3: It Hits Home

00:10 Tess Terrible: Last time on The Pursuit.

00:13 Dana Berliner: We lost by one vote. The Supreme Court held that the mere possibility of economic development, the mere possibility of more jobs and more taxes from a private development project was enough to call the takings “for public use.”

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00:46 Tess Terrible: This is The Pursuit, a podcast about government action and individual liberty. I’m Tess Terrible.

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01:01 Tess Terrible: If you recall from last week, we talked about Pine Manor College, a small liberal arts college in Brookline, Massachusetts. After chatting with Tom O’Reilly, President of Pine Manor College, I decided to visit the campus.

01:17 Tess Terrible: I visited the campus in November 2017. I actually used to live in Brookline. I have a pretty good feel for the area, having lived in or around Boston for most of my adult life before I moved to Washington, DC, but I can’t say I was all that familiar with Pine Manor College, other than its rough proximity to my old apartment. I arrived to Pine Manor College a few days prior to Thanksgiving. It’s a really, really beautiful campus. All brick and mortar and ivy. It’s intimate, filled with stone paths and old oak trees. It’s neatly tucked away in Brookline. I met with Tom O’Reilly. He updated me on the progress of their case. We discussed a recent town hall meeting that he attended.

02:08 Tom O’Reilly: The town voted for a partial step, perhaps some have called it a compromise. Initially, the target was Pine Manor College from an eminent domain standpoint. The college made a case during the waiting time between the announcement of it being included as a site and the actual town meeting, that we should not be a site. And in that public discourse, we were able to help open the town’s eyes as to what other options might equally make sense for what they wanted to do. One is the Pierce School. Pierce School is an existing 1970s building that the parents are calling substandard and which they know needs to be renovated regardless. And what they’ve proposed is rather than coming up with a one-​site solution, that they expand in place the existing building. For them, that does two things. One, it gives them a renewed building that is worthy of their students. And secondly, it creates expanded space to absorb most of, if not all of the additional need. And so they voted on a compromise proposal or motion that called for them to include Pine Manor College in their considerations, but also to include two other sites as well as other sites they deem necessary.

03:34 Tom O’Reilly: So what that means is between now and May, when the regular town meeting is scheduled, they will appoint a study commission to look at feasibility of various sites, with the goal of coming up with one that is both feasible and likely to be adopted by the community. The town is very divided. And I think that one of the things that became clear is that there was no consensus around the Pine Manor College site. When I spoke, I think that folks thought we’re not sure what they would get. And what I decided to do is speak to values. The town has a history of really articulating its values, commitment to education, commitment to open space, commitment to equity, commitment to a large - a healthy number of values that they put foremost in what they want to be doing. What we pointed out, what I pointed out in my conversation was that the town really wasn’t focused on its values. It wasn’t adhering to its values in selecting the Pine Manor College site. And I think that that took people a step back and helped them to reframe what we were talking about. The town has been very specific about education being its number one goal. They call it our brand. The brand of Brookline is education.

04:55 Tom O’Reilly: And yet in their proposal to consider taking Pine Manor College, they’re pitting two important educational missions against each other. Pine Manor College serves 85% students of color, 84% first generation, first in their families to attend college, 80% low income, 50% multilingual. Traditionally, a very underrepresented population in higher ed. Traditionally, a very challenged population in terms of graduation rates. And so here we have a college that’s been very successful in serving these young folks and yet in the only proposal that the town has that pits two important educational missions against each other, one is put at risk.

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05:42 Tess Terrible: This is Jim Stergios. He’s the Executive Director of the Pioneer Institute in Boston, a state-​based think tank focused on education policy. He is also a resident of Brookline, Massachusetts.

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05:56 Jim Stergios: The reputation of the Brookline public schools is that they are among the best in Massachusetts and that is probably true. It’s not as good as they think. Analyses that I’ve looked at would suggest they are probably more like 30th in the state, out of, say, 300 districts. What is important to know about Brookline is that the educational attainments of parents there, of families there, are exceptionally high. And therefore, if you will, the product coming out in the other side of the public school system is not at a par with the inputs. The Brookline public school system has now for about four years been trying to figure out where to put a school, and this tells you everything about a monolithic, monopolistic entity. Over time, they have found themselves in the position of thinking about taking land from a park. Decided not to do that. And in this case, they’ve decided to go to a private college and say, “Hey, folks. You’re not in a good financial position. Pine Manor has had financial troubles for well over a decade. We know that it would be difficult for you to fight back on this and yet, what we wanna do is we wanna take your land.” So they think that they have a weak party that they’re “negotiating” with, and they actually popped out this proposal without any real conversation with the college.

