Eminent domain

Property rights in Wichita. At yesterday’s meeting of the Wichita City Council, the city approved its legislative agenda. The city incorporates the agenda of the League of Kansas Municipalities. One plank: “We support increased flexibility for local governments to use eminent domain for economic development purposes, including blight remediation, without seeking legislative approval.” Susan Estes of Americans for Prosperity appeared before the council, asking members to strike this provision, as the taking of property by eminent domain for the purposes of giving it to someone else is one of the worse violations of property rights and freedom. No council member was moved to make such a motion.

Importance of open records. In a press release from 2008, the Kansas Sunshine Coalition for Open Government noted the problems with open and transparent government in Kansas: “Kansas recently failed an open government test by the Better Government Association, an independent non-partisan government watchdog group based in Chicago. Among other things, the BGA researches solutions that promote transparency and accountability in government. ‘The threat today is real,’ said Randy Brown, executive director of the Kansas Sunshine Coalition for Open Government. ‘We are seeing closed government problems popping up around the state. Some local governments are doing well. But for Kansans who understand that open government at all levels is essential to democracy, things are getting worse, not better.’” … Yesterday the Wichita City Council provided another example in how open and transparent government is not valued.

Wichita city news. The communications staff of the City of Wichita maintains a city news and announcements page. Staff has ample time (and a half-million dollar budget) to write articles covering — in detail — when carolers will be at the airport. But substantive news that the city is opposed to — say the successful filing of a petition challenging a Wichita city ordinance — doesn’t make it on this page.

Cronyism in America. The harm of crony capitalism is explained in a short video from Economic Freedom Project. Susan Dudley says this in the video: “Crony capitalism means that your success as an entrepreneur depends less on how well you meet your customers’, and more on how well you curry favor from the government. It’s a problem because it means that valuable resources — including the best and brightest minds — are diverted from productive uses towards unproductive seeking government favors.” … In its conclusion, the video sates: “Without special protections that can only be provided by an increasingly powerful government, big businesses would have to compete to earn their profits, instead of taking them straight from taxpayers. We all agree: Businesses should succeed or fail based on the value they provide to their consumers, not based on their ability to influence the political system. And that’s what happens in a free market.” … It should be noted that the economic development policies of Wichita are firmly rooted in crony capitalism.

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Eminent domain reserved for use in Wichita

by Bob Weeks on December 16, 2010

As part of the plan for the future of downtown Wichita, the city council was asked to formally disavow the use of eminent domain to take private property for the purpose of economic development. The council would not agree to this restriction.

Susan Estes noted that the legislative agenda that the city council passed earlier in the meeting supported “home rule and local control as the most valid solution for recurring legislative issues.” High on the list of these issues is eminent domain.

Estes asked that the city adopt a statement that the city will not use eminent domain to take property for someone else’s use.

Answering her, Mayor Carl Brewer said it is the council’s record not to use eminent domain. “But,” he said, the city needs that opportunity and flexibility. He said that the city has been asked by developers to use eminent domain, but they’ve resisted. Nonetheless, he described it as one of the tools that is available to the city.

Council member Janet Miller said that the Kansas legislature has placed restrictions on eminent domain, which she characterized as a prohibition.

While Miller is correct — the Kansas legislature would have to pass a statute authorizing specific use of eminent domain, and the law is now more in favor of property owners than in the past — that protection, in my opinion, is weak.

We can easily imagine a scenario where a developer — promising a grand development — wants a large tract of land, perhaps a city block or more. The mayor and others will travel to Topeka and testify that the city desperately needs the jobs and tax revenue the development will create. (Forgetting the fact that the development will probably be in a tax increment financing district and therefore not contributing increased tax revenue to the city’s general government.) The city’s lobbyist will work the halls, a case of a taxpayer-paid lobbyist working against the interest of taxpayers. The case will be made to other lawmakers that if they ever want to use eminent domain in their home towns, they’d better vote for Wichita’s request. Other forms of legislative logrolling will be in full behind-the-scenes use.

So now property owners, instead of having to contest the city’s lawyers before a judge, have to lobby the entire legislature. The case — instead of being heard in a forum where the rule of law is respected — will be contested in a political body which in many cases has shown us that it cares little for private property rights.

This was a moment in time where the city council could have taken leadership in protecting property owners from eminent domain abuse. The city — particularly Mayor Brewer and Council Member Miller — failed to grasp the importance of protecting this form of liberty and economic freedom.

