As most are aware of by now, on Thursday, June 23, 2005, the U.S. Supreme Court ruled 5-4 in favor of the Connecticut city of New London to turn 90 acres of waterfront land into office buildings and other facilities, which essentially expanded eminent domain to include development by private companies. It immediately spurred public outcry since now corporations could petition local governments to tear down homes without owners' consent for the sake of development. In 2004, in the St. Louis suburb of Sunset Hills the city council decided to level all 254 homes in Sunset Manor and turn the land over to a shopping mall developer. The Kelo v. City of New London Supreme Court case dashed the hopes of the residents that their local government would not be able to do such a thing. Once that precedent was set, there was nothing legal left to stop the bulldozers from coming.
It was on July 12, 2005 that Sunset Hills voted to officially allow the condemnation of the 85 homes (and several small businesses) in Sunset Manor. On July 26, 2005, the monumental Kelo decision forced a judge to reluctantly uphold the taking of the homes. "The United States Supreme Court has denied the Alamo reinforcements. Perhaps the people will clip the wings of eminent domain in Missouri, but today in Missouri it soars and devours," the judge said.
Even with the opposition, though, as with most situations like this, there were some residents who didn't mind much, as long as they were well-compensated monetarily for their homes. However, the political arguments over the Kelo decision have been quite noisy as lawmakers in many states began falling over themselves trying to quickly create legislation to block abuse of eminent domain to please their angered, homeowning constituents. Because of this harsh anti-eminent domain climate the bank that had planned to finance the mall construction withdrew its funding abruptly, leaving Novus Development Company, the developer, without a way to pay the residents for their homes. So it looked like the project would be dead and the homes were saved. But there was a huge problem.
Most of the residents had already moved out and purchased new homes, expecting the money, and leaving their old ones sitting in disrepair for years.
Included in those properties is a vacated former Bob Evans restaurant. Not only is the entire Sunset Manor an eyesore, homeowners there continue to pay double house payments: one on their old home and one on their new home.
When the deal fell through, the anger the residents felt far outweighed their initial anger when they found out their homes would be taken. More than one hundred residents jammed a board meeting on November 8, 2005 complaining that Novus never had the money to pay for any of its scheduled closing dates with the over two hundred property owners and that the city should have known that. The $62 million in Tax Increment Financing (TIF) and Transportation Development District (TDD) assistance to Novus that the city had granted was a mistake, the residents and their lawyer, Gerald Carmody, claimed, because Novus didn't have the money in time for the August 22 date or its rescheduled September 30 closing. Carmody, on behalf of the residents, demanded that the contract be terminated and that the redevelopment plan should be sent back to the TIF Commission for reconsideration.
"I'm here tonight to ask you to take a step forward, not look back, take a step forward in assessing where we are today with respect to the Sunset Manor redevelopment project, to accept the realities of the situation which is that this redeveloper cannot, and will not, develop the project that you all had envisioned when you approved these redevelopment ordinances, " Carmody said on November 8.
Carmody also accused the city of knowing that the original deal it had approved would never happen the way it had been originally presented. Carmody said that at the time the city approved the plan, "it was for a different project than will ever be built." He claimed that the Famous-Barr that Novus was going to pay $10 million to move from Chesterfield (a town out in the western-most area of St. Louis County) was not, in fact, the anchor store that was being contemplated at the time of his claim.
It seems, though, that Novus president Jonathan Browne honestly feels bad about the deal. He certainly hadn't planned on his financier to back out at the eleventh hour. He is even paying $1,500 per month to property owners with contracts, which will be in addition to what they would eventually be paid for their homes. He said his thoughts are plagued by the Sunset Hills project night and day: before goes to bed at night and first thing in the morning when he awakens. He owns sixteen of the 262 homes in the Manor. Browne says that he still wants Macy's - currently the Chesterfield Famous-Barr - to be the tenant anchor of the project, which is contrary to Carmody's claims.
His aspirations to eventually get the financing and get the deal through still persist, despite a potentially devastating court ruling in early February, 2006 which seems to have killed the deal. The Circuit Court of St. Louis County, and Judge Gloria Clark Reno, indeed ruled that the development project should have been returned to the city's TIF commission for review because of "substantial changes" made to the project. The court also found that the city's cost-benefit analysis did not contain sufficient information from Novus Development Co. for the TIF commission to determine whether the project was financially feasible. This ruling resulted in two ordinances that had been passed by the Sunset Hills Board of Aldermen, one granting the TIF, the other naming Novus as the developer, were declared "void and unenforceable." This has probably pleased a lot of residents who never wanted to see their homes destroyed. But for the homeowners wanting ... and waiting ... to be bought out, it's just another big sock to their financial gut. The rift that has formed between Sunset Manor residents - those for the deal and those against it - has gotten much wider.
Is the project really dead?
If Browne can get the money, which could take another year, perhaps it eventually can go through. But for residents with houses sitting vacant and rotting - which they are still making payments on - those twelve months are just too damn long.