________________________________________________________________________

Eminent Domain: Looking for consensus on the N.J.Commerce & Economic
Development Committee

“Our idea is that these ideas, plus others, will be assembled in a compromise bill....
If we stall, we’ll look for another alternative.”
–Asm. John Burzichelli

Assemblyman John Burzichelli, D-3, Chairman of the Commerce and Economic Development Committee, will recommend a
consensus bill in June which will attempt to address eminent domain issues. Eminent domain has been the subject of two
 committee hearings held in the past few months. See The Daily Journal (Gannett newspapers) of 15 May.

Assemblyman Burzichelli and his committee will attempt to draft a bill which will be an amalgamation of eminent domain
revisions suggested in over a dozen bills introduced by legislators in 2006. An outright ban on the use of eminent domain
for economic development is not in the cards, nor is a moratorium on the use of eminent domain as has been suggested
by several legislators.

What is unclear is how Assemblyman Burzichelli’s efforts interplay with Public Advocate Ronald Chen, who has been
charged by Governor Corzine to address the eminent domain issue and prepare a report to the governor and the Legislature,
presumably recommending eminent domain revisions. The Public Advocate has been invited to brief the Assembly Commerce
and Economic Development Committee on his fact finding regarding the use of eminent domain for economic development
purposes at tomorrow's meeting.

Burzichelli announced at the committee meeting on May 11 that the modifications are geared to changes in The Local
Redevelopment and Housing Law (P.L. 1992, c.79). We have said before, (see blog post, Eminent Domain Think Tank ) and
it’s worth repeating, eminent domain reform cannot be done piecemeal. The Legislature and the governor
need to consider comprehensive reform which will address the following laws:
1. The Eminent Domain Act of 1971, N.J.S.A. 20:3-1 et seq.
2. The Relocation Assistance Act, N.J.S.A. 20:4-1
3. The Relocation Assistance Regulations, N.J.A.C. 5:11-1
4. The Local Redevelopment Housing Law, N.J.S.A. 40:12-1 et seq.

A comprehensive reform can only be accomplished over a six month period by a bipartisan committee composed of retired
judges, academicians, eminent domain practitioners, representatives of municipalities, the Department of Transportation, and
other condemning authorities. Anything short of a comprehensive review will be mere window dressing on a problem which
should be given the full attention of the assembly, senate and the governor.

At the May 11 meeting, Assemblyman Burzichelli's committee considered the following bills:

A-537 sponsored by Assemblyman Michael Panter, which would prevent the use of condemnation to acquire residential
property under redevelopment laws.

A-582 sponsored by Assemblyman Kean, which establishes minimum amounts for eminent domain relocation assistance and
additional homeowner payments.

A-1220 sponsored by Assemblyman Diegnan which requires DCA approval for designation of areas in need of redevelopment
and requires referendum before condemning land for private economic development.

A-1290 sponsored by Assemblyman Louis Manzo, which requires “just compensation” for condemnation of single-family
residences to be based on cost of comparable relocation properties.

A-2017 sponsored by Assemblyman Sean Kean, which would require increased notice to affected property owners for proposed
redevelopment and rehabilitation areas.

A-2018 sponsored by Assemblyman Sean Kean, which would require payment of an extra $100,000 to owners whose property
is condemned for private economic development purposes.

A-2019 sponsored by Assemblyman Sean Kean, which would require municipal referendum prior to condemnation of private
property when sale or transfer to private entity for economic development purposes is contemplated.

A-2423 sponsored by Assemblywoman Charlotte Vandervalk, which would place a temporary moratorium of 48 months on
certain uses of eminent domain and create the Eminent Domain Study Commission to examine its use Statewide.

ACR-138 sponsored by Assemblyman Richard Merkt, which would propose a constitutional amendment to limit exercise of
eminent domain to acquisition of land for essential public purposes.

ACR-161 sponsored by Assemblyman Michael Patrick Carroll, which would propose a constitutional amendment to limit the
use of condemnation to traditional public purposes and repeal constitutional provision allowing condemnation and long-term
tax exemptions for redevelopment projects.

ACR-168 sponsored by Assemblyman Christopher Connors, which would propose a constitutional amendment to restrict use
of condemnation power against non-blighted property for private economic development purposes.

