Property owner feels pressure to sell over proposed condo development San Diego (CA) Union-Tribune, 12/23/04

By Amy Oakes

Francisco Flores ignored the letters asking if he wanted to sell his homes on Roosevelt Street [in Chula Vista]. And he only half-listened to the real estate agent who came knocking on his door one day.

Local developer Jim Pieri is pushing plans to build two 200-foot-high luxury condominium towers and 16 town houses on land that included Flores' homes. Pieri made it clear he wants Flores' property for his project, but Flores didn't really care all that much.

It wasn't until Flores received a letter – a copy of correspondence between Pieri and the city – mentioning the city's ability to take property by force in redevelopment areas that he started to worry.

"When he (the real estate agent) gave him the letter, he started to pay attention," said Flores' son, Alex, who was translating for his father. "It mentioned eminent domain."

While many of his neighbors have agreed to sell, Flores is one of the few holdouts. He has no intention of selling the 15,000-square-foot lot where his family lives.

The city has no legal authority to take his property, a point city officials clarified after Flores saw that initial letter. Still, Flores is feeling increasing pressure to clear out.

Pieri's attorney John Moot says it's unfair to cast the developer as Goliath to Flores' David, as some in the community see him. Those people, Moot said, are against the project and may be using Flores as a "pawn" to block it.

The debate over Españada is just beginning. Supporters argue it is needed to jump-start revitalization on the west side. Opponents say the planned 15-story towers are too high and will bring too much traffic to already congested roads.

The City Council was scheduled to vote on Españada this month. But council members decided to wait until after the general plan update is done.

That update, expected in March, will allow for high-density residential development where the proj-ect is proposed. Currently, the project would require a zoning change before it could be built.

Pieri still needs to acquire some of the land for the 4.2-acre project at the northeast corner of H Street and Fourth Avenue. He has bought or is about to buy most of the property for the initial stages of construction.

All the properties except one – Flores' – are in Chula Vista's redevelopment area. In a redevelopment area the city has the authority to use eminent domain – pay market value for the land and relocation expenses – but it is often used as a last resort and needs to pass legal standards.

Along with Flores, the owner of a 28-unit apartment complex on H Street has said he does not want to sell. The complex, however, is more vulnerable because it's in the city's redevelopment area.

Fair treatment?
From the start, Flores said he has not been treated fairly. About eight months ago, Flores said he started to receive letters from Pieri's Mountain West real estate company with offers to buy the property. When he didn't respond, a Mountain West representative started showing up at his home.

"One time, my dad kicked him out," Alex Flores said.

The first offer from Pieri, Alex Flores said, was for $400,000. The offers have since increased to more than $700,000. He said Pieri also has offered alternative properties – some smaller than the one his father owns.

Francisco Flores, through his son, said he countered with a $2.5 million selling price, with the intention of halting Pieri's efforts.

"I don't want to sell," Flores said. "We're established."

Flores, who speaks predominantly Spanish, said that early on, Mountain West representative Nick Ross talked about the city's ability to use eminent domain. Flores said Ross gave him a copy of the Feb. 9 letter from the city to Pieri discussing the Españada project. It detailed the process by which the city could condemn properties for the project.

Ross also sent Flores a letter in May stating that eminent domain may be used to acquire properties "required" for Españada. It then stated, "Your property is one that is required for the project and for that reason I have made efforts on numerous occasions to make you aware of the project, and have made offers to you for the purchase of your property," Ross wrote.

Flores' fear mounted when, in June, the city's Community Development Department sent him a letter stating that his property was in Chula Vista's redevelopment area and that the Españada project had been proposed in that location. Two days later, city officials sent him a clarification letter, saying they had made a mistake.

Flores took his concerns to the Planning Commission at its Sept. 22 meeting. By then, members of Crossroads II, a community activist group that voiced some objections about the Españada project, had been helping him. They set up meetings with city officials for him and read over the letters he had received.

"They were intimidating him with the use of eminent domain," said Gerald Scott, a member of Crossroads II.

Moot, Pieri's attorney and a former councilman, said the letters to Flores never actually stated that his property could be taken by eminent domain. But, he said, he did recommend that Flores "talk to an attorney who specializes in eminent domain."

'Critical issue'
Don Kramer, the project manager for Españada, said the city is looking at ways to acquire the Flores property. In October, Kramer sent an e-mail to Ken Lee, a community development specialist for the city, asking if city officials had discussed expanding the redevelopment area.

"This is a critical issue as it impacts the Flores property on Roosevelt Street, as well as future projects under consideration," Kramer wrote.

However, Lee and other city officials said they are not currently looking at expanding the redevelopment area, or acquiring the Flores property.

"This is between Mr. Flores and Mr. Pieri," said Dana Smith, assistant director of community development.

Moot said Pieri is still trying to buy the properties. Property negotiations for Gateway, an upscale office and retail complex next to the proposed Españada site, were more difficult, Moot said.

In the end, Moot said, Pieri acquired the needed land privately. Moot said in most cases property owners fare better dealing with a private buyer than going through eminent domain.

"We're quite confident and willing to pay more than fair market value," he said of the current holdouts.

If Pieri can't acquire the Flores property, Moot said, the project will be redesigned. Under the current plans, Pieri wants to build town houses where the Flores property is.

Still, Moot said, his client is committed to trying to negotiate with Flores.

But Flores is firm. He said he has his own plans for the property he bought 11 years ago for $213,000. He has done improvements over the years and plans to do more.

"My dad doesn't want to sell," Alex Flores said. "We like the area."

Union-Tribune: www.uniontrib.com


Threshold of a misstep — The Washington Times, 12/21/04

By Clint Bolick

The Supreme Court will soon hear arguments in one of the most important property-rights cases in a generation. A remarkable coalition has called upon the court to restore the constitutional requirement of "public use" as a prerequisite to government taking of property.

One would expect the Bush administration, with its professed support for strict constitutional construction and for property rights, to join the dozens of conservative and libertarian groups arrayed in this effort, or at worst to sit on the sidelines. But for reasons unfathomable to President Bush's core constituency, the administration is seriously considering filing a brief opposing property rights.

