Runaway Train

City Council's 25-percenters created a ticking time bomb by collapsing at the feet of Councillor Loretta Smith

If you’re unsure that the Portland city council is a runaway train, consider this…

This is how Willy Week put it before stuffing the story down the memory-hole…

The Portland City Council on Thursday evening voted unanimously to approve an $8.5 million settlement of a federal lawsuit filed in 2022 by Black families displaced from the Albina neighborhood by the city’s urban renewal practices.

The City Attorney’s Office and Oregon Law Center attorneys representing 26 plaintiffs reached a tentative settlement last week for the city to pay $1 million and Prosper Portland, the city’s economic development agency, to pay another $1 million.

But the City Council on Thursday shot down that amount, increasing it instead to $8.5 million. Councilor Loretta Smith championed the fourfold increase, offering poignant remarks about how the city systemically drove Black residents out of North and Northeast Portland for decades.

Thanks to the unanimous vote (after discussion and deal-cutting behind closed doors) there will be no way to challenge any of the relatives getting a cut of the payoff, under oath in federal court, to prove they were actually “robbed” decades ago in a transaction that was entirely legal at the time, and remains so today.

Or to question a version of history that often differs from what actually happened.

Or to challenge the suit’s novel legal theories that you don’t need a degree from Yale Law School to suspect are…well,sine fundamento.

The case won’t be heard before a judge governed by rules of evidence, hearsay, and standing, as opposed to a body of politicians facing an audience made up of litigants.

There will be no judge to consider Federal Rule of Civil Procedure 11b, which penalizes litigants for telling lies (even white ones) in a complaint.

Or decide whether the plaintiffs have actual “standing” to take a case to federal court in the first place.

Instead, the council’s 25-percenters¹ fell for naked emotional blackmail that was exploited by Councilor Loretta Smith in a bit of political bit of ju-jitsu loaded with political positioning, rivalries within the black “community,” and the power dynamics of the new council itself.

Maybe that’s why one of Smith’s rivals for titular leadership of the council’s racial caucus, Candace Avalos, burst into hyperventilation and tears after the vote…

…although it’s difficult to see how eminent domain cases from last century are “what we were robbed from,” since Councillor Candace Avalos was, in fact, a kid in Virginia during the years when the city was allegedly committing ethnic cleansing.

My partner, Pam Fitzsimmons, an astute reader of the city’s tormented racial politics, offered this analysis…

During the city council election, I wrote a piece contrasting two candidate forums—one for District 4 and the other for District 1. Two very different forums.

In District 1 the issues were mostly about race and money. Council candidate Smith emphasized that with all her government experience she knew how to access public funds and how to move money to pay for programs and projects. She said she was trying to find money for homeowners “who look like me” and how to identify federal funds for housing and rent assistance.

More significantly, she noted, “We had a commissioner who looked like us who took our money from us. … I will never try to take your money. away.”

That was a direct slam at Jo Ann Hardesty, who defeated her in 2018.

…which seems about right.

Others from the “nonpartisan” council’s Democratic Socialist Party bloc seemed pleased that the decision lit a fuse on an inevitable—even welcome—fiscal time-bomb. Here’s Sameer Kanal…

…issuing a “C’mon Down” for anyone who feels their now-dead relatives were cheated by the government’s eminent domain “takings” (no matter that they were totally legal) to muscle up to the city council’s trough. Paid for by people Kanal probably thinks are saps.

A few of the non-socialist, non-racialist folks on the council—who were very quiet (here’s lookin’ at ya, Dan Ryan²)—are certainly aware that thousands of people were hit by eminent domain’s heavy hand in the city’s urban renewal, freeway-building era (which we wrote about here, here, and here). Among the victims were owners of 1,400 properties torn down to clear a path for the Mt. Hood freeway—another project, like the Emanuel Hospital expansion, which flamed out.