Seven legislators testified: Assemblymen Robert Gordon, Richard Merkt, Joe Pennachio, Sean Kean, Louis Manzo,
Guy Gregg, and Assemblywoman Charlotte Vandervalk. All the lawmakers testified to the public's desire to see eminent
domain reform.
Listen to the testimony of the legislators.

http://www.njeminentdomain.com/state-of-new-jersey-63-eminent-domain-looking-for-consensus-on-the-njcommerce-economic-development-committee.html

 


Vote goes tavern's way

JCRA quits bid to take it for Prep
Tuesday, November 22, 2005
By BONNIE FRIEDMAN
JOURNAL STAFF WRITER

The Jersey City Redevelopment Agency voted yesterday to support Mayor Jerramiah Healy's decision to
pull out of the eminent domain case that would have transferred a Downtown tavern to a private Catholic
high school for boys.

In a unanimous vote by the four commissioners at the meeting, the board withdrew support for a controversial
 plan that would have allowed St. Peter's Preparatory High School to turn the Golden Cicada tavern site
into a 7-yard extension to an adjacent practice football field. Three commissioners didn't attend the meeting.

The parties were set to go to court Nov. 18, but the hearing was postponed after Healy announced two
weeks ago he no longer supported the city's involvement in the plan.

The four commissioners had little to say following the roughly 5-minute meeting.

"I voted personally on the matter without influence," said Chairman James Morley, noting he did not serve
on the board when it initially voted to condemn the property.

But Councilwoman Willie Flood, who is also a new appointment to the commission, said the mayor's
words persuaded her.

"It's difficult because there are children involved and usually I come down on the side of children," she said.
"But I voted because the mayor made a decision and I try to support the mayor. With him being a lawyer,
 I think he might know more than a lay person."

Cheng "Terry" Tan, the owner of the Golden Cicada tavern, also lauded the mayor's involvement in the dispute.

"I just want to say thank you for what is the proper thing to do," he said.

In the two weeks since Healy made the announcement, Tan said that several developers have expressed
interest in purchasing the property, but that he has not yet made a decision about the 5,000-square-foot
property.

Ronald Chen, an associate dean at Rutgers Law School-Newark and a volunteer member of the American
Civil Liberties Union, said the JCRA has also agreed to pay Tan a sum for legal expenses. He declined to
disclose the amount of the settlement.

Chen said he expected Superior Court Judge Maurice Gallipoli to transfer the title back to Tan in the next few days.

Representatives of St. Peter's Prep could not be reached for comment yesterday.

© 2005  The Jersey Journal
© 2005 NJ.com All Rights Reserved.

Bar's fate still awaits court date

Hearing rescheduled as business owner fights St. Peter's Prep over land

Ricardo Kaulessar
Reporter staff writer

 
A GOLDEN HAVEN – The Golden Cicada, located on the corner of Grand Street and Marin Boulevard in Jersey City, has become the center of media attention in recent weeks.
If you approach the Golden Cicada Bar and Restaurant on Grand Street in Downtown Jersey City, you will be
greeted by a sign perched above the fence:

"Hands off my property,

The ten Commandants [sic] says 'THOU SHALT NOT STEAL!'

Support the campaign to stop Eminent Domain here

If they can steal mine, yours could be next.

Golden Cicada Tavern"

The situation facing the Golden Cicada's owner, Cheng "Terry" Tan, almost seemed to have reached biblical
proportions. This past July, the Golden Cicada was taken by the Jersey City Redevelopment Agency through
eminent domain.

Eminent domain is the power to take private property for public use by the state or municipality, as long as
they provide just compensation.

But the agency took Tan's property in order to grant it to St. Peter's Prep High School on Grand Street, a few
blocks away. The school needs his property in order to lengthen their athletic field, located directly behind the
bar. They need seven yards more in order to be a regulation field for holding varsity matches, rather than just
for practice. The field was built in 2003 and completed in 2004.

But can a government do that for a parochial school?

Tan's situation has been well documented in the media and will be further spotlighted by a hearing, which
was rescheduled from this past Friday (Nov. 4) to Friday, Nov. 18 in State Superior Court in Jersey City.

The Jersey City Redevelopment Agency hopes that a ruling will allow them to continue the eminent domain
process.

That would mean making a final offer price for purchasing the property that Tan would have to accept.

Tan will be represented by volunteer lawyers with the American Civil Liberties Union of New Jersey, who
plan to argue that the Redevelopment Authority's actions violated a clause of the United States Constitution.
The government may only take a property owner's land if it is for a "public use."

