The Anti-Kelo (A heavy government hand isn't necessary for economic development)

Wall Street Journal ^ | April 6, 2006 | STEVEN GREENHUT

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ANAHEIM, Calif.--While city officials have long micromanaged land-use decisions and appropriated private property for economic redevelopment, it was not until the Supreme Court's Kelo v. City of New London decision last summer that many Americans noticed the degree to which big government has set up shop on Main Street.

Take Garden Grove, an aging working-class city of gaudy strip malls and tract houses 34 miles south of Los Angeles. In 2002, officials planned to bulldoze a large, decent neighborhood to make way for a theme park, issuing bond debt to finance subsidies to help its developer. The project failed amid community protest; so the local government moved on, this time attempting to turn city-owned land over to a group of Indians who would work with a Las Vegas developer to build a casino.

Economic redevelopment is a serious, complex issue, but it isn't always done this way; and Anaheim, just north of Garden Grove, is proving it. Although the community faces similar problems, its city council, led by Republican Mayor Curt Pringle, is taking a more freedom-friendly approach to revitalization: protecting property rights, deregulating land uses, promoting competition, loosening business restrictions and lowering taxes.

Anaheim's old downtown was obliterated in the 1970s through past uses of eminent domain and urban renewal. Now, the city (population: 328,000) wants to build a new downtown, and the target location is called the Platinum Triangle, an area of one-story warehouses near Angel Stadium. In the typical world of redevelopment, officials would choose a plan and a developer, offer subsidies and exclusive development rights, and exert pressure on existing property owners to leave the area. Instead, Anaheim created a land-value premium by creating an overlay zone that allowed almost any imaginable use of property. Because current owners could now sell to a