Residents of a working class neighborhood of New London, Connecticut, are looking to the U.S. Supreme Court to save their homes from demolition.

The Court heard arguments Tuesday [22 February] in a case that has sparked several years of bitter wrangling between the homeowners and the city. New London intends to seize their property to make way for development that could bring in badly needed tax dollars. Residents of the Fort Trumbull neighborhood say that is not a legitimate reason to force them out.

Suzanne and Matt Dery at their New London home - photo by Isaac Reese, courtesy Institute for Justice

At the heart of the case is the concept of "eminent domain" - which allows governments to appropriate private property for public use, while paying compensation to the owner.

Matt Dery says the fight began with a phone call from real estate agents asking if he would sell his home. Then agents began combing the neighborhood, knocking on every door. "The first time that we ever met with them face-to-face they said that if we didn't sell the property to them, they were just going to take it by eminent domain," Mr. Dery recalls. "That was one of the first things that they said to us."

Susette Kelo in front of her Fort Trumbull cottage - photo by Isaac Reese, courtesy Institute for Justice

Most of his 80 neighbors agreed to sell, but not the Derys…or Susette Kelo. Sitting in her pink Victorian cottage, she says the New London Development Corporation (NLDC) -- the private company authorized to develop the 37-hectare area -- is trying to get her to leave so that someone richer can move in. "Several months ago, there was a paper that the NLDC had put out," she says. "And it said they wanted to build 80 condominium units along East Street. I live on East Street. Why can't I live here?"

In all, seven homeowners have refused to leave Fort Trumbull - even though wrecking crews arrived three years ago and demolished most of the homes around them.

NLDC Map showing Fort Trumbull

NLDC attorney Ed O'Connell argues that the seven holdouts are standing in the way of progress for the entire city. The confrontation, he says, "really boils down to whether a handful of persons, no matter how well intentioned they may be, should be able to thwart programs designed to benefit tens of thousands of people."

NLDC map showing part of the development plan for Fort Trumbull

Mr. O'Connell says Fort Trumbull was a neighborhood in decline. Tidy homes stood beside a deteriorating railroad yard, a sewer treatment plant and an oil tank farm.

The opportunity for development came about when pharmaceutical giant Pfizer decided to build its global research facility in New London. Local officials decided they could upgrade the adjacent property by clearing out Fort Trumbull to make way for a new hotel and conference center, along with high-priced condos and office buildings.

Mr. O'Connell says New London needs to increase its tax base to pay for city services. "Must we wait for our cities to deteriorate completely into a state of total decay and blight," he asks, "before we can take action to benefit the entire community?"

Scott Bullock

But Scott Bullock, who represents the Fort Trumbull homeowners, says eminent domain should not apply. "This is not a case where the government is using eminent domain to clear out what are called 'slum or blighted' areas," says Mr. Bullock, an attorney at the Institute for Justice, a nonprofit, libertarian law firm. "This is a case where the government is simply using eminent domain because it wants to increase its tax revenue."

Mr. Bullock is asking the U.S. Supreme Court to step in because he believes Connecticut has given municipal governments virtually unlimited authority to seize private property. "Everyone's home would generate more tax revenue if it were a business," he points out. "Every large business generates more tax revenue than a smaller business. So if this precedent is upheld, really nobody's home, nobody's small business, is going to be safe."

The Supreme Court ruled in the 1950s that seizing slum property for a public purpose was constitutional. The city argues that the same principle applies in this case. New London's lawyers say plans to improve the town's tax base are every bit as important as plans to eliminate blight. Both benefit the public.

Maura Casey

Maura Casey, an editor at New London's The Day newspaper, suggests that the conflict could have been handled differently. She says the NLDC made a mistake from the beginning, repeating what she calls the sin of urban renewal by trying to wipe the slate clean, rather than considering whether homes could be preserved. Still, she says, it's time for the standoff to end. "If it doesn't get resolved in some sort of timely fashion," she predicts, "New London is going to be held back, where it once seemed like progress was inevitable."

Back in Fort Trumbull, Susette Kelo says East Street is no slum. She also points out that her property and the land belonging to the other remaining homeowners take up only about 1.5% of the area slated for development. "We never said they couldn't do what they wanted to do," she says. "Everything that they wanted to do, they had more than enough land to do it on. All we wanted was to stay."