Won’t it be amusing if someone who is descended from the city’s Jewish community, displaced by the South Auditorium urban renewal project, decides to lobby for what the Albina lawsuit calls their lost “intergenerational” wealth. Their stories, as told by Steve the Historian on YouTube, are just as heartrending as anything from Albina…

…but we doubt they’ll play as well as Councilor Smith’s (and others’) renditions.³

All because 12 city councilors heard the thunderclap of a lawsuit and started running for the cliff.

What the hell was so scary that the city paid $8.5-million to make it go away?

Even though the council’s vote is a done deal—complete with Councilor Smith demanding to know when the check would be in the mail—it’s important to remember…

no lawsuit, no settlement

..which gave a political blessing to the suit’s key demand, which you can read on page 53 of the 54-page federal lawsuit…

As a result of defendants’ actions, plaintiffs have unjustly suffered inter-generational displacement, loss of community, and financial loss in the form of the lost opportunity to benefit from increased property values, to build inter-generational wealth, and to maintain housing and social security.

To render it in everyday language:

If Emanuel Hospital, which had been in Albina since 1914, thus predating the arrival of blacks, hadn’t made an effort to expand and better serve the community; and if the hospital wasn’t hemmed-in by freeways, leaving it with no route to expand; and if Congress hadn’t pulled the plug on the money after property had already been condemned; and if the people who took the buyouts had, miraculously, kept the house for seven decades; and if no one had moved away in search of a better neighborhood as the city integrated; and if the the house had never been sold for any other reason…well, we’d be rich!

A symphony of “ifs.” Not that life actually works that way—but, hey! We’re in Portland!

Undeterred, the lawsuit rambles widely through the byzantine tangles of the Emanuel Project’s history, complete with a never-before-disclosed…

secret conspiracy

…provenance not mentioned, it all comes down to that simple proposition….

The descendants should get what the house would have been worth.

If…

To get to this conclusion, the platoon of lawyers presented what reads less like a sober legal proceeding than a novel by John Steinbeck combined with a tale of conspiracy by John Grisham.

The tale is told in sinister-sounding chapters…

Phase One: Emanuel Destroys Homes with the Hidden Sanction of the City and PDC.

Phase Two: The City and PDC Step Out of the Shadows and Overtly Help Emanuel Destroy the Rest of the Neighborhood Via Eminent Domain.

…and plumps out the brief with chapters such as…

Defendants sold the idea of “blight” to further their conspiracy…

…and…

Defendants Continue to Conceal Their Conspiracy and Further Enrich Themselves via The Williams & Russell Project

Phase one covers the hospital’s negotiations with three families and is replete with accusations, none documented, such as…

…The Campbells were forced to sell their interest in the property to a real estate agent for a mere $10…

…and…

After the family was forced out, Emanuel bought their property for $4,332.06 in 1965 from a subsequent owner, with the Campbells receiving none of that money.

….without disclosing any documentation (beyond promises to tell all “at trial”). No county records, no deeds…no memoranda.⁴ If they exist, the platoon of lawyers didn’t cite them.

In “Phase Two,” each family’s case—10 in all—ends with the same sort of lamentation, such as…

Had it not been taken and destroyed, the estimated value of the Hepburn family’s house was $567,092.42 as of April 2021…

…or…

Had it not been taken and destroyed, the estimated value of the N. Fargo house was $333,354.31 as of April 2021. Ms. Marshall continues to be harmed by defendants’ actions and inactions.

This makes the second tranche more troubling. First, because it is thoroughly documented—meticulously—in an obscure city website, Emanuel Hospital Relocation Files. It lists 182 individuals whose property was taken by the Portland Development Commission during the Emanuel Project. Eighteen of those records (just under 10-percent of the people allegedly harmed) involve plaintiffs in the case.⁵

Some of the records are hundreds of items long…

…since this was a big bureaucracy spending big money, and bureaucracies like everything on paper and recorded. Obsessively.

I’ve read each of the case files for all 18 families. Unless bureaucrats simply falsified the paperwork, one comes away with a strong impression that PDC played by the book—and often went beyond it. Most of the cases were settled routinely. The PDC worked to find equivalent houses, in one case strong-arming a white seller who attempted to back out of a deal with a black buyer.

