NYC Hides Behind Eminent Domain Law
By: Richard Silver
President, American Pipe and Tank Lining Co., Inc.
New York City businesses are being tested. Unfortunately, it is not just the sour economy that’s doing the testing. In an ironic twist, it is the city itself that is causing businesses duress.
My business is one such business. My family has owned and operated American Pipe & Tank for decades. We clean and maintain water tanks. In an industry of un-sung heroes, our staff of professionals ensures that the iconic water towers gracing the NYC skyline are more than just ornamental decoration. They are an integral part of daily life in NYC. And through the years, American Pipe has suffered through the bad times and benefited from the good.
American Pipe and Tank has grown to become a New York City institution. But in 2006 that all changed. Using the protection of eminent domain laws, the City took possession of our building, 538 West 35th Street. I now know what many others know—that New York State is the most egregious perpetrator of eminent domain abuse in our country.
Those who defend the system say eminent domain is necessary to allow for economic development projects to go forward. They compare today's use of eminent domain to yesterday's use, when property was condemned for the building of roads, fire houses and public libraries. What the practice really amounts to is the city and state playing favorites, choosing one private interest over another. This type of power should be used in limited circumstances, though sadly it is not.
For private property to be condemned using eminent domain, the state must first make a determination that the area in question is "blighted." There is an arbitrary determination by the Empire State Development Corporation (ESDC). They do not have written standards as to their definition of blight. The determination is at the sole discretion of the ESDC. This is hardly fair treatment for NYC business and property owners.
After an area is designated as blighted and condemnation proceedings begin, the condemned property owner has no power to challenge the decision in a trial before a jury. Instead, property owners are required to file the lawsuit at an appellate court – with no witnesses, no cross-examination, no opportunity to raise new evidence and no right to discovery. Does this seem fair?
Ironically, this is the second time New York City has condemned a property owned/occupied by American Pipe and Tank. In 1972 my father and I were located on East 12th Street between Avenues B and C on the lower east side. When the City forced us out and a decision had to be made about where to relocate our family business, we opted to be true pioneers and moved to the desolate west side. Our company remained there until earlier this year when my son Steven and I faced the same demands made by NYC and once again, we packed our bags.
In the end, businesses such as American Pipe and Tank suffer. This time around, we were forced to leave NYC to make room for a private developer to come in and change the inherent character of a neighborhood, merely for their financial gain. In our building’s case, it was to pave way for Hudson Yards. Yes, there will be parks and subway service. But there will also be more luxury high rise office and residential buildings—is this what the people of New York City really need?
And just when you are thoroughly disgusted with the system, consider this—if a property is acquired through eminent domain, the tenant is entitled to monetary compensation. This includes moving and storage costs as well as payment of the difference between the old rent and the new rent; a financial incentive to relocate within the five boroughs as well as other expenses associated with the cost of relocating a business. Unfortunately, the red tape that accompanies filing for reimbursement is quite cumbersome and, even though the City claims that it will reimburse relocation costs, they are challenging our right to these expenses.
My heart is in New York, and while it may have been cost effective to move to Long Island or New Jersey, in the end we opted to stay. After two years of negotiating with the City’s attorneys, American Pipe & Tank relocated to Long Island City in January 2009; to date, the City has proved that their promises were empty; other than a small token payment when the property was seized, they have not paid American one thin dime for the effort and cost of such an undertaking. New York City made a promise to us and has turned a blind eye to that promise. They have failed miserably in meeting their obligations to American Pipe and Tank and undoubtedly to other businesses across the city that have been forced to leave. Fortunately for me, our business is stronger than that. Relying on our company’s resiliency and my own tenacity, I opted to stay close to New York, the city I love.
American Pipe & Tank Lining Co. is now located at 11-42 46th Road, Long Island City, NY 11101. For information please call 212.736.6618 or visit www.americanpipeandtank.com