But the land where the homes once stood has remained undeveloped, and the community took another hit last week when Pfizer, a major economic engine in the city and its largest taxpayer, announced plans to close the $350 million research center and relocate about 1,500 jobs to nearby Groton.
Now some angry and befuddled current and former residents, including some who lost their homes, say the drug company's announcement reaffirms their conviction that the city never needed to pick the property rights fight in the first place. If they have lost, they say, then so apparently has the city.
"We just got so sick of hearing that we were supposed to sacrifice for the greater good," said Matthew Dery, the sales and retention manager at The Day newspaper in New London who relocated to Waterford after being forced out of a home that had been in his family for about a century. "As it turns out, there was no greater good."
Pfizer's pharmaceutical research center, which opened in 2001, was a catalyst for a planned multimillion-dollar private development that was to include residential, hotel conference, research and development space and a new state park. City officials decided they needed 90 acres adjacent to the Pfizer center to complement the building.
Many homeowners in the Fort Trumbull neighborhood sold to accommodate the wrecking crews, but seven fought the city all the way to the Supreme Court, which ruled 5-4 in 2005 that cities could use eminent domain to take property for private development.
Efforts to develop the area have since faltered as one firm that planned to develop nearly the entire northern half of the Fort Trumbull peninsula failed to secure financing, while backers halted fundraising for a proposed $60 million Coast Guard museum.
Pfizer said in a statement that eminent domain played no part in the building's development since it was constructed on industrial brown field. The company said it worked with the state to clean up the polluted site, formerly an abandoned mill and scrap yard, and had no stake in the court case or in the land the city seized for private development.
As for pulling out of New London, the company says it's consolidating following its recent merger with Wyeth Pharmaceuticals.
And some in the former whaling hub see Pfizer's departure as added injury after the stalled development, further proof of a fight that no one needed — or won.
"It was for nothing, basically," New London resident Pat Lee, 64, said of the eminent domain skirmish Friday while preparing sandwiches behind the counter at Paty's Shaw's Cove Deli.
Susette Kelo, the lead plaintiff and owner of a pink house that was sold to a preservationist for a dollar, said she was not surprised by Pfizer's planned departure or by the lack of development in the area. Kelo, a nurse, was paid $442,000 by the state for her old property, which was moved less than two miles away, and she now lives in Groton. Other homeowners forced to leave were also compensated by the state.
"We always thought it was foolish from the beginning; we had always said that from the beginning," she said.
John Brooks, executive director of the New London Development Corporation, acknowledged the Pfizer project was a catalyst for the broader economic development proposal but stressed that the projects were separate. He said he still believed the land would be put to use and blamed the recession for the delay.
Though the promised residential housing, office space, hotel and other private development have stalled, Brooks said there have been public infrastructure improvements on the property as well as a new 16-acre state park. He said only one third of the 90 acres still remains to be developed.
"It's ready for development, and development's going to happen once the economy rebounds," Brooks said.
Dana Berliner, a senior attorney with the Institute for Justice who represented the homeowners, said the episode underscores why local governments should not take "risky" and "inadvisable" business deals involving their own residents. The institute says more than 40 states have taken steps to better protect property owners from seizures by eminent domain.
"There was evidence back when we had the trial that nothing would be built on the land that was taken, and the courts just didn't want to look at that," Berliner said. "They said, 'Well, the city's got a plan, and we'll just trust that they know what they're doing because they say they have a plan.'"
Pfizer's departure could ripple far beyond the eminent domain debate as some small business owners are fretting about the loss of a major economic player. Paty Daignault, owner of Paty's Shaw's Cove Deli, estimated that Pfizer accounts for about $3,000 a year, roughly a third of her annual business, between catering and walk-in orders.
As for Dery, the newspaper employee, he has not returned to the old neighborhood since he left three years ago.
"I would never go back there," he said. "That was our property. That's our water view. Those are our homes. It didn't belong to the community at large."