Eminent Danger

The New York Sun
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December 18, 2006 edition
Editorials


Eminent Danger
New York Sun Editorial
December 18, 2006


How's this for irony as the Public Authorities Control Board considers the matter of Atlantic Yards in Brooklyn? It seems that hopes for defending property rights in New York are resting not with our Republican mayor or governor, but with the speaker of the Assembly, Democrat Sheldon Silver. We are under no illusions that a vote by Mr. Silver this week against Atlantic Yards would represent principled opposition to the idea of private property being seized by the government to be handed over to another private owner for economic development purposes. It would likely just be an example of Mr. Silver's legendary negotiating acumen — he takes a deal to the wire and extracts every possible concession, even if he favors the project in question. But the unusual situation only underscores the perils of the way this project has evolved.

We start out from a position of favoring private-sector building and investment in New York City. We have no objection to the density of the $4.2 billion plan by developer Forest City Ratner to build a Nets basketball arena and housing designed by Frank Gehry near the Atlantic Avenue subway stop in Brooklyn. Initial indications were that the project would be primarily privately funded and that, because most of the land for the project was either owned by the Long Island Rail Road or had been privately acquired, the use of the government's power to condemn property through eminent domain would not be needed. It is good news that Forest City Ratner is interested in investing this much money in Brooklyn.

The project, however, has evolved considerably since it was first announced. First, as Mayor Bloomberg kissed Bertha Lewis, the New York executive director of the Association of Community Organizations for Reform Now, developer Bruce Ratner agreed to devote half of the rental units on the site — 2,250 of 4,500 apartments — to "affordable" housing. That opened the door for Forest City Ratner to seek subsidies for those units in the form of tax-exempt financing. The project started to look less like free-market investment and more like a classic market-distorting income-redistribution scheme in which the hardworking taxpayers of New York pay the price for those few lucky enough to score an "affordable" apartment.

Now comes the news that Mr. Pataki's Empire State Development Corporation is moving to evict what the New York Post reports are 60 households and 13 businesses using eminent domain power. With the notable exception of the Brooklyn Papers, a chain of weeklies in Kings County, the press has been cheering on this trampling of property rights. The Daily News ran an editorial in support of the project, and a New York Post editorial this past week sneered at the project's opponents as "misguided, ivory-tower, eminent-domain purists." As for the New York Times, Forest City Ratner is the New York Times Company's partner in building the paper's luxurious new "affordable" headquarters near the Port Authority bus terminal in Manhattan, which itself involved the use of eminent domain condemnation.

We've sat through the Bloomberg administration's presentation on the importance of eminent domain as an urban development tool, and we don't mind saying we were unmoved. The administration itself trumpets as an eminent domain success story Forest City Ratner's own Metrotech center in downtown Brooklyn. That development is lifeless after 6 p.m. and integrates poorly with the surrounding neighborhoods. Everything that Mayor Bloomberg did not like about the World Trade Center is on display at Metrotech. The strongest argument made by proponents of using eminent domain for private projects is that if the practice is barred, the illogical result is that it would be legal to seize homes for a new jail or a new public housing project, but not for projects that might be better for a neighborhood, such as restaurants, hotels, or luxury condominiums.

The problem is that the concern about property rights is bedrock. It's Locke. It is one of the ideas upon which this nation was founded. It is also essential. Who would plunk down $1 million or more for one of Mr. Ratner's condos knowing that some powerful developer allied with the government could come along and roust him for some better project? It isn't only Atlantic Yards and the Times headquarters. Justice Thomas warned, in his dissent from the Supreme Court's decision in Kelo v. New London, of the "far-reaching, and dangerous, result" of the court's majority opinion.

Mr. Bloomberg's master plan for New York in 2030 speaks of creating many new parks, and one of Speaker Silver's priorities has long been a Second Avenue subway. Count on more property seizures for what, in those instances at least, would likely be public uses. Columbia University may see Forest City Ratner's maneuvers and decide to use eminent domain rather than paying a market-clearing price to property owners in Manhattanville, where it wants to build an expanded campus for the sciences.

If Mr. Silver does block Mr. Pataki from midnight condemnations at Atlantic Yards, the decisions would be left to the new governor, Eliot Spitzer. His appointees to head the MTA and the Empire State Development Corporation, Elliot "Lee" Sander and Avi Schick, have excellent reputations. In taking on Wall Street, Mr. Spitzer often made the claim that, rather than being hostile to capitalism, he was defending the property rights of the small investor. What an irony it would be if Mr. Spitzer, the bane of Wall Street, turns out to be a more trustworthy defender of property rights than either Mr. Bloomberg or Mr. Pataki.