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Political pretense vs. market performance. What is the difference between markets and politics or government? “There is a large gap between the performance of markets and the public’s approval of markets. Despite the clear superiority of free markets over other economic arrangements at protecting liberty, promoting social cooperation and creating general prosperity, they have always been subject to pervasive doubts and, often, outright hostility. Of course, many people are also skeptical about government. Yet when problems arise that can even remotely be blamed on markets, the strong tendency is to ‘correct’ the ‘market failures’ by substituting more government control for market incentives.” The article is The Political Economy of Morality: Political Pretense vs. Market Performance by Dwight R. Lee. Lee explains the difference between “magnanimous morality” (helping people) and “mundane morality” (obeying the generally accepted rules or norms of conduct). Markets operate under mundane morality, which is not as emotionally appealing as as magnanimous morality. But it’s important, as it is markets — not government — that have provided economic progress. There’s much more to appreciate in this article, which ends this way: “The rhetoric dominating the public statements of politicians and their special-interest supplicants is successful at convincing people that magnanimous morality requires substituting political action for market incentives, even though the former generates outcomes that are less efficient and moral than does the latter. The reality is that political behavior is as motivated by self-interest as market behavior is. … As long as there are people who cannot resist the appeal of morality on the cheap, the political process will continue to serve up cheap morality. And the result will continue to be neither moral nor cheap.”

Begging for Billionaires. The documentary film Begging for Billionaires will be shown in Wichita next week. The film’s synopsis is this: “In 2005, a divided U.S. Supreme Court gave city governments the authority to take private homes and businesses by eminent domain and transfer ownership to private developers for the purpose of building things like shopping centers, corporate office towers and professional sports arenas. According to the court, the community economic development benefits of such private projects qualified them as being for ‘public use’ under the 5th Amendment’s ‘takings clause.’ The Court’s ruling immediately sparked public outrage and was broadly criticized as a gross misinterpretation of the constitution. Through a mix of guerrilla journalism, expert interviews, and the stories of victims; Begging For Billionaires reveals the fallout of the Kelo case, exposing how city governments brazenly seize property after property from the powerless and give it to the powerful for the pettiest of non-essential ‘economic development’ projects, many of which are subsidized with taxpayer money. Meanwhile, poor and disadvantaged families are forced from their homes. Everyday citizens watch helplessly as their family histories are bulldozed to smithereens. In some cases, homeowners scramble to save their life’s possessions as demolition crews pulverize the walls around them, and Centuries-old neighborhoods are wiped from existence despite rich histories and beautifully maintained homes. Begging for Billionaires begs the question: are we losing sight of the balance between individual property rights and those of the community?” The movie, sponsored by Americans for Prosperity, will be shown on Monday, December 13 from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

O’Toole on urban planning. As Wichita considers approving a plan for the revitalization of downtown Wichita, we should consider the wisdom of Randal O’Toole: “Urban planners want to shape our cities. And they want our cities to shape you. That’s the conclusion of Cato Institute Senior Fellow Randal O’Toole. He argues that the rationales for most urban planning collapses upon examination.” O’Toole visited Wichita earlier this year. Click here to view a short video of him speaking on urban planning.

Kansas House of Representatives leaders elected. “House Speaker Mike O’Neal, R-Hutchinson and Rep. Arlen Siegfreid, R-Olathe, will hold pivotal leadership positions in the Kansas House after voting Monday among GOP members who re-elected O’Neal to the chamber’s top job and selected Siegfreid as the new House majority leader.” More from Tim Carpenter in the Topeka Capital-Journal.

School lessons learned. Joel Klein, Chancellor of New York City public schools, writing in the Wall Street Journal: “Over the past eight years, I’ve been privileged to serve as chancellor of the New York City Department of Education, the nation’s largest school district. Working with a mayor who courageously took responsibility for our schools, our department has made significant changes and progress. Along the way, I’ve learned some important lessons about what works in public education, what doesn’t, and what (and who) are the biggest obstacles to the transformative changes we still need. … Traditional proposals for improving education — more money, better curriculum, smaller classes, etc. — aren’t going to get the job done. … Bureaucrats, unions and politicians had their way, and they blamed poor results on students and their families. … The people with the loudest and best-funded voices are committed to maintaining a status quo that protects their needs even if it doesn’t work for children. … As I leave the best job I’ve ever had, I know that more progress is possible despite the inevitable resistance to change. To prevail, the public and, most importantly, parents must insist on a single standard: Every school has to be one to which we’d send our own kids. We are not remotely close to that today. We know how to fix public education. The question is whether we have the political will to do it.” This is more evidence of how far behind the rest of the states is Kansas.

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Wichita mayor to lead LKM. City press release: “Wichita Mayor Carl Brewer was elected as the 81st president of the League of Kansas Municipalities (LKM) during the organization’s annual conference Tuesday morning in Overland Park. … He also urged his fellow local leaders to restore the public’s confidence in government. ‘We need to have our citizens recognize the value of competent government, and why our freedoms and security depend on it,’ he said.” As noted a few days ago on these pages, the League of Kansas Municipalities is a special interest group working in favor not of the citizens who live in Kansas towns and cities, but the politicians and bureaucrats that run them — and their cronies — who benefit from the LKM’s advocacy of things like TIF districts, STAR bonds, tax abatements, and eminent domain for economic development. So I don’t know if we should be proud that our mayor is the president of this group.

Goody Clancy in Topeka, too. The Topeka Capital-Journal reports that Goody Clancy, the planning firm working for Wichita is also working in Topeka.

