Property Rights Foundation of America®

from PRFA's Twelfth Annual National Conference on Private Property Rights
October 18, 2008

Fight the Good Fight for Private Property Rights

Don Corace
Real Estate Developer and Author, Naples, Florida

We want to hear about property rights. Carol mentioned my book, Government Pirates: The Assault on Private Property Rights and How We Can Fight It. One of the things that I did in researching the book was to start contacting private property groups throughout the country. And I was pleasantly surprised at how people have come together on property rights issues. Not enough, but they have come together and there have been some people who have been very instrumental in the research for this book. One of these is R.J. Smith who is sitting here at the front table. R.J.—I like to say is a legend, but he probably has the most encyclopedic mind when it comes to endangered species issues and property rights issues in general. Also, I am here as a direct result of some of the research that Carol gave me, those hour-long phone conversations I've had over the past few years that saved me weeks, if not months, of research, just because of her knowledge and passion for this issue.

As Carol mentioned, I have been a developer for over 25 years and I've developed property in Texas, Southern California, and Florida, where I currently reside. One of the more interesting stories, when I was out in Southern California developing property, was about eighteen years ago, when I lived in Riverside County in Southern California. At that point, the U.S. Fish and Wildlife Service decided they wanted to list the Stephens' kangaroo rat as an endangered species. Of course, many of us developers and farmers were extremely interested in this issue, because most of the area to be developed in this certain valley in Riverside County were farm fields and that was where these little critters' habitat was (and in some cases also in the hills). So we went to a workshop sponsored by U.S. Fish and Wildlife.

A number of farmers and developers were listening to the biologists spew all these population figures and estimates as to how much habitat has been destroyed by development, how much future development is going to destroy habitat for the Stephens' kangaroo rat. And so we were filled with all these facts and figures. Then it came to the Q & A. One gentleman farmer stood up and said, "There's no g…damn way that there is Stephens' kangaroo rats, they're not extinct, they're not endangered, because they're all over our fields." So a lot of the people in the crowd just said, "Yes, yes, that's true, we see them all the time." The crowd was starting to get riled up.

Now the biologist that was providing all this information was someone with whom I'd had a recent run-in at a meeting. In fact, for those of you who know me, I sort of take these bureaucrats by the jugular and try to shake them a little bit, because in some cases that's the only way you're going to be able to get anything done. In a meeting with this bureaucrat, he was sitting right across the table from me and I called him a liar on some data. This gentleman was up in front of the group. I decided I was going to ask a question that I knew the answer to. And he knew I knew the answer, too, but I wanted to get the crowd riled up. So I said to him, "These Stephens' kangaroo rats, aren't there a number of subspecies? In fact, aren't there twenty-two subspecies to kangaroo rats?" He said, "Yes, there are."

So I said, "You haven't finished all your studies, you haven't furnished all your data. Is it possible that these kangaroo rats interbreed?" And he said, "Yes, we're trying to determine what type of kangaroo rat is in this particular area, in this valley."

And I said, "Well, if not all the kangaroo rats were going to be put on the endangered species list, and let's say the Pacific kangaroo rat, which is another subspecies which wasn't going to be put on, how do you tell the difference if they interbreed?"

So he kind of hemmed and hawed and kind of gave me a dirty look because he knew exactly what I was getting at. He said, "Well, we go on the ground. We go out and we identify the species and we look at their habitat and that sort of thing."

So he pointed to another person and he said, "Your question, sir?" And I said, "No, wait a minute, wait a minute. Everybody needs to understand how you identify a Stephens' kangaroo rat."

And finally he said, "We have to measure the thickness of their skulls." And I said, "OK, so you measure the thickness of their skulls. What do you have to do?" He said, "Well, we have to split open their skulls."

So I said, "Let me get this right" — and he's just fuming — "let me get this right. So you said you have to kill a potential endangered species to determine if it is an endangered species?" He said, "Yes."

By the way, these kangaroo rats are nocturnal. And mysteriously, over the next weeks and next few months, when you would drive down the freeway of this particular valley that was under intense development pressure, where there were a lot of open farm fields, you would see groupings of red lights that were farm tractors. They were hauling behind them these long 3-inch to 4-inch disk implements. They were out there disking the property because they were just simply trying to help the Fish and Wildlife Service split the skulls of the Stephens' kangaroo rat. So they were good stewards of the environment.

