypotheticals are interesting. I

like them and it’s important to fine tune this,

as well. But, the eminent domain cases that

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we’re involved in, it’s not the situations that

we’ve been addressing here and I’ve addressed in

other legislative testimonies. It’s

neighborhoods being taken for lifestyle centers.

It’s small businesses being taken for larger

businesses. It’s those types of situations. And

the neighborhoods that are targeted are typically

those that happen to have nice views of the

water, and they happen to have access to

highways. Those are the neighborhoods that are

typically targeted. And I think it’s important

to point out, if you had a truly definition of

blight and you had areas like in Philadelphia

where you have largely abandoned properties and

properties where people are really crying out for

economic development, eminent domain could still

be used in those areas, and it would not really

target the poor neighborhoods. It would really

target those areas that the community wants to

have revitalized.

ASSEMBLYMAN BRODSKY: If Justice Thomas’

decision was the law, however, it could not.

MR. BULLOCK: It would have to be done on

a property-by-property basis. That’s right.

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ASSEMBLYMAN BRODSKY: Let me ask you

sort of a related question. Is your theoretical

basis for your position on eminent domain linked

at all to your views on regulatory takings?

MR. BULLOCK: No. And interestingly

enough, I disagree with John in regulatory

takings. But I think what’s important about this

is that you can be in favor of a strong public

use clause and still think that regulatory

takings should be given a very narrow definition.

And we’ve worked with people who believe that

very thing because there’s a lot of people who

are concerned about takings of private property

that would disagree with typical property rights

advocates on the issue of regulatory takings.

ASSEMBLYMAN BRODSKY: Are you supportive

of the Oregon initiative?

MR. BULLOCK: We were not involved. We

typically don’t do that. So we were not involved

in that.

ASSEMBLYMAN BRODSKY: Is it your opinion

that that was a good initiative?

MR. BULLOCK: I haven’t looked at it

closely enough to know the details of it. We

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have filed briefs in port and regulatory takings

cases, and we do advocate greater protections for

that. But I think it is important to stress that

this issue can be separated out and would have no

impact upon the issue of regulatory takings if

the issue of private-to-private transfers of land

was addressed by the Assembly.

ASSEMBLYMAN BRODSKY: Mr. Bullock, in

his earlier testimony, Mr. Echeverria,

characterized things short of the position

advocated as cosmetic. One of the things we are

now considering is the suggestion for a property

rights ombudsman, which has been tried in the

State of Utah. Do you find that to be a useful

or not useful idea?

MR. ECHEVERRIA: I’m told by the Utah

ombudsman that his program is very successful,

and he’s produced a lot of good results. I’m not

intimately familiar with his work and the results

he’s accomplished.

The skepticism I have is it seems like a

very ad hoc process in which there are sort of

very ad hoc conversations. I guess I’m maybe too

much of a lawyer, but I kind of like enforceable

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procedural requirements and sometimes enforceable

substantive standards that people could actually

go to court to enforce. So I’m a little bit

nervous about relegating people to too informal a

process.

If I could comment briefly on the blight

issue.

ASSEMBLYMAN BRODSKY: Please.

MR. ECHEVERRIA: I’m unfortunately not as

well informed as I should be. The House acted

yesterday and I have a kind of pile of amendments

and proposed legislation. This can be confirmed.

But my latest understanding was that the House

was essentially eliminating the blight exception

and basically saying that only in cases in which

there’s an imminent threat to life or public

health could you rely on a kind of hard rationale

for using eminent domain. That, as I understand

it –

ASSEMBLYMAN BRODSKY: Can you confirm

that Mr. Bullock? Do you know anything about

that?

MR. BULLOCK: You know, I was up in New

London yesterday so I don’t know the exact

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legislation that was passed.

ASSEMBLYMAN BRODSKY: I’m sorry, Mr.

Echeverria.

MR. ECHEVERRIA: I could confirm that to

you.

ASSEMBLYMAN BRODSKY: Would you? That

would be helpful to us.

MR. ECHEVERRIA: It was a little bit of

the nature of the coalition that was working on

this issue which is sort of the libertarian

right, if you will, and some prominent

representatives of the Congressional Black Caucus

who had a long-term sorry history of dealing with

blight designations were very adamant in making

sure that it was very much confined. So the

ranking member of the Judiciary Committee, for

example, is very concerned about getting a narrow

definition of blight.

Under the federal legislation, my

understanding is that New York’s ability to carry

out eminent domain the way it currently

authorizes under New York law would be very

severely constrained.

In my view, in an ideal world, the State

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of New York would step back, perhaps in the

context of this commission, and examine whether

or not the blight designation makes any sense. I

think it’s a very old fashioned way to approach

the question of whether or not you should use

eminent domain. I am very concerned that it has

been used in the past and could be used in the

future as an excuse for targeting lower income

communities, minority communities, communities

without a great deal of political power. So if

you have legislation or you have a constitutional

role that says we’re going to restrict all kinds

of use of eminent domain, but as long as you

could define the community as bad enough, then

public authorities are free to go forward with an

eminent domain. It seems to me it could have an

adverse targeting effect.

Furthermore, experience has shown that

the term is highly malleable and very

unpredictable in application. I’m understanding,

based on some litigation in California, for

example, that the term blight has been applied to

properties that are – it would surprise the

neighborhood, as well as the neighbors to

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discover that this area is officially a blighted

area. And it seems to me it asks not all the

wrong question but most of the wrong questions.

It’s backward looking. It says what’s there now.

It doesn’t ask what could it be. It doesn’t ask

are the homeowners are going to be relocated?

Are they going to receive just compensation or

fair compensation? It doesn’t ask whether it’s

going to be a great project. And it seems to me

that those are, if not the questions, certainly

centrally important questions. And if you rely

narrowly on a blight exception, no matter how

defined you could avoid asking what I think are

the most important questions.

So, if you’re inclined to take a bigger

look at how eminent domain should be used, I

would think that you should look carefully at

whether or not blight should remain as a

precondition for the use of eminent domain power.

ASSEMBLYMAN BRODSKY: I heard you

earlier say, I believe, that you favored elected

officials making the final decisions. Did I

mishear that?

MR. ECHEVERRIA: Absolutely. Yes.

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ASSEMBLYMAN BRODSKY: Mr. Bullock, do

you have a position on that or is that just

cosmetic?

MR. BULLOCK: On the ombudsman?

ASSEMBLYMAN BRODSKY: On the decision

about condemnation to be made only by an elected

official or elected officials.

MR. BULLOCK: I don’t know of any

situations where it’s not made by an elected

official in some capacity.

ASSEMBLYMAN BRODSKY: In the State of

New York, under our authority system these non-

elected bodies who created the Metropolitan

Transportation Authority, among others, they’re

not constrained by approval by elected officials.

Is that a matter that should be corrected?

MR. BULLOCK: Sure. Absolutely. I mean,

if there are not votes upon it, on particular

condemnations by local officials and only by the

state officials, then absolutely. I would be in

favor of something like that. I think that

that’s a good change, but it’s not sufficient.

ASSEMBLYMAN BRODSKY: Final question.

Mr. Bullock, your Institute of Justice is

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characterized or self-characterized as a

conservative legal think tank.

MR. BULLOCK: Well, we’re not a think

tank. We’re a litigation group. We do not

describe ourselves as conservative.

ASSEMBLYMAN BRODSKY: The people do.

MR. BULLOCK: I think wrongly. We

describe ourselves as libertarian.

ASSEMBLYMAN BRODSKY: Does it not strike

you as strange that the ideological preference

for limited judicial activity for judges who will

no overturn legislative bodies has been turned on

its head in this case?

MR. BULLOCK: Well, you know I never like

the term judicial activism or judicial restraint

because I just don’t think they actually capture

what the judiciary should be doing. The public

use clause is an explicit part of the

Constitution, and if legislative bodies violate

it then I think the judiciary has to play a very

active role in overturning that. I agree with

you that if somebody says that this is an example

of judicial activism, the Kelo case, I think that

that is incorrect because this was a case where I

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think the judiciary failed to step up and impose

some limitations upon legislative bodies.



ASSEMBLYMAN LAVINE: Thanks. Mr.

Echeverria, other than for environmental

litigation is the Georgetown Environmental Law

and Policy Institute engaged in litigation of any

other issues?

MR. ECHEVERRIA: I’m sorry. Apart from

what, sir?

ASSEMBLYMAN LAVINE: Apart from

environmental issues, does the Georgetown

Environmental Law and Policy Institute get

involved with litigation of any other issues?

MR. ECHEVERRIA: Well, we deal with a

number of environmental issues, but we’ve also

gotten involved in other issues relating to

regulation and management of property. For

example, we represented the Attorney General and

the Governor of Hawaii before the Supreme Court

in the case of Lingual v. Chevron this year. It

dealt with the authority of the legitimacy of

Hawaii legislation regulating the rent that oil

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companies could charge independent dealers in

order to protect consumers from high gasoline

prices. It claims, you might be surprised to

learn that it was brought under the takings

clause of the Fifth Amendment. We argued that

that kind of claim had no business being brought

under the takings clause and were vindicated in

that view. Our work gets us into topics beyond,

strictly speaking, environmental law.

ASSEMBLYMAN LAVINE: Thank you. And Mr.

Bullock, what about the Institute for Justice?

What kind of things is that involved with?

