8/19/2004

Normal May Use Eminent Domain in Downtown

By Mary Ann Ford

In June, the Normal City Council voted to use its eminent domain authority – if necessary – to obtain property for a planned downtown hotel/conference center. Earlier this month, another council vote opened the door for similar proceedings to gain land for a new downtown bank building.

In the meantime, court proceedings have begun in a separate eminent domain case, involving land the town needs to widen Hershey Road near Shepard Road in northeast Normal.

Redevelopment, road, sewer or utility improvements are among the reasons municipalities can use their eminent domain authority – a right afforded by the U.S. Constitution.

It gives public bodies like city councils in Normal and Bloomington and some private companies, like utilities and railroads, the legal power to acquire private property for a public purpose as long as the owner is compensated.

But it's not automatic. Government can't just say it wants land, give the owner money and take the property.

There is a system of checks and balances. In some cases, the courts check eminent domain powers. Other times, it's the community.

Take, for instance, a recent case in Lakewood, Ohio, that drew the attention of CBS' "60 Minutes."

The city wanted to replace some homes with expensive condominiums that would bring in more tax money. To proceed with the project, "60 Minutes" reported, the city council had to declare the area blighted so it could take the property through its eminent domain authority.

The council adopted a new standard for the area: a home could be considered blighted if it didn't have three bedrooms, two baths, an attached two-car garage and central air.

Even the homes of council members and the mayor couldn't comply with the new rule.

Residents fought back and eventually voted down the new standards and voted the mayor out of office.

Jack Teplitz, a Peoria attorney and consultant for the downtown Normal redevelopment project, said the Ohio case was extreme and noted the system of checks and balances worked.

Still, the case made the Castle Coalition's list titled "Government Theft: The Top 10 Abuses of Eminent Domain." The Castle Coalition is a grassroots anti-eminent domain group [www.castlecoalition.org/].

"Eminent domain is the power of government to force people from their family homes, to destroy their businesses," the coalition says on its Web site.

"If individual property owners could stop a (redevelopment) plan, it would render the ability to fix a blighted area impossible," countered Teplitz.

Normal is in the midst of a historic downtown redevelopment plan, and the council created a downtown tax increment financing district in May 2003 to help pay for it. In a TIF district, property assessments are frozen.

Any increase in assessed value that usually comes with improvements in an area is used to help pay for the redevelopment through the life of the district – about 20 years.

Teplitz said downtown Normal qualifies as a "conservation" area under TIF standards. That means at least half of the buildings within the area are at least 35 years old and the area is beginning to show signs of decline. If not checked, those conditions could lead to blight, he said.

Part of the redevelopment plan is a hotel/conference center on land bordered by Fell Avenue on the west, Beaufort Street on the south, Broadway on the east and North Street on the north.

Enter property owner and Castle Coalition member Orval Yarger.

Yarger owns or is part owner of several properties the town needs to accomplish the redevelopment plan.

Yarger, his brother, Bill, and Alec Wade, known as the Alamo II partnership, own 211 W. North St., 213 W. North St. and 207 S. Fell Ave. – properties at the location of the proposed town-owned conference center.

Orval Yarger also owns 103 Broadway, commonly known as the Broadway Mall. The town is eyeing that property for a new Citizens Savings Bank. Citizens is currently at 301 Broadway St., the location of some of the land needed for the downtown hotel.

So far, negotiations to acquire the properties have failed, and the issue could end up in court – as an eminent domain case.

"I am not against redevelopment," said Orval Yarger. "I'm certainly not against the hotel project. But I'm sort of against the way I've been treated."

Yarger maintains he would give the town the land it wants for the conference center if he gets three parcels, including the property where University Christian Church stands, across North Street.

"I never asked for money, I only asked for a land swap," he said. "It's almost the same square footage. But the town said the land he wanted in exchange was too expensive and, besides, the church property wasn't for sale.

"My land isn't for sale either," responded Yarger.

Town officials tell a different story. Mayor Chris Koos said the town has been negotiating with the Alamo II partnership for two years, offering $1.25 million for Waterson Place and 211 and 213 W. North St.

Alamo II partnership countered with an offer of $3 million, he said.

Meanwhile, the town tried to purchase the 103 Broadway property from Eleanor Stubblefield so Citizens Savings Bank could build a new bank. Stubblefield ended up approaching Orval Yarger about buying the property. He paid $290,000 – less than the $305,000 offered by the town.

Yarger said he had tried to purchase the property from Stubblefield for years.

When town officials approached Yarger about buying the same property, he added an adjacent property – Guitar World – and agreed to sell both to the town for $675,000. Guitar World is worth about $100,000, according to town officials, and is not a property the town wants.

But Yarger said, "two pieces are more valuable than just one" and Guitar World includes a recording studio that he built.

The sale did not go through because Yarger said he wanted the other land issue resolved first.

"Eminent domain was never intended to be used to take private property from one to give to another," he said. "It's for public good like roads, interstate highways and intersections."

Like many states, Illinois' interpretation of eminent domain authority has been refined by court cases. One commonly referred to is a 1999 East St. Louis lawsuit – Southwestern Illinois Development Authority vs. National City Environmental.

The ruling in that case somewhat supports Yarger's opinion – that private property can't be taken and given to another private developer for a private project.

However, the case also recognizes exceptions, including taking property to eliminate blight, said Normal Corporation Counsel Steve Mahrt.

Teplitz said eliminating blight is a long-recognized use of eminent domain.

And in a TIF district, private property can be taken to eliminate or prevent blight. "It's not important what the end use is," he said.




Contact Mary Ann Ford at mford@pantagraph.com

Copyright © 2004, Pantagraph Publishing Co. www.pantagraph.com

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