Wednesday, September 17, 2008

Testimony of Walter South at the Public Hearing before the

Testimony of Walter South at the Public Hearing before the
Committee of Corporations, Authorities & Commissions on
the use of eminent domain by the State and City of New
York, convened by ranking member Senator Bill Perkins

My name is Walter South. I am pleased to testify today as Bill Perkins is one politician in our community who has had the integrity not only to say what needs to be said, but also to do what is right. I am sorry to say I cannot make this statement about many other of our local politicians.

I am a member of CB#9, but speak here as an individual. I have Graduate Degrees in Sociology, Urban Planning, and Historic Preservation. I only mention this background to indicate that I do bring to the table a certain amount of academic understanding of urban issues and, in particular, an understanding of the dangers in the abuse of Eminent Domain.

First, I would like to make clear the premise of my remarks. And that is this: If you have good political connections and if you have money, you can actually rent the State of New York.

Now some people may think that this is a joke, but all you have to do is to walk from here to Broadway and 125th. There you can see where Columbia University has rented from the State the right to use eminent domain. It is here that the University is planning a new office park for business. Columbia is in the process of acquiring eighteen acres of prime Manhattan real estate on the cheap for a new office park for biotech research. This is not academic expansion. There will not be a single classroom in these buildings. This is pure and simple a for-profit venture. Columbia wants to eat at the table with the big boys (Harvard and Yale) but cannot pick up the tab and needs the State of New York to help.

If you want to rent the powers of the State, as Columbia has, the process is actually quite simple. It requires only ten easy steps.

(1) Study the census tracts in your community to find where poor people live. Poor people are usually people of color and are least likely to have the power or the money to protest effectively. Of course, it is a bonus if this area has waterfront exposure. In addition, in an area of the poor your opposition can either be bought-off or rolled-over. For example, right down the street one of the local clergy came out against the Columbia expansion plan. I was quite surprised and discussed this good news with a local wag. His reply was that the clergyman in question was only negotiating. I was told later that Columbia staff talked to him. That convinced him to be in favor of the expansion. The only serious question was the cost to Columbia. Later in public meetings he testified for Columbia. And, the local politicians can be rolled over by contributions for re-election. The fee here is higher. It is around $2,500.

(2) Fantasize about what you could do if you owned their property. At this point you only need nothing more than a fanciful notion. You do not have to have any real plans or even any real money to do the development; you only have to have a dream, and only to claim you need their property to fulfill your dream. You do not even have to prove a need. Again look at Columbia. They only claim they need more space. This claim has never been substantiated. In addition, they even today have no real plans and they do not have the funding to build.

(3) Hire a big name or famous architect to create a drawing of your fantasy. For this purpose color is important. Even a good Powerpoint presentation can help. Someone like Rizzo Piano will dazzle Amanda Burden at City Planning, and help bat a home run on zoning issues. I might add that Rizzo may need to associate with a City firm like SOM to get the support of the local boys.

(4) Next, talk to the Mayor and Governor to get them on Board. Promise them an increase in taxable income. Of course this is difficult when you are actually planning to take the property off the tax rolls as Columbia plans to do with it’s for profit business venture. But above all, promise jobs. A round number is best because you have to remember what you said and a figure like 5,672 is difficult. So 6,000 is a better choice. The only problem with Columbia, with 13,000 employees at present, is that 6,000 new employees represents an increase of about 46-47% employees. This is a stretch. But, not to worry. Very few will remember, and afterall a promise is not a contract. It is a sort of MOU which Columbia prefers to any contract. For example, look at the Poletown Case in Michigan. Big job promises and GM closed the new factory.

(5) Once the key politicians are comfortable, you have to pay the rent. You go to the Empire State Development Corporation and bear the freight. In the case of Columbia the down payment was around $327,000. It is necessary to understand that ESDC is a fee driven agency. Pay the fee and they do your bidding. Put it another way; it is a kind of Livery Service for the well connected rich. You pay what’s on the meter and they will drive you home. Don’t expect them to put up front money for your fantasy life.

(6) Next hire a “Planning” Firm to do an Environment Impact Statement. Firms like AKRF can be had. AFRK probably has never had an EIS that was not favorable to the applicant. These new “Planning” firms in the field of American Literature have replaced Herman Melville. AKRF can now develop the greatest fish story ever told. In their offices they have reams of mimeographed sections of an EIS which have passed muster with the Agencies, and they can put together a new one which will be approved for any new applicant. I must warn you, this is pricey. It could run over a million dollars. But you have to understand the amount of work that is required to collate and staple multiple copies of a new application. In addition they have to fill the blanks with the new applicants name and the location of the new development.

(7) The EIS is filed next with the local Planning Agency who as the Lead Agency graciously agrees to review it. Any objections to the EIS will be drafted by the applicant’s employee, in this case AKRF. In the case of Columbia we raised any number of objections to the EIS with City Planning. The changes in the text that came back were straight out of the mouth of Columbia’s PR department. I asked in a meeting with City Planning who exactly had drafted these changes. We were told that the applicant actually has the EIS prepared and is responsible for any changes at their expense, and furthermore this was standard procedure with City Planning. You must understand that the Lead Agency’s job is to get the EIS approved, not to protect the public. This may be shocking, but the Lead Agency is not writing the EIS with public money. The applicant is paying for the drafting of the EIS and as such what is in the EIS is at the bidding of the employer and not the Lead Agency. If you question this process ask Ray Gastil or Robert Dobruskin at New York City Planning. What was supposed to be a public protection has morphed into a justification for the applicant’s development which the Government can use to hide behind if they are criticized by the community.