MR. BULLOCK: Well, we do all

constitutional litigation. And we litigation

primarily in four areas, what we call economic

liberty where we challenge barriers to

entrepreneurship, private property rights,

educational freedom and First Amendment. So this

is a part of an overall, of a larger program.

ASSEMBLYMAN LAVINE: Okay. And what

aspect, in particular of educational freedom is

the Institute for Justice devoting its

intensities towards?

MR. BULLOCK: We’ve been primarily

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involved in defense of school choice programs

that have been passed by legislative bodies.

ASSEMBLYMAN LAVINE: Now, I want to thank

you both for being here this morning and this

afternoon. This is historically and emotionally

a very charged subject. And we need to proceed

based on the best factual knowledge that we are

able to develop. Each of you has been very

helpful, and I think you’d agree that the public

hearing process gives us an opportunity to vet,

question, and understand much better these

extraordinarily complicated issues.

But can I ask you one question? There

does seem to be a little concern this morning

about what the United States Congress, the House

of Representatives has done and no one seems to

have a good sense or a good feel for it. I

shouldn’t say about it. Was that bill the

subject of public hearings?

MR. BULLOCK: Yes, it was. The members

for the Institute of Justice testified at it. I

think there was at least, I’m not sure of the

exact number of hearings, but there were clearly

legislative hearings in several different

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committees, I think, in the house.

ASSEMBLYMAN LAVINE: Mr. Echeverria,

what do you think about that?

MR. BULLOCK: To give you a sense of how

they do it down there, the Agriculture Committee

held a hearing on the Kelo issue. They had about

ten witnesses. Every single witness started with

a statement about how outrageous the

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Kelo

decision was and how it was absolutely important

for the preservation of the republic that the

House pass revolutionary legislation.

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I’m sorry to report to you from

Washington, D.C., that the House of

Representatives is no longer a thoughtful,

deliberative body that looks at issues in an

intelligent way, and the legislation that’s been

produced by the House reflects the process that

the followed.

ASSEMBLYMAN LAVINE: Shocked. I’m just

shocked. Thank you.

MR. ECHEVERRIA: If I can commend

Congressman Nadler for his valued efforts to

stand up for –

ASSEMBLYMAN BRODSKY: I think Mr.

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Bullock wants to say something.

MR. BULLOCK: Well, Mr. Nadler stood

virtually alone in opposing the legislation that

was passed. And I think it’s important to point

out that this had overwhelmingly broad consensus

for it. At a time when Washington is a bitterly

divided city where virtually nothing happens in

the House that is bipartisan, this truly did

unite people from across the aisle. And you

don’t see numbers like the ones I just read to

you outside of programs for childhood

immunization or something like that. So it shows

the breathe of support.

ASSEMBLYMAN BRODSKY: Or the Iraq War.

MR. BULLOCK: What’s that?

ASSEMBLYMAN BRODSKY: Or the Iraq War.

MR. BULLOCK: I don’t even know if the

numbers were high for the Iraq War. Certainly

not anymore.

CHAIRWOMAN WEINSTEIN: To return to New

York and eminent domain. Mr. Bullock, could you

just help clarify for me some of your responses

that you said to Mr. Brodsky with the example of

a parking facility. You have the municipal

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parking facility, the locality built – or,

actually, there’s a need for a parking facility

and there’s some private land that needs to be

taken by eminent domain. And the municipality

has two choices, it could take the land, build a

parking lot and run it through their Department

of Transportation or whatever agency, or they can

take the land and have a private developer

develop a parking lot. And the fee for parking

in that facility is going to be the same, whether

it’s a city municipal lot or private lot. Can

you again describe how you draw a difference

between whether that eminent domain procedure is

appropriate in that circumstance? Why it’s

appropriate when it’s the city that’s going to

run the lot and why not when the city is going to

have the developer put the risk of running the

lot.

MR. BULLOCK: Well, I think part of the

problem, and you might want to address this in

the legislation if this actually is a real issue.

CHAIRWOMAN WEINSTEIN: Parking is a big

issue in New York City.

MR. BULLOCK: Oh, sure. Of course it is.

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But the ownership issue and that sort of thing.

And if you want to have – I think the real need

for it, the real determination is from where is

this desire coming from? Have the public bodies

decided that the public needs a public parking

lot.

CHAIRWOMAN WEINSTEIN: Assume that that’s

true. There’s been studies. There’s a shopping

area and no place to park. There’s no place to

use the municipal park that’s right adjacent to

this land.

MR. BULLOCK: And it’s not in response to

a private development that just went up next

door.

CHAIRWOMAN WEINSTEIN: There’s a desire,

the city wants to be able to attract people to

come into that community.

MR. BULLOCK: Right. You know, I haven’t

been involved in a case. I haven’t looked at the

law on it. I think it could be a situation where

–

CHAIRWOMAN WEINSTEIN: Oh. For example,

my own community of Sheepshead Bay there’s a

desire to have people come and enjoy the day and

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parking is given as a reason why people can’t

come. The lack of parking.

MR. BULLOCK: Right. And I think in

those instances if the public bodies actually

then in some ways maintained control over the

parking facility and were ultimately responsible

for it, then it would qualify as a public use.

Let me give you an example of it, as well, where

I don’t make it so much based upon –

CHAIRWOMAN WEINSTEIN: It’s just the

constitutional issue that if it’s public

ownership it’s okay; but if it’s private

ownership it’s not okay. Do you objection to the

fact that the Constitution allows that public

taking when it’s public ownership?

MR. BULLOCK: Right now we’re talking

about policy because the court has spoken and the

court has made it very clear that they are going

to have a very broad interpretation of the public

use requirement of the Constitution. New York

courts have spoken and basically agree with the

U.S. Supreme Court. So now we’re just talking

about what the Legislature wants to do in

response to that. I think it, at the very least,

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needs to narrow the definition of public use.

What I’m trying to point out here is a

situation like a prison. A prison is obviously a

public use. And if a prison is built and the

public decides that they need to have a prison,

I’ll often times –

CHAIRWOMAN WEINSTEIN: Actually, in New

York State often prisons are considered economic

development and not public use.

MR. BULLOCK: That should not be

absolutely the justification for it. But of

course prisons now are typically run by private

bodies. Now, that would not change under our

definition of public use or under the legislation

that was proposed, what is ultimately going to be

a public use.

ASSEMBLYMAN BRODSKY: Public toll road,

good; private toll road, bad. Right?

Constitutionally?

MR. BULLOCK: Constitutionally it all

depends on the access. And there were actually

cases that looked at it.

ASSEMBLYMAN BRODSKY: Equal access.

Public toll road, good; private – let me rephrase

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that. Public toll road, good; private non-toll

road, bad.

MR. BULLOCK: Under a proper

understanding of the Constitution, correct. But

let me address something here because, as I said

these are interesting hypotheticals and you could

always pick out the cases where it’s going to be

a difficult call. That, I think – no law is

going to be perfect. Ninety-five percent in the

law is perfection. And even if you pass the most

carefully crafted laws there is going to be

certain issues on the margin that you’re going to

have to address as to whether or not it’s a

public or a private use.

ASSEMBLYMAN BRODSKY: Nice try.

MR. BULLOCK: No. No. But here’s the

important point. Here’s the important point. In

all the cases that we deal with and all the cases

that you look at in the book that we put

together, Public Power, Private Gain, that’s not

what people object to. What they object to are

things like big box retail stores, lifestyle

centers, neighborhoods being taken for shopping

malls. That’s where the controversy is, not on

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the issues of the –

ASSEMBLYMAN BRODSKY: If you gave me a

rule that solved that problem and didn’t create a

set of other problems of the kind we’ve been

discussing, then we might agree. The problem is

your rule goes beyond your examples and therein

is where we have a very, very, very difficult

problem. And I don’t know what we’re going to

do. But I don’t think its good enough in this

forum to say 95 percent is good. If you’re going

to offer us a rule, that rule better apply

intelligently across the board.

MR. BULLOCK: And I think it does. If

you look at the legislation that was passed by

the U.S. House of Representatives, it does apply

in a vast majority of cases. Again, could you

always come up with a hypothetical that somebody

hadn’t thought of? Of course. That always

happens in the law. But this rule is a heck of a

lot clearer than most legislation that is passed.

I mean, look at the Disabilities Act. I mean,

reasonable accommodation and then leave it up to

judges and courts to try to decide what that

actually means. This provides real definitions.

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It doesn’t just say economic development, figure

it out. Blight, figure out what that means. It

provides some real teeth and substance to it and

that’s why I think you can address the vast

majority of this.

ASSEMBLYMAN BRODSKY: Assuming we all

know what’s in the bill, which we don’t know yet,

you may be right.

MR. BULLOCK: Well and I would urge you

also to look on our website where we have model

legislation that we drafted that addresses these

very issues, not just the House of

Representatives where they were changing it up

until the very last minute and we can’t know

exactly what the details are. But we have draft

legislation that addresses these very issues on

our website.

MR. ECHEVERRIA: Well, let me give you

some examples, as I understand it, would be

defeated under the House bill. The renovation of

the Baltimore waterfront, Lincoln Center and

Fordham University and of greatest personal

important to me, we have a stadium going up in my

neighborhood for the Washington Nationals. Under

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that proposal the public would acquire the site,

build a stadium and enter into a lease with Major

League Baseball and then ultimately with the team

owners. The House bill says you can’t take and

then lease to a private interest that’s going to

make any money. So, unless there’s some

exclusion, which I haven’t seen yet for baseball,

and there maybe ultimately a baseball exclusion

for the reasons that I explained, the bill, as

drafted, would prohibit the development of

baseball stadiums in the nation’s capitol.