Anyway, it is a pleasure being here. Today I want to talk about three things, essentially how our property is being assaulted by these government pirates as I say in my book. I also want to talk to you a little bit about some of the horrific stories that are in the book. I found that it was important when I was writing this book that this book was particularly geared toward John Q. Public. It's not geared toward folks like us. I could be preaching to the choir. But it was really geared toward getting people in the mass market to understand these issues. They understand eminent domain to a certain degree, but they don't understand these other regulatory takings that we've been talking about. I also want to give you an idea of a little bit of a blueprint on how we can curb this tide of abuse.

First of all, I'd like to tell you what motivated me to write this book. It was in June of 2005 and when I read the Susette Kelo v. New London Supreme Court decision on eminent domain. You would think that, as a greedy developer, that I would think that this is another opportunity for the development community. But that was not the case. When I read that decision and realized that over the past twenty-five years I have seen the irresponsible, reckless behavior of local government, I just thought that it was unconscionable. And at the time, I just thought back of all the times I have been through zoning, wetlands, and endangered species issues, for example, and how that really also compares to eminent domain. To me, there is no difference, it's still a taking of private property rights. They are just calling it something different. Now, that is not to say eminent domain is not a useful tool for government. Obviously we need to have eminent domain authority to acquire roads, for schools, dams, hospitals and other public use facilities. But for the Supreme Court in their infinite wisdom to actually take that public use definition and say that it could be used for economic development was just plain wrong. And that was just one of the many categories I discuss in this book. In the right hands, it could be a useful tool, but in the wrong hands it's a wrecking ball to the American dream.

For example, even Susette Kelo, when interviewed, said that "If the government was going to take my property I would willingly give it, willingly sell the property as long as I was justly compensated, for a public use project." But for them to take her property and to use it for private development, she obviously resisted that and for that she's a hero in the property rights community.

The other interesting thing about eminent domain schemes—and I'll call them schemes because that's exactly what they are, I can with confidence say that nine times out of ten these redevelopment projects that get underway really never pan out. In many cases bonds are sold, they have to be refinanced, and in the long run what happens is the taxpayers end up paying the bill, because developers back out of deals, projections aren't met. All these great, rosy projections on tax revenues and job creation never come about and you see this time and time again all over the country. In fact, in the Kelo situation in New London, Connecticut, I don't know if you're aware of this, but Susette Kelo's home was removed from an area, and all the other homes and small businesses were bulldozed. And now it sits as an barren open field. The developer backed out of the venture and the city reportedly spent $78 million and has nothing to show for it. That's our government at work and, as I said, that's going on all over the country.

Eminent domain is just one category. Eminent domain is really just the tip of the iceberg when it comes to the assault on our private property rights. When you take into account zoning, wetlands, and endangered species protection, you will find that at least in eminent domain you are supposed to be compensated for your property and in many cases you are. You may not agree with the compensation, but at least there's a mechanism that you're supposed to be paid for it. But in these other, so-called regulatory takings, of wetlands and endangered species and zoning issues, you not only do not get compensated, in fact, in many cases you're extorted land and money in exchange for approvals.

This just doesn't only happen to developers. It happens to everyday Americans. I've seen this first hand., I've sat at kitchen tables interviewing them throughout the country. It happens to everyday Americans, small homeowners, mom and pop businesses, farmers and ranchers. This was one of the things that really propelled me to write this book, because I, too, have been abused over the years as a developer, as an individual property owner.

Let's take eminent domain, for example. Essentially, those issues as I just mentioned are tame compared to some of these other regulatory issues. For example, take zoning. This is a lot of what we've been talking about today. A very gifted speaker spoke about the zoning in Houston. I have developed property in Houston. I've seen it. It does work without zoning. There have to be some guidelines, which there are, that you just can't build a steel mill next to a kindergarten but what's happening throughout the country is that no-growth communities are strangling the rights of property owners through zoning.

