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Eminent domain abuse has sunk to a new low in New Jersey, where a state agency is allegedly trying to seize a man’s business and apartment house even though it has no known plans to use the property.
To make matters worse, the Casino Reinvestment Development Authority (CRDA) is trying to keep the family from employing attorneys to defend its property rights.
“CRDA’s attempt to prevent property owners from effectively defending themselves with pro bono lawyers demonstrates both how little confidence the agency has in its own legal arguments and how much contempt CRDA has for the rights of the people it is trying to displace,” said Bob McNamara, the lead attorney for the Institute for Justice on the case. McNamara alleged that CRDA has asked courts to prevent his organization from defending the man at the center of the case, Charlie Birnbaum.
Birnbaum is the owner of a small apartment building near Atlantic City’s famous boardwalk. CRDA wants to seize the historic structure as a part of a project designed to revitalize the area around the bankrupt Revel Casino. McNamara said the plans filed by CDRA do not state how Birnbaum’s property would be used.
Designed to Benefit a Failing Industry?
The Revel Casino filed for Chapter 11 bankruptcy last year because of falling gambling revenues. The Press of Atlantic City reported that the Revel is now auctioning off the property it owns on the Boardwalk in an attempt to pay its debts.
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The apartment house CRDA is trying to seize has been in Birnbaum’s family for 45 years. News reports indicate that his parents were Holocaust survivors who purchased the building and raised their children there. Birnbaum operates a piano tuning business in the building and rents the apartments to tenants. CRDA would bulldoze the building and turn it into a vacant lot.
It isn’t clear how CRDA’s projects could benefit Atlantic City. Business at the city’s casinos has been falling for the last seven years, according to local press. Atlantic City’s gambling palaces are losing business to new casinos in Pennsylvania and other states.
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The gambling business in Atlantic City is now so bad that two casino operators, Tropicana Entertainment and Caesars Entertainment, actually bought the Atlantic Club casino and shut it down in order to boost their business. Some observers are now predicting that Atlantic City’s casinos will cannibalize each other.
Eminent Domain Abuse Increasing
The Birnbaum case is only one example of what attorney Ilya Somin labeled “a resurgence of eminent domain abuse” in a recent Washington Post op-ed piece. Other attorneys agree.
“This latest condemnation by the Casino Reinvestment Development Authority is part of a new wave of eminent-domain abuse, as cities and redevelopment agencies try to regain some of the power they lost,” Institute for Justice Attorney Dana Berliner wrote in a Wall Street Journal op-ed piece.
Municipalities had cut back on the use of eminent domain to benefit private businesses because of bad press surrounding the US Supreme Court’s Kelo decision, Berliner noted. Governments are now reviving the practice because the public is less aware of it.
In Kelo, the Supreme Court ruled that the use of eminent domain to seize property for “economic development” was constitutional. The case prompted 44 states to pass laws restricting the practice. Unfortunately many of those laws are weak and provide little protection for property rights.
“As the Kelo backlash recedes and the real estate market begins to recover from its recent plunge, they (eminent domain abuse cases) are likely to increase,” Berliner wrote. “It is also unsurprising that politically connected casinos, developers, and other interest groups are taking advantage of the situation to lobby for takings that benefit themselves at the expense of the poor and politically weak, and to undermine post-Kelo reforms.”
Should the government ever be allowed to take property via eminent domain? Let us know in the comments section below.
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