Hadley Township Redevelopment Has Been a Disaster

November 18, 2008

Hadley Township Redevelopment Has Been a Disaster

If you want an example of the terrible effects of eminent domain, you don’t need to look any further than Hadley Township in Richmond Heights. It was covered as part of Tim Lee’s study of eminent domain abuse for the Show-Me Institute. It is even more than just a horrible example of eminent domain abuse, though — it is the ultimate example of why local government should not get into the redevelopment business in the first place. While nobody has yet been put out of their homes, an entire neighborhood is suffering greatly from the combination of a city wanting to redevelop its community, the threat of eminent domain hanging over the heads of residents (some of whom have, admittedly, always wanted to sell), and the recent failures of the development proposal stemming from the credit crisis.

None of this had to happen. If the city has stayed out, involving itself only in the potential rezoning, the developer would have made offers to the residents. If he had made a good enough offer, likely all would have sold. And if someone decided not to sell their property and the development died as a result, then so be it. As for the business knowledge of local officials, how about this quote from one of the councilmembers in the Post-Dispatch article:

But Councilwoman Gina Mitten was disappointed.

“A $200 million project — and the developer can’t come up with another $72,000?” said an exasperated Mitten.

Yes, that is exactly how business is done. You come up with a business plan and then you just have as much money waiting on the side as the government wants you to hand over. (This post should not be taken, in any way, as defending the developer. …)

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7 Comments »

Abuse which began over eight years ago continues to get extended weekly. Public policies are a honest reflection of public leadership. Allowing private greed to trump public good has become too common in communities divided by design.

Comment by Jack — November 19, 2008 @ 7:22 a.m.
I’m not sure what this person is trying to say, but isn’t complaining about the greed of others a fundamentally greedy act?

Comment by Josh Smith — November 20, 2008 @ 2:32 p.m.
Not when the government is the one encouraging greed, profit, or business at the expense of the rights of others. Government allignment with developers for eminent domain abuses is greed at its worst, and many of us have and will continue to complain about it loudly and demand that it stop. That does not make us greedy. Read all of our studies before you attempt to call out my most loyal readers, newbie.

Comment by David Stokes — November 20, 2008 @ 3:19 p.m.
I am of course deeply opposed to eminent domain abuses, and frankly I don’t think that eminent domain(or rezoning for that matter) should be permitted at all (or not counted as a takings in the case of rezoning). The protection of private property rights should be first and foremost in government action, anything else is bad.
I wouldn’t call it greed, however. Greed is a natural human trait, and probably a good thing. What ED abusers are doing is attempting to steal. That’s unacceptable for reasons beyond greed. Greed is like coveting, you can disagree with it, but you probably shouldn’t punish it if no one gets hurt. Stealing is a whole other matter.

Comment by Josh Smith — November 20, 2008 @ 3:29 p.m.
Also, I would like to apologize to Jack. I misunderstood the content of his post and rescind my criticism.

Comment by Josh Smith — November 20, 2008 @ 3:33 p.m.
The word greed seems to have different meanings, connotations and relevance depending on the situation. It is quite beneficial in free and fair markets. Unfortunately in this situation neither is the market free or fair. Thieves come in many forms and are undoubtedly greedy. When leadership, which is entrusted to preserve property rights, opens the door, selectively extends invitations, designs and then declares blight, many more than just the owners are harmed. But there is a significant difference between greed and self preservation.

Comment by Jack — November 21, 2008 @ 7:55 a.m.
I am the person who made the comment, and believe your post takes it out of context. The $72k referred to was for the resident homeowners – not for the City.

The comment was made after several meetings in which the developer refused to pay the residents adequate compensation as part of its request that the council grant a one year extension to purchase the properties. For me, the payments to the residents was one (of several) threshold issues that needed to be resolved, as the extension would have meant that residents would be required to pay real estate property taxes they had not expected to pay, as they were repeatedly told that their homes would be purchased by the end of 2008. Many residents were troubled by the need to pay for maintenance and other necessary repairs that would go to waste when their homes were demolished. To me, such residents should, at a minimum, be paid for the out-of-pocket costs incurred as a result of the developer’s failure to proceed with the development in a timely manner. While those payments were not part of the original “business plan,” neither was a year-long extension.

I would also point out that the developer did indeed later offer a larger sum – despite their repeated statements that they were unable to pay one dime more to the homeowners. But, at that point, the developer wanted a TWO-year extension (along with many other contract changes that were, ultimately, unacceptable to a majority of the city council).

As a practicing attorney, I believe I do have an idea of how business is done. That knowledge is, in part, what prompted me to vote against the choice of this developer (although a majority of the council disagreed with me). I stated at the time of that vote that this project was too large and too important to award it to a developer without a proven track record in public/private redevelopment and in acquiring so many parcels of land. Moreover, I stressed that its financing numbers were questionable, and that the TIF commission, charged with reviewing the financial viability of the project, had rejected the proposal. The bottom line is that I had serious concerns about the developer’s ability and financial wherewithal to complete the project. In my opinion, the numbers simply did not work, and the comments you quote reflect my frustration with the project’s continued fiscal deficiencies.

