New London May Build Townhouses on Site of Kelo Takings

For years, the site of the property condemned in the controversial Kelo v. City of New London case has stood empty. Now however, there are recent reports that the city of New London has found a developer interested in building townhouses on the site (see here and here) [HT: my RA Eva Choi, and Michael O’Malley of the Yale University Press].

Several previous plans to develop on the condemned property have gone under. In November, the Pfizer Corporation, whose lobbying helped instigate the initial takings, announced the planned closing of its headquarters in New London. That step further reduced the likelihood that anything will be built in the area. It remains to be soon whether the townhouse development will work out better than these previous efforts. At present, it is not clear how much the new project will cost taxpayers, and a news report indicates that “[c]onstruction on the project will not occur any time soon.”

Even if the townhouses are eventually built, it is unlikely that they will generate enough development to offset the value of the numerous homes and businesses wiped out by the condemnations, the opportunity cost of having the area lie empty for years, and the over $80 million in public funds already expended on the project.

Ironically, much of the condemned area was a lower-middle class residential neighborhood before the takings, and New London’s current plan is to use the land for roughly the same purpose. The City could have “achieved” this result at far lower cost simply by leaving the neighborhood alone in the first place. Taken as a whole, the Kelo story exemplifies the ways in which “economic development” takings not only victimize property owners, but also often destroy more development than they create (see also my more extended discussion in this article, which cites figures for the costs of the Kelo takings).

UPDATE: This article from the New London newspaper The Day gives more details, and says that the townhouse plan would not actually include any of the condemned land (though it would use some former federal government-owned land that was included in the redevelopment plan that also led to the condemnations):

The Stillmans’ [the developers’] plans call for two-story townhouses with peaked roofs and small porches close to the sidewalk. Garages and parking spaces would be in the back of the housing units, which would be clustered along East and Chelsea streets.

The housing would sit on 6.5 acres that used to be part of the Naval Undersea Warfare Center and were not involved in the eminent domain takings. It is adjacent to Fort Trumbull State Park and the Coast Guard Station.

The Stillmans said they would develop most of the townhouses for a “relatively upscale rental market” and would pursue marketing analysis to fine-tune the parameters of the development.

This suggests that the land taken by eminent domain would remain unused even if the townhouses are ultimately built.