07:24 Tess Terrible: Jim mentions an important detail here, Pine Manor’s financial troubles. The first time Tom and I spoke over the phone, he told me how the college had years of operating losses and that Pine Manor was placed on probation in 2016. Could you tell me why Pine Manor was placed on probation?

07:46 Tom O’Reilly: Sure. There were a handful of reasons that caused the accreditation group to put the college on probation. One of those was financial fragility. The college had lost money for 20 years and they were concerned about its ability to continue forward if it was gonna continue to lose money. They raised concern about lack of a permanent president. There’d been a number of interim presidents who had lasted for very short periods of time, a year and a half typically. They were concerned about the quality and the depth of student support, and they were concerned about, what they perceived, a lack of mission statement and strategic plan for the college. So those are the principal concerns that they had, all well founded. So the first thing we did was focus on finances and we turned the college into the black fiscal year-​end 2016. By end of fiscal year 2017, we had achieved surpluses again and we’re in the black again. And we are on track for doing that again in fiscal year ’18.

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08:52 Tess Terrible: Pine Manor was recently taken off probation. I find it a bit too coincidental that the town of Brookline is looking at seizing land from a private entity - in this case, a private school - who’s faced financial uncertainty in the past, using eminent domain where they know the plaintiffs will already have a difficult time fighting a seizure. It all sounds too familiar.

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09:23 Tess Terrible: Kelo versus New London was a case decided by the Supreme Court in 2005. The town of New London, Connecticut planned to seize 20 homes using eminent domain and demolish them as a plan for private economic development to support a new headquarters for the pharmaceutical company Pfizer, a private corporation. The town argued that the possibility of economic development, more jobs, and more taxes was enough to call it public use, and the Supreme Court ruled in the town’s favor.

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10:00 Dana Berliner: That was a pretty astonishing decision given the constitutional history. I mean, not only is it not at all a public use to build private condominiums and private office buildings to support a big, private project nearby, but the court didn’t even care that they weren’t gonna build that stuff at all, which we had introduced the evidence at trial that none of it was ever gonna happen.

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10:32 Tess Terrible: This is Scott Bullock and Dana Berliner from the Institute for Justice. If you remember from last week, they argued the historic Kelo versus New London case.

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10:43 Dana Berliner: And the New London Development Corporation said, “We can imagine a world in which someone would build some stuff here, and it would be nice and produce jobs and taxes.” And the court by a five-​four vote said, “Okay, sure.” That was not a good day. I think it’s fair to say that it was my worst professional day ever. Those were some very, very hard phone calls to make.

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11:26 Tess Terrible: This was a hard blow for everyone involved, but it was hardest for that woman in the “Little Pink House.” Susette Kelo and I met shortly before Christmas 2017. We met in a small restaurant in New London, Connecticut, which is why you might hear a bit of holiday music in the background. We talked about her case, her life, and the home she fought so hard for.

11:56 Susette Kelo: Well, what can I tell you about New London? Well, I guess they describe it as an economic-​depressed city. I looked at it more like a place to be able to own a home by the water. I really love New London. I do. I think I miss the way it was when I first came here. So yes, I do miss living by the water, yeah. It was a very small neighborhood. It was almost a neighborhood that you didn’t even know it was there unless you knew it was there. It was sort of like a peninsula, that you can only get to by going underneath the train trestles. So, I saw it listed and I had wanted to move someplace by the water, and of course places for… Well, I was a paramedic then, sort of like “only the rich can live by the water” type thing. You know what I mean? [chuckle] So, I found… I was fortunate enough to find this place. I went to see it, and it was just a nice place with a nice water view. So, that’s really why I bought it. It was in 2000, ’99 at the end of 1999 and 2000, that they started to put the articles in the paper about the redevelopment, and to propose a buyout of the neighbors. They said that Pfizer was going to move to the neighborhood, not to the neighborhood, but to adjacent property and build there. And they wanted to build a development to complement Pfizer.

