Thursday - August 18, 2005

Most Outrageous Item Of The Day

Are you sitting down? No drinks in your hand? Are you calm and relaxed? OK, get ready for this one. After the recent decision in Kelo vs. New London, in which SCOTUS declared land-snatching to be legal, the city of New London is now declaring that Kelo and others were illegally living on city land and owe back rent ....

(FAIRFIELD COUNTY WEEKLY)—Those who believe in the adage “when it rains, it pours” might take the tale of the plaintiffs in Kelo v. New London as a cue to buy two of every animal and a load of wood from Home Depot. The U.S. Supreme Court recently found that the city’s original seizure of private property was constitutional under the principal of eminent domain, and now New London is claiming that the affected homeowners were living on city land for the duration of the lawsuit and owe back rent. It’s a new definition of chutzpah: Confiscate land and charge back rent for the years the owners fought confiscation.

In some cases, their debt could amount to hundreds of thousands of dollars. Moreover, the homeowners are being offered buyouts based on the market rate as it was in 2000 . The hard rains started falling that year, when Matt Dery and his neighbors in Fort Trumbull learned that the city planned to replace their homes with a hotel, a conference center, offices and upscale housing that would complement the adjoining Pfizer Inc. research facility. The city, citing eminent domain, condemned their homes, told them to move and began leveling surrounding houses. Dery and six of his neighbors fought the takeover, but five years later, on June 23, the downpour of misfortune continued as the U.S. Supreme Court ruled 5-4 that the city could claim the property for economic development.

Dery owns four buildings on the project site, including his home and the birthplace and lifelong home of his 87-year-old mother, Wilhelmina. Dery plans to make every remaining effort to keep his land, but with few legal options remaining, he’s planning for the worst. And for good reason. It’s reasonable to think that people who purchased property years ago (in some cases, decades ago) would be in a position to cash in, especially since they’re being forced from their homes. But that’s not the case. The New London Development Corp., the semi-public organization hired by the city to facilitate the deal, is offering residents the market rate as it was in 2000, as state law requires. That rate pales in comparison to what the units are now worth, owing largely to the relentless housing bubble that has yet to burst.

“I can’t replace what I have in this market for three times [the 2000 assessment],” says Dery, 48, who works as a home delivery sales manager for the New London Day . He soothes himself with humor: “It’s a lot like what I like to do in the stock market: buy high and sell low.” And there are more storms on the horizon. In June 2004, NLDC sent the seven affected residents a letter indicating that after the completion of the case, the city would expect to receive retroactive “use and occupancy” payments (also known as “rent") from the residents. In the letter, lawyers argued that because the takeover took place in 2000, the residents had been living on city property for nearly five years, and would therefore owe rent for the duration of their stay at the close of the trial. Any money made from tenantssome residents’ only form of incomewould also have to be paid to the city.

With language seemingly lifted straight from The Goonies , NLDC’s lawyers wrote, “We know your clients did not expect to live in city-owned property for free, or rent out that property and pocket the profits, if they ultimately lost the case.” They warned that “this problem will only get worse with the passage of time,” and that the city was prepared to sue for the money if need be. A lawyer for the residents, Scott Bullock, responded to the letter on July 8, 2004, asserting that the NLDC had agreed to forgo rents as part of a pretrial agreement in which the residents in turn agreed to a hastened trial schedule. Bullock called the NLDC’s effort at obtaining back rent “a new low.”

(--thanks to Brian J. fer the tipoff on this one)

Posted by The Skipper     on 08/18/2005 at 08:18 AM   
Filed Under: • Judges-Courts • Outrageous •  
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