ASSEMBLYMAN BRODSKY: I just wanted to

say I thought your testimony today was

extraordinary. And we thank you for schlepping.

That, Mr. Bullock, is a New York term meaning

make the shuttle up. I thank you very much for

extraordinary testimony.

MR. ECHEVERRIA: I just have one last

though in response to the kind remarks about our

great contribution today. And I think we made a

modest contribution, at best, because this is a

very complicated issue. The devil is in the

details.

One thing that I think you could very

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usefully do if you were inclined to go with a

commission approach, that has occurred to me as

you were speaking, was to get me or I could work

with somebody and nominate the ten best eminent

domain projects of the history of New York State.

And Scott could nominate the ten most abusive

examples. You could actually collect some facts

and information about the process that was

followed and the results achieved, talk to the

affected landowners, talk to the businesses, find

out what tax revenues were generated, what the

collateral benefits were and say how does this

process working on the ground, and what is it

meaning to real communities and real people. And

only with that kind of information in hand, which

takes a lot of work, but only with that

information in had can you really make a

considered judgment.

With all due respect to Scott, I don’t

think you can rely on his telephone size,

telephone book size compilation of the 10,000

eminent domain horror stories because on

examination they don’t all turn out to hold

water.

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CHAIRWOMAN WEINSTEIN: Thank you very

much.

Our next panel, we have Professor Philip

Weinberg, a Professor at St. John’s University

and Mindy Fullilove, Professor Clinical

Psychiatry at Columbia University.

PHILIP WEINBERG, having been first duly



MINDY FULLILOVE, having been first duly



CHAIRWOMAN WEINSTEIN: Professor

Weinberg.

PROFESSOR WEINBERG: Thank you very

much. I’m going to summarize my remarks.

They’re in my prepared testimony.

My take on this is in between those who

think that Kelo was an unmitigated disaster and

that the world’s going to come to an end, and

those who applaud it as merely restating the law.

I think that there is a strong need for the

Assembly and, indeed, the State Legislature to

address these issues. There’s no use talking

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about the Constitution for a while because the

Supreme Court has spoken, although I must say

that I disagree with the decision. I thought

Justice O’Connor had it exactly right. But

that’s not our issue. Our issue is what ought to

be done to fix the problem.

I think what needs to be done is to

eliminate or severely curtail the ability of the

state and the various agencies, the IDAs and all

the rest. And we heard from Mr. Cardozo that

perhaps the City is more hamstrung that some of

the other agencies. But we know that the MTA,

and the Port Authority, and the IDAs upstate have

a virtually untrammled ability to exercise

eminent domain through economic purposes. And I

think that’s wrong and I think the Legislature

ought to step up and limit very strictly what

those agencies can do.

I would, in fact, limit it to blight,

even though I’ve heard criticism of that word and

some of those criticisms I share. But I think

eliminating blight such as was done in Time

Square by the City of New York was commendable

because there the blight really amounted to the

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danger of crime where people simply didn’t want

to go to Times Square. That’s very different

from going into the middle of Brooklyn and using

eminent domain to build a sports stadium and some

high rise buildings which will mostly be market

rate housing and the rest. To me it’s easy to

differentiate. There’s always a problem in the

middle, sure. But it’s easy to differentiate

between those two situations. And I don’t think

pure economic development ala Kelo v. City of New 11

London or, for that matter, a sports stadium

whether it’s on the west side or Brooklyn, ought

to be something that the Legislature ought to

empower these agencies to do.

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I share the concern about the MTA, for

example, saying well anything that we do that

produces revenue, because we run trains, makes it

okay. When they’re condemning property for

transportation, if they want to build a new rail

line, fine. Make them sandwiches. That’s not

the situation in a lot of these eminent domain

economic development scenarios. And I do think

the Legislature has to step up and limit it.

Now, when you exercise eminent domain to

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remove blight, when the blight is pollution, when

the blight is contamination, when the blight is a

high crime incidence, then I think it’s perfectly

valid to use it. But I share of the concerns

expressed by Assemblyman Brodsky and others that

blight can be misused. When you’re simply

talking about a working class neighborhood and in

deciding that “it’s blighted”. Bango. Then

you’re betting with the shirts of people who

ought not to be victimized by the eminent domain

process.

That’s further a concern because of the

attitude that the courts have where the will

essentially rubber stamp because the test is only

whether the agency acted rationally and it’s a

very difficult burden for the attackers, assuming

they have the funds and the time to hire lawyers

and attack these things, to overcome.

So, I have comment on the specific

legislation which are in my written comments.

I’d be glad to talk about those. But essentially

those are my points.

DR. FULLILOVE: Thanks for inviting me.

I’m a psychiatrist so I come at this from a

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completely different perspective. My interest in

this comes from the burden of disease which is

localized in some poor communities in New York

City and elsewhere in the United States.

Historically, the connection between the use of

eminent domain for urban renewal and other

processes of spatial dislocation and the

flourishing of disease in poor neighborhoods. So

I want to specifically oppose this concept that

the way to manage blight to is use eminent

domain. I think it’s really quite the wrong

approach.

Our research, and we’ve been to many

studies in many cities in the United States, and

Canada, and Europe to examine these issues has

really looked at the long-term consequences. So,

starting with urban renewal in the 50’s and 60’s,

asking people, planners, advocates, historians,

residents, politicians what do you think happened

over the long run? What emerges from these

stories is that the costs are different and much

worse than are generally dealt with. When we

look at the results of eminent domain, we look at

the thing that’s in the place, Lincoln Center,

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but we don’t look at what happened to the people

who used to live there and what happened to them.

ASSEMBLYMAN BRODSKY: In the San Juan

Hill neighborhood.

DR. FULLILOVE: Exactly. Where did all

those people go? What were their lives

afterwards? And, in fact, this issue of the

people who are displaced bearing the brunt of the

costs is very true. Very little of what it cost

them to be displaced can be compensated or is

compensated. Typically, and this is especially

true for poor black people who are 63 percent of

the people who were displaced by urban renewal in

the 1950’s and 60’s can only move to other

segregated areas which are typically low on the

list for investment of any kind. So they can

only move to areas which are likely to be sites

of disinvestment -- so supermarkets moving out,

banks moving out, businesses moving out.

Therefore, they’re going to crumble into blight

and then they will have to be moved again.

The new application of urban renewal to

the new blighted area moves the same people

again. So, at each of these turns of the cycle

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people are impoverished economically and

socially. They are psychologically damaged, and

the psychological damages both the grief for

their lost neighborhood and their lost home, and

a substantial alienation from the U.S.

Government. The riots in the 1960’s, according

to the current commission, were no small part a

result of a reaction to urban renewal, worsening

the conditions of the urban poor.

This burden of economic, social, and

psychological impoverishment and political

alienation is then started again as the people

are moved again. This becomes a problem for the

state and I really would like to stress that a

city can actually solve its problems of dealing

with blight by using urban renewal, pushing the

poor, pushing the poor, pushing the poor.

Because the City can actually push the poor out

of its boundaries. Then they’ll arrive in

another city which will then collapse and have

the problems of crime and disinvestment that used

to be someplace else. The state will have to in

some way pick up the check for this. The

original city which got rid of its problem is

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blameless. We observe this process in great

detail in Newark, New Jersey, which has managed

to push its problems of crime and poverty into

the cities of Irvington and East Orange, which

have subsequently collapsed and have much higher

crime rates than Newark does at the present time.

They used to be prosperous suburbs. Chicago is

in the process of pushing its problems out to the

near suburbs. While the city prospers, these

surrounding cities go down and I think that this

becomes of great concern to the state.

Furthermore, in all of these projects, more

affordable low income housing is destroyed than

has ever been replaced. Hence, we’ve been on

steady downward stream of the amount of

affordable low income housing in the nation and

this contributes to the problem of homelessness.

In fact, it’s the source of the problem of

homelessness.

The first point I want to make is that

the cost to the people who get displaced, and to

the city, and to the state far exceed what’s ever

usually discussed or estimated. Much of these

costs have to do with the fact that when you do a

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big urban renewal project you wreck a

neighborhood. And a neighborhood is both a

fundamental unit of social organization, a

fundamental political unit, but it also exists

because people invest their time and energy into

working together and creating self-help

organizations. In any decent neighborhood you

can literally find thousands of organizations in

even a very small neighborhood. By the time you

could up all the religious organizations, and all

the youth sports organizations, and after school,

and bridge clubs, all of these things help people

sustain themselves. When you bulldoze a

neighborhood, you destroy all of those

organizations. They are not portable. They

disappear. And, therefore, people are left with

the enormous task of having to start over. In a

society that’s rapidly moving forward, anybody

who has to start over is disadvantaged fairly

permanently.

One of the things that I think is

essential is that we have much more appreciation

in the ways in which neighborhoods are the

cornerstone of our society and our democracy and

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we wreck them at our peril because they are hard

to replace and hard to repair. It is

economically, it seems to me, impossible to

replace low income housing at the rate of which

we can destroy it.