"I have no problem with St. Peter's Prep. I have a problem with government taking property from private
party A and giving it to private party B," said Tan. "That's a violation of the Constitution, and that's just wrong."

But that hearing may not happen due to an announcement late Friday by Mayor Jerramiah Healy.
 
Update

On Friday evening, the Associated Press reported that the city will no longer go through with the taking of the Golden Cicada by
eminent domain.

Healy issued a written statement saying, "There are instances when the city's taking of private property for public purpose is
appropriate, but this is not one of those instances."

Tan, when contacted Saturday, said he only found out about Healy's announcement during a 11 p.m. newscast Friday night,
and had not heard from the Mayor's office but realized that it was the weekend and  would probably find out more during the week.
But he is not exactly elated.

"My property is useless. It is still zoned as open space by the [Jersey City] Redevelopment Agency, which means I can't develop
on it," said Tan.

Tan couldn't offer any more comment until he met with his lawyers during the week.   Prep officials could not be reached
for comment on Healy's announcement.

The Jersey City Redevelopment Agency vs. Cheng Tan
While most property owners would be nervous about a legal maneuver that could potentially ruin their business, Tan
projected calm before the storm.

"I prepared myself, researched all about eminent domain, so I know the law and I know what I'm getting into," said Tan in
an interview last week. "If this was someone else who wasn't as prepared, this situation could drive someone to suicide or
do something as drastic."

Six-year struggle
The case was actually the climax of a six-year struggle between the agency and Tan.

In 1999, the Jersey City Redevelopment Agency (followed by approval by the City Council in 2000) adopted the Tidewater
Basin Redevelopment Plan that zoned the area where Tan's property was located for commercial and residential purposes.
But before the year ended, they changed the zoning for the area to be utilized for athletic or educational purposes.

It turned out around the same time St. Peter's Prep was looking to develop a two-acre parcel of land once used for boat repair,
 to use now for an athletic field.

Tan said he opposed the zoning, since he wanted the freedom of either maintaining his business or developing the property
for condos. Tan said that since 1999, he had looked to build a nine-unit condo building on the property he had owned since 1987.
But the specter of the redevelopment plan and the possibility of the eminent domain always loomed heavy.

"I couldn't sue anyone to stop the taking of my property since I was not served with the papers to do so," said Tan.

Instead it was a number of negotiations with St. Peter's Prep over acquisition of the property over nearly six years,
with the prevailing offer of $550,000. But Tan would not accept, saying the property is worth twice as much.

Tan said in July, the Redevelopment Agency served him with papers saying they would seize title to his property. Since then,
Tan has presented his plight in front of the Jersey City City Council, in a letter Tan wrote to Archbishop John J. Myers of the
 Newark Archdiocese about his situation, and at a rally in October organized by the Hoboken Republicans Club against
eminent domain.

In fact, Tan has become darling of the anti-eminent domain, pro-property rights crowd. He has appeared in front of the
U.S. Senate to testify on eminent domain.

But in recent weeks, the other side has struck back.

Presenting their case
St. Peter's Prep recently posted an open letter on their school website (www.stpetersprep.com) defending themselves in
this matter. The letter, dated Oct. 28, details the history leading to the hearing.

St. Peter's Prep points out in the letter that acquisition of the seven yards "was to increase the safety and usefulness of
the facility by extending the northern portion of the field and, thus, eliminate the possibility of a youngster being injured by
running into the rear of the buildings on Grand Street."

Prep was actually seeking the garages located behind Tan's building to complete the field, but were named redevelopers
of the entire property by the Jersey City Redevelopment Agency.

Also stated in the open letter was that Prep had invested over $4 million dollars to develop the field and "within this accepted
 legal framework for municipal redevelopment, the school has made a good-faith offer to acquire the property, based on an
 independent appraisal of its value. James Horan, vice president of planning and external affairs for St. Peter's Prep, said
last week that $550,000 is what is being offered to Tan based on the zoning of the property. In addition, a payment in that
 amount was deposited in an escrow account managed by the Jersey City Redevelopment Agency."

But he said that in a meeting held nearly a month ago between Tan and school officials, Tan was asking for too much.

"He told [Prep officials] that he wanted $1.35 million. That's way too much for property that is open space," said Horan.
"If the property was zoned for residential or commercial, then I could see paying that but not in this case."

