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Location: Arlington, Virginia, United States

Thursday, December 08, 2005

Progress, Progress, Progress...

Florida City Considers Eminent Domain

By Joyce Howard Price
October 3, 2005

Florida's Riviera Beach is a poor, predominantly black, coastal community that intends to revitalize its economy by using eminent domain, if necessary, to displace about 6,000 local residents and build a billion-dollar waterfront yachting and housing complex. "This is a community that's in dire need of jobs, which has a median income of less than $19,000 a year," said Riviera Beach Mayor Michael Brown.

He defends the use of eminent domain by saying the city is "using tools that have been available to governments for years to bring communities like ours out of the economic doldrums and the trauma centers." Mr. Brown said Riviera Beach is doing what the city of New London, Conn., is trying to do and what the U.S. Supreme Court said is proper in its ruling June 23 in Kelo v. City of New London. That decision upheld the right of government to seize private properties for use by private developers for projects designed to generate jobs and increase the tax base.

"Now eminent domain is affecting people who never had to deal with it before and who have political connections," Mr. Brown said. "But if we don't use this power, cities will die." Jacqui Loriol insists she and her husband will fight the loss of their 80-year-old home in Riviera Beach.

"This is a very [racially] mixed area that's also very stable," she said. "But no one seems to care ... Riviera Beach needs economic redevelopment. But there's got to be another way." In the Kelo ruling, a divided Supreme Court held that private development offering jobs and increased tax revenues constituted a public use of property, but the court held that state legislatures can draft eminent-domain statutes to their satisfaction. Dana Berliner, senior lawyer with the Institute for Justice, which represented homeowners in the Kelo case, said "pie in the sky" expectations like those expressed by Mr. Brown are routine in all these cases.

"They always think economic redevelopment will bring more joy than what is there now," she said. "Once someone can be replaced so something more expensive can go where they were, every home and business in the country is subject to taking by someone else." Last week, the Riviera Beach City Council tapped the New Jersey-based Viking Inlet Harbor Properties LLC to oversee the mammoth 400-acre redevelopment project. "More than 2,000 homes could be eligible for confiscation," said H. Adams Weaver, a local lawyer who is assisting protesting homeowners.

Viking spokesman Peter Frederiksen said the plan "is to create a working waterfront," adding that the project could take 15 years and that "we would only use condemnation as a last resort." Viking has said it will pay at least the assessed values of homes and businesses it buys.

Other plans for the project include creation of a basin for megayachts with high-end housing, retail and office space, a multilevel garage for boats, a 96,000-square-foot aquarium and a manmade lagoon. Mr. Brown said Riviera Beach wants to highlight its waterfront. "We have the best beach and the most attractive redevelopment property anywhere in the United States," he said. Mr. Frederiksen said people with yachts need a place to keep and service them. "And we want to develop a charter school for development of marine trades." Mr. Brown and others said this could be one of the biggest eminent-domain actions ever. A report in the Palm Beach Post said it is the biggest since 1954, when 5,000 residents of Washington were displaced for eventual development of the Southwest D.C. waterfront, L'Enfant Plaza, and the less-than-successful Waterside Mall.

The fact that Riviera Beach is so financially downtrodden may seem ironic because as Mr. Brown notes "it sits right across the inlet from Palm Beach," one of the nation's wealthiest areas.

"Palm Beach County is the largest county east of the Mississippi, and we have the second-highest rate of poverty in the county," the mayor said.


Blogger John said...

THAT, my fellow Americans, is a kind of "fascism": Government-sanctioned seizure of hearth and home, the forfeiture of your most solemn rights to private property.

President Bush has failed to speak out against that, probably because of the very justification that it would increase the "tax base" without having to raise taxes.

2:29 PM  
Blogger Kelly said...

There are many local issues that President Bush fails to speak out for or against.

It is shameful, however, that the local government is taking such action against the property of these people. The responsibility for this lies with the 'local' government. While I agree that this is fascism, we cannot blame our local problems on the President of the United States.

Can you imagine the case load he would have in trying to micro manage this country?

3:53 PM  
Blogger John said...

True, Kelly, however--and I might be wrong-- I believe he had veto power over the congressional legislation which expanded the eminent domain definition beyond "public works," and he certainly could have used the bully-pulpit to speak out against it if it was in fact "out of his jurisdiction."

It is a bad law.

Can you imagine Donald Trump writing you a check and telling you to move (for an amount less than your required incentive) so he can build a casino?

8:51 PM  
Blogger Kelly said...

I see your point. It is a bad law and if he had the chance to put a stop to it and did nothing..... then in that regard he is to blame.

I did some research into this and found the following...

9:59 PM  
Blogger Kelly said...

This comment has been removed by a blog administrator.

10:00 PM  
Blogger John said...

