Don’t Trust the Politicians
Friday, June 20th, 2008 By Marc Kilmer
When politicians are promoting “economic development” policies they always claim that they will result in a huge amount of investment in a community, hundreds (or thousands) of new jobs, more tax revenue, and on and on. Of course, these promises are hard to verify and often don’t pan out. This is true in perhaps the most visible case of “economic development” — the eminent domain action in New London, Connecticut, that produced the infamous Kelo decision from the Supreme Court.
Since the government bureaucrats who were stealing taking for public use the property of others won the case, what has happened? Not too much, it seems:
Like so many other projects that use eminent domain and rely on taxpayer subsidies, New London’s Fort Trumbull project has been a failure. After spending $78 million in taxpayer dollars, the city of New London and the private developer have engaged in no new construction since the project was approved in 2000. Indeed, since the property owners disputing the takings owned less than two acres in a 90-acre project area, the city has always had a vast majority of the land available for development. Yet, no new development has occurred. The preferred developer for part of the site, Corcoran Jennison, recently missed its latest deadline for securing financing for building on the site and was terminated as the “designated developer.”
“New London’s Fort Trumbull project has been an unmitigated disaster,” said [Institute for Justice] Senior Attorney Dana Berliner, who litigated the Kelo case with Bullock. “Despite the infusion of close to $80 million in taxpayer funds and three years elapsing since the Kelo decision, there has been no new construction in the area and nothing to show but brown, empty fields. The developer was so desperate for funding that it applied to the federal Housing and Urban Development agency to obtain taxpayer-subsidized loans to build luxury apartments on the land where Susette’s neighborhood once stood.
As this case illustrates, it’s a good idea to be very, very skeptical of politicians who are promising huge economic benefits from government meddling.
H/T Reason magazine’s Hit & Run blog.
Tags: Economy
