Cash Flow Is King!

by Stewart S. Koesten

We have found when parents are willing to consider the children's needs and concerns, a more effective long-term plan can be implemented that meets everyone's objectives more closely.

Developers who are about to invest their time and/or money in a major project would do well to keep an eye on Jefferson City and possibly even Topeka. The opposing sides have yet to man the barricades, but in case they do, it pays to know one’s military history.

In 281 BC, Pyrrhus, the king of Epirus, beat the Roman army at Heraclea. In 279, he defeated the Romans at Asculum. “Another such victory,” he said after the second exhausting victory, “and I shall be ruined.”

On June 23, 2005, the city of New London, Connecticut scored the kind of Supreme Court victory that only Pyrrhus could understand when it triumphed by a 5-4 margin in the Court’s first eminent domain case in more than twenty years, Kelo v. City of New London. Writing for the majority, Justice John Paul Stevens contended that a local government like New London’s should have wide latitude in seizing property for development purposes. The Supreme Court decided, in essence, that if a given development creates more revenues for a public body, then it becomes thus a “public use” as described in the fifth amendment of the Constitution.

The repercussions of this classic Pyhrric victory, only marginally more helpful than a defeat, are being felt in state legislatures across the country, including Missouri’s. These legislators are seeking to limit or, at the very least, define just what power a state has over its citizens. When the process is finished, Missouri communities will almost surely find themselves with less latitude than they had before New London’s win. Kansas developers know that they had better celebrate this potential competitive edge discreetly. Kelo resonates everywhere.

In the way of background, the city of New London decided to take advantage of a major new investment by Pfizer, the pharmaceutical company, by redeveloping the waterfront neighborhood near the new Pfizer site. The city worked through the New London Development Corporation, a private entity under the control of city government. The development corporation put together an ambitious mixed-use package, which the city approved, authorizing the corporation to acquire property in this older 90-acre, working class neighborhood.

When 15 of the 115 property owners refused to sell, the city moved to condemn their properties. Susette Kelo, a middle-class owner of a small home on the Thames River, had no idea she was about to launch a grassroots revolution when she lent her name to the resistance. But that she did. Indeed, her name now conjures up 30,000 Google references, virtually all of them sympathetic.

The fact that the conservatives on the Supreme Court—Rehnquist, Scalia, Thomas and the flexible Sandra Day O’Connor—were the ones who ruled for Kelo has kept the decision from becoming a public relations nightmare. Their support confused the media and dulled the outrage. The stereotype of the conservative had the four justices dwelling in some plutocrat’s pocket. Still, they were joined in dissent by enough liberal groups, like the NAACP and AARP, to give the dissent bi-partisan appeal.

The conservatives objected for fear that a ruling in favor of the city would destroy, in Scalia’s words, “the distinction between private use and public use.” O’Connor concurred in writing the principal dissent:

Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.

In Missouri, rural Democrats are flanking Republicans to the populist right to assert the peoples’ power over the presumed moneyed interests in the cities. Meanwhile, the developers and their allies are working overtime to educate the population on what they see as the absolute need for a liberal use of eminent domain.

There is nothing traditional or typical about the political battle that is brewing. So to the barricades, ladies and gentlemen, but hang on to your wallets while mounting.