FactFinder 12: Pompeo campaign ad. Analysis of an advertisement by Kansas fourth Congressional district candidate Republican Mike Pompeo by Michael Schwanke of KWCH 12 Eyewitness News concludes that Pompeo used some of the techniques that he and Republicans strongly criticized Democrat Raj Goyle for using. Schwanke concludes: “Goyle made those statements, but the ad doesn’t provide complete context.” This is the same issue that got Republicans riled up a few weeks ago.

Pompeo poll released. The Pompeo campaign has released a poll that was commissioned and paid for by the campaign. The results are Pompeo with 58 percent of the vote, and Goyle with 31 percent. Two minor party candidates get three percent each, and undecided voters are at 16 percent. In its analysis the polling firm notes “the confrontational attacks by Goyle have backfired and have resulted in Goyle’s negative rating increasing substantially.” Candidate-produced polls need to be considered carefully. Goyle’s campaign has released their own polls in August and September which showed a smaller Pompeo lead than public polls. FiveThirtyEight indicates it flags polls which meet its definition of a partisan poll, which it defines as a poll conducted [on behalf of] any current candidate for office. It also says “Nevertheless, they are included in the ratings. If a pollster releases a poll into the public domain, we assume that they are interested in doing their best and most accurate work, regardless of whom the poll is conducted for.” The firm that conducted this poll for Pompeo conducted a poll for the same campaign July 6th through 8th, about a month before the August primary election, with results of Pompeo leading Wink Hartman 27 percent to 21 percent. The actual results were Pompeo 39 percent, Jean Schodorf 24 percent, and Hartman 23 percent. Public polls underestimated Pompeo’s actual vote total, too.

Kansas legislator Merrick honored. American Legislative Exchange Council, described as a “nonpartisan individual membership organization of state legislators which favors federalism and conservative public policy solutions” has recognized Kansas Representative and Majority Leader Ray Merrick with its highest award. “The American Legislative Exchange Council (ALEC) is pleased to announce that Representative Ray Merrick of the Kansas House of Representatives recently received the highest honor that a setting legislator can receive from the organization — Legislator of the Year. Rep. Merrick received the award at ALEC’s 37th Annual Meeting, held in San Diego, Cal., August 5 — 8, 2010. Nearly 1,500 state legislators, policy experts, and private-sector leaders from across the United States attended three days of intensive discussions on the critical issues facing the states and our nation. This award is given to state legislators who are ALEC members in good standing and have distinguished themselves by advancing, introducing, and/or enacting policies based on the fundamental Jeffersonian principles of free markets, limited government, federalism, and individual liberty.”

Education reform setback. Wall Street Journal Review & Outlook: “Michelle Rhee described her decision yesterday to step down as Washington, D.C., schools chancellor after 3½ years as ‘heartbreaking.’ We share the sentiment. That one of the nation’s most talented school reformers was forced out does not bode well for students … Ms. Rhee’s resignation ‘won immediate support from the Washington Teachers’ Union,’ a strong signal that her departure is a victory for the adults who run public education, not the kids in failing schools. … One reason education reform is so difficult is because unions believe their political influence and money will outlast even the bravest reformers in the end — which is why they’re cheering today in the District of Columbia.”

Wichita Eagle voter guide available. Click here. You can get a list of the candidates, along with their responses to questions, customized for your address. The first advance voter ballots were mailed yesterday.

Kansas Jackass blogger guilty. Kansas Watchdog reports: “Former blogger Jason Croucher entered a plea of guilty to 3 counts of child pornography on Wednesday morning at the U.S. Court House. Croucher’s progressive ‘Kansas Jackass’ blog was widely read by members of the Kansas Legislature and others in Kansas in 2009. The blog is no longer online.” Croucher operated anonymously until “outed” by Earl Glynn and myself, although he planned to become known on his own at some time. His style was to poke fun at his opponents, using anything negative about them as material for his attacks. Rarely was public policy discussed in a meaningful and serious way.

Wichita Eagle Opinion Line. “Gov. Mark Parkinson: I have six employees. I need to expand my business or quit. Please loan me $1 million to be paid back with my employees’ income tax. Thank you.” A fine example of government intervention crowding out private investment and initiative.

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Wichita Visioneers in Louisville. The Wichita Business Journal’s Emily Behlmann reports on a trip by Wichitans to Louisville to get ideas on transforming Wichita’s downtown. Hopefully they won’t get this idea, as reported yesterday by the Louisville Courier-Journal: “The heavily subsidized 4th Street Live entertainment district has come under criticism from locally owned businesses for receiving millions of dollars in tax breaks and government subsidies — including a controversial, $950,000 city loan that won’t necessarily have to be repaid.” According to Wichita planner Goody Clancy, heavy subsidy isn’t supposed to be necessary in Wichita. And, I hope all the planners read Jack Cashill’s take on Louisville’s planning: Good intentions, and planners, can sap a city’s soul.

Lynn Jenkins: Don’t try to make Koch Industries a scapegoat. From today’s Wichita Eagle: “Koch management is dedicated to keeping the company growing. It reinvests 90 percent of company profits back into the businesses, allowing them to expand product lines and hire more employees. That is good for consumers and for workers. However, the company has come under fire because its owners support free-market principles inconsistent with the current Democrat leadership.”