So, just to further stress that blight is

a symptom, it’s not the disease. The real

disease is, in my opinion -- I’m a psychiatrist

and I’m an economist –- that we never have

investment spread evenly over the landscape. So

there’s a lot of investment right now in Times

Square, but there’s not investment in other

places. It’s not everywhere. The places where

there isn’t investment are the places where

there’s blight. Thus, the real issue is how do

we get investments spread more equitably across

the landscape.

When we go into poor neighborhoods that

have blighted, we look at the symptom and say we

have to get rid of the neighborhood. Getting rid

of the neighborhood impoverishes the people. If,

on the other hand, we can bring in investment,

what I have observed over, and over again is that

neighborhoods, because they have this wealth of

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organizations, this wealth of history, and

because it is a center of human life, can

flourish. And the best analogy is that if you

see a bit of rain fall in a desert, you see a lot

of flowers bloom. So, a small amount of

investment in a very impoverished neighborhood

can often make an enormous difference. We

studied this very carefully in Harlem when Harlem

Congregations for Community Improvements started

doing housing redevelopment. It was astounding

how much bringing one building back on line did

to energy a much larger area.

I think that eminent domain is terrible.

It’s not a solution to blight or poverty. It

makes the area look better, but it doesn’t help

the former citizens. In fact, it harms them.

Our research would suggest that most of the

people who are harmed in this way who are poor

and especially those who are black never recover.

They are set on a permanent downward path of

disadvantaged. Their disadvantage is severely

aggravated by this process. The blight exception

is a terrible idea.

CHAIRWOMAN WEINSTEIN: Mr. Brodsky has

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some questions.

ASSEMBLYMAN BRODSKY: Ms. Fullilove, it

sounds to me like your real grievance is against

what we’ll call, I think we understand each

other, urban renewal. That you would have the

same objections if the urban renewal were

essentially voluntary. If people, for example,

were offered three times the values of their

homes, all sold out voluntarily, then the

problems that you so ably described would still

exist. Neighborhoods would be destroyed. People

would be relocated. They might be a little bit

better off economically, but not enough to

substantially change their individual situations

and lives.

We are examining in this hearing the

exercise of the ultimately power of the state to

take people’s property. Do you see from your

work a distinction when the process is moved

forward voluntarily versus when its moved forward

by eminent domain?

DR. FULLILOVE: Absolutely. Especially

for the poor and the vulnerable, and especially

for African Americans.

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The issue has been alluded to before.

These are people who have relatively – are

incapable of influencing the political system.

So the idea that nobody would ever take the land

of people on Park Avenue, but they would take the

land of poor people, especially poor people of

color. In fact, it often seems to me that poor

people are kind of putting poor people on land is

a kind of holding action. It’s the land you want

to take next, so you put them there.

ASSEMBLYMAN BRODSKY: Who’s you?

DR. FULLILOVE: You, meaning the people

who have the power to do –

ASSEMBLYMAN BRODSKY: Did I just get you

people.

DR. FULLILOVE: Those people.

ASSEMBLYMAN BRODSKY: I see. Okay. Go

ahead. There’s a point here.

DR. FULLILOVE: The point is that your

question is there a difference when it’s

voluntary and when it’s coercive. Absolutely.

People will agree to sell their land for a better

offer. You can make me an offer I can’t refuse.

People sell at a certain point when the house

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reaches a certain amount of money and they sell

and feel good. It does change the neighborhood

but neighborhoods do evolve and do change. The

government coming in suddenly and saying we are

going to take this land and people feeling that

they have no effective voice in the process, what

Mr. O’Donnell talked about. They might to get

vote at the local community board, but nobody

listens to them higher up. This produces such a

profound feeling of alienation and really the

place to see this importantly is around the riots

in the 1960’s and in the Turner Commission Report

it’s amply documented.

ASSEMBLYMAN BRODSKY: And I share your

observation. But put the case that we’re not

relocating people or taking their property for a

mall. But the case that we’re using that tool

for purposes of building a hospital in a

community that’s medically underserved. Do you

have the same objection?

DR. FULLILOVE: I don’t think that’s the

issue. I think the issue is at this point people

have been moved too much. I’m speaking as a

physician. More important than building a

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hospital to take care of people’s health is they

invest in neighborhoods. People are going to be

sick. They’re more likely to be ill. The great

epidemics of the past 20 years that I’ve studied

-- the crack epidemic, the AIDS epidemic, asthma

epidemic, obesity epidemic –- are related to the

destabilization of neighborhoods. You’d create

much more health by stabilizing neighborhoods

than by building a hospital.

I think that we’ve just moved poor people

much too much.

PROFESSOR WEINBERG: If I could just

chime in here for one second. Of course there’s

a big difference between a hospital or another

kind of a public use and the kind of urban

renewal that was the subject of Kelo and that

we’re talking about today. I do agree that this

Legislature has commendably known when to use and

when to withhold the eminent domain power because

I’m thinking of the different, but not so

different, situation upstate where there was

concern about protecting the New York City water

supply, but the City was not given the power of

eminent domain around its reservoirs. It was

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told go ahead and buy land up there, but you

can’t use eminent domain. They used it 100 years

ago, but not today, to protect its reservoirs.

ASSEMBLYMAN BRODSKY: Let me ask –

DR. FULLILOVE: If I could just add. The

University of Medicine and Dentistry, which

started out as a college of medicine and

dentistry, was really one of the things that

touched off the Newark riot of 1967, because they

were going to condemn a very large area of land,

150 acres to give it to the medical school. So,

people really profoundly object to having their

land taken, even for something that seems like a

good cause. Newark was a very medically

underserved community. People don’t want to have

their land forcibly taken from them.

ASSEMBLYMAN BRODSKY: I hate to sound

brutal about this, but there maybe times when the

overall public good may require the creation of a

class of people who will sacrifice. Now, I

recognize, as you do, that the reality of our

political life in this nation is that those

people tend to be poor people. But we are

examining and hopefully we’ve learned something

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from the 60’s. And what we’re wrestling with is

whether there’s a way to use the tool without

creating the outcomes you so vividly describe.

So, it’s something we’re thinking about. I don’t

know from the point of view of a psychiatrist

whether we need the help. I mean, we may need a

little counseling here.

DR. FULLILOVE: Eminent domain is an

important tool. When it doesn’t take – when it’s

employed without an adequate cost accounting,

it’s improper. The cost accounting has never

been appropriate. So if you’re going to destroy

people’s lives, you’re going to impoverish them,

and you’re going to make them permanently unable

to participate in the economy, what are the costs

to the state in doing that?

ASSEMBLYMAN BRODSKY: Could you give us

a list of what you view as compensable costs?

DR. FULLILOVE: I would be happy to.

ASSEMBLYMAN BRODSKY: Would you? That

would be very helpful. Professor, I understood

Mr. Bullock’s view of the legal issue which is it

is the transfer of private property to private

property is a constitutional infirmity. What is

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your constitutional objection to the use of

eminent domain for economic development purposes?

PROFESSOR WEINBERG: I don’t think it’s

purely a question or even primarily of public

versus private because as even Mr. Bullock

conceited, and I part company with him in most

areas of life and law, but obviously railroads

and utilities have to have the right or it would

take a corkscrew shaped railroad to get from New

York to Buffalo if they didn’t have the power of

eminent domain.

It’s not a question of private. For

example, in your parking lot example, or

Assemblywoman Weinstein’s, I would regard that as

exactly the same. If it’s a public use to have a

parking lot to serve the downtown shopping area

or Sheepshead Bay where people like to go to eat

seafood and the rest, to me it doesn’t make any

difference at all whether it’s a private –

ASSEMBLYMAN BRODSKY: Then what’s your

constitutional objection?

PROFESSOR WEINBERG: My constitutional

objection is to expanding public use and now, of

course, we’re talking about the Legislature as

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the court invited in Kelo stepping into the

breach which the court did not –

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ASSEMBLYMAN BRODSKY: What should we not

permit as a matter of law in New York, the use of

eminent domain for economic development?

PROFESSOR WEINBERG: I would say economic

development has to be limited to situations where

there’s blight narrowly defined to include

pollution, contamination, Times Square in the

70’s, but not viable just because they happen to

be poor, just because they happen to be minority,

tough luck neighborhoods. And that’s what

troubles me.

ASSEMBLYMAN BRODSKY: If I could show

you a huge economic development project where we

would agree there were huge benefits to providing

jobs, jobs at all income ranges and that there

was complete public access and it was on Park

Avenue, you would not want us to use the power of

eminent domain to create that project.

PROFESSOR WEINBERG: That’s exactly

right. And let me give you an example. The

Supreme Court of Michigan, in a shocking case

that’s been overruled, the so-called Pulltown 25

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case, allowed, as I’m sure many of you know,

allowed the City of Detroit to condemn property,

not blighted property at all. It was a working

class neighborhood, viable neighborhood, to build

a GM assembly plant. And the rationalization was

it’s going to bring in jobs and ratables and so

on. It will benefit the whole city. And so just

take your poison. I think that was correctly

overruled much later. I think we can draw a line

and the Legislature has to step up and draw a

line between pure economic development and public

use.

ASSEMBLYMAN BRODSKY: Public use, use by

the public not benefit to the public.

PROFESSOR WEINBERG: I think it’s public

benefit but that has to be narrowly because

semantically public benefit would include the GM

plan and the shopping mall.

