http://en.wikipedia.org/wiki/Kelo_v._New_LondonIt doesn't address the effect of CT law specifically in that case but was based on allowing wide latitude to local governments.
The Wiki summary of the majority and concurring opinions
On June 23, 2005, the Supreme Court, in a 5–4 decision, found for the City of New London. Justice John Paul Stevens wrote the majority opinion; he was joined by Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer. Justice Kennedy also penned a concurring opinion setting out more detailed standards for judicial review of economic development takings than that found in Stevens' majority opinion. Stevens said that local governments should be afforded wide latitude in seizing property for land-use decisions of a local nature. "The city has carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue." The decision pre-empted criticism of the possibility that the decision would be abused for private purposes by arguing that "the hypothetical cases posited by petitioners can be confronted if and when they arise. They do not warrant the crafting of an artificial restriction on the concept of public use." Justice Stevens also emphasized the importance of judicial restraint, stating that the Court recognized that condemnation of property would entail hardship and that the states were free to impose restrictions on the use of this power by local authorities. Justice Kennedy's concurring opinion observed that in this particular case the development plan was not "of primary benefit to . . . the developer" and suggested that, if it had been, the taking might have been impermissible.