State redevelopment agencies "have a very good lobbying organization," says San Diego attorney Louis E. Goebel. "But the mentality is changing."
The classic case in San Diego was in the late 1990s, when the Frost family wanted to develop a hotel in the ballpark district. The Frosts had a developer lined up. The hotel could be built without the city having to pay condemnation costs. Nonetheless, Centre City and city council ganged up to award the land by condemnation to John Moores, majority Padres owner. "We argued abuse of eminent domain before the city council," says Douglas Tribble, attorney for the Frosts. The case went to superior court, where a judge upheld the right of the city to grab the land.
While this was going on, the Padres and the city were promising that tax revenue flowing from hotels and retailers in the ballpark district would pay for the ballpark. But mainly condos have been built -- few hotel rooms have come through. Tax revenue generated by housing is eaten up by infrastructure costs. The ballpark is still a major drain.
One reason citizens will vote on a hotel-tax increase this fall is that the Padres didn't live up to promises to construct revenue-generating hotels and other commercial structures, says former councilmember Bruce Henderson.
You can see how it works. The government seizes private land of a cloutless person and gives it at a lowball price to a politically potent nabob promising that tax revenues will pay for the big project. Those tax revenues don't come through. Hurting for revenue, the government then turns around and seizes some other powerless person's property, handing it at a low price to another politically potent person, whose project will theoretically replace the revenue lost when the first promises were broken. The daisy chain of deceit is one reason corporate welfare has burgeoned out of control. At last, there is hope the courts will do something.