In March of 2003, the City Commission in Newport, Kentucky voted 3-1 to use eminent domain to take the homes of 12 families on 56 acres of land. As many as 90 other homes were simply purchased by the city in the Cote Brilliant neighborhood. The city called the land “blighted”, and then took over the properties. At the time, the use of eminent domain was to pave the way for what the Kentucky Post called “an undetermined development project” called the Newport Promenade just west of interstate 471. Some of the homeowners at the time said they were bullied by the city into selling. One family was offered $80,000 for their house by the developer. “They’re not being fair,” the couple told the Post. “I knew we wouldn’t get what we wanted, but I thought they would be fair.” Now, more than two and a half years after the land-taking, it turns out that the Newport project should be called the Wal-Mart Promenade — and those displaced families, some of whom had invested most of their life’s savings into their homes — were moved from their homes to give Wal-Mart a home. A spokesman for the East Row Historic Association explained, “Neighbors on the hill were forced to leave because of blight. Nothing could be more blighted than jamming an unwanted Wal-Mart on this site.” The city still owns the land, but has agreed to let a company called Bear Creek develop the site. The developer was apparently shopping the site plan around at a trade show recently in Las Vegas, Nevada, and on the now-called “Newport Pavilion” plan was a super Wal-Mart, a Home Depot, and a Sam’s Club. The president of the Newport Business Association told City Commissioners, “Please don’t destroy our businesses and essentially fire so many employees who work in the city.” Another resident complained that Wal-Mart “just sucks the life out of the smaller shops. And we have, right now, the beginning of the rebirth of our downtown.” All the furor over the project caused Newport Mayor tom Guidugli to say, “Wal-Mart was never on our list of preferred tenants. We’re looking for something that’s more of a regional draw.” Opponents say the city argued that nearly 10% of the homes in the neighborhood were vacant — but the citywide average vacancy rate was nearly 11%. The city, they say, is merely stealing from those with less and giving to those with more, by converting a thriving, working class neighborhood, and turning it into a Wal-Mart superstore. The city has picked up all the costs of property acquisition, demolition, and related legal fees. The acquisition and demolition cost the city roughly $9 million. The City also issued $90 million in industrial revenue bonds to the site’s second developer in nearly 3 years. The city will hold the title on the property, thus exempting Super Wal-Mart from property and school taxes.
This deal combines the worst aspects of eminent domain and corporate welfare. The city takes people’s homes in the name of “economic development”, and then hands the world’s richest retailer a parcel of land with millions of dollars of free infrastructure, paid for by the public — including local small businesses — which allows the giant retailer to set up shop and put under the smaller competition that helped pay for their entry into the city. I think this is called a sweetheart deal, brokered by city officials. For earlier stories on this topic, search Newsflash by “eminent domain” and “corporate welfare.” Go to http://stopwalmartfromkillingnewport.blogspot.com/ for more background on this story.