Also fighting back is the Jersey City Redevelopment Agency, which sent a 30-day notice of eviction to Tan on Oct. 4.
The notice, a copy of which Tan provided to the Jersey City Reporter, indicated he had until this past Friday to vacate
for reasons such as "failure to pay rent to the Jersey City Redevelopment Agency."

Tan said it was just "a scare tactic."

John Curley, special counsel for the JCRA, said the eviction is sent as a formality ahead of a hearing and there had
been 90-day eviction notice sent previously in July, but no eviction proceedings were carried out. q


Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com.

 


Editorials December 15, 2005 

 
These homeowners say they’re getting robbed
Coda
Greg Bean
 

 

 
If you think we’re making progress eradicating organized crime, you probably ought
to take a look at Long Branch, N.J., where there are plenty of people who’d argue
the city fathers have turned municipally organized crime into an art form.  

Recently, the city took its first legal step in condemning 11 of 36 oceanfront properties
 the city wants to take by eminent domain, so that a private developer can tear down
the homes and build expensive townhouses and condominiums on the land.

To begin that process in earnest — after the owners of the properties rejected the
lowball offers made for their homes — the city filed two complaints in state Superior
Court, asking that Judge Lawrence Lawson assert the city’s right to take the properties
 located in the Beachfront North, Phase II redevelopment zone.

City Attorney James Aaron (with a straight face) said the complaints were filed only
after the property owners failed to negotiate in “good faith” with the city. The complaint
s ask the court to assert the city’s right to take the properties and to appoint
commissioners to fix the price for the properties.

Adding insult to injury, the complaint also asks the court to hold the defendant property owners (none of whom wanted
to sell in the first place) liable for any and “all remediation and/or cleanup of contamination or removal of solid waste
and/or sanitary landfill closure” existing on the properties before or after the city takes ownership.

In the months since this controversy erupted, the plight of the homeowners comprising MTOTSA (Marine and Ocean Terraces
and Seaview Avenue) who stand to lose their properties has turned Long Branch into the national poster child for eminent domain
abuse.

Last summer, the U.S. Supreme Court ignited a national storm of controversy after it ruled in a 5-4 decision in a case
regarding some New London, Conn., homeowners — whose properties were being taken by eminent domain in order to
build an office complex — that the government can seize homes and other private properties for private economic
development, even against the wishes of the property owners.

That decision, which effectively put an “Up for Grabs” sign on the front lawns of every property owner in the nation with
land that some future developer might covet, spawned a frenzy of proposed legislation across the country to curb the
growing threat of eminent domain abuse.

At the national level, laws were proposed to prohibit the federal government, or any state or local government that obtains
federal funds for a development project, from taking private property for economic development. At the state level, about 30
states are currently considering laws to limit the taking of property by eminent domain.

In New Jersey, a bill introduced by Michael Panter of Red Bank — who was recently re-elected to his seat in the state
Assembly — would restrict eminent domain for redevelopment by prohibiting the taking of any legally occupied residential
property that is up to housing code.

Another bill, introduced by Sen. Diane B. Allen, who represents Burlington and Camden counties, would establish a
two-year moratorium on taking property for private development. The moratorium would be used by a bipartisan
commission to study permanent changes to the state’s eminent domain laws.

Clearly, a state and national consensus is developing that eminent domain abuse by local governments must be stopped.

In Long Branch, meanwhile, the local government is acting like the bunch of drunkards who tried to slurp down as much
whiskey as possible before Prohibition became the law of the land in 1920. They see the writing on the wall, and are scurrying to have their case heard and adjudicated in court before the sluggish Legislature can act and stop the practice for good.

Attorneys for the homeowners named in the complaints say they’ll challenge the city and ask for dismissal of the
condemnation complaints, their chief defense being that the properties in question are not blighted and that it is the city
of Long Branch that has failed to negotiate in good faith. They also note that they believe the appraisals the city has provided,
and upon which offers were based, are half of what the properties are actually worth.

Among the 11 defendants named in the suit, the highest appraised value from the city’s appraiser was $625,000. Three
other properties were appraised at $448,000, $410,000 and $408,000. Six were appraised in the low- to mid-$300,000 range.
The lowest appraised offer was $210,000.

The average sale price of properties in Long Branch the last three years was $464,507. And, according to William Giordano,
 a professional appraiser who lives on Ocean Terrace, of 103 active listings of properties for sale in Long Branch as of Dec. 1,
the average asking price of properties in town was $658,773. Only nine listed below $300,000.