(8) In the meantime the developer begins to buy land in the target area. He always promises to only use Eminent Domain as a last resort. Actually by using this promise the developer is actually using Eminent Domain. What this actually means that if you do not voluntarily “sell”, your property will be condemned by ESDC and it will be given to Columbia. After getting a “sale’ you bind the “seller” with a gag order in the purchase agreement. This gag clause prohibits the “seller” from discussing the terms of the sale, or even criticizing the buyer. In some cases it even requires the “seller” to give public support as to the good intentions of the buyer. Not only have you “sold” your property but you have also agreed to become a slave of the buyer. This reinforces the image of the free market aspect of Eminent Domain. This does not mean anything will actually be built on your site by the developer. For example, in New London, on the site of the Kelo Case, to date the New London has spent $78 million and there has not been any new construction. In a case on the East Side near the UN, a site taken by Con Edison was in fact resold by Con Edison at a profit for new condos and a hotel! Columbia claims that their plan is for the next thirty years and they are asking for the right to use Eminent Domain anytime for their buildout. With no real plans and no financing what this expansion really means in the final analysis is merely a land grab.

(9) The purpose of buying land in the target area is to create blight. This is done by first doing research on the property to determine if there are any violations on the property you want or own. In the case of Reality House, Columbia found that the building had no C of O and was operating illegally. Columbia forced the State Agency, Oasis which had for years been knowingly funding the program, to terminate the funding and to facilitate a sale to the University. In the case of the auto mechanics building on Broadway they found all kinds of Building violations and forced the occupants to close shop and move. In the case of the old bookie joint next to Anne Whitman they gave someone permission to store junk cars there so a picture could be taken with junk in the foreground. They left up “For Rent” signs for years. But when you called the number you were told the building had actually just been rented. The only problem was no one ever moved in. They left up the stripped Fried Chicken canopy on 125th Street and Broadway to show how abandoned that site was. Even stranger just before the Blight Study began in both cases (both the first and second study) new graffiti suddenly appeared in the area, for example among other cases, on the Hudson Storage Building on Broadway. The purpose for the Blight is to be rewarded for your own neglect.

(10) With the approval of City Planning and with the roll over of City Council, Columbia now returns to the Empire State Development Corporation for the payoff. This is why they paid the rent money in the first place. The ESDC now finds Blight and proceeds to condemn not only the few remaining “holdouts”, but even the property of the City and Columbia. Understand that Columbia wants the land under all of the streets and sidewalks to be given to them for free. (This is in most urban sites about 40% of the land mass.) This will facilitate the creation of a gated business park. If you question this go up to their campus at 116th Street and explain why 116th Street, a public street, is gated. And, by condemning their own property Columbia can cancel any pesky leaseholds still in existence in property they have already purchased. They now own what was once yours and are basically free to do anything they want. There is nothing which cannot be changed in the future in their plans or their promises. They own.

What is to be done about this abuse of State power which is for rent?

Should the definition of Blight be changed?
At present the word Blight and means anything and everything and a word which means anything actually means nothing. This is not a solution.

Should the word just compensation be changed to mean something more than mere?
No, this too is not a solution. The problem is the taking of private property and giving it to another more powerful private party. The money is only a part of the scandal.

Should the hearing process be reformed?
No, the hearing process is a sham. When during this process only a Hearing Officer makes a record and no Commissioners actually sit, as was done in the case of the Blight hearing by ESDC on the Columbia designation, it is obvious that this is only to create a façade to fulfill the word of the law. This is not a dialog.

Should the bureaucracy be reformed?
No, why should some petty bureaucrat be able to decide to take your property.

The answer is simple. The taking of private property by the State and the conveyance of this property to another private entity is immoral, unethical, and contrary to the principals on which this country was founded. The Constitution of the United States and the Bill of Rights are being compromised. And the abuse of the power of the State is being seriously corrupted by this rental scheme.

In short, this practice must be abolished. The answer is Abolished.

And, in the case where Eminent Domain is being used for a real public purpose this too needs modification and needs be limited. This practice also has been subject to abuse. Just look at our surplus schools, highways, and urban renewal sites. These takings need be subject to a more comprehensive community review process. And the “sellers” of these sites should be rewarded for their giving something to the public. The law should be changed so that these sellers would be paid 200% of the appraised future value of the takings. This step would quickly put an end to the rash takings for the public use. Furthermore, an economic analysis should be required of the real cost and the real benefits to the community in any takings. Columbia is removing 18 acres from the tax rolls. Columbia will add to the cost of public transit, police, and fire protection. What are the true infrastructure costs? What will be the expense of nontaxable bond financing by the State Dormitory Authority for all of their new buildings? When all of these costs are summed they will exceed the benefits. This is but another example of State supporting the rich private interests with public funds.

When the State Government believes what I am saying, then the public will see change. When the State Government restores the rights which this country was founded on in the 1700’s and begins once again to protect private property, only then will we have a State Government that has integrity. Only then can the public respect its elected officials. Afterall to date 43 other states have passed either constitutional amendments or legislation that gives greater protection for property owners facing Eminent Domain abuse. Why hasn’t New York State done anything? New York State has the most abusive procedures of any state in this country and has done nothing. This is, in short, a scandal and to our shame.

Walter South
17 Sept 08

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