Professor Ilya Somin posts “If You Ever Build It, Maybe Some Economic Development Will Come – The New London Development Project Since Kelo.”
However, two and one half years after the Supreme Court ruled in favor of the city and some seven years after the condemnation proceedings were first initiated, little or no economic development has occurred on the condemned land.
. . .
If the Kelo condemnation ultimately ends up creating more economic costs than benefits, that would not be a surprising development. For reasons I have explained in great detail in several articles (e.g. here and here), economic development takings often harm local economies more than they benefit them. Local governments and the private interest groups that seek to acquire condemned land have strong incentives to overstate the benefits of such condemnations, while understating the costs. And it is extremely difficult – often impossible – for voters to assess their self-serving claims accurately.
Gideon Kanner’s take on the situation here.
The Kelo/Midkiff/Berman standard of review, which equates a decision to take property by eminent domain with the exercise of legislative police power, practically invites these type of results. After all, if the standard is whether the taking could “conceivably” result in economic benefit, what checks exist to make sure the government makes any realistic attempt to make sure the speculation has a basis in reality, and represents government’s best efforts to match the means with the ends before it takes the drastic step of dispossessing innocent property owners of their property? The really interesting question is whether government’s claim of conceivable benefit trumps proof of pretext. Under Justice Kennedy’s formulation, it should not, but that doesn’t prevent the government from making such arguments.