ASSEMBLYMAN BRODSKY: You can write a

definition – I invite you to inform the committee

members of your definition of public benefit that

can be included in the statute. It would be

helpful.

PROFESSOR WEINBERG: I’ll get back to you

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on that.

ASSEMBLYMAN BRODSKY: Last question.

We’ve also looked at what we referred to

dismissibly as cosmetic changes such as having

the power exercised only by elected officials,

not by unelected bureaucracies. Do you have an

opinion as to whether that’s a good idea?

PROFESSOR WEINBERG: Yeah, thanks. First

of all, it’s obviously better to have

accountability and I share the concern that’s

been expressed about public authorities acting

without the approval of elected officials. Sure

that would help. But in the end, I think, and

the Justice O’Connor dissent pointed this out in

the Kelo case, that it’s not a panacea to have

elected officials because frequently elected

officials are going to be on the let’s throw out

these people and develop for economic benefit

alone. The Super 6 turning into the Ritz

Carlton. Mrs. Kelo’s house and her others

turning into the Pfizer Development. So I don’t

think it’s a cure all to say that elected

officials have to sign off because sometimes

they’re going to be wrong and procedural

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safeguards are not sufficient protection. Sure,

they help. I think in the end there’s got to be

a substantive safeguard here that public use has

to be defined the way I believe the Constitution

intended that it be defined, and which any way

the court has allowed the Legislature to define.


CHAIRWOMAN WEINSTEIN: Mr. O’Connell.

ASSEMBLYMAN O’DONNELL: Yes. Perhaps if

they made all Motel 6’s Ritz Carltons but you

still charged Motel 6 prices that would qualify

as a public benefit. Let me ask you a couple of

questions.

I’m obviously shocked and discomforted by

the notion that I would agree with Judge Thomas

about anything. The two points I would like to

make are this. One is the public/private

distinction. How you define them will be helpful

to us when you give that to us. The previous

examples that I gave about the ability of a

private organization to acquire land through this

process that would permit them to then put a

fence around it when it used to be land that you

were allowed to walk on. Is that something that

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you were troubled by?

PROFESSOR WEINBERG: Yes. I happen to

share my friend John Echeverria’s point about the

public trust doctrine probably being the

safeguard in the case of waterfront property.

But, of course, the problem is broader than that.

And I very much share the concern that shopping

malls and private sports stadiums operated by

private hugely lucrative companies are not public

uses.

ASSEMBLYMAN O’DONNELL: Dr. Fullilove, I

want to thank you profoundly for being here

because your perspective is very refreshing.

Because I agree with you; I don’t believe the

costs are every properly calculated. I would

like for you to just comment, if you could, on

the distinction, the history of what eminent

domain was, was taking vacant land in a field

somewhere because you needed to put up a highway

or you needed to run power lines. So, far away

from where people live. What we dealt with in

the last 40 or 50 years is the use of eminent

domain to take away property in a variety of

circumstances where people are densely populated

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and they utilize the communities differently.

And, so, in the example of you can eventually

charge enough money or this being an offer you

can’t refuse, if you are an apartment building

owner and you are given enough money, you’ll sell

your apartment building. So the apartment

building owner is compensated. But the people

who fill the apartment building who contribute to

the life in the community, those people are not

compensated in eminent domain takings. And it’s

those people whose lives are disrupted and I

believe that you’re entirely correct. It’s more

about moving checkers around the checkerboard

than in ever, in fact, addressing the issues

where these people live and how their lives are

negatively affected. So if you had any studies

or information that you could provide to the

Committee, I’d be very appreciative.

DR. FULLILOVE: I would certainly agree

with you. The issue of just and fair

compensation has to go far beyond the property

owners and really has to consider what are the

costs of wrecking the neighborhood. If we really

believe in democracy, we would wreck

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neighborhoods very cautiously because they are

the cornerstone of democracy.

I personally believe that the founding

fathers, many of whom had come over from England,

had actually lived eminent domain because of the

Enclosure Acts and they knew perfectly well what

they were talking about when they said public use

and not private profit. The Enclosure laws were

about taking common land and giving it to private

landowners. So I think they knew perfectly well

and they were completely against this idea.


ASSEMBLYMAN LAVINE: Thank you. Dr.

Fullilove, am I pronouncing your name correctly?

DR. FULLILOVE: Yes you are.

ASSEMBLYMAN LAVINE: Good. Let me just

offer a little different perspective, although

the philosophy will remain the same, from my

colleague Mr. O’Donnell. Having grown up out in

the Midwest the term railroaded, as we know it,

meant the railroads came in and knocked you off

your property but those are ranchers and cowboys

out there.

I respect tremendously your observations

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on the misuse of eminent domain over the years.

Eminent domain used as a guise or a ruse for what

we might term, I guess the old term would be

social engineering has hurt us. It hurts us

tremendously. It hurts us today. Historically

tremendously. Especially when it has moved

members of a population who have been moved far

too often in our history against their collective

or individual will.

I’m trying to just understand part of

your point about the use of eminent domain. Are

you against its use categorically across the

board ever?

DR. FULLILOVE: I am against wrecking

neighborhoods categorically ever. I think that

we wreck neighborhoods under the guise that they

are blighted because we have disinvested. I

think that a neighborhood is a historically

involved entity that’s precious and that we

should nurture them. They will change and

evolve. But if we didn’t disinvest they wouldn’t

collapse. I believe that we should be doing much

more organic urban development where you nurture

what’s there. Columbia University owns half the

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buildings in Manhattanville. Why can’t they

build really an urban campus that’s interspersed

with the other buildings? Why does the moving

and storage company have to go? Why can’t it be

next door to the University? Why can’t they

University be part of the City? That would be a

much more organic development. They own a lot of

land. Why don’t they build on what they own?

Why do they have to take everybody else’s? It’s

really because they want to make a pseudo

enclosure. They may not put a fence around it,

but there will psychologically be a fence around

it. They will have landscaped it to be a fence

to keep people out. I’m against that. I think

that that’s that.

We’re in a situation where for 50 years

we’ve rather blithely wrecked American

neighborhoods for economic development, and we’ve

created enormous disasters. Think of the Pruitt

(phonetic) I-Go projects in St. Louis which were

built in the 50’s, dynamited in 1972, and where

the land is vacant in 2005. There are plenty of

stories about that. We’ve been very blithe about

dynamiting neighborhoods and it’s the poor who

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bear the burden of that. So I think we have to

have a new philosophy.

If I were going to recommend anything to

the Assembly, it’s as you go home to your

constituents and you walk around the

neighborhoods with them, ask them how do you feel

about your neighborhood? What makes this a good

neighborhood? How can I help you make it better?

ASSEMBLYMAN LAVINE: Do you think the

concept of having a state ombudsman who would be

sensitive to these concerns would be constructive

or useful?

DR. FULLILOVE: You know, probably the

issue is that the ombudsman is really the

electory. I’m sure you all are here because your

constituents are concerned about eminent domain.

And I think that if you walk around the

neighborhoods you represent and learn about them

that that would be the most useful thing you

could do. If people understood – say Mr. Sweeney

went to Mr. Brodsky’s district and walked around

neighborhoods with him and vice versa. What are

the neighborhoods of New York State and how do we

support all of them? It’s this knowledge of

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neighborhoods that’s missing in our sociology.

It’s missing in our legislation that’s

fundamental.

ASSEMBLYMAN LAVINE: Thank you.

CHAIRWOMAN WEINSTEIN: I have a question,

if you might both address the issue of

compensation. A number of the bills before the

committee talk about some conversation above fair

market value. One suggests 125 percent and

another 150. And also address the issue that I

think you alluded to, Dr. Fullilove, of

compensation for renters and for costs above fair

market value. I was just wondering. I would

like to hear some comments about the compensation

issue.

PROFESSOR WEINBERG: My own take on that

is that compensation over fair market value,

aside from the constitutional issues that Mr.

Cardozo raised earlier today, is really just if

condemnation is invalid in the first place

because it’s purely for economic development,

then sugar coating it doesn’t make it any better.

I think we have to address the substantive issue

and not the compensation issue. I think they’re

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separate. I think if we curb the kinds of

economic development for shopping malls and the

like, then uses or abuses of condemnation, then I

think we can use the time honored fair market

value without trying to impose a sweetener. To

me, it’s as dangerous as most artificial

sweeteners.

DR. FULLILOVE: It seems to me that

because blight really represents disinvestment,

the neighborhoods – and disinvestment is

structured by any number of policies, many of

them historic but which are still influencing the

way our cities work today, redlining, for

example.

The property is undervalued. So its fair

market value is undervalued and it’s shaped by

all this history. So, as soon as the developers

get it it’s going to double and triple. So, why

isn’t the fair market value the future fair

market value. So that’s the first issue. But

the second issue is that what if you were to add

up everything that’s in a neighborhood and

compensate the neighborhood for its contents?

Just as an example, but one which I find the most

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disturbing from my own research.

Urban African American ghettos, which

were targeted for urban renewal, possibly 1,000

of them were destroyed in that period, were homes

of jazz. There are many jazz clubs in the

neighborhoods and they were part of the jazz

circuit. But they were regional marginal

institutions and depended on being in the centers

of commercial activity which were most likely to

be near downtown and to be bulldozed. And, so

very few of those businesses could relocate and,

therefore, thousands of jazz clubs were wiped out

between 1950 and 1970. Jazz almost died as an

art form in the United States. It was kept alive

because the artists went to Europe and to Japan.

