Eminent Domain: Statement before the House State Government Committee

Meeting in City Council Chambers, 5th Floor, City County Building from noon to 5 pm on Thursday, September 22, 2005.

From Mark Rauterkus, 108 South 12th Street, South Side, Pittsburgh, PA, 15203
412 298 3432 Mark@Rauterkus.com

Schedule (estimated): To testify at 3:20 pm for 10 minutes for comments and 10 minutes for questions from Committee Members.

Dear Chairman, Representative Paul Clymer, members of the committee and fellow citizens:

My name is Mark Rauterkus. My family and I reside at 108 South 12th Street on the South Side, Pittsburgh, 15203. Home on the internet is at Rauterkus.com. My statements go to a blog and the Platform.For-Pgh.org wiki.

On September 6, 2005, a Pittsburgh daily newspaper ran this front page, above the fold headline:

Venezuelan state governor seizes Heinz plant

A state governor ordered troops to seize a tomato processing plant owned by U.S. food company H.J. Heinz.

At first blush, the Heinz spokesperson said, “We see this as a local issue." The company officials awaited the government's next step.

News quote: "At that time I was mayor of that town, I felt impotent. My hands tied, as 30 million kilos (66 million pounds) of tomatoes -- almost 1,000 hectares (2,500 acres) -- were produced, and the closing of the business led the farm workers to go broke," said Briceno.

Officials were expected to expropriate the plant, a move that would require the National Assembly to declare the property to be of "public interest."

Chavez said the government may expropriate the property of companies whose factories are idle or partially paralyzed, in order to put them back to work.

Venezuela's constitution says the government will respect private property but says the state may expropriate property if for public use or "social interest," as long as compensation is paid.

So far this year, the government has expropriated the assets of a failed paper company and an industrial valve maker. Venezuela's largest food producer was challenging the legality of a military takeover of its storage facilities. (Silos are not being used as required by law so soldiers seized control of the facilities.

These actions are much like eminent domain and there are aftershocks.

Consider the actions if you are an investor, board member, stockholder, manager, or sub-contractor. I'm not going to invest there as assets can vanish one day.

Heinz gets 60 percent of its revenue from outside North America, and is pursuing growth in China, India, and Indonesia.

"We're concerned at the actions of the authorities to seize the property. ... We hope this situation will be cleared up shortly and the property will be returned," the Venezuelan Heinz unit said in a statement issued Tuesday.

Heinz was preparing to sell the plant when the governor, an ally of President Hugo Chavez, seized it. The company said it was not warned about the seizure.

Chavez signed executive orders in January, 2005 that established the legal framework for the government to seize private properties it considers unused, and to distribute them to poor farmers and workers.

Sad to say, I expect that the poor will become poorer due to this policy. They might feel empowered for acting, but in the long haul, this will backfire. Meanwhile, the rich in power get richer in power.

Government is force. It is not reason, it is not eloquence, it is not compassion. It is force. And as the proverb goes, “When the only thing you have is a hammer everything starts to look like a nail.” This is why, for government, every situation boils down to a question of control. (Source: a posting at DownsizeDC.)

People in Pittsburgh notice and chuckle at interesting twists of fate. Heinz made tomato paste and baby food here. HEINZ used the leverage of eminent domain to expand its property on the North Side from Pittsburgh Wool. Now we have loft apartments and Del Monte.

Eminent domain is understood. In Homestead and the South Side, mills expanded over neighborhoods including Holly Cross Church. Pittsburgh's Civic Arena saga is well known, as is Fifth and Forbes plans A to F.

I'm a parent, coach, and a ballot candidate.

I ran

for PA Senate, 42nd district, (May 2005 special election),

for mayor, city of Pittsburgh (May 2001 – contested GOP Primary), and

expected candidate for City Council, district 3, (early 2006 upon resignation of Mr. Riccardi for his move to district magistrate position).

I'm a board member of the Allegheny County Libertarian Party. My affinity favors a common-sense libertarianism. I lean to a Geo-Libertarian views. "Geo" here could be "geography" and "land." I have self-identified as a free-market candidate as opposed to a corporate welfare approach.

I call leaders and the public to think again by injecting different perspectives.

Venezuelan authorities need to think again. In a global market, PA's leaders need to think again as well.

Eminent domain is about control, power and force.

Nationally, FEMA officials displayed their hyper-control mentality when a PA doctor was forced to stop giving chest compressions at the New Orleans airport.

Force is the government's hammer.

Dr. Mark N. Perlmutter traveled from Pennsylvania to Louisiana to help the victims. He was in the midst of applying chest compression to a dying woman when FEMA officials stopped him. He begged them to let him continue, but they refused. The doctor wasn't an official FEMA physician. State license clearances mattered most, even in the height of the crisis.

Some speakers want to take the hammer out of the hands of government.

It pleases me that the new laws you hope to advance say that an increase in the tax base of a municipality should NOT be the sole reason for allowing eminent domain. Please, think again about the borders of a real public interest project.

Times have changed. Spaces have changed.Eminent domain isn't what it used to be. I crave more creative ideas in the toolbox so we never need to use the hammer of force.