Should candidates bother to debate? Rasmussen finds that nearly half of likely voters have watched at least one debate, and about half find them informative.

Costly approach to Kansas economic development — or defense. “Insiders were still not talking Wednesday about the potential cost of saving 6,000 aircraft workers’ jobs in Wichita. Outsiders say that some circumstances at their employer, Hawker Beechcraft, are so different from other companies Kansas has fought to keep that it may be impossible to gauge what it might cost to help prevent the 80-year-old Wichita firm from moving lock, stock and avionics to Baton Rouge, La., and cashing in on Louisiana incentive packages rumored to be worth as much as $400 million.” From Kansas Reporter.

FiveThirtyEight. More about the political site FiveThirtyEight, which I took a look at on Sunday, especially its coverage of Kansas races. Here, James Taranto discusses FiveThirtyEight, concluding: “The recent acquisition of Nate Silver’s FiveThirtyEight.com makes for a striking contrast with the paper’s uneven news reporting and dreadful op-ed columnists.”

No Wichita city council today. It’s the League of Kansas Municipalities conference in Overland Park this week. LKM is a special interest group working in favor not of the citizens who live in Kansas towns and cities, but the politicians and bureaucrats that run them — and their cronies — who benefit from the LKM’s advocacy of things like TIF districts, STAR bonds, tax abatements, and eminent domain for economic development.

County commissioner forum tonight. Tonight at 7:00 pm at Gloria dei Lutheran Church, 1101 N. River Blvd. Oletha Faust-Goudeau and Richard Ranzau will appear.

Parkinson is moderate — he says again. Kansas Governor Mark Parkinson — yet again — engages in self-congratulation over “how Kansas has weathered the economic recession by setting politics aside and working together to find moderate, common-sense solutions.” He’s done this several times since the legislative session was over — so many times that I’ve lost count. Evidence of a guilty conscience, perhaps? Parkinson’s abandonment of the Kansas Democratic Party by not choosing to run for reelection has put that party at a tremendous disadvantage in this year’s elections.

Bureaucracy vs. Bureaucracy? “Andrew Gray, Libertarian Candidate for Kansas Governor, says that simplifying or repealing unnecessary statutes and regulations is a key part of his administration’s plan to empower the private sector to create jobs and prosperity in Kansas. He also says he’s pleased that Senator Brownback is at least talking about similar actions. However, Gray finds it ridiculous that Senator Brownback is actually planning to create more bureaucracy in order to cut bureaucracy.” I think he’s got a point. But anything that is necessary to reduce the size of government is what we need to do.

The impossibility of an informed electorate. D.W. MacKenzie writing for Mises Daily, reacting to a John Stossel suggestion that uninformed people have a duty not to vote: “The problem with voting in modern America is that we have a politicized society, and modern society is extraordinarily complex. Stossel suggests that only people who follow politics should vote. However, even those who follow politics very closely do not understand the implications of changes in public policy. The lesson here is that efforts to incrementally reform government policies and programs through the democratic process are futile. To the extent that we vote at all, rational people should vote to depoliticize the economy. … What this means is that we need to reintroduce the price system as the primary method of economic communication, and the profit-and-loss sorting mechanism as the primary method of social reform.”

Gallup: Americans negative towards federal government. “More than 7 in 10 Americans use a word or phrase that is clearly negative when providing a top-of-mind reaction to the federal government.” Details here: Americans’ Image of “Federal Government” Mostly Negative.

A minority opinion, or a delusion? Paul Krugman in the New York Times: “Here’s the narrative you hear everywhere: President Obama has presided over a huge expansion of government, but unemployment has remained high. And this proves that government spending can’t create jobs. Here’s what you need to know: The whole story is a myth. There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: we never had the kind of fiscal expansion that might have created the millions of jobs we need.”

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The recent presentation of the draft master plan for the revitalization of downtown Wichita gave Wichitans a preview of the forms of public assistance that Goody Clancy recommends the city use. The plan may be viewed at the Wichita Downtown Development Corporation website.

It is a given, according to Goody Clancy, that downtown development will require public subsidy. Here’s an example as to why it is necessary: One of the issues with downtown development, especially in Wichita according to Goody Clancy, is “land acquisition & land lease issues.” It is contended that land ownership is fragmented, and assembling parcels for development is difficult. Therefore, public assistance is required.

The shakiness of this argument can be seen by examining recent events in Wichita. Earlier this year, a developer wanted to build a hotel in the downtown WaterWalk area. There are no land acquisition issues there. The city assembled that property — using eminent domain as a tool — some years ago. There is one owner. Yet, the hotel still required massive subsidy to make it economically feasible, according to the developer and Wichita city staff.

In a Wednesday morning workshop on the issue of public funding, a Goody Clancy consultant hinted at a legislative solution to the land acquisition problem. No more details were given, but solutions to problems like this usually involve the use of eminent domain.

Public assistance is proposed to be used only for those items that have a public purpose. The primary use is likely to be public parking. According to the logic of Goody Clancy consultants, if public funds pay for a parking garage located between an apartment building and an office building, that really doesn’t benefit just those two properties. Instead, it benefits everyone. It’s a public amenity. It’s infrastructure.