The case involves the abuse of one of the most dangerous powers of government, eminent domain. The Fifth Amendment provides that government may take property for "public use" with just compensation.

Historically, eminent domain was used for such obvious public works as schools, roads and the like. In recent years, state and local governments began using eminent domain to transfer property from one private owner to another more politically powerful private owner in the name of economic development. The Institute for Justice, which represents the plaintiffs in the case currently before the court, has documented more than 10,000 cases of such instances of Robin Hood-in-reverse.

So long as the power of eminent domain is unbounded by the requirement of public use, no one's home or business is safe. The government always can make the case that any particular property can be put to "higher" use — i.e., it can always generate more tax revenues for voracious local governments.

The victims are almost always ordinary people, who have little choice but to acquiesce because they cannot possibly afford the legal fees necessary to mount an uphill battle against their government.

The pendulum recently has begun to shift back. The Michigan Supreme Court recently overturned the infamous Poletown decision, in which an entire community was taken for the benefit of a General Motors plant that was never built. In Arizona, the court of appeals recently struck down a city's attempt to take a family-owned brake shop and give it to a hardware store that wanted to expand at a prime location. But until the public-use requirement is restored under the U.S. Constitution, such local triumphs will be episodic.

The case currently before the court presents a classic case of eminent domain abuse. The city of New London, Conn., wants to bulldoze a well-established working-class neighborhood to build a private office space and other unspecified development projects adjacent to a Pfizer plant. In a divided opinion, the Connecticut Supreme Court upheld the taking. The case presents the court with an ideal vehicle to breathe life back into the public use limitation.

Because eminent domain abuse often afflicts minorities, the poor and the politically powerless, the Institute for Justice has been joined not only by dozens of pro-free market groups but by nontraditional allies such as Ralph Nader-affiliated community groups, the National Association for the Advancement of Colored People and the American Association of Retired Persons. When opposition briefs are filed next month, expect a score of taxpayer-financed briefs by state and local governments seeking to protect their limitless power.

That the Bush administration would consider joining them is bizarre.

Ordinarily, an administration weighs in on other people's cases only where a direct federal government interest is presented. Here, no such interest exists, because the federal government typically uses eminent domain only for public use.

So what is it that is impelling the administration to betray its principles?

Is it succumbing to pressure from federal bureaucrats born of solidarity with state and local power? Is it seeking to shelter big business interests that are beneficiaries of eminent domain abuse?

We can't know because no one in the administration is saying. Even worse is the brazen disdain with which the administration has dismissed pleas from some of its staunchest allies to stay out of the case.

On Oct. 29, a letter signed by 44 conservative and libertarian luminaries -- ranging from Grover Norquist to Paul Weyrich and David Keene, and encompassing such groups as the Free Congress Foundation, Family Research Council and National Taxpayers Union — sent the president a letter imploring him to stay on the sidelines. It would be nice to have the administration on the playing field on the side of its friends; but at this point, agnosticism is preferable to adopting the wrong religion.

When property-rights advocates presented a copy of the letter to Timothy Goeglein, the administration's emissary to the conservative movement, he dismissively dropped it to the ground. At coalition meetings hosted by Grover Norquist, administration officials have refused to comment.

The administration's allies deserve more than that. So does the public, which has a right to demand that public officials abide the constitutional limits on government power.

Many among them thought they had a friend on the White House. So when the arguments are submitted in the New London case, it will be jarring if we see the administration standing with the foes of property rights. Perhaps by then the administration will explain its betrayal — or maybe not, for its actions appear truly inexplicable.

The Washington Times: www.washingtontimes.com

Clint Bolick is strategic litigation counsel for the Institute for Justice
Contact the Institute by email at general@ij.org

Briefs filed in support of the petitioners in Kelo v. New London — The Institute for Justice

The Institute for Justice, which will represent the petitioners before the US Supreme Court in what promises to be the landmark eminent domain case of Kelo v. New London, has assembled the Amicus Curiae briefs filed with the Court supporting its clients.

According to the Institute's John Kramer, more than two dozen individuals and organizations have submitted briefs. These include world-renowned urban policy scholar Jane Jacobs, civil rights groups including the NAACP and the Southern Christian Leadership Conference, AARP, noted legal scholar Richard Epstein and the Farm Bureau. Each of these urged the justices to use the case of Kelo v. City of New London to end eminent domain abuse—where governments across the nation take one person’s private home only to hand that land over to another private party for their use. This landmark constitutional case, filed by the Institute for Justice, will decide whether the “public use” requirement of the U.S. Constitution allows the government to use eminent domain to take one person’s non-blighted home or small business so a larger business can make more money off that land and pay more taxes as a result.

The following is a list of these individuals and organizations. All of the briefs are available online in ".pdf" (Adobe) format and may be accessed through the Institute's website at: www.ij.org/kelo

Induviduals and organizations submitting briefs:

  • Urban Sociologist Jane Jacobs, Author of Death and Life of Great American Cities
  • NAACP, AARP, et al.
  • American Farm Bureau Federation, et al.
  • National Association of Homebuilders & National Association of Realtors
  • John Norquist, President, Congress for New Urbanism
  • Becket Fund for Religious Liberty
  • 13 Noted Property Law Professors
  • Property Rights Foundation of America
  • Richard Epstein & the Cato Institute
  • Better Government Association & Other Community Groups
  • Claremont Institute
  • Pacific Legal Foundation & Property Owners Battling Eminent Domain Abuse
  • Goldwater Institute, et al.
  • Cascade Policy Institute, et al.
  • Reason Foundation
  • New London Landmarks, Inc. & Coalition to Save Fort Trumbull
  • Develop Don’t Destroy (Brooklyn), Inc., et al.
  • New Jersey Property Owners Fighting Eminent Domain Abuse
  • Texas Property Owners Fighting Eminent Domain Abuse
  • Pennsylvania Property Owners Fighting Eminent Domain Abuse
  • Mountain States Legal Foundation, et al.
  • New London R.R. Co., Inc.
  • Hawaii Property Owners Fighting Eminent Domain Abuse
  • Tidewater Libertarian Party
  • Rutherford Institute

The Institute for Justice: www.ij.org

Council delays RDA takeover vote — Long Beach (CA) Press Telegram, 12/21/04

Leaders to wait six months for redevelopment study before deciding

By Jason Gewirtz

[Long Beach] City Council opted to wait six more months before deciding whether to take over the Redevelopment Agency [RDA] Board in a debate Tuesday that sparked a larger discussion about housing issues for Latinos.

