Does government have the right to condemn and obtain individuals' properties for the sole purpose of economic development?
The U.S. Supreme Court ultimately will answer that question after hearing a case from New London, Conn., in which a working-class neighborhood refused to sell for a riverfront hotel, health club and offices.
The case, deemed one of the most important property rights cases in the past 50 years, involves the practice of eminent domain and could affect redevelopment plans across the country, including projects in Liberty and Gladstone.
Officials with the Washington-based Institute for Justice, which represents the New London, Conn., homeowners, think property cannot be condemned for the sole purpose of private development.
If that is the case, then “no property in America is safe because anyone's home can create more jobs if it is replaced by a business and any small business can generate greater taxes if replaced by a bigger one,” according to a press release on the Institute's Web site.
Jim Gardner, press secretary for the Missouri attorney general's office, said on the state level eminent domain is used almost exclusively through the Missouri Department of Transportation to obtain right of way for road construction.
“It's generally been held that it has to be for public use,” Gardner said. But “public use” can mean different things, from roads to race tracks.
“It often comes down to the courts having to make a determination on these things,” Gardner said.
Robert Bateman, a Gladstone business owner and an opponent to eminent domain for private development, has posted signs at 68th and Broadway decrying its abuse.
Bateman said he is concerned about his rights as a property owner. He said if the U.S. Supreme Court rules in favor of eminent domain for economic development then no one's property is safe.
“These cities all have economic development directors and what is their purpose? It's to steal people's property,” Bateman said. “It's outrageous what is happening and this is just the start.”
In Liberty, city officials in 1997 targeted the Liberty Triangle, an 88-acre parcel bordered by Interstate 35, Missouri 152 and Missouri 291 for redevelopment. Last week, Lowe's, a building supply store, was the first major business to open under the new redevelopment.
Chris Williams, the city's outside legal counsel, said officials have not had to resort to condemnation proceedings on any of the 27 parcels in the project. But he said that doesn't mean it won't happen. So far about five or six parcels have been acquired.
Williams said the city has contracted with LTD Enterprises, LLC, to develop the triangle with the exception of Lowe's. LTD Enterprises is made up of three principles — two of whom are Liberty residents, Dan Carr of CB Richard Ellis real estate and Tim Harris of Star Development. A third partner, Rich Baier, also is with CB Richard Ellis.
“At this point, the law in Missouri provides that you can use eminent domain if necessary for redevelopment,” Williams said. He said the city, through real estate agents, is negotiating with a number of property owners to buy the land instead of using eminent domain.
“Some are not going to want to sell and if it reaches that point that they can't negotiate a purchase, then the city has to decide whether they want to file condemnation action for the property,” Williams said.
Williams said it was difficult to determine what impact, if any, the Supreme Court case will have on the triangle project. He said the triangle area was declared “blighted” by the City Council before proceedings with redevelopment began.
The “blighted” designation strengthens the city's justification for redevelopment.
State statute includes a number of criteria to determine blighted conditions including inadequate street layouts and improper subdivision.
Williams said the triangle has several odd-shaped parcels, including one that is landlocked and can't be accessed through roads.
But Bateman says the “blighted” designation is justification to achieve whatever is wanted by the powers-that-be.
“They will call anything they want ‘blighted',” he said. “It's whatever the politicians want at the time …”
In Gladstone, City Manager Kirk Davis thinks eminent domain is justified in cases of economic development, but said the city has not used it in about 15 years.
“I have concerns anytime I think any economic tools are being compromised,” Davis said about the Supreme Court case. “We have limited tools … and it seems to me you need all the options.”
Davis said redevelopment can generate higher sales tax revenue that keeps property taxes lower in the city and provides services and goods for others.
“Any revenue that comes in to the city goes out in the form of providing services to the citizens,” he said.
With Gladstone at 90 percent developed, most new projects would have to be redevelopment. And now Gladstone has some plans on the drawing board, including a downtown redevelopment project in the vicinity of 70th Street and North Oak Trafficway, calling for a community center, office and retail space and homes. Other redevelopment projects include Gladstone Plaza at 65th and North Oak Trafficway and a new shopping center near 58th Street and Antioch Road.
Davis declined to say whether any of the projects would involve eminent domain. He said he wasn't comfortable discussing that because of negotiations. He said developers traditionally are allowed the chance to acquire the property through negotiations before the city decides to use its eminent domain option.
Davis said there are aspects of eminent domain that protect existing landowners and one of them is “just compensation” for their property.
But Bateman said “just compensation” is rarely just.
“The property owners are the sacrificial lambs,” he said. “They have to accept the price or face years of litigation … and most people don't have that kind of money. It's expensive and cities know that.”
kansas City Star: www.kansascity.com