Pfizer Abandons New London Headquarters 4 Years After Landmark Eminent Domain Case
On Monday November 11th 2009, pharmaceutical giant Pfizer announced that it will abandon its $300 million dollar world research-and-development headquarters in New London CT. This comes only four years after a Pfizer-inspired development plan resulted in the landmark Kelo v. New London Supreme Court ruling, which sanctioned the use of eminent domain for private development.
In the late 90's, the New London Development Corporation, working in collaboration with Pfizer, created a plan to turn the neighborhood adjacent to the Pfizer office complex into a “world class development” that would include condos and up-scale retail shopping. The plan hinged on the displacement of existing residents by taking their properties through the use of eminent domain. Seven homeowners challenged the takings, with one homeowner, Susette Kelo bringing the case to the United States Supreme Court. Ultimately, the court ruled 5-4 in favor of the City of New London, setting a legal precedent that allowed governments to take peoples homes to “revitalize” an area, even if the property will be turned over to a private company. This ruling intensified the practice of city officials across the country displacing poor and working property owners in order to bring in housing and businesses marketed for tourists and wealthier residents. Following the Kelo decision, the homes adjacent to the Pfizer headquarters were bulldozed by the city. No development was ever built. Years later, the land still remains vacant. For more information check out this segment of Democracy Now! or the article in New London's paper, The Day.
In Philadelphia, like in New London, residents have been fighting eminent domain abuses for years. The Community Leadership Institute was successfully able to fight the takings of some of their members homes and also educate and help support community members who were facing eminent domain. To listen to the story of Carolyn Thomas, a West Philadelphia resident displaced from her home in 2003 go here.
Pfizer's departure also tells a cautionary tale about the use of tax abatements to entice private development. Pfizer was given a 10 year tax abatement that resulted in the city receiving only 1/5th of the property taxes that would have regularly been paid on the property. They have announced an exit plan that will move them out of the property by 2012, the year their tax abatement will end. In Philadelphia, Mayor Nutter continues to support the 10 year tax abatement, with the idea that there will be a big payoff in a few years when all of these now underpaying properties will start to be fully taxed. But this plan does not account for the potential for properties to be worth significantly less or abandoned by their owners, let alone the millions of dollars of lost tax revenue now. The Philadelphia Inquirer estimated that due to the 10 year tax abatement Philadelphia has lost at least $84,727,393 in total revenue since 2008. The real amount is undoubtably even greater because this figure is only a third of what the city actually lost, based on the Inquirer's assumption that two thirds of the properties would not have been built without the abatement. This comes at a time when the city government is claiming huge budget shortfalls and threatening to cut city services even further. At the beginning of November all city departments were asked to prepare budgets that would reflect an additional 7.5% cut in funding, which is on top of the 20% cuts that many departments already experienced last year. That 84 million dollars of lost revenue would go a long way if it went to Philadelphia's libraries and schools instead of into private developers' pockets.
Both eminent domain abuses and tax abatements are clear examples of cities prioritizing corporate handouts over the needs of long-time residents. And even after all that, the corporations still abandon the city as soon as there is a higher profit to be made elsewhere.
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