Nevermind that anywhere but downtown, people have to pay for their own parking. Homeowners build garages and driveways at their own expense. Developers build parking lots on their own.

While “structured parking” — that’s planner-speak for multi-story parking garages — is more expensive to build per parking spot than surface lots, that’s no reason for the public to pay.

The forms of public assistance mentioned as available for use include, at the state and national level: historic preservation tax credits, low income housing tax credits, new market tax credits, STAR bonds, brownfield grants, livable city grants, and transportation funds.

At the local level, programs mentioned include capital investment, tax increment financing (TIF), community improvement districts (CID), facade loans/grants, low interest loan pools, and land.

The last item refers to the fact that Goody Clancy considers it an advantage that the City of Wichita owns a lot of land downtown, as it can control the timing and features of development.

Missing from this list is any mention of a direct tax to fund downtown redevelopment. But downtown leaders admire the city sales tax used to fund development in downtown Oklahoma City, and some have privately told me that a sales tax would be good for downtown Wichita. I expect to see a sales tax proposed in Wichita, as I don’t believe there is enough funding available through the sources mentioned above to do all that downtown boosters will want to do.

Supporters of a sales tax for downtown subsidies will use the Intrust Bank Arena as an example of a successful project funded through a sales tax. They’ll say, as did Kansas Governor Mark Parkinson this year, that people didn’t even notice the one cent per dollar sales tax. It’s harmless, they will contend, despite evidence to the contrary. Not to mention that pronouncement of the arena as a sustainable success story is premature.

Goody Clancy proposes that projects qualify for public assistance through a point system, which is reported on in a Wichita Business Journal article. By meeting established criteria, developers would earn — or not earn — points. Earning a certain level of points would be necessary for the city to consider the application for public assistance, and the number of points earned would help the city justify pouring public assistance into a project. Presumably the point system could help the city rank and prioritize projects that are competing for limited funds.

Further considerations the city would use in deciding which projects to subsidize include, according to the presentation: team experience, financial qualifications, references, project economics, and public/private leverage ratio.

The problem is that any point system the city would use would be a system that meets political criteria, not market criteria. We must realize that the incentives and motivations of politicians and city hall bureaucrats are very different from the incentives and constraints that control behavior in markets. As Gene Callahan explains:

The Public Choice School has pointed out another force … Strong incentives exist for politicians to favor special-interest groups at the expense of the general public. Those upon whom benefits are concentrated are motivated to campaign hard for those benefits.

Specifically, for downtown redevelopment to be successful, we need to have development that is profitable for the private sector, considering all costs. By subsidizing certain developers according to political criteria the city ignores and distorts the dictates of markets, and capital is misapplied. People make decisions for wrong reasons using incorrect information.

While some city council members openly speak of the “free market” with disdain and other members pay it lip service only, we must remember that the free market consists of, in Wichita’s case, hundreds of thousands of consumers making decisions every day about where they want to live, work, and play. These decisions are made based on the individual preferences of each person, supplemented by the information the price system supplies.

The price system is the best way we have to communicate the relative value of things. Hayek explains its importance:

Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people in the same way as subjective values help the individual to coordinate the parts of his plan.

The price system is a wonderful, almost miraculous system that, as Hayek writes, coordinates the actions of millions. It allows for the process of economic calculation which is at the heart of capitalism. The lack of economic calculation based on a price system is the reason why socialism fails everywhere it is tried. Callahan summarizes what Mises showed the world:

Mises showed that socialism is incapable of achieving an efficient use of society’s resources, because its economic planners have no means by which to perform economic calculation.

The point system that Goody Clancy proposes to dish out subsidy is a bypass of the price system and economic calculation. It substitutes the judgment of central planners for free people coordinating activities through the price system. Wichitans should reject this idea.

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Letters on Wichita Bowllagio

by Bob Weeks on June 14, 2010

Letters from two friends recently appeared in the Wichita Eagle regarding the proposed Bowllagio project, a west side entertainment destination. Bowllagio is planned to have a bowling and entertainment center, a boutique hotel, and a restaurant owned by a celebrity television chef.

The developers of this project propose to make use of $13 million in STAR bond financing. STAR bonds are issued for the immediate benefit of the developers, with the sales tax collected in the district used to pay off the bonds. The project also proposes to be a Community Improvement District, which allows an additional two cents per dollar to be collected in sales tax, again for the benefit of the district.

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Property rights

Imagine paying your mortgage and taxes for many years, only to get a knock on your door one day. A real estate developer tells you he wants your land.

That’s what happened to a couple on South Maize Road in the boundaries of the proposed Bowllagio sales-tax-and-revenue (STAR) bonds district. They were offered the county-appraised value, plus 10 percent, for their home. But they don’t want to move, as they couldn’t find a comparable property for what the developer offered.

Now the homeowners are concerned they may be forced out of their home through the process of eminent domain. This forceful taking of property by government is one of the worst possible violations of private property rights.

Wichita Mayor Carl Brewer said that the city does not intend to use eminent domain for the proposed Bowllagio entertainment complex.