There were arguments—no one wants the government to take their property—but appraisers were hired to determine “fair market value,” as well as the value of replacement houses. Families got up to $15,000 above the market value of their houses to bridge the gap between Albina prices and prices elsewhere in Portland, plus various other amounts for moving and other expenses. The PDC workers helped find replacement houses, in some cases took family members on tours of possible purchases.

If there was some sort of ethnic cleansing conspiracy taking place, it doesn’t show up in the records. Far from it—although the lawsuit complains, more than once, that blacks were offered homes in—hold your breath!—white areas. Neo-segregation wasn’t yet part of the Portland progressive catechism.

Then there’s the case of plaintiff Karen Smith, whose…

…idyllic childhood was abruptly shattered by defendants, who told the Smiths one day that their family would have to move to make way for a “veteran’s hospital.”

… whereupon…

The Smiths eventually and reluctantly moved due to the intimidation that they were experiencing, including the frequent visits of real estate agents to their home. They were forcefully relocated to a predominantly white neighborhood in the early 1970s…

As it turns out, Ms. Smith still lives in that relocation house.⁶ I won’t dox her with the address; let’s just say it’s a very tidy bungalow in a solid neighborhood. And, according to PortlandMaps the house she was forced into now has a 2024 real market value of $606,550.

The suit claims that her Albina house would now be worth $445,943.

So what to make of the core claim that—because those now-disappeared houses would now be worth many more $-thousands —the city should make up the difference. Shouldn’t the appreciated value of the replacement, “equivalent” houses be deducted? Did the value of the replacement houses go up (along with every other piece of Portland real estate)? Did anyone moved into those houses ever leverage that value gain into even bigger, better houses?

Boy! This stuff gets kinda complicated!

As for restoring the inflated value of the old houses, a thorough search of search engines, from Google to ChatGPT and Perplexity, turned up the same statement:

There is no federal case law directly holding that children or grandchildren of individuals whose property was taken under eminent domain are entitled to recover present-day value of the condemned property—assuming the taking itself was lawful and compensated at the time.

…and…

Federal case law firmly establishes that compensation in eminent domain cases is fixed at the time of the taking. Descendants are entitled only to their ancestor’s share of the original compensation, adjusted for interest where applicable.

.…and here…

The scope of judicial review of eminent domain proceedings is no doubt extremely narrow. The Supreme Court of the United States has said in all-inclusive and unqualified language that "when the use is public, the necessity or expediency of appropriating any particular property is not a subject of judicial cognizance.”

Which leaves us with a couple of last questions.

Did Portland City Attorney Robert Taylor⁷ open any law books…before cutting the original “make it go away” deal with the Albina posse?

Did the 25-percenters on city council give away the store…for a case that was designed more for political impact than a serious hearing in federal court?

Aren’t these the same people who write our city’s laws?

Did the platoon of largely publicly-financed lawyers ever really intend this rickety case to go to court—or was their brief really intended to strum socialist heartstrings?

Has the lawsuit actually been “settled,” since Emanuel Hospital remains a defendant—and hasn’t said anything about settling? Did the city just throw Emanuel under the bus?

How many “slip-n-fall” lawyers are out shopping for distant relatives of other urban renewal projects that fell through?

When will the middle-roaders on council—they know who they are—make any effort to man up and stop the runaway train?

1. Let us never forget that each councilor was elected with no more/no less than 25-percent of a low-turnout vote, under an opaque “rank choice” voting system that no one seems to understand.

2. History has a way of tapping the damndest people on the shoulder. Dan, we’re waiting.

3. Maybe after Gaza fades into the rear-view mirror.

4. Portland Maps didn’t carry digitized property records until 1997.

5. Which prompts the question: why them?

6. As far as I could determine, she’s the only descendant still living in a relocation house.

7. The same legal-beagle who ruled that Mayor Wilson couldn’t break the tie vote over who would become the council’s president—not that Wilson seemed to have the stones to do it.