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Jonathan O'Connell - July 14, 2005 Those who believe in the adage "when it rains, it pours" might take the t ale of the plaintiffs in Kelo v New London as a cue to buy two of every animal and a load of wood from Home Depot. The US Supreme Court recen tly found that the city's original seizure of private property was const itutional under the principal of eminent domain, and now New London is c laiming that the affected homeowners were living on city land for the du ration of the lawsuit and owe back rent. It's a new definition of chutzp ah: Confiscate land and charge back rent for the years the owners fought confiscation. In some cases, their debt could amount to hundreds of thousands of dollar s Moreover, the homeowners are being offered buyouts based on the marke t rate as it was in 2000 . The hard rains started falling that year, when Matt Dery and his neighbor s in Fort Trumbull learned that the city planned to replace their homes with a hotel, a conference center, offices and upscale housing that woul d complement the adjoining Pfizer Inc. The city, citing eminent domain, condemned their homes, told them to move and began leveling surrounding houses. Dery and six of his neighbors fo ught the takeover, but five years later, on June 23, the downpour of mis fortune continued as the US Supreme Court ruled 5-4 that the city coul d claim the property for economic development. Dery owns four buildings on the project site, including his home and the birthplace and lifelong home of his 87-year-old mother, Wilhelmina. Dery plans to make every remaining effort to keep his land, but with few leg al options remaining, he's planning for the worst. It's reasonable to think that people who purchased p roperty years ago (in some cases, decades ago) would be in a position to cash in, especially since they're being forced from their homes. That rate pales in comparison to what the units are now worth, owing largely to the relentless housing b ubble that has yet to burst.
He soothes himself with humor: "It's a lot like wh at I like to do in the stock market: buy high and sell low." In June 2004, NLDC sent the sev en affected residents a letter indicating that after the completion of t he case, the city would expect to receive retroactive "use and occupancy " payments (also known as "rent") from the residents. In the letter, lawyers argued that because the takeover took place in 200 0, the residents had been living on city property for nearly five years, and would therefore owe rent for the duration of their stay at the clos e of the trial. Any money made from tenantssome residents' only form of incomewould also have to be paid to the city. With language seemingly lifted straight from The Goonies , NLDC's lawyers wrote, "We know your clients did not expect to live in city-owned prope rty for free, or rent out that property and pocket the profits, if they ultimately lost the case." They warned that "this problem will only get worse with the passage of time," and that the city was prepared to sue f or the money if need be. A lawyer for the residents, Scott Bullock, responded to the letter on Jul y 8, 2004, asserting that the NLDC had agreed to forgo rents as part of a pretrial agreement in which the residents in turn agreed to a hastened trial schedule. Bullock called the NLDC's effort at obtaining back rent "a new low." "It seems like it is simply a desperate attempt by a nearly broke organiz ation to try to come up with more funds to perpetuate its own existence, " Bullock wrote. With the case nearly closed, the NLDC may soon make good on its promise t o sue. Jeremy Paul, an associate UConn law dean who teaches property law , says it's not clear who might prevail in a legal battle over rent. "Fr om a political standpoint, the city might be better off trying to reach some settlement with the homeowners," he says. An NLDC estimate assessed Dery for $6,100 per month since the takeover, a debt of more than $300K. One of his neighbors, case namesake Susette Ke lo, who owns a single-family house with her husband, learned she would o we in the ballpark of 57 grand. I could probably get a large -size refrigerator box and live under the bridge."
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