That’s good news. The city can and should affirm this promise by writing it into the Bowllagio authorizing ordinance. Supporting private property rights is essential; the use of public funds for private projects is bad policy.

Susan Oliver Estes
Wichita

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Let developer fill funding gap

Bowllagio’s representative told the Wichita City Council last week that the developer needed $13 million in public money to fill the projected funding shortfall for the project to be economically feasible. I believe the developer needs to dig deeper into his own pocket to fill this funding gap, or seek private venture capital.

As an experienced real estate practitioner, I am aggrieved that the Wichita mayor and City Council members lack the necessary experience to properly evaluate these projects. They have proved to be little match in protecting the public treasury against sophisticated developers accustomed to using the public purse as part of their real estate funding formulas.

The investment of public money in bowling alleys, restaurants, shops and hotels that compete with existing businesses that offer the same services is not a proper role for government to play and is wrong. It creates an unlevel playing field for those businesses that compete in the same market using their own money.

If the Bowllagio development venture is an economically feasible project, the private developer will find the private money he needs to fund it.

John R. Todd
Wichita

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Jeff Fluhr updates status of downtown Wichita

by Bob Weeks on November 17, 2009

Last Friday, Jeff Fluhr, president of the Wichita Downtown Development Corporation, addressed members and guests of the Wichita Pachyderm Club. His topic was the future of downtown Wichita and its revitalization.

“It’s very important that we have a downtown that is very clear and very concise on where it wants to go,” he said. He likened the development of downtown to the planning of an automobile trip, so that we don’t make major investments that we later regret.

The potential of increased private investment is an important goal for downtown. Predictability will help the private sector invest, he said.

As to the importance of downtown, he said that is where the distinctive quality of a city is found — its history, cultural arts, and other institutions that represent the community. Tourism is another goal of a revitalized downtown Wichita, along with an improved perception in the global market as a great place to do business.

Old Town is an example of success in Wichita, he said, an example of what can be done when people are creative and purposeful. He said that Wichita’s transit center, being located near the new Intrust Bank Arena, provides the potential to use mass transit.

As to the economics of downtown Wichita redevelopment, he showed a chart, nearly a year old, that compares public and private investment in downtown over the past ten years. The two amounts are nearly equal to each other. Fluhr said that Goody Clancy, the firm hired to to plan the revitalization of downtown Wichita, has offered the opinion that the way Wichita has measured investment in downtown — using capital investment only — is not an accurate picture. We should also take into account companies that may have moved into the downtown area because of the improvements that have been made. What types of jobs have been created, and what is the spin-off from them?

Addressing the WaterWalk project, he said that an important event took place last November, when people started moving in to the residential building. Now we see human activity in the development. The landscaping is being installed at this time.

Along Douglas, Fluhr said that gaps in the buildings are a problem. We need to bring storefronts back to downtown. This creates an atmosphere of walkability, which helps to bring residential back to downtown, an important thing he said we must continue to work on.

Mentioning the Q-Line, the free trolley bus service, Fluhr said that “we’ll literally have a couple thousand people that can be on this thing in a given night.”

Besides downtown, Fluhr said that they’re also looking at “first-ring” neighborhoods, the areas that surround downtown. In response to a question, he said we need a healthy city throughout. The first-ring neighborhoods may provide housing that is more affordable than in downtown proper.

Analysis

In comparing the planning of downtown Wichita to a car trip, Fluhr made the same presumption that Wichita city council member Lavonta Williams made when she compared downtown planning to planning her lessons as a schoolteacher. The planning of even a small portion of a city is an immensely more complicated task. That these two figures make such comparisons leads me to believe that we don’t understand the monumental scope of the task we’ve decided to undertake.

Regarding predictability being important to private sector investors: the planning process right now has created huge uncertainty as to the future of downtown. Who is likely to invest in downtown at this time, when so much is up in the air?

Further, the potential use of eminent domain to take property creates uncertainty, too. This is why it is important for the city to swear off the use of eminent domain, and even the threat of its use.

There’s also this concern I have about the predictability Fluhr said is needed for private investment to flourish: For the future to be certain, someone has to enforce the plans that have been made. All the methods that government has to enforce or encourage human behavior lead to loss of economic freedom: incentives, grants, tax abatements, subsidies, regulation, zoning, eminent domain, preferred treatment. All are contrary to economic freedom.

It’s also troubling that now we’re going to be measuring the economic impact of public investment in a new way, using — if I can read between the lines a bit — things like “multipliers” and other economic development jargon and devices to exaggerate the impact of public investment. It’s important to remember that when left to their own devices, Wichitans have made investments that have produced tremendous economic impact with their own multiplier effects. These investments, however, have not always been made in the politically-favored downtown area. Instead, they’re been made where people wanted them to be made, so their economic impact, in terms of creating wealth and things that people really want, has been greater than if directed by government planners.

As to the Q-Line claim of thousands of riders in a night, I hope Fluhr meant the potential capacity of the Q-Line system, as its actual ridership is much less and very expensive on a per-rider basis. See Wichita’s Q-Line an expensive ride for ridership numbers, which have been less than 1,500 per month.