One of the most egregious stories, not only in my book, but one of the most egregious stories in the nation, is a story that took place years ago in Pompano Beach, Florida. For those of you who have read the book or heard me on radio, this is one of those stories that just makes you shake your head and wonder how this can happen in America. Essentially there were two brothers who owned a very successful restaurant in Pompano Beach. They had property that was right on the Intracoastal Waterway, with excellent frontage and great views of the Atlantic Ocean. They decided that they were going to raze their building and they were going to build a hotel. They were zoned for it and they had all their approvals.

Unfortunately, the folks across the street in a condo tower didn't want to have their precious views of the Atlantic Ocean blocked. So, rightfully so, they went to the city planners and they said they didn't want this project to go forward and it went through the public process. However, these folks had their zoning, they could go up eighteen stories for their hotel. But what happened was that these NIMBY's, these homeowners, were very influential politically. They conspired with the city for thirty-one years. Believe it or not, these people went through thirty-one years of litigation after they actually bulldozed their restaurant. Thirty-one years. And it drove them into the ground, drove them into bankruptcy.

The neighboring homeowners used every tool they had in the book. They used environmental protection for docks. They used the Federal Aviation Administration. There was an airport that was going to be built nearby. The FAA came in, had to investigate. They threw all these obstacles up at these people. Essentially what happened was that the city wanted this property for a park, so they continued to litigate and eventually the folks lost the property to bankruptcy court. The city bought it for $3.7 million and reportedly spent between $3 to $5 million of legal fees over the thirty-one-year period.

What happened was that these gentleman lost their property and one of the brothers, who was a millionaire, went from being a millionaire to a $12 per hour liquor salesman, and he had a stroke and he was paralyzed on his left side of his body. This was a clear story about how zoning was used and is abused throughout the country. And that's just one story.

Another is a wetland story. We can all agree that our water resources are important, we need to protect our wetlands. There are a lot of useful things for wetland resources throughout the country. But what's happened is that the Army Corps of Engineers and Environmental Protection Agency, essentially have jurisdiction over every trickle of water and some of the abuses that are going on throughout the country are just mind-boggling. I've been talking to some of the folks in New York on some of the wetlands issues. You just hear story after story.

One of the first wetland stories, where the person was imprisoned for a wetlands violation, took place in the panhandle of Florida. The gentlemen involved were Ocie Mills and his son. Ocie Mills was a very vocal opponent of Army Corps of Engineer regulations. He got up and spoke publicly about this. The Corps of Engineers, of course, didn't like that a gentleman was getting up and trying to usurp their authority, their jurisdiction over wetlands. They saw an opportunity when Ocie and his son decided that they wanted to build a house on a waterfront lot in the panhandle. Essentially he got all his permits—his local permits and his state permits. The state environmental agency said, "You don't need to get a federal permit because you're not going to be disturbing a certain amount of property." They went in and they cleaned out a ditch on the property because it was infested with mosquitoes and snakes. In addition they brought in sand to increase the elevation of the property because it was waterfront.

What happened next was just mind-boggling. The Corps of Engineers came in, armed, and gave him a cease and desist order. Eventually what happened was he had had some minor technical violations to the permit, so he decided, because he had defeated the state environmental agency on a similar issue years before, that he was going to take them to federal court, and he was going to represent himself. Now for the attorneys that are here, that's not a very good thing to do, especially in federal court. Needless to say, he lost.

He and his son spent twenty-one months in federal prison and six months probation for the first wetlands conviction in the United States. Now compare this with the Exxon Valdez disaster. There, the captain, who was reportedly drunk, spent 1,000 hours of community service and no probation time whatsoever for what is arguably the worst environmental disaster of the past few centuries. So here you have a gentleman who was simply trying to go ahead and develop his property and he was specifically targeted by the government. That's our government at work.

Let's look at the Endangered Species Act, which my friend R.J. is such an expert on. You will see that the Endangered Species Act is probably the single environmental law that most trumps the Constitution, more than anything else. We all understand that we want to make sure to protect the endangered species. But we all have to allocate for economic development. We all are environmentalists at heart to a certain degree, or I should say conservationists, because there is a big difference between conservationists and environmentalists.