It wasn't a "Republican" thing though Kelly.

I think conservatives in Congress were the most outspoken against it, and liberals the loudest champions.

12:29 AM  
Blogger John said...

Anyway, despite being supportive of the "ownership society" ethos, that's ultimately a delusion.

Do you have a mortgage on a property?

Then the bank owns it, and is actually the "owner's" own landlord:

If you're late on your monthly "rent"--i.e. the mortgage payment-- you get hit with a penalty fee and get written up...

...just as you, "the owner," would hit a tenant with a late-fee and perhaps write them up if they're late on paying you rent.

You miss too many "rental payments" and/or can't make up the outstandings, you could very well get "evicted" from the very property you think you "own" in the form of "foreclosure."

Are you mortgage-free?

Congratulations! That's great!

But you still gotta pay "rent" to an even BIGGER landlord: Uncle Sam, in the form of "property taxes."

You miss a couple of those, you get even bigger penalty fees, get seriously written up--not just to the credit bureaus this time, but to the IRS as well-- and risk getting evicted from the very property you think you "own" scot-free (i.e. fully paid off)... government foreclosure.

Essentially--speaking cynically-- we live in indentured servitude our entire lives, in a system less far removed from Mediaeval feudalism than is generally believed.

And now we can be "evicted" even if we have a sterling record of "rental payments" (mortgage, insurance, and tax payments) because of this eminent domain ruling.

So what do we truly "own," unconditionally?

It is said in some quarters that the "ownership society" that President Bush trumpets--having led to record homeownership-- was enabled more by a loosening of lending practices, a lowering of standards.

The "loosening" is described by some fiscal conservatives as "artificial," that is, it spites market forces of supply and demand and allows people who "really"--by previous standards of lending--could not have afforded to buy property "A" but suddenly find themselves able to...

...without "really" being able to.

Some people point at that as not only the reason for the record "homeownership" but also behind the record foreclosures, and will be the biggest reason behind any "popping" of the Real Estate "balloon" (the longevity of which has confounded the Prophets of Doom who had predicted a catastrophic collapse and a plunge back into Recession for quite some time now).

Republicus sees merit in that argument, but considers them more to be contributive factors to the boom and any potential fall than the driving ones.

(Republicus would consider icreases in job opportunities, incomes, and population, as well.)

The fact that there IS record homeownership would certainly lead to record foreclosures if the buying:foreclosing ratio remained somewhat constant.

Republicus has not studied any differences between the ratios today and the ones preceding the loosening of lending standards, but would guess that the ratio has changed to some degree indicating a proportional increase in foreclosures-- but he could be wrong.

He doesn't know for sure, and is not in the mood to research that, but certainly would think that if any proportional increase in the rate of foreclosures was substantial enough to indicate a serious imbalance caused by excessively liberal lending practices, that information would be plastered on the front page headlines, as there are politically-driven forces in the media who are eager to not only report any ominous weaknesses in the "Bush Economy," but are ready, willing, and able exaggerate them.

Republicus thinks there are bubbles in pockets of the country that will deflate, but does not forsesee an industry-wide "crash."

In the opinion of Republicus, the slow deflation that we can see--here and there-- is not so much a harbinger of a "POP" as it is a low hissing sound, and is more indicative of a bull market running its course and, naturally, cyclically, getting bearish than it is a proof of a bull running on hooves of clay and prematurely collapsing.

And that's only speculation.

Although there's a finite number of generational buyers...

...there is still a large demand in places like California, with a supply-side still busily building to keep up with it.

And everyone needs to live somewhere.

And America is the best place to live.

And the American population is increasing, not decreasing...

8:57 AM  
Blogger John said...

P.S. But of course, the earlier appraisal above--that we really don't "own" anything--is silly.

I mean, if you want to play in the system, you pay, but if you play your cards right, you build real wealth.

10:46 AM  
Blogger John said...

All of that being said, the eminent domain ruling empowers looters, and it would be great poetic justice if Justice Souter loses his own house to it.

10:53 AM  
Blogger Kelly said...

sorry, it took me a bit to get back to this...keeping track of where I have been in here and what's been said is mind boggling sometimes.

Anyway, I agree that it would be poetic justice for one of these "looters" to loose their home because of eminent domain.

I understand the nature of this issue. There have been instances in the area where I live where roads took presidence over the land/home owner...whether they owned it outright or via the bank.

I also know that nothing is truly ours. My husband and I have owned a home outright. We have had one completely paid off and knew that even though we owed nothing to the bank we were still obligated to pay and pay and pay to the tax man.

That is another subject...for another day.

We sold that home and bought a bigger one to support the crowd (aka kids) we have around here. So, we are back to paying the bank AND the tax man.

Nice to have a good open discussion without the fiery darts of our adversary.

11:18 PM  

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