Former Governor Ruth Ann Minner was a failure for Delaware. During her tenure, the State was on cruise control. Legislative & other cronies ran the show — spending money where and on whom they wanted. The “piece de resistance” was NKS Distributors & the Tigani family. DelDot cut them a sweet heart deal. Now we find out that a little later in the Minner Administration, the Tunnell family reached their own deal. This was to be expected. To paraphrase our former Governor, with Governor Minner “you almost expect these things to happen.”
But, with Jack Markell — businessman, consultant, MBA, former Treasurer — we expected better. Now we find out that, according to the News Journal (The article can be found here):
The Tunnell deal was struck in the closing days of Gov. Ruth Ann Minner’s administration but renewed under Gov. Jack Markell. The Schell deal was struck this year.
Markell said he became aware of deals this week — weeks after The News Journal began asking questions. [Emphasis added]
You mean that after two budget cycles, that after the Federal audits of the weatherization program corruption, that after the publication of the Tigani deal, that the Governor’s Cabinet Secretaries are not telling him where they are spending taxpayer money? Or that he is not demanding (or receiving) openness and accountability?
Now, instead observing a clinic on crisis management, Delaware’s taxpayers are receiving another demonstration of the benefits of campaign donations — from the News Journal article:
Markell said he knew his campaign received contributions from “Mr. Tunnell and members of the Schell family,” adding that political contributions do not affect his decisions.
Schell has proved a reliable contributor to Markell since his 2008 campaign, contributing $1,200 to Markell’s election and another $1,200 to Markell’s campaign fund in 2009. Other Schell family interests brought the total contribution to $10,300. Robert and Mindi M. Tunnell gave separate $1,200 contributions to Markell’s primary campaign in 2008.
This blog has pointed out other influential “investors” in the Governor and the beneficial response that they’ve received from DelDot (Check the blog post here).
Whether the Governor is making these decisions deliberately or through ignorance (it is his administration and so they are his decisions), the end result is the same, and we expected better.
Run Charlie run.
Cleon Cauley was installed as Deputy Transportation Secretary by Gov. Markell last week. An eye on the inside, perhaps?
C’mon Charlie, you’re smarter and more knowledgeable then this. DelDOT can’t hold a property owner hostage by refusing to allow approval/development of a property and not expect to pay someone. It’s call a taking. If DelDOT wants to stop development so it can buy the property for less in the future, it has to compensate the property owner now. That’s all that is happening and it’s hardly nefarious (despite the News-Journal’s best efforts to make it seem underhanded). This has nothing to do with campaign contributions; under that standard, more than half the state wouldn’t be entitled to do business with the State government since so many contribute.
No, this is simply about property rights. Imagine if DelDOT came along and told you you couldn’t do anything with your property because DelDOT wanted to buy it, but DelDOT didn’t have the money to buy yet. Your bank would still want its interest payments and if there wasn’t any financing, you’d still want a return on your investment.
The problem is that folks don’t appreciate the costs of building new roads. Once DelDOT identifies a route and tries to put a hold on any more development along that route, it’s effectively taken the property and must pay compensation. Fortunately the Fifth Amendment to the Constitution is in play to make sure that property owners are protected, because is clear that lazy thinker who don’t think things through don’t get this.
Dear Prop:
“Imagine if DelDOT came along and told you you couldn’t do anything with your property…”
That would be some imagination. Why? Because, DelDot cannot do that. Period, end of discussion. Your fundamental premise is completely flawed and demonstrates a lack of understanding of law and constitutional rights.
So, what is really happening? Well… The State government MIGHT want to use some land in the future for a road. So, it contracted an option with two out of tens of land owners to pay them to not use their land. There was no broad proposal to the other tens of land owners whose land MIGHT also be purchased. A clear case of favoritism.
Now, to the next point — MIGHT —
The State MIGHT need a new prison. Should the Dept of Corrections make a guess as to where that should be and pay land owners for some future potential? The Appoquinimink School District MIGHT need a new school. Should it identify a potential sight and pay land owners to keep it available? DelDot MIGHT need a new road in my neighborhood, should they pay me for this potential?
The answer is NO in every case.
When government needs to use the power of eminent domain, it should use that power. Right now, government doesn’t need to use eminent domain powers because NOTHING IS IMMINENT.
In short, DelDot is wasting taxpayer money by providing financial support to some well-connected people. No part of this has anything to do with takings and/or eminent domain. It has everything to do with government waste and good connections.
“Might” is right.
DelDOT could probably grant a “letter of no objection” and the proposed projects on these sites just “might” go forward.
However –and this is a HUGE however– the housing projects in the way, after receiving final record plat approvals, just “might” not get construction loan financing from the banks due to the glut of paper lots, improved lots and finished houses still sitting idle on the market. (Didn’t Wilmington Trust crumble due, in part, to bad construction loans???)
Thus DelDOT should probably just call the developers’ bluffs and dare them to move forward.
Or, better yet, find a new route if and when it is officially confirmed that this bypass is actually needed.
Or, barring that, simply upgrade the existing road network in the area for a fraction of the price.
Also, the News Journal, for all its faults, is merely doing its job. Just wish they would have turned the flashlight on way back in 2001.
Sorry Charlie, but you’re flat wrong on what happened. Read a little more carefully (I know, it’s the News-Journal and so it’s a little hard to do) and do a little research. What happened is this:
1. Property owner/businessman does due diligence on a project, including conversations with DelDOT and is told by DelDOT that is has no plans for the property.
2. Property owner/businessman proceeds to make substantial investment, including borrowing millions of dollars and spending hundreds of thousands on approvals.
