Saturday, April 4, 2009

Queensgate (II): Egregious City Action Could Cost Millions

In Part 1, I explained the enormous opportunity presented by the Queensgate Terminal project.

And I explained that the hold-up in moving forward was neither money, nor zoning. What is the obstacle? . . . . .

The problem has been one of the most startling, indefensible cases of a government eviscerating private property rights you’ll ever see.

You see, after this property was leased for the development of this port, after the property owner and City had worked together to apply for federal funds to support the project, and after the City had previously granted permits for the project, in 2005, the City informed Queensgate Terminals that they planned to permanently cut off access from this property to any public roads (in this case, River Road). Just like that.

As Judge Painter of the Appellate Court wrote: “Here, it seems that the city proposes to landlock the 30 acres, not just legally, but actually—by making the property inaccessible from land.”

Under the law, that's called a government taking. Usually such acts breed outrage, but in this case, it hasn’t raised a stir. Still, it could prove very pricey to taxpayers.

Needless to say, this rather blatant act led to a lawsuit, and the City desperately tried to defend itself all the way through the Ohio Supreme Court, losing every step of the way (not one judge ever sided with the City's arguments). And last year, in a unanimous opinion, the Court ordered the City to begin proceedings to pay, with taxpayer dollars, the value of which they deprived Queensgate Terminals through this “taking”. The process of valuing the cost has not yet occurred (which is a good thing for taxpayers), but could be well into the millions.

You can read the cases yourself (Supreme Court case, Appellate Court case, Appellate Court case II) to see just how strongly each and every city argument was rejected. A few snippets will give a taste of it:

When a party [city] relies on a dissent, but the majority decision is binding on us, its argument is looking bleak.”

The city’s argument “shows that lawyers who have an incentive to do so can read any case to say anything.”

“Again, the city cites an inapposite case for a goofy proposition.”

Bottom line: Government can not simply cut off access to private property. And if it does, it has to pay the cost. So in this case, in stopping a project that has an enormous economic impact for our region, the City and its taxpayers are now on the hook for potentially millions of dollars because its actions were such an abuse of government power.

But that’s not all. There’s another unseemly step the City took. At about the time this case was at the Supreme Court, the City apparently reached a settlement with Queensgate Terminals. The agreement was that the City would purchase the land themselves from the original owner, then lease it to Queensgate Terminals to build and operate the port.

But once they acquired the land—the City refused to follow through on leasing it as they had agreed to! I needn’t tell you that violating an agreement in such a way opens the City up to even more liability—in addition to now shouldering the costs of maintaining the property they own, plus the cost of the "taking".

So today, this potentially enormous project sits motionless. The City owns it, and won’t lease it as it agreed to do in a legal settlement. And the only reason it hasn’t moved forward previously has nothing to do with money or zoning. Rather, it’s because the City egregiously violated the rights of the owners by inappropriately and arbitrarily cutting off all access of the property to public rights of way.

Rather than generating millions of dollars, many new jobs and new community investments if and when the project moves forward, the City’s actions are likely to cost taxpayers millions.


The Dean of Cincinnati said...

You were on council. Does that give you any insight into WHY these kinds of things happen?

David Pepper said...

A combination of things happen on something like this:

1) Honestly, some bureaucratic actions do take place that Council doesn't know about. The initial "takings" action here is likely one of those. (I at least hope that if the Administration had said, "we're going to cut this property off from all public access", someone would have started asking questions and objected).

2) Next, too often, lawyers insist (unrealistically) they have a winning case and that the case will not cost the City anything, and will maintain this stance despite repeated losses in court. Elected officials must really probe their lawyers to ensure that it's worth moving forward, or they can really put the City in jeopardy.

3) Council, like all elected bodies, has a hard time disappointing an organized crowd of constituents. So here, even though millions are likely to be lost, and they are essentially defending a pretty egregious "taking," few want to say no to a passionate group of citizens who are worried about the project.

Barch said...

This is exactly what our city needs. Few here realize how lucky Cincinnati is to have such a strong rail and barge infrastructure. I am suprised by how many people tell me that they thought rail transportation was a thing of the past. I am a rail yard supervisor here in Cincinnati and often tell people how vital the rail industry is to our everyday life. Bringing intermodal transportation to Cincinnati on a large scale as this project claims to do will be a big boon for all of our local manufacturing companies.

Judy Floyd said...

In my opinion, the Queensgate Terminal Project would be such a wonderful, positive asset to our city/county. The fact that the project would receive State and Federal Funds is a "win-win" situation.

David, your May newsletter has contained so much good information about this project. I wonder how many folks like me have just read bits and pieces of it in the newspaper. Why don't you request to be a guest columnist in the Enquirer and duplicate all this good information, in addition to the fact that "The City" is trying to prevent the project from becoming a reality. Who in "The City" is responsible for this prevention?

Anonymous said...

Was this ever submitted as a "shovel ready" project?

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