Finally, I would like to state that I, too have concerns about the abuse of eminent domain. While I suspect that we would never agree on what constitutes abuse, I do believe that the TIF & eminent domain laws could be improved to better balance the conflicting needs of the various stakeholders.

While we may not see eye-to-eye on this issue, my positions on this particular project may be found on my website (ginamitten.com).

Comment by Gina MItten — April 20, 2009 @ 4:23 a.m.

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Abuse which began over eight years ago continues to get extended weekly. Public policies are a honest reflection of public leadership. Allowing private greed to trump public good has become too common in communities divided by design.

Comment by Jack — November 19, 2008 @ 7:22 a.m.

I’m not sure what this person is trying to say, but isn’t complaining about the greed of others a fundamentally greedy act?

Comment by Josh Smith — November 20, 2008 @ 2:32 p.m.

Not when the government is the one encouraging greed, profit, or business at the expense of the rights of others. Government allignment with developers for eminent domain abuses is greed at its worst, and many of us have and will continue to complain about it loudly and demand that it stop. That does not make us greedy. Read all of our studies before you attempt to call out my most loyal readers, newbie.

Comment by David Stokes — November 20, 2008 @ 3:19 p.m.

I am of course deeply opposed to eminent domain abuses, and frankly I don’t think that eminent domain(or rezoning for that matter) should be permitted at all (or not counted as a takings in the case of rezoning). The protection of private property rights should be first and foremost in government action, anything else is bad.
I wouldn’t call it greed, however. Greed is a natural human trait, and probably a good thing. What ED abusers are doing is attempting to steal. That’s unacceptable for reasons beyond greed. Greed is like coveting, you can disagree with it, but you probably shouldn’t punish it if no one gets hurt. Stealing is a whole other matter.

Comment by Josh Smith — November 20, 2008 @ 3:29 p.m.

Also, I would like to apologize to Jack. I misunderstood the content of his post and rescind my criticism.

Comment by Josh Smith — November 20, 2008 @ 3:33 p.m.

The word greed seems to have different meanings, connotations and relevance depending on the situation. It is quite beneficial in free and fair markets. Unfortunately in this situation neither is the market free or fair. Thieves come in many forms and are undoubtedly greedy. When leadership, which is entrusted to preserve property rights, opens the door, selectively extends invitations, designs and then declares blight, many more than just the owners are harmed. But there is a significant difference between greed and self preservation.

Comment by Jack — November 21, 2008 @ 7:55 a.m.

I am the person who made the comment, and believe your post takes it out of context. The $72k referred to was for the resident homeowners – not for the City.

The comment was made after several meetings in which the developer refused to pay the residents adequate compensation as part of its request that the council grant a one year extension to purchase the properties. For me, the payments to the residents was one (of several) threshold issues that needed to be resolved, as the extension would have meant that residents would be required to pay real estate property taxes they had not expected to pay, as they were repeatedly told that their homes would be purchased by the end of 2008. Many residents were troubled by the need to pay for maintenance and other necessary repairs that would go to waste when their homes were demolished. To me, such residents should, at a minimum, be paid for the out-of-pocket costs incurred as a result of the developer’s failure to proceed with the development in a timely manner. While those payments were not part of the original “business plan,” neither was a year-long extension.

I would also point out that the developer did indeed later offer a larger sum – despite their repeated statements that they were unable to pay one dime more to the homeowners. But, at that point, the developer wanted a TWO-year extension (along with many other contract changes that were, ultimately, unacceptable to a majority of the city council).

As a practicing attorney, I believe I do have an idea of how business is done. That knowledge is, in part, what prompted me to vote against the choice of this developer (although a majority of the council disagreed with me). I stated at the time of that vote that this project was too large and too important to award it to a developer without a proven track record in public/private redevelopment and in acquiring so many parcels of land. Moreover, I stressed that its financing numbers were questionable, and that the TIF commission, charged with reviewing the financial viability of the project, had rejected the proposal. The bottom line is that I had serious concerns about the developer’s ability and financial wherewithal to complete the project. In my opinion, the numbers simply did not work, and the comments you quote reflect my frustration with the project’s continued fiscal deficiencies.

Finally, I would like to state that I, too have concerns about the abuse of eminent domain. While I suspect that we would never agree on what constitutes abuse, I do believe that the TIF & eminent domain laws could be improved to better balance the conflicting needs of the various stakeholders.

While we may not see eye-to-eye on this issue, my positions on this particular project may be found on my website (ginamitten.com).

Comment by Gina MItten — April 20, 2009 @ 4:23 a.m.

November 18, 2008