And few, if any, of those properties came with ocean views or easy access to the water.

The developer who wants their property, meanwhile, plans to replace the homes with 185 condominiums. While they have
not revealed the sale price of those units, the new condominium units in the city’s other beachfront redevelopment projects
have sold for between $400,000 and $2.2 million, except for one that sold for $200,000.

Assuming that all units sell in the lowest range of $400,000, that’s still $74 million. At a price of $500,000, it’s $92.5 million;
at $750,000 it’s $138.75 million; at $1 million it’s $185 million. At $1.5 million it’s .… well, you get the picture.

The total offered to the 11 property owners named in the complaint is just south of $4.1 million.

No wonder Long Branch is in such a hurry to take these properties and let the developer start building before the Legislature
passes a law to stop them. If they pull it off, somebody stands to make a pile of money.

And it’s no wonder the folks living in MTOTSA feel they’re being robbed.

 

Gregory Bean is executive editor of Greater Media Newspapers.


 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Jersey City tries to seize bar for private school's field

Friday, October 28, 2005
BY STEVE CHAMBERS
Star-Ledger Staff

The Golden Cicada tavern in Jersey City sits alongside some of the state's most valuable real estate.

But when the city's redevelopment agency moved this summer to seize the bar and the back room apartment where
owner Cheng Tan lives, it wasn't to make way for another gleaming office tower or upscale residential project.

Instead, the city plans to turn the property over to a Catholic high school, so it can expand its football field.

The religious implications outraged civil libertarians, and property rights groups, still smarting from a U.S. Supreme Court
ruling in June, argued the city is misusing its powers of condemnation.

"This is one of the most egregious cases of eminent domain in the country,"    said Steve Anderson of the Institute for
Justice in Washington. 

Next week, when Tan's case goes before a judge in Jersey City, he will have the benefit of free legal advice, but his lawyers
face an uphill battle. The summer court case confirmed the use of eminent domain by government to seize
private land and turn it over to others for private use.

But lawyers for the American Civil Liberties Union and Rutgers Constitutional Litigation Clinic, who are representing Tan,
argue the redevelopment agency is violating the constitutional prohibition on favoring a religion.

"It's inappropriate for government to take land from one person and give it to another for their personal use," said Ed Barocas,
the ACLU's legal director in New Jersey. "It's even more inappropriate to take it to benefit a particular religion."

St. Peter's Prep, a respected institution with powerful political ties, argues that after spending years and about $4 million
assembling property for much-needed athletic fields, it is being held up unfairly by Tan.  The school last year built a new
field adjacent to the Golden Cicada, but the Rev. James Keenan, St. Peter's president, said it is 7 yards shy of
regulation and must be lengthened for the varsity to play its home games there.

"We offered to buy the garages behind his business, which would give us enough room," Keenan said. "That would not
affect his business, but he refused."

Keenan also stressed that Tan put his business up for sale in 1998, but the bar owner said that is irrelevant.

"My wife was sick, and I was having financial difficulties," Tan said. "But that has nothing to do with their right to take my
business. It doesn't matter if this business was open one day or one year."

Tan bought the bar in 1987 and Kam-sin, his late wife, ran it while he continued to work as an electrical engineer.
(The bar's name is the English translation of his wife's Mandarin name.)

On paper, the legal argument is technically between the redevelopment agency -- which is empowered by state law to
seize property -- and Tan. The city council in 2000 declared the area around Tan's bar "in need of redevelopment" and
designated it for open space and recreation. A lawyer for the city confirmed that the agency has an agreement to sell
Tan's property to St. Peter's at cost if it wins the case.  Keenan said the school bought an adjacent scrap yard in 1999 and
hoped, at the time, to get both Tan's property and a neighboring rowhouse. (The elderly owner of the rowhouse has never
put it up for sale, Keenan said, and the school is willing to wait him out.)

As the legal process churned slowly along, Tan became increasingly well-versed and militant about eminent domain.
"It's like the reincarnation of Thomas Paine," he joked, noting that eminent domain is a frequent subject of conversation
among his regulars. "When the government starts ignoring property rights, we all have a serious problem."

In 2003, the school won approval to build its elaborate practice field but soon discovered that the scrap yard was far
more polluted than expected. The price of the project ballooned from $2.5 million to $4 million, Keenan said.

