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John Brooks (Associated Press/Photo by Fred Beckham)

Undeveloped domain

Economy | The town that made headlines in the Supreme Court eminent domain case faces stalled economic development

The company that was going to rejuvenate the economy of New London, Conn.-the town where the U.S. Supreme Court ruled that a government could use the power of eminent domain to seize property for private economic development-is pulling out of New London and moving on. Eminent domain opponents point to the move as final proof that a development project for the town was ill-conceived from the start.

When Pfizer Inc. set up offices in New London, it became the catalyst for a multi-million dollar, 90-acre development plan that included a new state park, a hotel conference center, residential space, and a research and development center. The Fort Trumbull Municipal Development Project was supposed to create up to 2,300 jobs and generate up to $1.2 million per year in tax revenues for the town, but seven Fort Trumbull property owners halted the plan.

The owners refused to give up their houses to developers even when the city used the power of eminent domain to force them out. The property owners took the case all the way to the Supreme Court, which ruled in 2005 that using eminent domain to take private property for private development qualified as "public use." Even if the public was not literally using the property-for instance, if they built a hotel instead of a public park-there was a "broader and more natural interpretation of public use as 'public purpose,'" said the court.

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The decision prompted national outrage, with 43 states passing legislation to protect property owners, and it continued to foster resentment in New London since most of the 90-acre plot is still undeveloped. The developer built an 88,000-square-foot office project, but funding has disappeared and the rest of the project-along with the jobs and the tax money-has failed to materialize.

In a final blow, Pfizer has merged with Wyeth and just announced that it is moving most of its 1,400 employees from New London to nearby Groton. Opponents of eminent domain say the move is proof that the project was wrong from the start. Scott Bullock, co-counsel for the case with Institute for Justice, called Pfizer the "very lynchpin of the project," adding, "All of this really just demonstrates the folly of government abusing eminent domain and granting massive corporate welfare to corporations and to developers to do these types of projects."

The project's supporters argue that the economy, not the management, is to blame for the development halt. John Brooks, executive director of the New London Development Corporation, said building at the site will carry on: "It doesn't really affect our plans at all. We still have one completed office project and we've got more development that's incomplete primarily because of the economic downturn. We see it as a potential opportunity."

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