Kelo at Ground Zero

Here is an outside-the-box approach to the Ground Zero Mosque. As readers of American Thinker well know, a business group known as SoHo Properties wants to build a mosque and Islamic center two blocks north of Ground Zero, where a pair of empty buildings now stand. SoHo Properties owns the building and land at 45-47 Park Place. The electric utility Consolidated Edison (Con Ed) owns the building and land right next door at 49-51 Park Place. SoHo Properties has an option to buy 49-51Park Place from Con Ed.

Previously, the walls between the two buildings had been demolished and a Burlington Coat Factory store (now shuttered) had operated out of the combined space.

Important to the discussion of the mosque project is its economic impact. Building the mosque means that two commercial buildings on which New York City now levies real estate taxes will be replaced by a house of worship on which the city will not levy real estate taxes. Meanwhile, New York City is so short of tax revenues that it has been reducing the number of teachers in its schools, not hiring police and firemen needed to protect its citizens, delaying infrastructure repairs and cutting back on social services for the poor. Removing additional properties from the tax rolls will require the city to further cut back on municipal services. 

What if, instead of a house of worship, a new commercial building were to be built on those parcels on Park Place? For one thing, the city would continue be able to collect real estate taxes -- and even more taxes than it does now because any new and taller building would be assessed at a higher value than the pair of older buildings are today. 

And how about if a hotel were built on those parcels? That would be the best of all possible economic outcomes for the people of New York. That's because New York City also has a hotel occupancy tax. It would be what tax experts might call a "two-fer" for the city.

In 2005, the United States Supreme Court, in Kelo, et al. v. City of New London, significantly expanded governments' power of eminent domain. Previously, governments' power to seize private property was limited to those cases where the redevelopment undertaken would be for the direct benefit of the public: roads, reservoirs, sewage treatment plants, schools, etc.

New London, Connecticut, had seized privately owned houses and land so that a developer could construct office buildings and shops. New London argued that it had the power to seize the houses and land of private citizens because the greater public would benefit from the higher tax revenues such development would generate. The Supreme Court agreed.

That is now the law of the land.

A developer or business group might now approach the New York City Council asking that the city use its power of eminent domain to seize the properties at 45-47 and 49-51 Park Place and sell them to the developers to build a hotel on the site. From a strictly economic-benefit perspective, the city would be hard- pressed to turn that developer down.

In fact, if New York City were to choose the plans of the religious group over those of a commercial group for any reason other than which plan (house of worship or hotel) would result in the greater economic benefit, it would be unconstitutional. The First Amendment to the United States Constitution prohibits government from favoring one religion.

Anyone want to build a hotel?

Update: Someone already did want to build a hotel in lower Manhattan.