The school got help from the state Legislature, which, at the behest of state Sen. Bernard Kenny (D-Hudson), chipped
in $250,000 for the cleanup. Kenny's sons both attended St. Peter's.

Kenny said in an interview that while it has become "politically popular" to bash eminent domain, he considers it an important
redevelopment tool for cities. He said he is untroubled by its use to aid St. Peter's.

John Curley, a lawyer for the city, said it is common for government to take land and give it to religious organizations
for things like construction of affordable housing, which, like the fields, isn't a religious purpose.

Curley said the agency has deposited $550,000 in an account for Tan. The bar owner would also be eligible for relocation
costs and could sell his liquor license for about $150,000, Curley said.

Tan, however, said his 5,000-square-foot property is worth far more given its location beside booming real estate. He said
he doubts he would be relocated to anything other than a troubled neighborhood.

Over the years, Tan has considered building condominiums on the site, and the time has never been riper. Thousands of
units are under construction or on the drawing board within walking distance of his bar, and he willingly
conceded that he would prefer to develop his property.

The neighboring projects have paved over similar watering holes. Two years ago, Captain Al's closed down around the
corner, and many of the regulars found their way to The Golden Cicada.

"This is not just about The Golden Cicada," said Ed McCormick, a local accountant who once bellied up at Captain Al's
but yesterday sat in Tan's bar sipping dumpling soup and beer. "If they can do it here, they can do it darned near anywhere."

Steve Chambers covers land-use issues. He may be reached at
schambers@starledger.com or (973) 392-1674.

© 2005 The Star Ledger

© 2005 NJ.com All Rights Reserved.


Eminent Domain Project at Standstill Despite Ruling

C.M. Glover for The New York Times

The land taken by New London remains empty; little has been done.

By WILLIAM YARDLEY

Published: November 21, 2005

NEW LONDON, Conn. - They have still not moved out. Not Susette Kelo. Not the Derys. Not Byron Athenian or Bill Von Winkle or the others.

Five months after the United States Supreme Court set off a national debate by ruling that the City of New London could seize their property
through eminent domain to make way for new private development, no one has been forced to leave.

The New York Times

New London has sought to redevelop an area near the Thames River.

No bulldozers have arrived to level the last houses still standing, and none are expected soon.

Even though the holdouts lost their case, and the development that would displace them finally seems free to go forward,
 construction has not begun, and some elements of the project have been effectively paralyzed since the court ruling prompted
 a political outcry.

"I felt relaxed enough to get my checkbook out and put the new roof on," said Mr. Von Winkle, who owns three buildings with
 a total of 12 occupied apartments in the Fort Trumbull neighborhood by the Thames River, where the city was sued for
claiming 15 properties through eminent domain.

Ms. Kelo, also among the handful of holdouts, said, "We still have hope that we'll get to keep our homes."

It is not that Ms. Kelo and the others have chained themselves to their property in a final dramatic defiance of the law.

Instead, wary of public disapproval and challenges from groups like the Institute for Justice, the law firm that represented
 the holdouts in court, the state and the city have halted plans to evict the remaining residents. Investors are concerned
about building on land that some people consider a symbol of property rights. At the same time, contract disputes and
financial uncertainty have delayed construction even in areas that have been cleared.

With so many complications, some people are unsure whether the city's initial vision for the property - a mix of housing,
hotel and office space intended to transform part of its riverfront and bolster a declining tax base - is even realistic anymore.

"Winning took so long," said Mayor Jane L. Glover, "that the plan may not be as viable in 2005 or 2006 or 2007."

New London, founded in the 17th century as a port city in southeastern Connecticut, has a high unemployment rate and
fewer residents today than it had in 1920. Its court battle over eminent domain started five years ago, when it claimed the
property of six Fort Trumbull homeowners, a two-block area within 90 acres set for development. Homeowners challenged
the move, and the matter eventually made its way to the Supreme Court, which ruled 5 to 4 in June that the city had the
right to take the land to improve its financial health, even though doing so would eventually transfer the property to a
private developer.

But in a dissent that echoed what property rights activists were saying, Justice Sandra Day O'Connor wrote: "The specter of
condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home
with a shopping mall or any farm with a factory."

Congress and state legislatures across the country have reacted by revisiting eminent domain laws. Over the summer, the
United States House of Representatives passed a resolution condemning the court decision. This month, the House voted
overwhelmingly to deny federal economic development money for two years to local governments that seize private property for
private development.