How would you value that? That this

original American art form was almost destroyed

by the use of eminent domain, sort of blithe use

of eminent domain. That should be factored into

the cost to America, to New York State, to New

York City, of using eminent domain. It’s a big

list.

Mary Bishop who is a reporter in Roanoke

said that you ought to include the fact that when

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you sit on your porch there’s a particular way in

which the sunlight comes over your neighbor’s

house.

CHAIRWOMAN WEINSTEIN: Thank you both for

being here.

I’m sorry. Mr. Green. Assemblyman

Green.

ASSEMBLYMAN GREEN: Again, going back to

the compensation component. Because you’re

saying any sweetener would be a problem. But in

the context of procedural law sometimes we put

prescriptions in that essentially create breaks

on – well, it could create breaks with respect

to, in this case, development that might lead to

eminent domain or abuse of eminent domain. Going

back to the concept of if, in fact, there was

legislative prescription that called upon the

developer to provide compensation which came from

their profits in out years, would that or would

that not at least create some breaks with respect

to developers coming into neighborhoods and with

respect to, let’s say, the Empire State

Development Corporation by example, creating an

incentive for development that’s based upon

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economic development purposes.

PROFESSOR WEINBERG: It might very well

have that effect, but I would rather get to the

source of the problem and limit or curtail the

ability to use eminent domain for those purposes

in the first place. Because if I lose my house,

why should I get 100 percent of the value if it’s

taken for a road, or a public school, or a

transit line and 150 if it’s taken for a sports

stadium. I’m sympathetic with the view that if

there’s economic development that somebody ought

to reimburse. But I’d rather cut off the source

and limit the economic development takings in the

first place, and that’s the best protection that

the homeowner in Brooklyn or anyplace can have.

ASSEMBLYMAN GREEN: So in that sense you

do favor the House bill that –

PROFESSOR WEINBERG: No. I think the

House bill probably went too far. I think

there’s a way to craft it so that economic

development takings are limited to blight, and

blight is narrowly defined. But from what I’ve

heard, and I haven’t see it with my own eyes, the

House bill may go further in that direction than

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I think most of us would want to go. But we all

ought to look at the House bill before we talk

about it too much.

ASSEMBLYMAN GREEN: What if there was

language in the bill that also had a new

definition of blight? That would help?

PROFESSOR WEINBERG: Yeah. If blighted

was limited to contaminated, polluted, high

incidence of crime as opposed to just poor

people, then you want to look at what the purpose

of the taking is as well.

ASSEMBLYMAN GREEN: Okay.

PROFESSOR WEINBERG: Shopping malls,

basketball stadiums, to me are not public uses

whether the area is blighted or not. They’re

just not public uses.

ASSEMBLYMAN GREEN: Dealing with renters.

What if we had a clause that essentially called

for the developer to provide reasonable

comparable living space, particularly if they’re

developing housing? Reasonable comparable living

space would be provided to the renters within the

new location that would be developed. What would

your reaction be to that?

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PROFESSOR WEINBERG: I think that might

make a lot of sense. If, indeed, a commission is

set up, that would be a perfect issue for that

commission to look at. I think there is

something that’s worth exploring.

As I understand it, the tenant gets

relocation costs, but that’s just the mover and

the costs of the crates and barrels. What you’re

talking about, and which I think agree with, is

something broader than that and I think that’s

definitely worth exploring.

ASSEMBLYMAN GREEN: Okay. And then also

the same principles could be used with respect to

owners of commercial retail space, as well.

PROFESSOR WEINBERG: I think so. Yeah.

CHAIRWOMAN WEINSTEIN: Thank you both for

being here.

Our final witness is Daniel Goldstein

from the organization Develop Don’t Destroy

Brooklyn. I would just let people know here that

the Committee is accepting written testimony from

people who were not invited to testify if you

want to address the issues raised in our hearing

notice.

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Mr. Goldstein, we have your written

testimony and would appreciate if you could

summarize as you reference back to the materials

rather than read word for word.

MR. GOLDSTEIN: I was hoping to read word

for word.

CHAIRWOMAN WEINSTEIN: Maybe skip a word

here or there.

MR. GOLDSTEIN: I’ll do my best.

DANIEL GOLDSTEIN, having been first duly



MR. GOLDSTEIN: In my prepared remarks I

did not mention the word compensation at all and

that’s because if your civil rights and liberties

are being abused, what are they worth exactly? I

don’t think there’s a price, 150 percent or

whatever that they’re worth as Professor Weinberg

kind of said. If the use is wrong, then who

cares about the compensation. I’m sure you’ll

figure out an appropriate compensation both for

homeowners, renters, and business owners. But,

surely, when the developer is going to make a

profit many times of what the worth is before

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condemnation, the people condemned should share

in that. But compensation is not the issue in my

opinion.

It’s a shame that Mr. Cardozo had to

leave because I’m very familiar with the Atlantic

Yards proposal and opposed to it. And everything

he said about ULURP, about a deliberative

process, a local process does not apply to the

largest development plan in Brooklyn in the past

three decades. There is no ULURP process. There

is no overall planning process. There is no vote

by our City Council. There’s no input from

community boards. No input from city planning.

None official. There have been some dog and pony

shows, but there is not ULURP process.

This project was proposed two years ago

by the developer. It’s the developer driven

process, the developer’s idea. It is not an

economic development plan.

I will try to go through my remarks not

word for word.

As I said, my name is Daniel Goldstein.

I live in Brooklyn. My home is on Pacific Street

in Prospect Heights, and it happens to sit at

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center court of the Forest City Ratner’s Atlantic

Yards proposal which is for an arena and about

9.1 million square feet of development. My home

would be taken by eminent domain, and I and my

neighbors and that neighborhood have lived under

that threat for nearly two years now.

I’m also the spokesperson for Develop

Don’t Destroy Brooklyn, which leads a grassroots

coalition of community organizations opposed to

that plan, as well as the use of eminent domain

for that development. Our organization has about

5,000 members. And last December we filed an

amicus brief supporting the petitioner, Susette

Kelo.

The Ratner plan involves three key issues

that we’ve talked a lot about here today. And

that’s the misuse of eminent domain – the key

issues are local oversight so-called economic

development, and so-called blight.

I want to be clear that I don’t have an

agenda other than advocacy for reforming New

York’s eminent domain law. Because there is an

epidemic of abuse of that law and the

Constitution or what was called in the 1800’s the

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despotic power. I do not have an extreme

property rights agenda. And unlike many of the

proponents of eminent domain, condemnation for

so-called economic development, I also do not

have a corporatist agenda.

I truly believe that what I have to say

represents the views of the vast majority of

everyday citizens of our state and country. This

is because the issue at hand is not simply a

property rights issue or an economic development

issue, but rather it is an issue of civil rights

and civil liberties. The abuse of those rights

and liberties needs to stop now.

The facts on the ground in Brooklyn is

this. There’s a proposal for an arena and 17

skyscrapers proposed by Forest City Ratner. That

firm has benefited from the use of eminent domain

for the New York Times headquarters which is

going up, as well as Metrotech, which was touched

on earlier, though not named

The project proposes the use of eminent

domain for about 53 buildings. It would displace

around 800 people and 35 businesses. Wielding

the threat of eminent domain, Mr. Ratner’s firm

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has bought out many residents and some

businesses, but many still remain and will

challenge condemnation.

As I said, even though it’s the largest

development proposal for Brooklyn in at least 30

years, it completely bypasses the normal ULURP

process. City Council, City Planning, the

borough president, community boards, and

community residents have no say at all in the

project – not in the planning, the oversight,

approval or invocation of eminent domain. There

is no comprehensive economic development plan.

The lead agency is one of the public authorities

or public corporations that we’ve talked about

today, that’s the ESDC.

December 03 is when the project was

proposed or unveiled with a lot of fanfare and

political support. But the project was only made

official this past September. So, for nearly two

years, before any official or agency has approved

eminent domain, an entire neighborhood has lived

under that developer’s threat of eminent domain

without the state or city even having the decency

to explain to the citizens in that footprint what

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the law entails and what the timeline of that

project would be. The State has, therefore,

allowed the developer to use the state’s

constitutionally granted power as a threat to

block bust a community. This is also going on in

West Harlem with the Columbia University

expansion. Not surprisingly, it’s the same ESDC

that would do the condemnation.

Two weeks ago I was at Senator Alesi’s

hearing on this same eminent domain issue. At

that hearing, in the amicus brief supporting New

London and the responses of some of the

proponents of eminent domain, in the wake of that

five-four decision, what I’ve heard over, and

over, and over is the extreme importance of local

planning, oversight and approval for development

plans involving condemnation. That’s the

sentiment of supporters of eminent domain, and

they’re absolutely right. New York State must

require that the use of eminent domain receive a

vote by local city councils.

My State Senator, Velmanette Montgomery,

and Mr. Brodsky have a bill that is very narrowly

focused that would require eminent domain in New

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York City to go through a vote of the City

Council, and I believe that that must be passed.

By the way, Mr. Brodsky’s co-sponsors is one of

my other local Assembly Members, Joan Millman,

whose district has a part of the Ratner plan, as

well. That bill should be passed.

