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Bulldozed by Eminent Domain

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Bulldozed
by Carla T. Main (Encounter Books 2007); 276 pages; $27.95.

In 2005, eminent domain became a hot national issue with all the attention focused on it because of the Supreme Court’s decision in Kelo v. New London. While property-rights scholars and libertarian activists had long known about the nasty, authoritarian business of taking private property away from people through eminent domain and then transferring it to others who were expected to make “better” use of it, Kelo’s holding that it was permissible under the Constitution for governments to seize property for “economic development” purposes outraged great numbers of Americans. The palpable unfairness of tossing poor homeowners out just so a business can put up a new mall, hotel, or office complex that will increase the city’s tax collections brought together a broad coalition of Americans who wanted to see the law reformed.

The anti-Kelo movement won a few victories in state legislatures, but lost others, and some of the steam seems to have gone out of it. With the publication of Carla Main’s Bulldozed, however, the reform movement should get a jolt of new energy. It is an incendiary book that centers on a protracted and highly revealing eminent-domain battle in Freeport, Texas, where a family’s efforts to save their small business from condemnation was of Alamo proportions — but with the defenders holding out. What makes Bulldozed so compelling is the wealth of detail Main presents on the slimy, despicable tactics used by city officials in an effort to get their way. Thus, the book isn’t only a lesson about eminent domain, but also a lesson on the ugly truth about local-government “democracy.”

Freeport is a grimy industrial town on the Old Brazos River, a few miles inland from the Gulf of Mexico. The dominant feature of the landscape is a Dow Chemical plant that employs most of the local labor force. It is a poor city with an annual budget of only $13 million. Freeport’s website tries to depict the city as an alluring tourist spot, but in fact there is very little to attract vacationers, and much to repel them.

City officials were not content to govern over such a mundane place. Suffering from a bad case of glitz-envy, they concocted a plan to boost the economy with a marina. It would be a privately owned enterprise, to be built by a wealthy scion of a Houston oil family, mostly with funds from the city’s meager budget. This was a classic “heads-I-win-tails-you-lose” deal from his perspective. As if that weren’t bad enough, the plans called for land along the river owned by the Western Seafood Company. Western Seafood had been founded in 1950 by the Gore family and it was truly one of those “up by the bootstraps” stories. The business, which bought from and sold to the shrimp trawlers that fish the Gulf of Mexico, was one of the largest employers and taxpayers in Freeport. City officials, however, were enamored of the idea of the marina as a catalyst for other investments, such as hotels and restaurants, that would turn their town into a “destination.” They were eager to shove the Gores out so they could have their marvelous marina.

Throughout the book, Main gives readers insights into the petty tyranny of Freeport’s government, tyranny greatly exacerbated by the lust for privately owned land. The first insight concerns the notice officially given to the Gores that the city had designs on their property. There wasn’t any. On September 8, 2003, a fax was sent to the offices of Western Seafood. Without any cover sheet or other explanation, the document that came through had been issued by the Army Corps of Engineers. It said, “Public Notice” at the top, without any indication that it had particular relevance to Western Seafood. Fortunately, Wright Gore read through it anyway. The document was a lot of legalese, but he figured out that it meant that a marina was planned for their section of the river, cutting off access to the fishing trawlers that were their livelihood. And when he got to the end, he was stunned to read that public comments were due by September 12.

If Gore hadn’t read through the anonymous fax, he would not have been able to respond in time and would thereby have lost the possibility of objecting to the taking of his property. This was just the first of several instances where the city ran roughshod over the idea of due process of law.

The Gores got their attorney (who had to quickly master the intricacies of eminent-domain procedure) into action immediately. Working frantically, he was able to stave off confiscation of the Western Seafood property and turned what the city had hoped would be a quick knockout into a bloody 15-round fight. After more than three years of litigation that has cost the Gore family more than $450,000, it appears that the city has been defeated; but as Yogi Berra said, “It ain’t over till it’s over.” With eminent domain, it’s never really over.


An anti-capitalist mentality

A crucial point about Freeport that Main stresses is that its unfriendly attitude toward business had much to do with its poor condition. Paperwork and bureaucratic obstruction made it such a headache to set up and run a business that most people had just given up trying. The downtown area was mostly a wasteland of empty storefronts. A lady who wanted to open a muffin shop threw in the towel after hearing about all the city’s requirements. Property owners were nickel-and-dimed to death with a stream of fees. But instead of changing their ways and waiting for entrepreneurs to discover Freeport, city officials set their sights on economic revitalization through a grand, visionary central-planning scheme. In Freeport, as in so many other places, politicians prefer coercion to freedom as the means of achieving their objectives. They’d rather throw the dice on one big idea than set the right conditions to attract many small investments — exactly what Public Choice theory would predict.