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13:57 Susette Kelo: I believe that the first people to sell were like the people that were landlords type people who had just, “Were renting a building.” so they sold. But the people that had been there all their lives said no, most of them. But slowly but surely, they picked them all off through their offers and family getting involved and stuff like that. Well, I guess our first reaction was disbelief that they could really do something like this. And then my second reaction was to say, “Hell, no. I won’t go. Really.” And that’s how it all started. I simply said, “No. I’m not going.” Of course, there was a lot involved with saying, “No. I’m not going.” But simply, it wasn’t the right thing to do. As I said, it was wrong then, and it’s still wrong today, what they did to us. You just can’t say, and I explained this to somebody who’s having a problem somewhere else. And I said, “Listen, you can’t say no. And then two weeks later, say, ‘Okay, I’ll go.’ ” Because it doesn’t work that way. You gotta say what you mean and mean what you said. I said, no. And that’s what I meant. I meant no.

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15:13 Susette Kelo: You can’t take mom-​and-​pop coffee shop by eminent domain and give it to Dunkin’ Donuts but I thought… Because I thought it was wrong and they were judges, I said they would see it was wrong. So when they came back with the decision, I was like, “How can they… How can they do this?” I guess you could just say we were shocked, disappointed, hurt, like, let down. The wolves are at our doors for nine years, and now you’re gonna let ‘em in. Literally, it was appalling.

16:00 Tess Terrible: Susette’s house was sold for $1 to a private buyer. The house was relocated to another area of New London, but Susette no longer lives in the home. She currently lives with her husband in another small town in Connecticut.

16:17 Scott Bullock: So, we worked out an agreement with the city so that Susette’s home would be preserved and moved. It was rebuilt about a mile away from where it originally stood. Person who believed in what the property owners were doing owns the home, lives in it. It has a great historical marker out in front of it, including a big post that says, “Not for sale” in front of it. It’s called the Kelo house. People can go visit it. It’s still painted pink, and it’s a real monument to the fight that all the homeowners waged there. The other homes where folks had to move out, and they were bulldozed. And the Fort Trumbull neighborhood now, it’s been 12 years since the Supreme Court decision. The project has been a total and complete fiasco.

17:09 Tess Terrible: I should mention something about the Fort Trumbull area. After this case, Pfizer left. There is nothing here. It’s an empty lot.

17:19 Scott Bullock: The neighborhood’s been cleared now for over 10 years. There’s been nothing built there. The project never happened. And so, New London spent, the State of Connecticut spent over $80 million in public money, and threw these people out of their homes, violated the Constitution and they have absolutely nothing to show for it.

17:40 Dana Berliner: And Pfizer moved out. As soon as its tax breaks were done - it got a period of tax breaks that were substantial. As soon as those were over, it left New London. Not only did they not build anything on the area that had been condemned to complement the Pfizer facility, but they don’t even have the Pfizer facility anymore.

18:04 Scott Bullock: Yeah, and it shows what happens when these projects take place. It’s not only just eminent domain, it’s typically massive amounts of corporate welfare that are used as well. And then cities and taxpayers end up holding the bag for these terrible decisions that are made by city officials.

18:23 Dana Berliner: But it is just a barren, weed-​filled area. Not one single thing was built on land that was taken by eminent domain, nothing, not even a shed.

18:38 Scott Bullock: Some feral cats have set up home there.

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18:45 Tess Terrible: This case is so infamous and it went on for so long. In researching this case, I wondered, “Why fight? Why not just take the money?” The Fifth Amendment, which grants the power of eminent domain, talks about owners receiving just compensation for their property or fair market value. But what does just compensation really mean?

19:11 Scott Bullock: What just compensation in a market transaction is is what price it will take for an owner of land, business or a home to sell. That’s not what it means in the eminent domain context. There it simply means the appraised value of the property for its current use. When the government exercises eminent domain, that is all you’re really entitled to. Some statutes allow you to get some moving expenses and some other types of minor expenses for it, but it is simply the appraised value of the property for its current use. And then parties, the government and the owner can argue about what that might be. But as I said, it’s the exact opposite of a truly voluntary market transaction, which is the price that it will take for somebody to voluntarily sell their land. In a market transaction, sometimes that price point could be reached, other times people just aren’t willing to sell. People have to accept that and move on. But the real tragedy of eminent domain is the voluntary nature of it is taken away and the government has the right to take your property regardless of whatever price you might want for it or whether you even want to sell in the first instance.