The issue of dissolving the appointed RDA Board has divided the council since six members called for a hearing on the issue in October.

But in Tuesday's unanimous vote, members chose to wait until a $430,000 study of the city's cumbersome redevelopment program is complete before making a decision that affects control of millions of dollars to cure neighborhood blight.

"There is no fear, to me, in learning," Councilwoman Laura Richardson said. "There is no fear in knowledge."

The council and the RDA Board, which has opposed the takeover bid, will hold a joint session June 7 to review the report's findings. On June 14, the council will once again take up the issue of a board takeover, which continued to evoke passion on both sides of the debate Tuesday.

"I consider it a decision that the community has been asking for," RDA Board Member Alan Burks said of the delay.

But dozens of Latino residents, including many children, attended Tuesday's meeting to urge the council to take over control immediately. Several said they were concerned about eminent domain, one of redevelopment's most significant powers, being in the hands of appointed board members instead of elected leaders.

Eminent domain allows the RDA Board to force owners to sell their properties to make way for redevelopment projects. Since 1990, the board has used its eminent domain power 17 times to acquire 50 properties citywide.

Others suggested that the RDA Board has looked out for developers' interests ahead of the interests of those living in redevelopment areas.

"Latinos in Long Beach want the City Council in Long Beach to run the show, not big business," said Ginny Gonzales with the League of United Latin American Citizens of Long Beach.

Council members sympathized, despite some suggestions that the biggest housing concerns of those in attendance were not redevelopment related.

Councilwoman Bonnie Lowenthal, whose downtown district includes several significant redevelopment projects, said she will host a "housing relocation information meeting' Jan. 24. While the meeting will cover eminent domain, it will also cover evictions, relocation rules and other issues that don't necessarily have a redevelopment link.

"There's a lot of confusion and a lot of fear," she said.

But Councilwoman Tonia Reyes Uranga said the group's frustration was based on past RDA Board decisions to build housing units that don't accommodate growing Latino families. In cases of eminent domain, Uranga said, residents in blighted properties are reluctant to sell their properties if they can't afford to live somewhere else.

"Under redevelopment, sometimes you don't have those options," she said.

Tuesday's hearing was the latest of several council meetings to focus on a potential RDA Board takeover. Supporters have argued that the move would streamline a process that often takes years to complete projects. Council control would also give elected leaders more accountability over those projects, supporters say.

But opponents had urged the delay that the council approved Tuesday. The RDA-commissioned study that sparked the delay is expected to analyze the good and bad in the city program. The report, due back May 31, will also make recommendations on the best ways to fix any problems.

Uranga, who has supported a takeover, told her council colleagues that her vote to wait for the report was reluctant.

"I truly believe in everyone's heart you have made up your mind," she said.

Long Beach Press Telegram: www.presstelegram.com

Marina slowly becoming visible, viable — The (Brazoria County TX) Facts, 12/22/04

By Elliott Blackburn

[Freeport TX] workers are clearing obstacles between developers and a new marina this month, both physical and litigious.

Demolition teams knocked down five buildings Tuesday and removed trash and other debris from the site of a proposed $8.5 million marina, which city planners hope will feature restaurants, hotels, hundreds of boat slips and lots of revenue.

The real headway might be behind the scenes, as city and business representatives negotiate around a legal stalemate, Freeport Economic Development coordinator Lee Cameron said.

"Hopefully, we'll have it signed before the end of the year," Cameron said.

Two Freeport property owners fought the city's power to seize private property for public use, called eminent domain, with lawsuits filed around the project's original October 2003 start date. The marina has repeatedly stalled in the face of court battles and vocal opposition to a $6 million loan to marina developers and the use of eminent domain.

A lawsuit filed by Wright Gore Jr., owner of the Western Seafood Co. and its roughly 300 feet of coveted waterfront property, is idle in the U.S. 5th Circuit Court of Appeals. Further legal action awaits a decision in another eminent domain case set for argument before the U.S. Supreme Court in February.

The city can build around the property, but the Western Seafood line is destined for lucrative small-boat slips in the marina plan.

"We're sitting here at the mercy of the courts," Freeport City Councilman Jim Phillips said. "We're moving forward with other stages of it, but there's nothing we can really do."

The city might have found a way around a second property owner who has vowed to fight city efforts to take his property.

Freeport is negotiating with J & S Contractors Inc. for more than 1,300 feet of waterfront property, Cameron said. The land would give the marina project contiguous, riverside property down to the guillotine gate and avoid lawsuit co-defendant Trico Shrimp Co.

"With the Glick property, we could actually go around Trico," Cameron said.

Under a new design plan, the city could relocate Trico either farther down the river or to two unspecified sites, Cameron said. Trico owner Dennis Henderson could not be reached to comment on any negotiations Tuesday.

The city would relocate J & S to the other side of the guillotine gate, Cameron said. If the deal is closed, the city could reapply for a permit in January and begin construction in April at the earliest, he said.

The cooperation of J & S wasn't a show of support, said company partner Johnnie Glick. The company decided to work out a deal with the city rather than risk running up court costs fighting it, he said.

"You've got a choice of play ball or you're going to spend all your money to try and keep what's yours," Glick said. "They're going to tax you out or run you out anyway."

As for the marina as a business, other projects, like the Bridge Harbor marina, had fallen flat, Glick said. He doubted a Freeport marina could compete with other established harbors along the coast.

"I think it's the dumbest thing I've ever seen grown men do," Glick said. "I don't feel that this one will ever be booked up solid."

But Phillips said the marina could be the spark the city needs to improve its economic condition.

"We have to have something to bring life to the downtown area," Phillips said. "We have to have something to give people a reason to come to Freeport and spend their money."

