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Welcome to Nashua, NH. Kindly check your Constitutional rights at the city limits (Part I)

Nashua, NH is New Hampshire's second-largest city. It sits right on the Massachusetts border, pretty much on the midline of New Hampshire. And I'm starting to think that Nausea is feeling the effects of that toxic influence.

Nashua gets its water from the Pennichuck Water Works, a private company located in the neighboring town of Merrimack. The relationship seemed fine until 2002, when Pennichuck was to be sold to Philadelphia Suburban Corporation for $106 million dollars.

That's when the people of Nashua started noticing -- and thinking. They didn't like the idea of a company several states away controlling their water supply, so they figured they'd do something. They put their own offer on the table -- $121 million --, which Pennichuck rejected.

So Nashua figured they wouldn't take no for an answer. They started eminent domain procedings, with an eye towards simply taking over the plant. The Water Works is fighting back, saying that the fight has already cost its stockholders over $80 million in stock value.

The Nashua Telegraph has been giving good coverage of this event, with the latest developments here and a decent timeline here. (Registration required, but BugMeNot is your friend.)

Comments (9)

Hey Jay.I'm from N... (Below threshold)
Josh Davenport:

Hey Jay.

I'm from Newmarket. I'm a full blown libertarian conservative, no doubt about it.

The whole Kelo thing has made me pretty much sick.
But at least in this case, the takings is actually for public use.

Frankly, after the Kelo developers have put their money down, I hope the town eyes the Pfiser facility and decides it needs it for salt storage, or something. Preferably something thats truly public use, but also stupid.

We've been dealing with som... (Below threshold)

We've been dealing with something similar in Lexington, KY for several years. The last election cycle most of the pro-takeover council members were voted out. They're still trying law suits and petition drives to restart the effort though.

I have to agree with Josh o... (Below threshold)

I have to agree with Josh on this one. This is one case where eminent domain makes sense. Especially considering Nashua offered more than the other company. There is no question about fair value being offered.

It would seem that eminent ... (Below threshold)

It would seem that eminent domain is possibly justified under these circumstances. I would guess that the "people of Nashua" will be putting the Pennichuck Water Works to public use.

One has to wonder, why did Pennichuck Water Works reject the larger offer? This is pure speculation, but I would bet that Philadelphia Suburban Corporation was offering a stock swap for the purchase while Nashua would have to offer cash. Why would a board reject an all cash offer in faver of a smaller stock (and possibly cash) offer? If I were the Telegraph, I would be looking into the relationship between Pennichuck WW and Philadelphia SC. I'll bet that they share some board members and/or a golden parachute has been offered to Don Correll (CEO of Pennichuck WW).

Sigh... I guess I flubbed t... (Below threshold)
Jay Tea:

Sigh... I guess I flubbed this one.

The point I was trying to make was that while the taking would be for public use, the motivation being cited was simply to keep the owners from selling to an out-of-state corporation. There were no allegations of poor service, of inability to continue to provide water to the city, no threats to raise the rates to draconian levels or to curtail services, nothing.

As far as I can tell, the only gain will be to the city of Nashua, which will own a hunk of property outside its borders, and convert the employees into city workers -- something that strikes me as a naked political power grab, and the chance to expand the city government's power base, with no real gains to the citizenry.


Jay,In the third par... (Below threshold)

In the third paragraph, when you referenced "the people of Nashua", that's where you lost me. If you had said the city government of Nashua, without popular support, had performed this act, then I would have agreed with you about the political power grab.

When government acts according to the wishes of the people, that is democracy at it's best, regardless of whether it is giving the government more power (which I will agree is a bad thing).

[Walmart is] opposed by ... (Below threshold)

[Walmart is] opposed by a lot of people. Some are concerned about its environmental impact on the site they've chosen. Some worry about the increased traffic on an already-congested street. Others, like me, are more concerned about the current occupant of that land

And then still others oppose it because they hate Wal-Mart with a hot and holy hatred born of socialistic religious zeal. You almost expect to see those giant puppet heads and bizarre costumes at the anti-Wal Maet demonstrations.

I haven't checked yet, but ... (Below threshold)

I haven't checked yet, but I will make a note (and try to find it). Does New Hampshire regulate water utilities? If so, the citizens of the town would be protected. Most utilities, even in this age of deregulation, are still regulated by the state governments.

Try NARUC for info.

Jay, it's a valid point.</p... (Below threshold)
Josh Davenport:

Jay, it's a valid point.

But you should have made it clear that the taking was likely constitutional, if perhaps bad policy.

Still, even on the policy debate there are a few balancing factors.
Delocalisation is not an imaginary phenomenon. It is possible that a town with an active citizenry could run the water works better than a corporation that is immune and dislocated from local input.

To say it another way, one doesn't defecate where one eats.

Whether this effect would balance out other effects depends on the town and the corporation. I would say any of the smaller towns in the state would probably benefit, because of their tight social cohesion.

Nashua, perhaps not.






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