20:29 Tess Terrible: This is Mike Cristofaro from last week’s episode. If you recall from last week, Mike’s parents owned a home in Fort Trumbull. His family was part of the group of plaintiffs in this case.

20:42 Mike Cristofaro: They offered my parents, what was it? $65,000 for that property. At the time, they were paying taxes valued up to $475,000. That’s what it was on the records. Now, it wasn’t about the money. They could’ve came and offered us $500,000 for it. “No, thank you.” But we went to an attorney, we wanna fight this. He just looked at us and said, “I’ll be happy to take the case. It’ll be a $40,000 retainer fee, but I can tell you right now, you better take the money and just move.” How do you fight… They’re offering you $65,000 and it’s gonna cost you $40,000 just to retain a lawyer to start a fight. Do you know when the decision came down, we fought for another year, another year. The city of New London, they basically came back and said, “Since we’ve owned the property since 2000, we’re charging you rent.” They sent us a bill. It was for over $120,000 in back rent. They were gonna give us $65,000. We would have had to pay the city of New London money to move out of our own home. They don’t make you whole.

22:19 Tess Terrible: So this idea of just compensation…

22:22 Mike Cristofaro: Is a joke. It’s a joke. Okay? Like I said, my parents owned the house, free and clear. Whatever they ended up buying, they would’ve had a mortgage. And it would probably have been two or three times more than what they got for the property. And then they would’ve had to hire a moving truck to move out of the property. You need to make people whole.

22:54 Susette Kelo: I guess people could say, “You can sell.” People used to read stories in the newspaper, “Oh, she only wants money,” but I never talked about selling and I never talked about money the whole time I worked through the process, not until I was forced to go, and then I didn’t sell it. They took it. Nobody asked for this.

23:17 Dana Berliner: Eminent domain hits home. It is as Scott said, it’s the power to take away somebody’s home or ruin someone’s business. It goes to the core of what is meaningful to people. Their family, their home and their livelihood, and eminent domain has the power to destroy all of that. If you randomly select any group of people and say, “Do you wanna sell your home right now?” some will say, “Sure.” And some will say, “No. Absolutely not.” And that’s what happens when you use eminent domain over a huge area. And for the ones who don’t wanna move, there is no way to compensate for what they’re losing. It’s true of businesses, too, though. Just compensation doesn’t include most of the losses to small businesses. If eminent domain is used against your business, that business is probably going to be destroyed.

24:28 Tom O’Reilly: I do go back to an important message that a good friend of mine, when we were thinking about the issue of eminent domain, brought to me. And she had a terrific comment, I thought, because she had thought deeply about it. And we’re both political scientists by our original background, college, having studied that. And so we often talk and engage about what does the political process mean. And when we thought about eminent domain, her comments to me, and I’ll quote her, is that, “Whether it is coming from the White House or from a town hall in a place like Brookline, Massachusetts, to the extent government officials act without transparency, and use or misuse the tools of governance in a heavy-​handed manner, it erodes the trust of the public at all levels of government.” And this is the risk that eminent domain causes, when government has not gone beyond the call of duty to be fair, open, equitable and transparent. Government, big or small, really does impact people’s lives. And more than that, it sets the tone about what people believe they can do about their own lives. And when government makes people feel as though it’s untrustworthy or the individual is unempowered, in democracy, that’s bad. In our system - it really needs to be a system of laws and not just of people exerting power.

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26:02 Tess Terrible: There are some things that are just not for sale. No amount of money can compensate for the loss. No matter what the case and why it’s being taken. At the time I am recording this, Brookline, Massachusetts has identified a new site that’s already town-​owned. There is some rumor, however, that they may come back at Pine Manor College to secure conservation land to make up for the town land they use for the school, so eminent domain remains a possibility.

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26:46 Tess Terrible: The Pursuit is produced and hosted by me, Tess Terrible. It is a project of the Cato Institute and Lib​er​tar​i​an​ism​.org.