The Facts: www.thefacts.com


Another vote looms on Tempe mall land — East Valley (Phoenix-area AZ) Tribune, 12/21/04

By Dennis Welch

A new state law could force the Tempe City Council to vote at least one more time before condemning private property needed for the planned $200 million Tempe Marketplace.

Before local governments can take private property for development, state law requires they pass a resolution by a super-majority showing that the land is critical for the planned project.

Tim Keller, executive director for Arizona’s Institute for Justice chapter, said the city has not done that.

"In my opinion, the City Council will have to make a separate vote before they can use eminent domain," he said.

"No city is above the law," Keller said.

If the city pushes forward, Keller said Tempe would be violating an Arizona law that went into effect last year.

The institute, a Washington, D.C.-based law firm, successfully defended brake shop owner Randy Bailey against Mesa’s attempt to take his land and give it to another local businessman to build a hardware store.

In the past, Keller has said the institute could step in to defend the holdouts under the right conditions.

Keller said he will continue to monitor the situation, but has not committed to taking any legal action.

Developers Miravista Holdings and Vestar are attempting to assemble nearly 90 parcels of property near Rio Salado Parkway and McClintock Drive.

Marlene Pontrelli, an attorney for the city, said her office will make sure Tempe has met the state’s requirements before moving forward.

The city has been preparing to mail nearly 20 final notices to landowners who have not sold their property to the developers.

The notices, which are being reviewed by the city attorney’s office, would give the holdouts seven days to respond before condemnation proceedings could begin.

There was no plan for the City Council to make a separate vote regarding the necessity of the properties.

Sen. Jay Tibshraeny, R-Chandler, one of the state lawmakers who worked on the eminent domain bill, said they wanted the provision to add more teeth to the law.

"Basically we wanted to put more of the burden of proof on the cities to ensure that eminent domain was being used as a last resort and people’s private property rights were not being violated," Tibshraeny said.

In April, the previous Tempe City Council unanimously voted to use eminent domain if the developers could not cut private deals with the property owners.

"As policymakers, part of our job is to abide by the law and I for one will look to the city attorney and her counsel to ensure that we do so," said Tempe Mayor Hugh Hallman.

He was not on the council that authorized the use of eminent domain.

Hut Hutson, the other new member of the council, said the city should move forward with condemnation.

He added that he generally is opposed to using eminent domain, but said he backs it in this case because of environmental concerns.

East Valley tribune: www.eastvalleytribune.com

Eminent Domain Case To Be Heard Feb. 22 — Connecticut Farm Bureau, 12/20/04

Press Release

The American Farm Bureau Federation [AFBF] was one of 25 associations and groups that filed friend-of-the-court briefs supporting property owners being displaced by the city of New London, Conn. Eight groups are thought to be filing contrary briefs supporting the city in the eminent domain case coming before the U.S. Supreme Court.

The Supreme Court is expected to hear the case Feb. 22. The case centers on whether a government body can take private property for the purpose of turning it over to business developers to construct businesses that might generate higher taxes.

AFBF contends, if the court allows this practice, farm landowners would be in jeopardy of losing land whenever a government entity wants to help another private enterprise expand or construct a new business enterprise.

Connecticut Farm Bureau, 510 Pigeon Hill Rd, Windsor, CT, 06095
860-298-4401, fax 860-298-4408

The Condemned — Mother Jones, 1/04

In Ohio, and across the country, homeowners are battling cities and developers conspiring to seize their property

By Gary Greenberg

From his office at the top of Rookwood Tower, the seven-story, glass-and-steel building that his family’s real estate company built, Jeffrey Robert Anderson Jr., or J.R. as he is known here in Norwood, Ohio, can easily survey his empire. Directly below the tower and its 185,000 square feet of professional and financial services offices is Rookwood Pavilion, 23 acres of shopping and eating. A little farther to the left is Rookwood Commons — not, Anderson advises me, a shopping plaza, but a "lifestyle center" containing a Gap, Ann Taylor, and 46 of the other usual suspects. This former brownfield, abandoned when a machine tool factory left Norwood, is now the premier shopping destination in Greater Cincinnati, if not all of Ohio, according to anyone around here that you ask. It’s an impressive sight, and perched high up in his well-appointed office with its sculptures and paintings and enormous glass-topped table, you might believe that this tall and fit 32-year-old with flaxen hair and bright blue eyes rules over all that he sees, or at least all that lies this side of the interstate.

And he would, were it not for the 13-acre, triangular spit of land directly below the tower. There, under the spruce and maple trees, are the asphalt-shingled roofs of a tidy neighborhood of modest houses. Bounded by the Cincinnati city line to the east and Rookwood to the south, and cut off from the rest of Norwood by an interstate highway, these 97 homes and small businesses are glaringly out of place, a mid-20th-century remnant amid all this 21st-century glitz. They’re also in Anderson's way. He wants to expand the Rookwood complex, but he has to buy and raze all these houses first, and while most property owners have eagerly accepted his offer to buy their houses at a premium price, five have refused. And so the $125 million-plus project, known as Rookwood Exchange, slated to be under construction by now, is at a dead standstill.

But Anderson has an ace up his sleeve. At his behest, and using his money, the city of Norwood has invoked its powers of eminent domain — the right, granted by the Takings Clause of the Fifth Amendment to the Constitution, of a government to seize private property and turn it to public use — to condemn a neighborhood and order residents out of their homes. Norwood is not the first city to act as a real estate broker whose offer can’t be refused, nor is Anderson the first businessman to benefit from this kind of largesse. A 1954 Supreme Court decision stating that the economic benefits of private development are a legitimate "public use" has forged an unholy alliance between cities strapped for cash and entrepreneurs promising economic bounty. (Anderson, for example, forecasts that Rookwood Exchange will net Norwood, a city with an annual budget of $18 million, between $1.5 and $3 million in annual taxes.) Struggling cities have placed their urban renewal hopes in the hands of developers like Anderson, who in turn rely on governments to assemble the parcels for their projects.

According to the Institute for Justice (IJ), a public-interest law firm, this is a growing trend. The institute analyzed eminent domain cases between 1998 and 2002 and found more than 10,000 instances where local governments had attempted to use a power once reserved for indisputably public projects like highways and railroads to obtain properties for private development projects such as box stores and golf courses.

