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Francis Dougherty
Finance 366- Introduction to Real Estate and Urban Development
Section 001
Tuesday, September 29, 2015
http://www.oyez.org/cases/2000-2009/2004/2004_04_108
“The Limits of Property Rights”(2)
In the case of Kelo vs. New London, I support the majority ruling in using eminent domain to transfer property rights in order to re-build the suffering city of New London. The cities justification for the use of eminent domain is that the Pfizer research center, along with multiple restaurants, shops, and a museum is “public benefit”, and therefore falls under the category of public use. Being that New London has a dwindling population and a high unemployment rate, creating jobs and tourist attractions that boost the local economy is a viable solution and would benefit the public. “The city was not taking the land simply to benefit a certain group of private individuals, but was following an economic development plan” (Oyez). In this case, the majority concurred that even though the land was not to be “used by the public” in the form of a highway, railroad, or school, it was to benefit the public by redeveloping the local economy and therefore constituted a “public use”.
The underlying dilemma is should private property be condemned by the government and then turned over to another private owner who offers higher tax revenue and more local jobs. In this setting, generating more income for the local economy is the primary goal and is a public use. If the city of New London had not been in economic turmoil and was in fact thriving economically, the city could not argue that this was a public use because there was no public need. As pointed out by the New York Times in “The Limits of Property Rights”, the dissenters of the case said, “eminent domain must not be used for purely private gain”(2). This statement I can agree with, but in this case, it is more than a “purely private gain”. With economic redevelopment in mind, the city acted correctly in using eminent domain.
Ten years later, a different picture is painted. Instead of a research facility and multiple other prosperous businesses, nothing sits on the highly disputed land. The non-profit private developer who was appointed by the city to redevelop the land, lacked financing and resources to pull off the venture. A huge reason why this fell through is Pfizer merged with Wyeth and shut down its $350 million research facility in New London. This...