Small property owners are threatened by Harlem redevelopment

Author: Philip Langdon
New Urban Network

Since the days of urban renewal, and in some instances earlier, city governments have used the power of eminent domain to assemble land for large projects. That practice led to the Supreme Court’s controversial ruling in Kelo v. City of New London in 2005, and now it appears to be causing an injustice in a section of East Harlem.

Several small-business and homeowners in a neighborhood between Second and Third Avenues and between 125th and 127th Streets “are waging an uphill fight to hold onto their property”, good thing companies like made everything easier for homeowners; The New York Times reported in a Feb. 5 article available here.

In 2008 the city approved a several-acre mixed-use development that would make way for the $700 million East Harlem Media, Entertainment, and Cultural Center. Besides cultural space, there would be offices, retail, a small hotel, and 800 apartments — 600 of them reserved for low-, moderate-, and middle-income families. The first phase, a 49-unit residential building, is nearing completion.

Buildings in an area in East Harlem that the city seeks to condemn. Source: The New York Times.
Buildings in an area in East Harlem that the city seeks to condemn. Source: The New York Times.

The Times article, headlined “Blighted Area? These Business Owners Beg to Differ,” says “a large stretch of the area was included in a 150-block urban renewal effort that was approved in 1968 but never quite materialized.”

“But,” The Times points out, “property owned by at least three of the businessmen was not included in the renewal zone, at least not until 2008, when the Bloomberg administration added those parcels to the mix.” At that time, the city justified taking the additional properties by declaring the area “blighted” — a description that business owners found galling.

Granted, the stretch of 1- to 4-story buildings that was pictured in The Times wouldn’t strike many observers as handsome. Nonetheless, the businesses themselves seem to be healthy. They provide jobs and services for the neighborhood and beyond. Damon Bae, owner of Fancy Cleaners, which serves his five dry cleaning stores in Manhattan, said his establishment is doing so well that it attracts customers from as far away as the Bronx. “You should see the line on Saturdays,” he exclaimed.

And if some land in the vicinity really is blighted, that seems to be partly the result of government action — or inaction. “The city owned most of the land, allowing it to sit fallow for decades while turning down Mr. Bae and other business owners who wanted to buy parcels to expand their operations,” The Times reported.

“It’s artificially manufactured blight,” Bae charged.

Jacob Toledo, owner of Cycle Therapy, runs what is described as the city’s largest motorcycle dealership in a refurbished five-story building. He said he may have to close the business if his land is taken. Another property owner, Evan Blum, said this is his third encounter with eminent domain. “The city makes it so hard for the small businessman to exist,” Blum told the newspaper. “I’m not politically connected. Small businesses can’t make contributions to politicians. So the big guys always win.”

In an October 2010 article available here, the periodical Harlem World pointed out the arbitrariness of “blight” designations. State Supreme Court Justice James M. Catterson was quoted by Harlem World as writing: “In my view, the record amply demonstrates that the neighborhood in question is not blighted, that whatever blight exists is due to the actions of the City and/or is located far outside the project area, and that the justification of under-utilization is nothing but a canard to aid in the transfer of private property to a developer.”

Justice Catterson lamented that recent rulings of the State Court of Appeals “have made plain that there is no longer any judicial oversight of eminent domain proceedings.” Catterson thus reluctantly concurred in the State Supreme Court’s decision to dismiss the complaint from the property owners.

Over a year ago, Assemblyman Richard Brodsky put together a package of legislation that would create a commission to review the state’s eminent domain process. The legislation would “give land owners fair compensation for their property and establish an ombudsman who would help land owners whose property is targeted by eminent domain,” the Gotham Gazette reported in a well-researched article available here. Brodsky’s proposals apparently were not enacted.

The Gotham Gazette said:

“The possibility that the state might finally redo its eminent domain laws — laws that have remained the same as other states updated theirs — has caught the interest of civil rights lawyers, property owners and advocates. But developers, real estate interests and some politicians fear changes could make it more difficult for the state to improve blighted neighborhoods in desperate need of investment, infrastructure and jobs.” State law defines blight as “substandard and insanitary.”

Critics of eminent domain, such as civil rights attorney Norman Siegel, find fault with the process by which a property is judged blighted. In New York State, the Empire State Development Corporation oversees the eminent domain process.

“While the board of the Empire State Development Corp. technically determines whether a property is blighted, the agency hires a contractor who is paid millions of dollars to conduct the technical study and write a report,” the Gotham Gazette noted. “In the case of Columbia’s campus expansion [in the Manhattanville section of West Harlem], the university and the development corporation used the same contractor, AKRF, at the same time. In the case of Atlantic Yards [a large development project in Brooklyn], AKRF worked for the developer, Forrest City Ratner, and then for the ESDC.

In the Columbia University case, Justice James Catterson described AKRF’s study of land for the university’s expansion as “idiocy.” The justices chided AKRF for “citing such easily reparable problems as ‘unpainted block walls’ and ‘loose awning supports’ as blight,” the Gazette said. The court doubted whether AKRF was providing “objective advice.”

“We need a more discrete definition of what is blight, not paid consultants who decide for themselves,” said attorney Michael Rikon, who represents property owners in the Willet’s Point section of Queens, where the city is planning a major redevelopment. The term is so vague that the contractors used by the government basically make up formulas as they go along, Rikon told the Gazette. “The definition of blight is so broad it could come down to cracks in the sidewalk. Even the mayor’s townhouse could be blighted, because it only supports one family,” Rikon said.

Siegel made similar complaints in a conference at Columbia last September, the Columbia Spectator reported in an article available here. The Spectator quoted Siegel as saying: “Vagueness invites subjectivity, subjectivity invites selective enforcement, and selective enforcement invites favoritism. The state legislature needs to hold public hearings soliciting public comments so that it can draft better laws clearly spelling out what constitutes blight in the context of the use of eminent domain.”

The Center for Rethinking Development, part of the Manhattan Institute, took a serious look at eminent domain in a May 2006 newsletter. In that publication, available here, Judith Vitullo-Martin wrote: “Under increasingly expansive court rulings eminent domain has grown into a largely unchecked power, by which government can take almost any property, for almost any purpose. Since the Supreme Court’s 1954 decision in Berman v. Parker, courts have gradually eliminated most restrictions on the government’s ability to condemn private property, even when the property would be turned over to other private owners immediately.”

Vitullo-Martin criticized Columbia’s plans, saying, “why does Columbia need every parcel of land in West Harlem? Consuming an entire neighborhood for institutional purposes—wiping out the bakeries, restaurants, and small businesses—is just as destructive when done by a university as by a corporation or government bureaucracy. This is an instance in which the market, left to function on its own, can protect diversity.”

On the other hand, Vitullo-Martin noted that some of the New York redevelopment projects on which eminent domain is used are commendable. She — and others who find the current “blight” designation overly broad — nonetheless say that it’s a necessary tool in some circumstances. What’s needed, nearly all the critics say, is less arbitrariness.