No properties are off-limits — working-class communities, ski chalets, and one-tenth of San Jose, California, have all been targets of condemnation proceedings on behalf of enterprises as varied as casinos, Costco, and the New York Times — and no one has yet been able to thwart this newly privatized version of eminent domain. But by litigating against what it calls "eminent domain abuse," the IJ has succeeded in creating enough disarray in state courts to achieve its ultimate goal: convincing the Supreme Court to revisit the issue. This spring, for the first time in 50 years, the court will address the parameters of eminent domain, and the institute hopes the justices will rein in the private use of what the court itself once called government’s "despotic power."

"It was the day before Mother’s Day in 2002," Joy Gamble says. "They said they were going to build this fabulous project, and we were going to be gone. The roof fell in." The Gambles, who have lived in Norwood their entire lives, made an immediate decision. They weren’t selling, no matter what price Anderson was paying. "And start life all over again?" Carl adds. "We started here, we raised two kids here, we finish up here."

"Here" is the Gambles' two-story stucco home a few doors up tree-lined Atlantic Avenue from its terminus at the I-71 off-ramp. An American flag is planted by the brick front stairs, next to a hand-lettered sign that says, "IF YOU WANT THIS PROPERTY YOU SHOULD HAVE BOUGHT IT IN 1969." Inside, a hunting supply catalog sits on the coffee table, a Ronald Reagan calendar hangs from the kitchen wall, and vivid tapestries and paintings of stags and partridges give the overall effect of Field & Stream on acid. The Gambles, who won’t give their ages ("I forgot," says Carl; "I don’t tell," says Joy), appear to be in their 70s, and they speak in clipped sentences inflected with the local twang. "The first time we had contact with these people," Joy tells me, "[Anderson] wanted to meet with us. I said, 'We don’t want to sell.' He said, 'Thank you.' I said, 'You're welcome.' I hung up. Very nice." Joy goes on to list several other unsuccessful attempts, noting that Anderson’s people were always extremely polite.

But what the Gambles didn't know was that in January 2002, before he called them or any of their neighbors, Anderson had asked the City Council to undertake an urban renewal study, the prerequisite to condemning properties. "I figured we wouldn’t have to go through with it," Anderson says. "Just pass the urban renewal study and get things rolling." When he built Rookwood Tower back in 1997, Anderson had easily convinced the city to authorize such a study — although he was ultimately able to assemble the necessary properties on his own. But in 2003, three years after he was indicted for corruption, the longtime mayor — whom Anderson had given $23,000 in campaign contributions ("an astronomical sum around here," says one city official) and an undisclosed amount toward legal fees — resigned. The council, perhaps eager to seem less cozy with its largest private taxpayer, had earlier told Anderson "to go out and pound the doors, go assemble as many houses as possible," he says. "Once I’m completely at a stalemate, then come back and discuss urban renewal."

While Anderson was going door to door in the early summer of 2002, so was Joe Horney, a 35-year-old construction manager. Sitting on the Gambles' couch, bouncing his two-year-old daughter on his lap, Horney proudly recounts how he used an inheritance to buy a two-family house across from the Gambles when he was 21. When he heard the news, he says, "I decided to go out and meet the neighbors. I found out from a lot of people that they were perfectly happy here, they'd like to stay. So we started a petition." At first, about half of the homeowners vowed not to sell. But in September, Anderson and his partners announced their terms: They'd buy everyone's house at a 35 percent premium over its fair market value, but only if they had all the neighbors under contract. If any residents held out, the developers would ask the city to condemn those properties, and a jury would decide the price. Throughout the fall, many of Horney's erstwhile allies signed contracts. In the meantime, Anderson eliminated from his plans a 28-house section of the neighborhood in which resistance was most concentrated, and by year’s end, with 5 of the remaining 69 owners still refusing to sell, Anderson had his stalemate — in no small part, as it turns out, because condemnation had been in the air all along. "Where I made my decision is when eminent domain was threatened from day one," says Horney. "Once they threatened my rights, my decision was made."

The City Council authorized the urban renewal study, which Anderson paid for, in April 2003. Citing certain facts — small driveways, narrow streets, lots that don't conform to current zoning regulations, houses that are more than 40 years old, a neighborhood subject to all the light and noise and traffic that progress (much of it Rookwood-related) has brought — the study declared the neighborhood blighted and thus eligible to be seized, emptied, and razed.

Standing in the Gambles' tranquil back yard, with its lilacs and bird feeders, it's hard to understand how anyone could think this property was blighted. Horney points out that by the study's criteria, nearly anyone's home could be taken by the government. "You could call the White House blighted because it's over 40 years old, it's got a lack of parking, it's surrounded by commercial development. I'm sure there is noise. If you tore it down and put in a big office building, certainly it would generate more taxes than Mr. Bush living there." The City Council proceeded to condemn the five properties not under contract with Anderson. According to Mayor Tom Williams, they took this action reluctantly, partly to secure tax revenues for the city. "I was a cop for 34 years, got shot once and shot people twice," Williams says. "It's the same with this thing. You hate to pull the trigger, but sometimes it’s a necessity."

When Institute for Justice lawyers Scott Bullock and Dana Berliner first visited Norwood in December 2002, they were pleased with what they saw: "a classic mixed-use neighborhood, in perfectly fine condition," as Bullock puts it. That boded well for the institute — which Bullock describes as an "unabashedly libertarian" organization and which gets much of its funding from wealthy opponents of big government like energy magnates David and Charles Koch — and its overall goal of reversing what it sees as a disastrous half-century of eminent domain jurisprudence.

Governments have always taken land on behalf of private interests; owners of mines and railroads relied heavily on condemnations for their rights of way, which were granted because, as one Pennsylvania court put it, "the necessities of a great public industry, which although in the hands of a private corporation, [serve] a great public interest." But in Berman v. Parker, a 1954 case, the Supreme Court ruled that the District of Columbia could seize a fully functional store in a blighted neighborhood on the grounds that, as Justice William O. Douglas wrote in the unanimous opinion, "It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled." It was not up to the courts to insist "that public ownership is the sole method of promoting the public purposes of community redevelopment projects." Legislatures, in other words, were free to determine — as the Norwood City Council did — that one private use of a property was better for the overall community than another, and to use eminent domain to enforce this finding.