The question of public use/public

benefit, and I don’t envy you having to define

those, but I think it’s simple. The Constitution

says public use, so it’s public use. Public

benefit is something else, providing jobs,

housing, new tax revenue. Sure. That’s a public

benefit. But our Constitution says public use.

Many Americans, I believe, and Mr.

Bullock alluded to this about polling, would

posit that the abuse of eminent domain is an

abuse of the Constitution. And what is certain

is that the abuse of eminent domain is an abuse

of power that renders the constitutional takings

clause meaningless and does truly threaten every

unconnected property owner and their tenants

throughout New York. Too often this abuse of

power is formulated by the unholy alliance

between government and private developers, who

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are major political players or donors in a

specific city or statewide.

More often than not so-called economic

development simply means increased tax revenue

for a locality. But here that is a slippery

slope that Mr. Brodsky alluded to. What

locality, what city in this country ever stopped

seeking more tax revenues? It never ends.

As Dr. Fullilove said, the foundation of

community – or alluded to – the foundation of a

community consists of homes and small business.

The abuse of eminent domain destroys lives and

those communities. I don’t think she mentioned

her book which is called Root Shock, is all about

that and goes in-depth about what she was talking

about. It should be read by any Legislator

considering reforming our eminent domain laws.

I think the question what is the abuse of

eminent domain, I think it is like pornography.

You do know it when you see it. I think it’s

pretty obvious to the citizen and the Legislator

what an abuse is of eminent domain. In the case

of the Ratner project, the abuse of eminent

domain has reached, in my opinion, a corrupt

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extreme where the favoritism is blatant, the

cronyism is clear and the developer is an old law

school buddy of our Governor Pataki, one to he

project’s chief political supporters. Mr. Ratner

has a cozy relationship with Mayor Bloomberg.

Just this past week if you watched the two

debates, the issue of Atlantic Yards came up in

each debate. Mayor Bloomberg cavalierly said

this project has had more scrutiny than any other

development project or as much scrutiny as any

development project in the City’s history.

That’s a fantasy world. The exact opposite has

occurred, as I explained earlier.

Also, something that’s very disturbing.

Forest City Ratner has the Atlantic Center Mall

and one of the tenants is the ESDC. This is

directly adjacent to this proposed site. That’s

disturbing.

Favoritism and the absence of a

legitimate planning process is precisely what

Justice Kennedy had in mind in his Kelo decision.

He wrote a concurring opinion which hasn’t been

touched on here today where he wrote, “Transfers

intended to confer benefits on particular,

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favored private entities, and with only

incidental or pretextual public benefits, are

forbidden by the Public Use Clause.” After the

Kelo decision, Columbia Law School professor and

eminent domain expert Thomas Merrill said in the

New York Sun that, “The court responded more

favorably to the New London than they would have

if it had been the Ratner plan they were

considering.”

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Professor Miller and his colleague John

Echeverria, who spoke earlier, they co-wrote an

amicus brief for the American Planning

Association in support of New London. And in

that brief it stated that, “The dangers of

eminent domain should be addressed by ensuring

that it remains a second best alternative to

market exchange as means of acquiring resources

by encouraging careful planning and public

participation and decisions to invoke the power

of eminent domain.” That argument, in my

opinion, leaves the simple impression that should

be included in any reform of our eminent domain

law.

When there is no careful planning process

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and no genuine public participation, eminent

domain simply cannot be used. Mr. Brodsky’s

other bill, also co-sponsored by Assemblywoman

Millman, would fulfill that goal. By requiring a

comprehensive economic development plan, this

bill would eliminate boondoggle projects and

projects that use eminent domain as a first

resort, rather than a last resort.

But I think we need further reform. The

situation I’ve described in Brooklyn is in most

part not unique. Although it is unique, it

seems, from the testimony today in that there is

really no meaningful local input.

Mr. Brodsky’s bill is a good start, but

stricter public use requirements are necessary.

We need to rein in eminent domain and bring it

back to the traditional public use meaning. Such

reform would outlaw condemnation for the benefit

of private developers. And by doing so, it would

avoid the cronyism and favoritism which pits the

wealthy and powerful versus the powerless.

Eminent domain should not be used for private

for-profit developments no matter what the

benefit is to a locality. And certainly RFPs and

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competitive bidding should be mandated for public

project using eminent domain.

The Atlantic Yards project will use –

CHAIRWOMAN WEINSTEIN: Mr. Goldstein.

MR. GOLDSTEIN: Yes. I’ll go through

blight and then I’ll finish.

CHAIRWOMAN WEINSTEIN: Right. I don’t

want to cut you off in making your points, and

perhaps if you limit yourself to some of the

points rather than more of the example. You’ve

been a bit over the ten minutes. Actually quite

a bit over.

MR. GOLDSTEIN: Very well.

The Atlantic Yards project will use

blight to justify the use of eminent domain.

This is laughable. In a 22 acre site you have

MTA rail yards, you have a handful of properties

that are either vacant or vacant lots or falling

apart. The developer owns a number of those

properties. But the majority of the properties

are perfectly viable homes and businesses.

The fact that the current precedence in

the courts for using blight allow condemnation of

a whole area because some of that area is

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underutilized or falling apart, that is, really,

I think something that all of you Legislators

need to look at. It needs to clearly defined.

Blight needs to be clearly defined. In many

cases, those environmental reviews are written in

tandem with the developer and consultants.

Clearly, it’s to their benefit to call an area

blighted. I don’t think a developer should have

any say at all in whether or not an area is

determined to be blighted.

I’ll stop there. One last thing.

If eminent domain is going to be used, it

must be used as a last resort. In too many

cases, like Atlantic Yards, like Columbia, and

many other cases, it’s the first resort and it’s

a first resort because it’s implied that it will

be used. It’s directly said that it will be

used. Because of that people are threatened and

sell their homes. So it is used both as a threat

and then used when it’s invoked. So it must be

used as a last resort.

CHAIRWOMAN WEINSTEIN: Thank you. Thank

you for accommodating the committee. Assemblyman

Brodsky has a few questions.

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ASSEMBLYMAN BRODSKY: Your testimony is

that ULURP, that this project is not subject to

ULURP.

MR. GOLDSTEIN: That’s a big part of my

testimony. There will be – the ESCD will decide

on the use of eminent domain and the PSCB,

Sylver, Bruno, Pataki, will approve what the ESDC

approves.

ASSEMBLYMAN BRODSKY: That’s not

correct. The PSCB will deal with the financing

alone.

MR. GOLDSTEIN: My understanding is it

will also – they will vote on the approval of the

final EIS. If I’m wrong –

ASSEMBLYMAN BRODSKY: I think that’s not

correct. I don’t know that it’s material, but

PSCB would keep fairly religiously to financing.

MR. GOLDSTEIN: Then it means absolutely

no elected official has any say.

ASSEMBLYMAN BRODSKY: Where you here for

Corporation Counsel Cardozo’s testimony?

MR. GOLDSTEIN: I was.

ASSEMBLYMAN BRODSKY: And you heard him

say that ULURP was applying to all projects in

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the city?

MR. GOLDSTEIN: Yes.

ASSEMBLYMAN BRODSKY: And you disagree

with that?

MR. GOLDSTEIN: It’s absolutely untrue.

ASSEMBLYMAN BRODSKY: Then you disagree

with that.

MR. GOLDSTEIN: What’s that?

ASSEMBLYMAN BRODSKY: That’s a yes. You

disagree with it.

MR. GOLDSTEIN: I disagree with it. It

surprises me that he would be so adamant that

that’s the case.

ASSEMBLYMAN BRODSKY: We’ll clarify

that. That’s why we’re here.

If the site including your house was

exactly the same but they wanted to build a

hospital, would you have the same objection?

MR. GOLDSTEIN: If this were what I

consider public use, I wouldn’t be happy to leave

my home but I would leave it.

ASSEMBLYMAN BRODSKY: By public use you

mean just public ownership or do you mean public

benefit?

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MR. GOLDSTEIN: I mean public ownership

and for use by the public. A stadium and luxury

housing and commercial space is not for the

public’s use. Yes, there will be a benefit.

Anything you build may benefit. Yes.

ASSEMBLYMAN BRODSKY: The Supreme Court

has made clear that public ownership is a too

limited legal concept for the purposes of the

condemnation law. They’ve talked about public

benefit. Now, I’ll give you an example. There

are cases that came out of California and the

west where irrigation was a big issue and land

was taken essentially for the purpose of

providing water to somebody else. My land was

taken to get to her ranch. Now, we’re looking

for a rule here because hard cases make bad law

on both sides of it. You’re not a lawyer and I’m

not going to put a lawyer’s burden on you but

what you and your organization can be helpful

with is giving us something of a rule, not just

what you don’t think the standard should be, but

what the standard should be. Because although

the testimony today has been extraordinary from a

variety of points of view, I’m truly in my own

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mind not closer to knowing what that line is. I

am not of the view that Mr. Bullock met his

burden of saying somehow the private/public

ownership issue was enough. I can conceive of

projects that are profit making and popular.

Profit making, popular and privately owned.

That’s not to take a position on the Ratner

project, which I’m not doing. It’s to say you

can be helpful to us by giving us a rule that we

can live by because we may act on this thing

pretty quickly.

I would ask you to go back and have your

many lawyers, I assume there are many of them in

Brooklyn –

MR. GOLDSTEIN: No. This is the people’s

fight.