In September, Gov. M. Jodi Rell of Connecticut demanded that the New London Development Corporation, the city's development
agency, rescind eviction orders delivered to tenants in rental units that belong to homeowners who have refused to give up their
property.

The Connecticut General Assembly has asked cities to delay using eminent domain while it considers revising state law. Some
city and state officials cite the difficulty in finding a balance between using eminent domain to rebuild blighted areas and preventing
the potential for abuse that concerned Justice O'Connor.

"We're not writing a law to solve the New London problem," said State Representative Michael P. Lawlor, a Democrat who is
co-chairman of the Judiciary Committee. "We're writing a law to fix the Sandra Day O'Connor problem."

Amid all the debate, the Fort Trumbull project has stalled.

"This lawsuit put a chill on the development of the whole 90 acres, no doubt in my mind," said Thomas J. Londregan, the city's
director of law. "Any developer knew that whatever they did would most likely be appealed to the courts."

Contentiousness led to stalemate and stumbles. At one point the city severed ties with the New London Development Corporation,
only to reverse itself days later under pressure from the state. A key corporation executive was forced out.

Pressure to go forward is considerable, even if momentum is not. The state has already invested $73 million on environmental
cleanup and sewer and road improvements. Elegant street lamps, intended to illuminate a gentrified new riverfront, instead shine
over empty lots where buildings have been leveled but not replaced.

In recent weeks the city, the state and the developer, Boston-based Corcoran Jennison, have begun discussing ways to jump-start
construction in empty areas. Details are not firm.

"We are currently working our way toward what I believe will be something fruitful," said Michael Joplin, president of the New
London Development Corporation.

One point of contention: Corcoran Jennison is resisting pressure from the city to build a waterfront hotel first, as was initially
planned, out of concern that there is no market for one.

Corcoran Jennison says that Pfizer, which built a major research center next to the site in the late 1990's and pushed for the Fort
Trumbull development, backed away from a commitment to help pay for the hotel as the lawsuit dragged on. And the prospects for
a Coast Guard museum, which under one plan could be built on the holdouts' land, are also unclear.

Still, Ron Angelo, deputy commissioner of the state's Department of Economic and Community Development, insists that the
project, at least in some form, will get under way soon. "I think for the first time in a number of months, if not years, we have come
close to beginning with the project," he said.

If any construction begins soon, it will happen away from the area where the holdouts remain, said Marty Jones, president of
Corcoran Jennison, which has been under contract on the project since 1999.

"We need to have some positive things happening so that every lender and investor I go to doesn't say, 'I want to be 100 miles
away from here,' " Ms. Jones said. "Eminent domain in Fort Trumbull has been on the front page of every newspaper in the country,
 and it has not put New London in the most positive light."

Despite losing in court, the holdouts have gained political leverage, largely through the public relations effort led by the Institute
for Justice, Mr. Joplin said.

Scott G. Bullock, a lawyer for the Institute for Justice who argued for the resistant property owners before the Supreme Court,
said, "We might have lost the battle, but the overall war is really going in our favor."

"What developer is going to want to build on land that was received through probably the most universally despised Supreme
Court decision in decades?" Mr. Bullock asked.

Governor Rell has hired a mediator to meet with the holdouts. The goal is to see what, if any, financial terms, beyond the outdated
appraised value they have been offered, might persuade them to leave.

"I'm on the road to search for the proverbial win-win," said the mediator, Robert R. Albright. "It's an extraordinarily complex situation.
 It's not a two-party situation by any means. I'm not sure I can honestly give you an option set or even fully describe the obstacles."

The property owners have their critics in New London. They have been accused of delaying the city's resurgence, and even of taking
 payoffs from property rights advocates in order to keep up the fight. But at least a few, after seeing most of their neighborhood
leveled, say they will consider coming to terms with Mr. Albright if the money is right. Others, however, have not ruled out new
lawsuits.

Meanwhile, some renters are moving in, not out. Michelle Cerrato arrived from Pennsylvania in September and found her two-
bedroom apartment on Walbach Street through a newspaper ad. Unaware of the fuss over eminent domain, Ms. Cerrato, a 30-year-
old casino hostess with three children, soon figured out why neighbors have signs in their windows that say, "Not for Sale."

Confused and concerned that she would be evicted, she called her landlord, Sue Dery, one of the holdouts.

"She said it's not going to happen," Ms. Cerrato said. "It's been going on for eight years."