The city had come up with a comprehensive redevelopment plan that hardly anyone knew about. It wasn’t publicized, and anyone who wanted a copy had to make a request under the Texas Open Records Law. Not only would a marina wipe out Western Seafood, but the entire east end section of town — an area of small homes owned by poor working families — was declared to be “severely blighted.”


The long legal battle

Much of Bulldozed is a blow-by-blow account (including quite a few low blows) of the legal warfare, but along the way Main (a lawyer herself) gives the reader a primer on eminent-domain law in general. She goes back to two cases Daniel Webster argued (and, unfortunately, lost) before the Supreme Court in the 1840s, cases that began the process of undermining property rights. A century later, in Berman v. Parker, the Supreme Court would declare that the courts should defer to the ideas of local officials as to the “best use” for land. In 2005, Kelo was a brave fight against bad precedents that fell just short.

As to the marina plan, Main argues convincingly that it was a lame-brained scheme. Why would wealthy boat owners want to think about docking along a dirty old river dotted with industrial plants and rusting derelicts? Like so many other ideas that politicians dream up to “invest” other people’s money, the Freeport marina looked like a big flop that would leave the overburdened taxpayers struggling with increased debt. Propaganda by the city to persuade residents that the private party was taking the risk was the height of deception.

The Gores thought that one way of heading off the seizure of their business would be to arouse public opinion, so Wright set up a primitive website telling all he had found out about the redevelopment plan. For that temerity, he was promptly sued by the rich Houstonian — but refused to back down. When other opponents began questioning whether the city was going to condemn houses, officials heatedly denied that even one would be taken, although the “blight” designation is invariably used to justify a taking. Efforts at distributing information door to door were checked by enforcement of an obscure ordinance. But when city officials wanted to get their own ideas out, they made off with the run of a local advertising paper and stuffed their flyers into each paper before distributing them. In short, the political establishment played some very dirty pool.

“Well, it’s too bad that people are sometimes forced out through eminent domain,” some readers may be thinking, “but at least they’re fully compensated, aren’t they?” Actually, that is seldom the case. When governments take property, they usually find “experts” to low-ball the appraisal and never offer to pay for incidental expenses such as moving. While the Freeport case didn’t get to the compensation stage, Main’s discussion of other cases, especially the infamous Poletown case in Detroit, makes it clear that when governments use eminent domain, the results are hardly different from robbery. It’s enough to make you laugh at the claim of these politicians that they “represent” the people they’re victimizing.

An unexpected, favorable ruling by a state court judge threw a monkey wrench into the city’s plans. At enormous expense, the Gores have apparently been able to keep what is theirs.


The power of eminent domain

The great lesson of Bulldozed is that politicians shouldn’t be trusted with the power to remake cities according to their own visions. It’s quite appalling that in a town where many of the poor residents just wanted better protection against flooding, the politicians were interested only in squandering their money on a hallucination that Freeport could be transformed into a glittering tourist mecca. “Economic-development” takings distract politicians from doing the best they can to govern the city they’ve got and induce them to dream up grandiose ideas about the city they’d like to rule.

While Main does not challenge the moral basis of eminent domain itself, but only attacks the manifest unfairness of its use for “economic development,” a close reading of the book should get people wondering why even the traditional use of eminent domain, to seize private property for “public use,” is justified.

Suppose that instead of a marina intended to invigorate the economy of Freeport, city officials had decided that they needed the Western Seafood land for a public school. Or maybe a public park on the river. How would that change anything? The owners would still be subjected to coercion and the loss of their property so that a few other people — “the public” always means a small subset of the population — could have something they want at little or no expense. If taking the Western Seafood property for a marina would be wrong, taking it for other purposes would be no better.

Bulldozed is a very illuminating book, crucial reading for Americans who are concerned about the erosion of their property rights.

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    George C. Leef is the research director of the John W. Pope Center for Higher Education Policy in Raleigh, North Carolina. He was previously the president of Patrick Henry Associates, East Lansing, Michigan, an adjunct professor of law and economics, Northwood University, and a scholar with the Mackinac Center for Public Policy.