ASSEMBLYMAN BRODSKY: Distinguish

between people and lawyers.

MR. GOLDSTEIN: Lawyers are the ones who

want to be paid and people have to pay them.

ASSEMBLYMAN BRODSKY: I see. What do

you do for a living?

MR. GOLDSTEIN: I am an activist.

ASSEMBLYMAN BRODSKY: Good answer.

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Thank you for your testimony today. It would

really, truly be helpful as we try to do

something here, not just listen to complaints to

get some sort of rules.

MR. GOLDSTEIN: I would say a bottom line

in a rule should be that any so-called economic

development project should come out of an elected

body not out of –

ASSEMBLYMAN BRODSKY: I appreciate your

support for the procedural changes we’re talking

about. But the rule. You can’t do it in this

circumstance. I’m not any closer now than I was

at the beginning of the day. Thank you.

MR. GOLDSTEIN: Thank you.


ASSEMBLYMAN O’DONNELL: I just want to

sort of inquire a little bit about the history

here. Do you own where you live or do you rent?

MR. GOLDSTEIN: I own a condo.

ASSEMBLYMAN O’DONNELL: So at some point

did someone send you a letter saying great news.

We’re going to buy it from you. Is that what

happened to you?

MR. GOLDSTEIN: The project was leaked

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out through rumors in the press then finally

unveiled in December 03. Some of my neighbors

went to the developer; some didn’t. No. I was

contacted eventually by the developer when I

didn’t go along with some of my neighbors who did

settle with the buyout. But no. The Government

hasn’t come and said we’d like – no. No.

There’s nothing like that. There’s been no

process. When I’ve asked the developer in

meeting with the developer, what happens if I

don’t make a deal with you and they say you will

be condemned. That’s the way it’s gone. No

official process.

ASSEMBLYMAN O’DONNELL: Did they

communicate with you and say we’ll give you X

amount of dollars for your condo or did they not

communicate with you.

MR. GOLDSTEIN: Oh, yes. I met with the

representative from Forest City Ratner. They

made an offer that I’m not interested in.

ASSEMBLYMAN O’DONNELL: Okay. Then they

told you if you don’t take it they’re going to

take the property away anyway?

MR. GOLDSTEIN: At some point I was told

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that, yes. I know of neighbors who have had the

same message. Not that they would take it, you

can deal with the state who will condemn you.

ASSEMBLYMAN O’DONNELL: Okay. And so is

there any hope for you to hold onto your

apartment? Are there legal things that are being

followed by those lawyers? I’m one of those

lawyers, too, but I very rarely get paid to do

that.

MR. GOLDSTEIN: It won’t be ripe until

eminent domain is invoked and then we intend to

challenge it. We look to that Kennedy concurring

opinion as very powerful. It seems to me blight

will be used and we will have to argue that, and

I know that that’s very difficult to do.

ASSEMBLYMAN O’DONNELL: Let me make a

couple of presumptions here and ask you what your

opinion is. Presuming that there had been a

ULURP proceeding, and presuming that the

community board conducted hearings as required by

the ULURP rules and presuming that the community

board said we are opposed to this project, do you

therefore presume that when that became voted

upon by the city council that your position would

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have prevailed?

MR. GOLDSTEIN: No. I think the City

Council would have voted for this project. But I

do think that had it gone through ULURP, the

daylight that would have been shed on it would be

far greater than what has occurred. I think the

Council would have voted on it. Our efforts

would have been made to convince them that it’s

the wrong thing to vote for it.

ASSEMBLYMAN O’DONNELL: And do you

believe if in fact a ULURP process had been

followed that that would have been advantageous

to your position when you eventually have

litigation?

MR. GOLDSTEIN: No.

ASSEMBLYMAN O’DONNELL: Thank you very

much.

CHAIRWOMAN WEINSTEIN: Mr. Green.

MR. GOLDSTEIN: By the way, there’s no

going back. You can’t now come up with a plan.

ASSEMBLYMAN O’DONNELL: I understand

that. What I was trying to get at was part of

what we’re trying to consider here, what

procedure safeguards could be put into place to

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prevent this from happening again. So,

obviously, I saw you sitting here and saw you

listen to everyone’s testimony. I’m very

familiar with the ULURP process and what its

strengths and weaknesses are. The question

really is in your particular fight what you

thought about if we try to interject additional

procedural safeguards, if you believe that would

or would not have changed where you are

currently.

MR. GOLDSTEIN: But I do think it

certainly would have reshaped the project or had

that potential had it gone through that process.

ASSEMBLYMAN O’DONNELL: I hear you loud

and clear. Thank you very much.

ASSEMBLYMAN GREEN: Could you restate or

summarize again, looking at the fact that this

bypassed the City that there’s a different

process, there is no ULURP process linked to the

Empire State Development Corporation. If you had

your druthers with respect to procedural law that

should be integrated into the processes of the

Empire State Development Corporation or other

public authorities, what are the key principles

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and the core values that you think should be part

of that law?

MR. GOLDSTEIN: I don’t think a project

like this should go through that state process,

unless I’m misunderstanding your question.

ASSEMBLYMAN GREEN: What should it do?

MR. GODLSTEIN: A project like this

should go through ULURP. Is that the question?

ASSEMBLYMAN GREEN: That’s the question.

That’s one. A project like this should go

through ULURP.

Given the fact that this project is not

going to go through ULURP and it is going to go

through state authorization because, correct me

if I’m wrong, state authorization may not only

consider the financing of the project that will

go before the public authority control board but

may allow for other kinds of amendments, what

might you suggest to the State Legislature with

respect to, again, procedural law? I mean,

given the reality that when this project came out

there was no economic development planning

processes then. The fact that there was no ULURP

process, but it is going before the State

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Legislature, this body, what would you recommend?

MR. GOLDSTEIN: I’m sorry. If it were

going before the State Legislature?

ASSEMBLYMAN GREEN: It is going to go

before the State Legislature.

MR. GOLDSTEIN: The financing?

ASSEMBLYMAN GREEN: The financing. We

did not increase our borrowing ability so it will

have to go before the State Legislature.

MR. GOLDSTEIN: If you say so it must.

My reading of the MOU doesn’t say that the

bonding – it’s not clear where the $100 million

is going to come from. I’m not sure where it goes

--

ASSEMBLYMAN GREEN: That’s exactly

correct. That’s what I’m saying. The MOU is

basically just a memorandum of understanding. It

was not linked to any increased authorization on

our part to provide for additional resources for

this project. That’s the point that I’m making.

MR. GOLDSTEIN: Well, I think if and when

the Legislature is evaluating whether or not to

put $100 million or whatever into the project, I

think you have to evaluate the cost and benefits.

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You also need to evaluate, if you can achieve

some of those benefits without using eminent

domain at a lower cost. I mean, you mean to

truly evaluate the project. I think it’s

difficult to do that at this point the way things

have gone. Maybe I’m not understanding your

question. If the only say the Legislature has is

whether or not to fund the project as the MOU had

said, I assume the Legislature needs to evaluate

if it’s worth the investment.

ASSEMBLYMAN BRODSKY: I want to thank

you --

MR. GOLDSTEIN: May I just add one thing,

and it’s important about blight.

ASSEMBLYMAN BRODSKY: I was going to say

I want to thank you for coming.

MR. GOLDSTEIN: Sorry.

ASSEMBLYMAN BRODSKY: It’s been very

helpful testimony. I know it’s been a difficult

process in trying to get your points of view out.

I appreciate your coming down to understand what

we should be doing. If there’s anything else you

want to add, please do so.

MR. GOLDSTEIN: It does seem to me from

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today that you will take a serious look at the

misuse of blight. If anyone of you – Roger,

obviously, is very familiar with the neighborhood

and the footprint. What’s troubling is if you

call that area blighted a lot of Roger’s district

could be called blighted.

ASSEMBLYMAN GREEN: The area, for the

record, the area is not blighted. For the

record.

MR. GOLDSTEIN: And I appreciate that.

And Roger is correct. Just this week, in the

Real Deal Real Estate Magazine there’s a glowing

article about how booming that area is. One of

the buildings – they got it wrong – that was

mentioned in that article was my building, which

is a converted warehouse which six months after

it opened and people moved in, this project came

along. Within a year and a half, the building

has emptied out. I’m glad to hear Roger say

that.

If blight can be used for this

neighborhood, as you go eastward in Brooklyn you

better watch out because it will just continue.

ASSEMBLYMAN BRODSKY: Thank you very

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much for your testimony.

CHAIRWOMAN WEINSTEIN: Thank you for

being able to be here with us. No one else has

any questions for your Mr. Goldstein.

That concludes this hearing. There maybe

additional hearings held in other parts of the

state. I want to thank everybody who testified

today and participated.

(Whereupon, the Hearing on Eminent Domain

is adjourned at 2:35 p.m.)


216

C E R T I F I C A T E

I, FRANK GRAY, a Shorthand Reporter and

Notary Public in and for the State of New York,

do hereby stated:

THAT I attended at the time and place above

mentioned and took stenographic record of the

proceedings in the above-entitled matter;

THAT the foregoing transcript is a true and

accurate transcript of the same and the whole

thereof, according to the best of my ability and

belief.

IN WITNESS WHEREOF, I have hereunto set my

hand this _________ day of __________, 2005.

___________________________

FRANK GRAY

new york state assembly public hearing on eminent domain, transcript, 11/4/05

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