As a candidate for mayor in 2001, I pledged that I'd fight all instances of eminent domain within our area from any governmental entity. That statement, perhaps just a spec of trivia, didn't resonate with masses of voters then. Only a keen sage could appreciate such a statement and stance. Many keen sages are in this room. That "fringe statement" is becoming mainstream.

Let's make Pennsylvania the best place in the world for investments. Investments must be safe from seizure. Don't simply tweak the eminent domain laws. PA could jump to the head of the pack -- as other states are re-tooling their approach to eminent domain too.

I expect stances from candidates on eminent domain to rise in importance.

According to David Jahn, Chair of the Libertarian Party of Pennsylvania, "the Supreme Court betrayed the constitutional sanctity of property rights in the Kelo decision. Local governments can now seize private property and transfer it to developers of shopping centers, office complexes, hotels and sporting arenas for no more reason than the wishful hope of an increase in local tax revenues. The Court’s decision blights the 'public use' clause of the Fifth Amendment with corporate welfare."

The Libertarian Party plans to make eminent domain and the protection of private property rights a key campaign issue in 2006.

The Libertarian Party is the third largest political party in the United States with more than 600 officials serving in office throughout the nation.

Pennsylvania has an abundance of land and "brown fields." If we needed bigger spaces, we have them. We have miles of empty space that surrounds the Pittsburgh International Airport.

If you want to build a factory in this state, we don't need eminent domain.

Pittsburgh does NOT need to use eminent domain in downtown's Fifth & Forbes projects. If our leaders were more creative, the need for eminent domain vanishes.

Pittsburgh has blue areas that streak around town, our rivers. We can build anything we want over those rivers without eminent domain.

There are hundreds, if not thousands of acres of prime development space -- if one considers the spaces over the rivers.

We could build a downtown mall (or two) within pedestrian bridges that span from Station Square to town and then to the North Side. Shops, services, and all the goodies can be provided for and paid for by lease holders. There is even room for the mega developers like those that have been so warm to Mayor Tom Murphy in plans.

Create spaces over the water of the rivers.

If this is hard to picture, think of a pier in an ocean-side community. Huntington Beach, California, has a massive pier, for example. Gov. officials in H.B. manage the beach (a shared space, community owned) and built a pier. They sell leases on the pier for businesses. The lease holders pay for the pier itself. That's new development without the pain of eminent domain.

Finding spaces in Pennsylvania is not a problem, even in our biggest cities. Spaces are all over the place -- from closed prisons to waterfronts. Plus, the URA (Urban Redevlopment Authority) already owns plenty of properties, estimated at more than 5,000.

Space is our asset in PA.

We don't need government to take land from its citizens. Find the necessary spots in other, more original places.

Consider Maglev, a high-speed train was to zip from Greensburg to Monroeville to town and then the airport. The citizens in Westmorland County went bonkers figuring where that line would be placed. Elevated tracks are not wanted.

We don't need to use eminent domain for Maglev. Nor do we need to spend a fortune to secure land rights at market rates.

Put Maglev underground 300 to 500 feet. Then we'd have an experimental line. And it is proven as subway systems carry millions of people worldwide each day. Maglev as a subway would not bother anyone's property rights.

If you want to do some real work on eminent domain, unravel the rail road right of way and that relationship with eminent domain. Our state is blessed with rail lines that are not utilized for moving people.

Fix roads, bridges and tunnels that arlready are here. The Commonwealth could spend 25-years to fortify our existing infrastructure with continual maintenance and upgrades and be much, much better off. Hence, we'd never need to use eminent domain for a new road.

Pennsylvania is shrinking.

Schools are another point of entry for eminent domain. Pittsburgh Public Schools needed to use eminent domain to build a new school in recent years as one or two home owners didn't want to sell. But Pgh Public Schools just closed a dozen schools and more are on the chopping block.

The call for eminent domain vanishes if better uses of what we have is demanded.

If a popular, growth area needs a new school -- build taller on the existing footprint.

Nonprofits gobble up land in Pittsburgh. Pitt is trampling with its sprawl. Yet the tallest building on Pitt's campus was built 80 years ago. The newest building from Pitt in my neighborhood is a flat, football field the size of an airplane hangar without a basement nor second floor.

If I'm in your seats, I'd be working on the words to calls for a state-wide referendum that enacts a Pennsylvania moratorium on all eminent domain for 25 years.

I'd certainly want to sunset the provision. My children are here. They can face the problems of the future much better than me. I would never want to tie their hands -- like you did with the 50-million dollar gambling licenses that never expire.

If we had no eminent domain in Pennsylvania for 25 years, this would force creativity among the ambitions for building public spaces. Otherwise, it puts faith in the marketplace, as a fall back.

Finally, there has been a lot of talk about property tax reform. I think that the elimination of all property taxes is a bad idea. I think we should be taxing land. If you were to eliminate property taxes and eliminate eminent domain, we'd be much worse off when my kids have kids. The coupling would slide our Commonwealth into a FEUDAL state.

Pittsburgh already has two oversight boards and judges who dictate property tax shenanigans. I call them "dueling overlords.' With no property taxes and no eminent domain -- a new class of land-lords and royalty will emerge and so too will citizen serfs.

I'd be happy to defend these concepts on principle, if asked.