One of the stories in the book, one of the more amusing but one of the sad stories, took place in southern California in the city of Colton in San Bernardino County. I was in the area developing property south of there at the time this took place. The city of Colton really needed economic development and they were chosen as a site for a major regional medical center, called the Arrowhead Medical Center, which was going to be built to the tune of $487 million. It would have been a real shot in the arm for the community and for the county as a whole. The city, as well as the contractor and the developer, went ahead and got all their approvals. The plans were ready to go, and they were ready to sink their golden shovels in the sand in a couple of days, and right before they were supposed to do that, the U.S. Fish and Wildlife Service made an emergency listing of a fly as an endangered species, the Delhi Sands flower-loving fly.

They said, "You cannot build this project, and you have to halt construction because we're still doing studies." So what happened was that during this whole process, and it took 2-1/2 years for them to redesign this project so it wouldn't impact the habitat of this fly. During that process the U.S. Fish and Wildlife Service demanded that they divert traffic off of Interstate 10, which we know is a coastal interstate freeway, during the months of August and September because they "think" that's when the breeding season of the fly was and they certainly didn't want any to get squashed on anybody's windshield.

So essentially they redesigned the project, and took 2-1/2 years. It added an estimated cost of $25 million to the project and they were able to go forward with it. The city of Colton, reportedly, with other projects that were impacted by this fly, lost to the tune of $175 million of economic development, all because of an endangered fly. Now I don't know if this endangered fly is important to the ecosystem or not, but this was supposedly the only location in the world where this fly was located. So for it to have ecological benefits to the chain of life, I don't know, it's a little bit of a reach. But that's how crazy these laws have gotten and that's why they call the Endangered Species Act the pit bull of environmental laws.

In all these cases that I just mentioned, why should we as Americans, especially if we're not directly affected by some of these issues, why should we stand up, why should we care about Susette Kelo whose house was taken by the city through eminent domain abuse? Why should we care about this restaurant owner that had his property through zoning go through thirty-one years of litigation? Why should we care about Ocie Mills in the Florida panhandle being imprisoned? And why should we care about a fly? Some of these things will never directly affect us. But guess what? A lot of the people in these stories and other stories in the book, and countless thousands of other stories, they say to themselves, "This can never happen to me." And it does happen. It can happen to you and it does happen. And even if it doesn't affect us directly, there are three things that we really need to think about. First of all, common decency for our fellow citizens. And how important it is that these are property rights that are guaranteed through the Constitution are being trampled on by these government pirates, I like to say.

Also the ripple effect through the economy. There's a story in my book about a small homebuilder in Minnesota who is trying to build affordable town homes. Because of wetlands regulations, he went from 109 units down to 34 that he could build because he had to set aside wetlands. It increased the cost of those units by 300 percent. And the cities and towns throughout the country threw up their hands, said "Why can't you develop, build affordable housing?" Well, guess what, all those regulations are passed on to the consumer and part of that is contributing to the housing crisis that we find ourselves in today.

Third, if they are doing this to our physical property rights, real estate related, what else is next? What else are they doing to do? The Constitution is not a living document. For those of us in the room I'm sure we're thinking we're strict constructionists, what's happened to those twelve simple words in the Fifth Amendment, "nor shall private property be taken for public use without just compensation."? That applies to eminent domain, that should apply to zoning, that should apply to wetlands, should apply to endangered species, but it doesn't. Where have we gone wrong?

Obviously the judicial system has let us down. There are cases after cases, particularly in my book, of how you can see where the law has evolved over time in each one of these categories. You don't have to be a constitutional attorney, to understand a lot of this doesn't make sense, it doesn't tie back into the Constitution. So it's very frustrating when you write about these issues and you meet people and you see some of the frustrations and the pain these people are going through.

Now what can we do about it? Some of our speakers talked about how we have to get together, have to band together and educate the public. And that's very important because we can't do it ourselves. We as property rights advocates, we can't do it alone. We have to get out and educate people, and be able to tell the grassroots, educate them so they come out to rallies, so that they send out e-mails, so that they badger our representatives. It's very important to band together.

