Pfizer, the huge drug company, has announced that it will be leaving a large research complex in New London, Connecticut and moving several hundred jobs to nearby Groton. Such belt-tightening in tough economic times would normally draw little criticism. In this case, however, it should.
Recall that Pfizer played a central role in getting New London to seize the homes of local residents who lived adjacent to the Pfizer site. Pfizer, according to accounts, wanted that mixed residential area, called the Ft. Trumbull section, to be leveled and replaced with an upscale development that would include a five-star luxury hotel, top-tier condos, and private office space for Pfizer’s suppliers, workers, and visitors. Now Pfizer is leaving New London "high and dry." How did this happen?
A little less than a decade ago, New London and Pfizer wanted to "redevelop" a portion of that old coastal city, spurred on by a large state grant. What they did not predict was the local outcry against this "revitalization" when Ft. Trumbull residents learned that their homes would be taken by the process known as "eminent domain." Among the residents was the kind but spunky Susette Kelo, who, with the help of an outside legal advocacy organization, the Institute for Justice, and the institute’s lead attorney, Mr. Scott Bullock, took her case all the way to the U.S. Supreme Court. It became known as the "Kelo case."
Kelo’s contention was that when the government takes property by eminent domain, the seizure must be for a "public use." This is the language of the U.S. Constitution, where it says in the Fifth Amendment that private property shall not be taken except for a public use, and then only with just compensation from the government. New London was offering to pay Ms. Kelo for her property, but her contention was that in taking her property, and giving it to another private party for development—in the way the New London Development Corporation and Pfizer desired—was no longer a public use.
New London officials argued that greater tax revenues would be produced by the revitalization and, therefore, some public good was done by the restructuring of the Fort Trumbull area. Kelo and the Institute for Justice pointed to such a contention as ominous for all homeowners, since local governments could almost always imagine a "higher use" to which individual residential properties could be put.
Unfortunately, the Supreme Court found in favor of New London and against Kelo, but the case produced a firestorm of protest across the country, leading over 40 states to more tightly control eminent-domain abuse.
What about Pfizer? Well, a firm that should have been devoted to liberty and private property was in effect complicit with New London in ushering Ms. Kelo and others out of homes they had chosen and purchased. Pfizer even received special tax treatment, paying only one-fifth of the usual property taxes for the first 10 years of occupancy of its research site.
What thanks did New London receive from Pfizer for putting its own citizens out of their homes? That brings us to the latest development: Pfizer is moving the research jobs elsewhere.
The city probably will not "get back" its tax forgiveness. State tax monies from Connecticut used to entice New London to revitalize have been expended. Local businesses that depended upon Pfizer and the development for patronage are now looking at financial decline. What remains is a barren undeveloped site where homeowners once kept their homes with pride.
It is a sad story of local governments drawn into projects by the promise of large state grants. The grant then allowed them to accede to the special demands of large enterprises like Pfizer for tax breaks and special treatment. What is even sadder is that in their rush to redevelop, these same local governments bulldozed the fundamental rights of their own constituents and, then, their "business partner," Pfizer, cast them aside whenever it chose to do so. Ms. Kelo has a perfect right to say "I told you so."
— Dr. John A. Sparks is dean of the Calderwood School of Arts & Letters at Grove City College (Grove City, PA), where he teaches U.S. Constitutional History and Business Law, and he is a fellow with The Center for Vision & Values. A member of the State Bar of Pennsylvania, he is a graduate of Grove City College and the University of Michigan Law School.