According to the IJ’s Berliner, the Berman decision has devolved into a license for cities to "rent out" their eminent domain powers to private developers, with bogus blight designations providing the legal cover. But Jason Jordan, a government affairs director at the American Planning Association, sees the decision as underpinning the "hottest" trend in urban renewal: replacing economically obsolete neighborhoods with large-scale, tax-generating developments like Rookwood Exchange. "Eminent domain is an important tool for communities interested in revitalizing themselves," Jordan told me, and, according to Jeffrey Finkle, head of the International Economic Development Council, it's also a needed tool for reducing sprawl. "Unless we want to pave over all the land outside cities, we have to be able to do these projects inside the urban ring. How can we reposition cities if they don’t have the power to acquire private land?" The ability to team up with developers is indispensable to this agenda, Finkle adds. "Communities have to respond to market opportunities," he says. "If you have a developer willing to invest millions of dollars, it’s important to make that happen."

Rick Dettmer, who runs Norwood’s one-man municipal development office out of the basement of City Hall, says this is precisely why Norwood couldn't turn Anderson away. "The reality is that you need to rely on developer interest in order to facilitate projects. We're not paying for this party." If he were, Dettmer says he might throw it elsewhere — perhaps in Norwood's decaying downtown, less than a mile from the Rookwood complex. But Norwood, which has suffered two decades of factory closings, and which has a $1.5 million budget deficit, desperately needs this party, wherever it is held.

Many American cities are in a similar predicament, and in the wake of Berman and related state and federal court decisions, cities and entrepreneurs have worked out an elaborate courting ritual in which local governments offer up their eminent domain authority while developers tout the economic benefits of their projects to the electorate. "All the developer has to do," says the IJ’s Bullock, "is to convince the city that it’s good for them and that he will pay for it, and the city will start taking away people’s property." He adds that cities often offer more than condemnations. "Eminent domain is part of a whole set of incentives — tax breaks and deferrals and other public subsidies — that add up to massive corporate welfare. Often the numbers fail to live up to expectations. Jobs don't materialize or the economic benefits don’t outweigh the subsidies or the drain on public services that the development creates." When this happens, Bullock says, cities are left holding the bag.

The IJ took on its first eminent domain case in 1996, winning a favorable ruling for an elderly homeowner who refused to sell her Atlantic City property for a Donald Trump casino. "After that decision, we were swamped with phone calls," Bullock recalls, "and we started to think that courts might be willing to revisit this issue." The IJ has since taken on several cases nationwide, and saw Norwood — with its unblighted neighborhood, its developer-driven condemnations, and its questionable public use — as another opportunity to illustrate to a court how wrongheaded the private use of eminent domain is. An Ohio judge, however, was unswayed, ruling in June that although the neighborhood was not blighted, it was "deteriorating," and on these grounds, Norwood could go ahead and condemn the holdouts' properties; they are appealing.

In the meantime, a series of jury trials will decide the value of the five condemned properties. (In September, in the first of these trials, Horney’s house was valued at $233,000, money that, he says, "I hope I never see.") But developments elsewhere might make these trials irrelevant. In August 2004, the Michigan Supreme Court invalidated its 1981 landmark Poletown v. Detroit decision, which had determined that "one entity's profit maximization contributed to the health of the general economy." Stating that "Poletown's 'economic benefit' rationale would validate practically any exercise of the power of eminent domain on behalf of a private entity," the court refused to allow Wayne County to condemn land for an industrial park. "State courts from Nevada to Connecticut have relied on Poletown in upholding condemnations," Berliner said. "Now the same case will work for our side."

Add this case to those roiling communities across the country (see "Doing Developers' Dirty Work," page 44), and you have the kind of confusion in lower courts that begs for clarification from the U.S. Supreme Court. And indeed, shortly after the Poletown decision, the court agreed to hear another IJ case, in which the city of New London, Connecticut, condemned an unblighted neighborhood in order to make way for a hotel and condominium complex. Bullock hopes the Supreme Court will revisit the scope of the Berman decision, and rein in the privatization of eminent domain.

Out here on Edwards road, yellow signs bearing messages like "HELD HOSTAGE" and "WE SUPPORT ROOKWOOD EXCHANGE" sprout like dandelions from front lawns, and a king-size bedsheet banner hanging from Sandy Dittoe's pink stucco one-story declares, "64 OF 65 RESIDENTS WANT OUT. I AM ONE OF THEM." Dittoe bought her house for $82,000 seven years ago, and she's almost completely rehabbed it since. In 2002, speculating on Anderson's plans, she bought a house around the corner, which she rents out. When Anderson offered her $175,000 for each property, "it was a godsend," she told me. "I was thrilled." She began to make plans to move and to pay off the loan for her Northern Kentucky nightclub. But she has to wait for Anderson to make deals with all her neighbors before she'll receive a penny.

In the meantime, Dittoe's in limbo — a maddening situation that she blames on her holdout neighbors. "Sure I'm pissed. They're screwing everybody. I've been stuck in a house for two years. There's no point in putting any more money into it, but I still have to live here," she says, pointing out the unfinished trim in her kitchen and the place where she left off putting purple paint on a bedroom ceiling. Her neighbor, Bill Pierani, a part-time security guard for the Cincinnati Reds, agrees. "We'd have been out of here years ago if it wasn’t for them."

Pierani and Dittoe are glad to show me evidence of "blight": the streaks of grime in eaves; an overgrown back yard, home to rats and snakes; the foundations cracked, they say, by the heavy truck traffic; the "foot traffic" and the "element" it brings in; the guys — "I won’t tell you what color they were," Pierani says — who broke into someone's house. They point out the oil change place and the muffler shop down the street and describe how they've long wanted to get away from these nuisances — although there's little evidence that they or their neighbors tried to sell their homes or otherwise flee the neighborhood before Rookwood Exchange came along. Pierani compares the neighborhood, in which he has lived for nearly all of his life, to the cancer he once had. "The job is to go in and cut it off completely. Not to keep hacking at it."