It’s impossible not to appreciate Mr. Fluhr’s enthusiasm for his work and his genuine concern and vision for the future of downtown Wichita. I’m concerned, however, that Fluhr and the downtown Wichita revitalization boosters — let’s call them the “planners” — have fallen victim to what Randal O’Toole and others call the design fallacy.

O’Toole explains in his book The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future:

These planners are guilty of believing the design fallacy, the notion that architectural design is a major determinant in shaping human behavior. While design does play a role at the margins of certain things — for example, certain patterns can make housing more vulnerable to crime — the effects that planners project are often highly exaggerated.

Later O’Toole writes:

The worst thing about having a vision is that it confers upon the visionary a moral absolutism: only highly prescriptive regulation can ensure that the vision overcomes an uncaring populace responding to a free market that planners do not really trust. But the more prescriptive the plan, the more likely it is that the plan will be wrong, and such errors will prove extremely costly for the city or region that tries to implement the plan. … Problems such as these stem from the design fallacy that is shared by so many planners and the architects who inspire them.

Do the Wichita planners suffer from the design fallacy? Fluhr mentioned “engagement of the river” as he has in past talks. Referring to a conversion of an old school building into residential use, he used language like “a dynamic living space in a renovated school,” “each of the units is unique,” and “taking distinctive architecture to us and bringing it to new use.”

Referring to our Carnegie Library, he said that its architecture is unique to Wichita, and wouldn’t be found in other cities. Projects like this, along with the Broadview Hotel and Union Station, should “remain in our fabric” as part of the “distinctive qualities that make us who we are.”

This focus on the architecture of buildings in a city is characteristic of past talks by Fluhr. So yes, I believe that he and the planners are influenced by the design fallacy. It’s something we’ll have to watch out for as we proceed with the planning process.

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Kelo abandonment holds lesson for Wichita

by Bob Weeks on November 15, 2009

In New London, Connecticut, developers wanted to build a new business complex on land owned by a number of homeowners, including Suzette Kelo. She didn’t want to sell, and the case eventually wound its way to the United States Supreme Court. In the decision, the court ruled in favor of the ability of cities to use eminent domain to take property from one party and give to another private party for economic development.

Locally, at least one Wichita bureaucrat was relieved. According to Wichita Eagle reporting:

City economic development director Allen Bell lauded the Supreme Court decision.

“I’m relieved to know that we’ll continue to have an important tool for implementing economic development and urban redevelopment projects here in Wichita,” Bell said. “But this is a tool we do not use lightly. The city of Wichita has never sought to use eminent domain except in very rare cases when there is no alternative to keep a project alive and further the overall needs of the city.”

So what has happened in New London? Nothing. In fact, worse than nothing, as the planned development has been abandoned. Paul Jacob of the Citizens on Charge Foundation gives an excellent wrap-up of the situation in The politics of government usurpation, post-Kelo.

Eminent domain was used to assemble the property where the WaterWalk development stands in downtown Wichita. This development is emblematic of the failures of public-private partnerships. Is its failure the result of its foundation built on eminent domain?

As Wichita prepares its plans for downtown revitalization, freedom-loving citizens need to insist that the city forgo the use of eminent domain, especially the threat of its use. On its face, it appears that Kansas has a strong law prohibiting the type of eminent domain takings that the Supreme Court authorized in the Kelo decision. Kansas law says that the legislature must pass a law allowing the use of eminent domain on a specific parcel of property, if the purpose is to give it to another private party.

But it is the threat of the use of eminent domain that remains the real problem. We can easily imagine a scenario where the City of Wichita decides it needs a parcel of property for some public-private use. Mayor Carl Brewer may make the case that the property is needed so that Wichita can create hundreds, perhaps thousands of jobs. The economic future of our city hangs in the balance, he’ll say. Dale Goter, Wichita Governmental Relations Manager, will make the case to legislators that Wichita really needs the property. By the way, legislator from Overland Park, won’t your city also want to use eminent domain someday?

The poor property owner, who in the past would have been faced with a small battle in the Kansas district court, now has to lobby the entire Kansas legislature to protect his property.

This is why it is important for Wichitans to insist the the plans for downtown Wichita revitalization specifically state that eminent domain — not even its threat — will be used.

This summer I traveled to Anaheim, California to learn about a redevelopment district where the city decided not to use eminent domain. The article Anaheim’s mayor wrote about this planning effort is titled “Development Without Eminent Domain: Foundation of Freedom Inspires Urban Growth.” It’s very informative.

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Wichita planning puts freedom, prosperity at risk

October 13, 2009

Mr. Mayor, members of the council,

I’m here today to ask this council to put aside consideration of this proposal. My reasons are not particular to this proposal or planning firm, but rather I am concerned that we believe we have the ability to successfully plan at all.

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Wichita city council: more travel on tap

September 21, 2009

At tomorrow’s meeting of the Wichita City Council, approval of more travel is on the agenda.