One of the eminent domain stories that is probably the best example of eminent domain abuse was in Riviera Beach, Florida. The city of Riviera Beach was attempting to take property, which would displace an estimated 6,000 people. They were going to do that for the sake of a big yachting community, high rise condos, hotels and so forth. And they were making quite a bit of progress. They had the developer in tow and they were pushing very hard. At the time, because of the Kelo decision, and a couple of years before that, some of the House of Representatives, particularly then Governor Jeb Bush, were opposed to the Kelo decision. In the works was some reform from Florida. Now Florida at that time was probably one of the biggest abusers outside of maybe New Jersey, New York, maybe California. What happened was very interesting. Certain legal foundations, the Pacific Legal Foundation, the Institute for Justice, the Coalition for Property Rights in Orlando, and other law firms, came in, represented different property owners and filed suits. And because of that it created media attention. Once the media spotlight comes on, then all these other things, these behind-closed-door deals in smoke filled rooms, all that starts coming out.

One of the things that helped more than anything else was the fact when Sean Hannity on Hannity and Colmes actually went to Riviera Beach and interviewed Mayor Brown, who was really pushing for this project, confronted him. In fact, he pointed to the mayor's face and said, "You're just trying to remove these people from their homes, all so that you could hand it over to a developer." (There's an excerpt in the book about the dialogue.) It caught the media's attention. There were more stories about it as a result. Getting the media involved is extremely important. I've been telling people this throughout the country in all the interviews I've done. You've got to engage the media.

In this case Sean Hannity, Hannity and Colmes, Fox News did an excellent job. In my belief, the direct result of that, of all those other people filing suits, the rallies, and so forth, was that the legislation passed in Florida on eminent domain abuse. It passed through the legislature and became actually one of the most protective provisions for eminent domain abuse throughout the country. They went from being the most permissive to the most protective. In a large part it was because of the media's attention. They even made a Constitutional amendment, which serves as a model for the rest of the country for eminent domain abuse.

What we need to do is find more eminent domain abuse stories. Castle Coalition at the Institute for Justice does an excellent job in identifying these issues. Pacific Land Foundation deals with a lot of the regulatory takings, but what we need to do is find individual issues throughout the country, not just eminent domain, but zoning, wetlands, and endangered species, also conservation easement stories, things that the conservancies are doing. We need to bring these things to light, but it's essential we do it with the media, that we engage with them. I'm sure there will be some government pirates out there that we're going to expose. No longer can we actually be politically correct. We have to get in their face, just like Sean Hannity pointed in the face of that mayor in Riviera Beach. We need to take the gloves off. We need to say to these people, "We're going to expose you corrupt politicians, we're going to expose these entrenched bureaucrats, we're going to expose these liberal judges that are making these laws, we're going to expose these NIMBY's, we're going to expose these environmental extremists." If you shine a light on these people, they're going to back off. And that's what we need to do. We need to bring out all the resources we can and expose these people.

We need to target these people like they targeted Ocie Mills and put him in the federal prison. We need to turn the tables. We need to make some poster children out of these bureaucrats, these judges and these politicians. We can do it with these property rights groups like ourselves, coalescing with other groups and actually developing a coalition around these issues. And I'm going to do everything I can, so I would encourage you, go on my website, governmentpirates.com. There's a forum there where you can post stories. What I'm doing is taking some of these stories. I'm still on the book tour, I'm going around and talking to some of the radio talk show hosts and getting back on and portraying some of these stories. Believe me, people are getting it. People who call in to talk radio are starting to get it. And I am amazed by the people who call in and say, "Well I've got this issue that I was affected by, there's a zoning issue, a wetlands issue." It is becoming a kitchen table issue. It really is.

Now we heard some dire straits from our speakers earlier about what's going on in Capitol Hill. Believe me, if we can get the grassroots, if we can get some of these everyday Americans interested in these issues, we can do something, we can turn this tide of abuse. So I just want to say that I'm here to fight this good fight. I'm in for the long haul, because I've seen this reckless behavior and I certainly want to work with all of you here to do what I can and turn this tide of abuse because we the people are given these inalienable rights of life, liberty and pursuit of happiness and what we need to do is to protect our rights, protect our property. So let's get started, let's do something, let's go after them. Let's take the gloves off and let's just get out there and fight for our rights, because it's so very important to our constitution and so very important to our way of life in the United States.

God Bless America and thank you very much.

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