Showdown In The West

It’s over “regulatory takings,” and the political gunslinger is a wealthy real estate investor in New York City

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On November 7, residents of at least four Western states — Arizona, California, Idaho, and Washington — are to vote on ballot initiatives that critics say would all but paralyze land-use regulation and erode environmental protections.

While they are being pushed by a variety of organizations, the initiatives are all connected to Howard Rich, a wealthy New York real estate investor and libertarian activist. An investigation by the Center for Public Integrity has found that organizations controlled or funded by Rich account for 85 percent of reported pro-initiative contributions in the four states. As of September 21, public records show, these groups had spent nearly $5 million — including more than $3.3 million in California alone.

All the ballot measures would require that property owners whose development plans are constrained by regulations be compensated for the diminished value of their holdings. In three of the four states (the exception being Washington), the initiatives also would restrict government use of eminent domain.

Supporters say the initiatives are a response to a 2005 U.S. Supreme Court decision, Kelo v. City of New London, which held that property could be condemned and turned over to private interests as part of a community redevelopment effort.

“The Kelo decision really was a catalyst that made people across the country realize that property rights are on shaky ground,” says Heather Wilhelm of Americans for Limited Government, a Chicago-based organization that Rich chairs.

But opponents say the measures would throw land-use regulation into turmoil. A property owner whose development plans were stymied by zoning rules, for example, could demand millions of dollars in compensation or a waiver of the rules. Protections for forests, open spaces, and historical sites could be challenged, as could constraints on adult businesses and noise.

“It’s a blackmail scheme,” says Carl Zichella, the Sierra Club’s regional director for California. “They’re saying, ‘Let me do what I want or you pay me.’”

Rich, who became nationally known in the 1990s as a zealous proponent of term limits, has adopted regulatory takings as his new cause. In addition to the millions poured into the four states with takings initiatives, Rich-backed organizations also spent a total of more than $350,000 on initiatives in Nevada and Montana that, after making it onto the ballot, ran into legal problems. (The regulatory takings portion of the Nevada initiative was invalidated by the state’s Supreme Court on September 8; the Montana initiative was ordered off the ballot by a state judge on September 13, though the state Supreme Court will review the case.)

Rich-backed groups also spent nearly $2.5 million on unsuccessful attempts to put similar measures before voters in Missouri and Oklahoma.

In California, the biggest donor after Rich is Howard Ahmanson, Jr., a media-shy multimillionaire who lives in Orange County. According to reports filed with the California Secretary of State, Ahmanson’s Fieldstead & Company gave $200,000 to the Protect Our Homes Coalition, which got Proposition 90 on the ballot. Ahmanson has given generously over the years to a number of ultraconservative religious and political causes. “My purpose,” he once told a reporter for the Orange County Register, “is total integration of biblical law into our lives.”

Rich did not respond to the Center’s requests for an interview. In an e-mail message, Ahmanson told the Center that he has never met or spoken with Rich and that he has long had an interest in “the property rights of people without access to the levers of power.”

Wilhelm told the Center that “the rate of government takings skyrocketed” after the Kelo decision. The initiatives, she says, would protect landowners from “bureaucrats who can literally bulldoze over people’s property.”

But critics say the measures are the products of a campaign of deception — mostly bankrolled by Rich — that seeks to capitalize on public outrage over Kelo, and that their passage on November 7 could prove disastrous.

California’s Proposition 90, for example, would require that landowners be paid “just compensation” for “government actions that result in substantial economic loss to private property.”

“This is certainly an overreach under any circumstances,” Zichella says. “It’s a trap for taxpayers — to pay people not to pollute or not to put strip joints next to elementary schools. It would completely put community protection out of business in California.”

Two years ago, a takings initiative known as Measure 37 passed easily in Oregon. Since then, property owners have filed more than 3,000 claims under the measure, many of them covering sizable tracts of open space and forest. Both the Oregon Department of Land Conservation and Development and county governments have been routinely waiving land-use regulations as a means of discharging the claims, which at last count, had collectively exceeded $5.6 billion.