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Wichita downtown revitalization discussed on Kansas Week

August 16, 2009

Bob Weeks discusses planning for downtown Wichita revitalization and what he learned on his trip to the Platinum Triangle in Anaheim, California. Host Tim Brown and guest Randy Brown also appear. From the KPTS Television show Kansas Week, August 14, 2009.

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Wichita’s getting ready to plan

August 14, 2009

The danger we face is that Wichita’s plan will end up like almost all other urban plans — a top-down effort micromanaged by politicians and bureaucrats, people whose incentives are all wrong. We already have the structure in place, with our mayor promoting the plan for downtown as his signature achievement, and a tax-supported downtown development organization headed by a young and energetic planning professional.

There is a different way to go about redevelopment, a way that respects freedom and property rights, while at the same time promising a better chance of success.

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Sedgwick County needs to slow down, deliberate land purchase

May 18, 2009

Sedgwick County seems to be in a rush to make a huge decision that will have far-reaching and long-lasting effects on our county. We don’t have, however, anywhere near all the information we need to make this decision. We need to slow down and decide what role we want to have county government play in economic development.

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Eminent domain abuse, then economic failure

March 20, 2009

The Cato Institute has a new video that details the history of Kelo v. City of New London, in which Suzette Kelo’s house was taken from her using eminent domain and given to a private developer for purposes of economic development.

“As it happens, the space where Kelo’s house and others once stood is still an empty dustbowl generating zero economic impact for the town.”

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Urban Renewal: A Flawed Idea That Failed 50 Years Ago

June 12, 2007

Urban renewal failed across the United States in the 20th century. The urban renewal efforts from the 20th century that are the foundation for the newly proposed redevelopment agency in Wichita rely upon these old Kansas laws that require an increase in local government’s powers. There are no clearly defined steps that will avoid repeating these past mistakes in the public hearing discussions so far.

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A downtown Wichita urban renewal success story … not

April 24, 2007

This history lesson from Karl Peterjohn of the Kansas Taxpayers Network tells the story of what might have been for downtown Wichita, and shows how close Wichita came to losing a company very important to our local economy, even if they’re not located downtown.

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Bill Davitt on blight

March 10, 2007

Bill Davitt makes some excellent points about the dangers of giving politicians power to control blight through eminent domain. He also explains why it is best to vote for Carlos Mayans for mayor of Wichita.

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The taking of private property

February 9, 2007

Eminent domain is not the only way that private property can be acquired by government. Placing restrictions on the land by law or regulation can also be a taking that warrants just compensation.

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Terrible Blighted Property

August 15, 2006

The link below from Castle Coalition shows some properties that have been declared as blighted by local governments, so that the local government can condemn the property and take it from its owner under the process of eminent domain. Judge for yourself as to whether these properties are, indeed, blight.

http://www.castlecoalition.org/CastleWatch/bogusblight/index.html

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Eminent Doman and the Downtown Wichita Arena

July 31, 2006

On August 25, 2004 and prior to the arena vote in November of that year, I presented testimony before this Commission questioning the wisdom of building a downtown arena without knowing the exact location of the parcel(s) of land the project would be located on. I asked the questions, does the Commission know the exact location of the arena project? Is the needed land for sale? Are the property owners willing to selling their land? And, most importantly, has the County secured a contract option to purchase the needed land with an exact purchase price? I believed then and now that the taxpaying public needed to know the answers to those questions before making a decision on a $184.5 million dollar project in the voting booth. From what I have been reading in the news recently, it seems apparent to me now that County officials failed in their “due diligence” responsibility to the citizens of this county by not securing the land for the arena in advance, and should now be willing to authorize another “non-binding” or perhaps a “binding” and final public vote on the arena project.

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Eminent domain testimony

March 9, 2006

You should not allow cities, counties and state agencies the power through eminent domain to force someone to involuntarily sell their home, their business, or their farm so they can give it to other private owners for their own private use. Under redevelopment law, city councils can essentially become the agent for the powerful, politically connected developers that tell city councils, “condemn this persons home, business, or farm, and through our development process, the tax revenue for the city will go up, and in the process you can look like visionaries.” (See attached testimony presented by Tim Sandefur, attorney for the “Pacific Legal Foundation” to a California legislative committee) Until the recent Kelo decision, the Fifth Amendment to our Constitution has allowed government to take private property for “public use” only, but now “public use” means anything a governmental unit decides will “benefit” the public, including increased tax revenues. That is why Steven Greenhut in his book, “Abuse of Power: How Government Misuses Eminent Domain” explains why cities in some parts of the country are taking non-taxed church properties through the eminent domain process and turning them over to tax-paying private developers in order to increase tax revenues. A chapter in his book entitled, “God Doesn’t Pay Taxes” explains that abuse in detail.

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John Todd on Eminent Domain in Kansas

January 23, 2006

I support the proposition to amend article 15 of the constitution of the state of Kansas by adding a new section thereto, concerning eminent domain as follows:

“Private property shall not be taken except for public use, and private property shall not be taken without just compensation. The taking of private property with the intent to or in anticipation of selling, leasing or otherwise transferring any interest in the property to any private entity is not a valid public use and is prohibited.”

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