3. DelDOT REFUSES (that’s right, refuses) to give the needed letter of no objection. Why? Because DelDOT has changed its mind and “might” need the property some day (actually, as I read the story, DelDOT wants to buy the property and uses the word “might” only because it hasn’t yet received final approvals from fed government, so “might” really all to be “in all likelihood will”). But for DelDOT’s desire for the property, the letter would be granted as a matter of course and project would proceed, but because of DelDOT’s action, project is dead in the water.
That’s what got DelDOT into this predicament. It refused to allow the project to proceed. And that, my friend, is a taking.
So, lacking the desire or ability to actually purchase the property, DelDOT did the next best thing and agreed to pay the interest carry until it decided to either purchase or allow the development to proceed.
I would hope, with a clearer understanding of the facts, you will stop the insults and concede that under the circumstances DelDOT either had to pay or allow development to proceed. You can criticize DelDOT for the choice it made, although had development proceeded, even getting final approval for a subdivision plan would make the property much more valuable, as a property with an approved plan is worth more than a project without an approved plan.
As to other property owners along the path, they’re not necessarily in the same predicament. Under Supreme Court case law, the issue of a taking depends, in part, on the “investment backed expectations” of the landowner. Where a landowner makes millions of dollars of investment and then is shut down, that’s a taking. However, where a farmer has owned land to farm, has been farming for decades, and continues to farm, then there probably hasn’t been a taking. The farmer’s investment and ownership of the land isn’t put at risk as a result of DelDOT’s actions, and DelDOT hasn’t wrongfully withheld any approvals. In short, context matters.
Surely you would agree that if someone bought a one acre parcel of ground on which to build their dream house, and DelDOT then decided that the new road would run right through the proposed house, and, in fact, DelDOT took action to prevent construction of the house (at least until DelDOT either bought the ground or decided not to proceed with the project), that the property would be entitled to compensation. Indeed, the property owner would still be required to pay the mortgage even though he or she couldn’t use it. At a minimum, DelDOT should pay that mortgage until it decides what it wants to do.
Finally, there is a critical difference between DelDOT and your hypotheticals involving a prison or new school and that is simply that in the case of a prison or new school, one doesn’t have to spend years studying a proposed alignment and go through years of hurdles the way DelDOT does for a major new road (don’t get me wrong, I recognize that there is still an approval process involved, but the approval process for a school typically doesn’t depend on the actual site the way a road does and is much shorter and less complicated). A school district can almost always buy a single site and generally enters into an arms-length contract for the property. Presumably a prison would work the same way (at this point, the most likely scenario for a “new” prison would be to build/expand on an existing site). However, if an agency wants to identify property for a potential project and then put a “hold” on any further development of that parcel pending regulatory approvals, then, depending on context, a taking could be deemed to have occurred once the government identifies the site it wants.
Finally, as to Que Pasa’s point that the projects might not proceed if they obtained final approval, one can feel better about that prospect in 2010, with the benefit of clear hindsight, then in 2007, when DelDOT was first denying the approvals. However, even an approved project is worth more than an unapproved project, and depending on how quickly the market comes back (and how slowly DelDOT moves), the land might still easily be worth more if development proceeds than if it does not. Moreover, once DelDOT showed the property in the path of the new road, one could argue a taking occurred, regardless of whether DelDOT granted the letter of no objection or not–simply showing the proposed project in the path clearly makes investors less likely to invest/purchase the ground.
What this whole unfortunate scenario demonstrates is just how expensive/difficult it can be to build a major new road. The potential exists to disrupt hundreds of projects. The Fifth Amendment to the Constitution, though, provides that when there are such costs, they are to be borne by the general public and not individual property owners.
What I find interesting in all of this is that no other developers/property owners have come forward with demonstrated harms or claims of harm. As I said earlier, most farmers probably aren’t suffering. They are farming and that’s all they expected/invested in their property for. When DelDOT takes it, they will be fairly compensated. Right now they may not even realize the proposed alignment runs through their property, and, even if it does, the proposal isn’t affecting them. But someone who’s project is stopped dead in the water–as happened here–suffers damage immediately and is entitled to compensation. I’m just surprised that others aren’t making that claim. The fact that we haven’t seen others come forward suggests that maybe, just maybe, these were the only two affected projects, and perhaps DelDOT’s route was chosen in part because it wasn’t as disruptive as other routes might be.
In any event, I would respectfully suggest that cronyism is not at work here. If the Tunnells or Schells had sued DelDOT they probably would have been able to force DelDOT to buy and/or allow development to proceed, and they probably would have been entitled to lost interest/interest carry during the time the projects were delayed. What’s at work here is the protection afforded all property owners by the U.S. Constitution.
Dear Prop:
Your recitation of certain facts does not make the argument.
“[DelDot] refused to allow the project to proceed. And that, my friend, is a taking.”
And that is a lawsuit by the injured party, which you eventually get to in your last paragraph. No lawsuit was ever filed to my knowledge and you admit that no suit was filed.
To this fact we need to add some additional data:
From every comment that I have seen, the legislature did not approve of this plan. Without legislative approval, there is no road. It was DEAD.
So, why did DelDot pay certain landowners for a road that it had no legislative approval to build with no legal justifications for threatening landowners?
I call it being preferential.
Let me say that if it weren’t for the lack of legislative approval of this road, I would likely agree to your theory that it might be a case of “Developers” versus “Farmers”. I’m not sure that the “Farmers” agree, however. You state that none has come forward with a claim, but that is to soon to tell. The story just broke last week.
And, just to be clear, I don’t fault the land owners for getting a good deal. If government wants to throw money at you, good for you.
[...] Gubernatorial level by the Stoltz organization and other “Friends of Jack” (here & here are two examples). Or the initial actions of Senate Pro Tem Tony DeLuca (here which is now rumored [...]