At a meeting the previous night, the residents' impatience turned on Anderson's lawyer, who assured them that the end was in sight. This statement left resident Walter Sims hopping mad. "That lawyer pissed me off because he stood up there and misled these people," Sims, who is settled into his rocker on the front porch, says in his Kentucky drawl. "He knows these people" — he points to a holdout's house next door — "ain’t gonna ever sell to him. But he’s relying on the city to do it for him in court. And he knows that until all these appeals are resolved, they can't do nothing. You know how slow the judicial system is? It takes them months to wipe their ass."

But the residents reserve most of their seething fury for the holdouts, and when Pierani says, "Twenty-five years ago, there would have been a homicide by this point," it's not clear if he's nostalgic or relieved. When Sims says, "I think people are mad and disgusted because they ain't got their money. Why haven't you done something by now to get us the money?" you feel how ugly things might get. And when a man smoking a cigarette on his porch first refuses to talk to you because "the papers always get this story wrong," and then calls you back to say, "Wait a minute. You can quote me on this. Fuck the Gambles. Yeah. Fuck the Gambles, and throw Joe Horney in there, too," you're pretty sure things already have.

In this kind of atmosphere, it's no surprise that the residents don't believe that the Gambles and the others are standing on principle. Explanations vary — some think that they're angling for a better price, others that they're just stubborn — but most people seem to agree with Dittoe's assessment that "this project is going to benefit everyone, all the residents here and the whole city." She adds, "There's more to it than just what these people want." But whatever NIMBY [not in my back yard] concerns may have motivated the holdouts in the first place, they have become galvanized by the large-scale implications of their battle. "What I want to protect is not just myself, but virtually everyone else in the USA from having their constitutional rights undermined," says Horney. "I mean, this is the land of the free and the home of the brave. We're allowed to go out and buy property, and that's being taken away." As they dig in for the appeals, it's clear that these folks are in it for the long haul, that, even with his rented eminent domain powers, Anderson has a lengthy wait before he can extend his empire into this neighborhood. "He can have the house when we're on our deathbed," says Carl Gamble. "Not a minute before."

Mother Jones: www.MotherJones.com


Ogden officials may condemn properties for a Wal-Mart — Salt Lake Tribune, 12/19/04

Downtown: Residents are ready to challenge the action's constitutionality

By Kristen Moulton

There are dark clouds on the horizon for cities, which for decades have used eminent domain or its threat as a tool to replace run-down neighborhoods with tax-generating, job-creating businesses.

Not only are courts across the nation beginning to side with private-property rights' advocates, the Utah Legislature is cracking open the door to have a look. This is at the behest of educators and Gov. Olene Walker, who note the loss of revenue to schools from some redevelopment projects.

Cities also are paying attention to Kelo v. City of New London, a case scheduled for arguments before the U.S. Supreme Court on Feb. 22. The Institute for Justice, a Washington-based public interest law firm, is asking the court to rule that it is wrong for cities to take property from one owner to give to a developer.

Scott Bullock, a senior attorney for the institute, says another case decided last summer also has implications.

The Michigan Supreme Court overturned its 1981 Poletown ruling, which is a textbook case long used by cities and courts to allow eminent domain for commercial projects.

In the 1981 case, the court allowed General Motors to push 3,000 largely Polish immigrants out of their homes so it could expand its manufacturing plant. The new state Supreme Court said the decision was indefensible.

The strongest cases for such takings involve areas considered blighted. That means they have decaying buildings and inadequate streets, curbs, sidewalks and sewers. These projects are usually undertaken by city redevelopment agencies (RDAs).

Property owners are given rights by Utah Code, but if they want to stop an RDA, they have to act quickly. Residents have 30 days after a "blight" designation to file a complaint in District Court - or they lose their right to question the blight.

Once a redevelopment area is before the RDA board, residents can block a planned redevelopment area by submitting written objections from 40 percent of the property owners. That forces a vote at the next election.

Written objections by 60 percent of the property owners can force the RDA to shelve the project for three years. In both cases, the objections have to be submitted before the board accepts the plan.

Rarely, however, do property owners organize early enough to contest a blight designation. More often, people begin objecting when the issue is how much money they will be compensated for their property, according to Craig Call, Utah's ombudsman for property rights.

Senorina Fernandez grew up with 11 siblings in this neighborhood that hugs the Union Pacific rail yard on the west side of downtown Ogden [UT]. She raised six children here.

So it's with no small measure of sadness that she realizes this could be her last Christmas in her modest, well-kept home in the long-neglected neighborhood.

Ogden City wants Fernandez, along with residents of 33 other homes and owners of eight businesses, to move out to make way for a Super Wal-Mart.

"It's not a palace. But it's my home. It's my home!" says Fernandez, a widow who keeps a big garden and lives on a Social Security check.

Fernandez and other home and business owners in the 21-acre island are not optimistic. But they say they will go down fighting City Hall.

"I'll be danged if I'm going to let it go," says Fernandez who, like nine other property owners, has an attorney and is waiting for the city to condemn her property so she can challenge the action. "It's not fair."

While some residents are thrilled with the city's plans to buy property they have been unable to sell, the holdouts say Ogden instead should help them fix the blight - substandard housing, streets with no curbs, gutters or sidewalks, abandoned cars.

"I don't think in America we should ever be forced to do this," says Hal LaFleur, who owns several of the area's private parcels, including the 4-year-old building that houses his son-in-law's welding business. "This is not for public use. This is for Wal-Mart."

Cities and other government agencies have been taking private property through eminent domain and the threat of it for decades. They consider business expansion a public good, particularly when they clean up run-down neighborhoods in the process.

A wave of court rulings nationally gives property-rights advocates hope that that era is ending.

But in the meantime, Ogden looks at the redevelopment project and Wal-Mart's proposed superstore as a godsend.

"A retail destination": Stuart Reid, the city's director of community and economic development - and the LDS Church bishop for members in the redevelopment area - told City Council members earlier this year it could lead to Ogden's renaissance.

It would clean up an unsightly, old neighborhood where houses are squeezed in with manufacturers at a major entrance to downtown, 21st Street. And it could also mean an estimated $700,000 more each year in sales-tax revenue.

"It would go a long way in re-establishing downtown as a retail destination," says Richard McConkie, Reid's assistant director.

Mayor Matthew Godfrey acknowledges some residents are being asked to make a sacrifice.

"The hardest part in all of this is the emotion," Godfrey says. "I don't like for the people to go through the trauma because of what we're doing. We feel bad they have to . . . go through something that's for the betterment of the community, but that's clearly the situation here."

The Ogden Wal-Mart redevelopment case has attracted the attention of a Washington, D.C.-based public interest law firm, which argues that eminent domain is unconstitutional when governments take property for private business.

The law firm - the Institute for Justice - will argue a major Connecticut case along those lines before the U.S. Supreme Court on Feb. 22.

"Wal-Mart should simply not be the recipient of land through eminent domain," says the institute's senior attorney, Scott Bullock. "It's bad business [and] it's wrong."

The institute is not involved in the Ogden fight, but is in contact with Dorothy Littrell, a North Ogden accountant. Littrell bought property in the Wal-Mart project area just so she could sue the city, on constitutional issues, in 2nd District Court.

"I am 76 and a great-grandmother, and I will not let my experience go to waste when I can fight this injustice," Littrell says.

Ogden City attorney Norm Ashton says the characterization of the city's action as "unconstitutional" is simply wishful thinking.

"That's their desire or hope, but that isn't the present state of the law."

City officials are still negotiating with the holdout residents and business owners, and Ashton said he is confident they will reach a settlement. But if not, he said, the city will use eminent domain.

Amy Butters, a Syracuse-based attorney, is working for free for property owners in the neighborhood, fueled in part by a wrenching childhood memory. Her grandfather was forced to sell his tailor shop on Washington Boulevard to make way for the Ogden City Mall in the early 1980s.

After the mall failed, the city bought the property, razed the buildings, and is slowly redeveloping the property.

"It's frustrating to me that cities think Wal-Mart is the economic answer to all their problems," says Butters.

If the city condemns her clients' properties and they go to court, she will argue, "You can clean up an area of the city without taking the property away and giving it to somebody else."

But Mayor Godfrey says that argument misses the point: The neighborhood is not supposed to be a neighborhood.

Zoning out: More than 50 years ago, the city zoned it for manufacturing. Officials assumed that the houses, already decades old by then, would eventually be replaced. That's also why the city has never invested in curbs, gutters, storm drains or sidewalks, Godfrey says.

The neighborhood clung on, though, and now it's an eyesore, Godfrey says, adding that "the revitalization of the urban center of the city is key."

Nonetheless, residents say if their neighborhood is blighted, it's the city's fault.

Fernandez and Donna Marti, who lives with her 80-year-old husband in the home where he was born, say the city has ignored calls seeking enforcement of lawn and abandoned-car ordinances.

She and her husband, Evo, have signed an option for the city to buy their home, which they have upgraded frequently through the years. But they are not happy about having to leave.

It rankles Marti that her LDS bishop is one of the city officials pushing her out of her home. Reid did not directly try to persuade her to sell, she says. But that was the subtle message.

"He said, 'Sometimes we all have to give up something.' That didn't set well with me. He said, 'As your bishop, I will say if it's meant to be, it will be,' " says Marti.

Reid did not return a request for comment.

But Godfrey said that Reid's church position cuts the opposite way residents suspect and is no conflict.

"It gives him more compassion. He knows some of these people very personally." Reid, Godfrey says, has stayed away from negotiations involving church members.

Milton and Cristina Rodriguez say they see an irony. In other projects, Ogden is encouraging people to live and work downtown - exactly what the Rodriguezes do.

Cristina lives just a block from her job at the Internal Revenue Service. Milton owns vacant properties adjacent to his home so he could build a shop for his growing chain-link fencing business.

"I'll fight it. I don't want to move," says Milton. "I've had the ideal situation here."

And Jerry Wells, who owns an auto-repair and body shop on land the city wants, is worried he won't be able to replace his acre of concrete-covered land and shop for less than $500,000 - the going price for similar properties elsewhere. The city's latest offer: $186,000.

"This isn't right. This isn't a school or a highway. It's a Wal-Mart! That's not how it's supposed to be," says Wells. "If they can do this now, they can do this any time to anybody."

Salt Lake Tribute: www.sltrib.com

Bellflower Invokes Eminent Domain — Long Beach (CA) Press Telegram, 12/18/04

With no end to negotiations in sight, the town will take over Peerless Water's assets.
By Karen Robes

Unable to reach an agreement with a water company that has millions of dollars in water-related assets, the [Bellflower CA] City Council has voted to exercise its power of eminent domain to obtain those assets and control the water services of about 1,800 residential accounts.

City Administrator Michael Egan said the city will deposit with the state treasurer about $3.5 million to acquire the assets of Peerless Water Co.

By exercising eminent domain, the city can take private property for public use and pay for it at fair market value. For more than four months, city officials have met with Peerless, one of five water companies that operate in Bellflower. Peerless officials expressed an interest in selling their company's local assets, including fire hydrants, meters, pipelines, service connections, wells and pumps.

After a formal appraisal, the city offered $3.5 million to Peerless company President J. William Zastrow, who turned it down and countered.

Refusing to disclose the amount, Egan called the counteroffer "far off on price."

Zastrow declined to comment.

Egan said the city hopes to take control of Peerless assets as early as April. Both sides may be able to negotiate a final price without going to court.

A city review of Peerless' water service in the city determined "several problems with its existing infrastructure and operation," according to a city staff report.

Problems included aging wells, water-pressure systems below industry standards, insufficient surface storage facilities and noncompliance with the city's 1995 recommendations for major pipeline improvements and interconnection installations.

An estimated $6.6 million is projected over the next 20 years to make engineering, water quality and other improvements, according to staff reports.

If the city obtains the assets, it plans to fund the purchase and the improvements with a $10 million water bond, which would be paid over 30 years.

"We're insuring the long-term viability and low-cost services to Bellflower residents," Egan said.

Long Beach Press Telegram: www.presstelegram.com