2/01/2005

Eminent domain takes aim at life's work — St Louis (MO) Post-Dispatch, 1/31/05

By Jake Wagman

Every month for 20 years, Gentle "Jim" Day mailed his $1,222.22 mortgage payment on his business, Royal Auto Repair.

He finally paid if off last year. But now Day, the son of Arkansas sharecroppers, faces losing his land and business.

An agency backed by the city is preparing to take Day's business by eminent domain to make way for something called a "Media Box."

Day can take the offer of $67,500 for his property - less than the city says it's worth - or continue with an already drawn-out court battle. Either way, he has little chance of keeping his shop on a triangle of land at Spring Avenue and Olive Street.

Critics say Day's situation is a classic example of the abuse of eminent domain. A case pending before the U.S. Supreme Court could affect thousands of similar cases nationwide.

In St. Louis, Day is one of a growing number of property owners angered by the methods being used to redevelop the city's arts district, an effort that has been led by a former mayor.

"Coming up, I was afraid of losing my property for tax purposes, lack of payment," says Day, 57. "I paid the property off, and I still lose the property. That's a bad feeling."

Compounding his frustration is that he knows little about what the plans are for the land, nor what a "Media Box" is.

Day's business is just steps way from the Fox Theatre, Powell Hall, the Contemporary Art Museum and other cultural institutions. The area is struggling and has been targeted for redevelopment by the city. Leading the charge is Grand Center Inc., a nonprofit organization headed by former Mayor Vincent C. Schoemehl Jr.

The redevelopment plan passed in 2002 by the Board of Aldermen names Grand Center as "master developer," giving the agency broad and almost unilateral powers to control land use. As president and chief executive of the agency, Schoemehl is the mini-mayor of a swatch of midtown roughly the size of 20 Busch Stadiums. Grand Center can approve or reject building designs, dispense up to $80 million in tax incentives and acquire land by eminent domain.

Grand Center's vision has the area becoming the "cultural soul" of the city, a residential and commercial district that will rival the Delmar Loop and Central West End.

The vision does not include an auto repair shop. The Post-Dispatch obtained a map of Grand Center's "Strategic Development Master Plan" that shows the "Media Box" in the same spot as Royal Auto Repair.

"Can't talk" about it

So just what is a Media Box?
For weeks, officials in Grand Center and others involved refused to discuss the plan.

The redevelopment plan originally given to the city called for a park, open space or residences on the site; an artist with a history of multimedia projects is involved.

"I can't talk to you about the Media Box," Eric Friedman, a real estate agent who describes himself as a principal in the project, said earlier last month.

But last week, Michelle Cohen, a public relations executive recently hired by Grand Center, said the "Media Box" is a building that will hold a design studio and apartments or condominiums.

"The 'Media Box' is really the working title for the design studio piece of it," Cohen said.

Friedman is working with the city's postmodern standard-bearer, an asbestos lawyer turned multimedia artist named Paul Guzzardo. Guzzardo has been involved in creative presentation of images, including projecting the last episode of "Seinfeld" on the side of a building on Washington Avenue. He also owned an "interactive" nightclub, Cabool, where dance moves were broadcast over the Internet.

"I have an interest and kind of obsession with information culture and urbanism," Guzzardo said recently - although he also refused to discuss the Media Box.

The proposal submitted to the city by Grand Center says nothing about using Day's property for commercial purposes. Still, Schoemehl says the intended use of the land is consistent with the redevelopment plan.

"It is not simply being condemned in furtherance of a piece of abstract art," Schoemehl said.

Fighting Grand Center
Day developed a knack for engine repair while working on farms in Crawfordsville, Ark., where he grew up.

He came to St. Louis as a young man for formal training as a mechanic. Before he bought Royal Auto Repair, Day worked jobs including on an assembly line at an envelope factory and in the kitchen of Uncle Bill's diner.

In October 2003, Schoemehl offered Day $125,000 for his land. Day rejected it. Two months later, Schoemehl cut the offer to $67,500. That is $12,800 less than the city's official appraisal.

"Let me put it this way - $67,000, if you give me three months, I could probably make that here," Day said in an interview in his cramped office at the repair shop.

After Day rejected the second offer, an arm of Grand Center filed a lawsuit to have the property condemned. It is pending in St. Louis Circuit Court.

Other property owners have sued Schoemehl and Grand Center over tactics they consider heavy-handed and bullying.

A group of property owners led by the Masonic Temple sued Grand Center in October in federal court. They charge that Grand Center has wrongfully threatened property owners with eminent domain "in an effort to get them to sell at a distressed price, sometimes offering only $1, which itself carries an ominous implication."

The company that operates the Fox Theatre sued Grand Center over parking spots, accusing it of seeking the "gentrification" of the area. That suit was dismissed, but, in a separate suit, Grand Center sued the company that owns Fox in a land dispute that was dismissed in circuit court. That suit is now pending in state appeals court.

Even the alderman who sponsored the measure to give Grand Center its power now says they might be taking those powers too far.

"Eminent domain should be the exercise of last resort," said Alderman Mike McMillan, D-19th Ward. "I do not think that, long term, it is the best thing for the development of the district because it creates a lot of bad will."

McMillan says he was surprised to learn about Day's situation.

"Had I been aware of it, I would not have supported the way it was done," McMillan said.

What is blight?
The Fifth Amendment allows local governments to take private property for "public use" as long as "just compensation" is provided. In the two centuries since those terms were inked, it has been up to judges and lawmakers to decide what they mean.

Grand Center's eminent domain powers stem from the designation that the area is "blighted."

And just what is the definition of blight?

"Bottom line is anything a local legislature says is blight is blight," says Stanley J. Wallach, a lawyer who is chairman of the Missouri Bar's Eminent Domain Law Committee. "Absent fraud or collusion or bad faith, courts will not second-guess it."

For instance, the campus of St. Louis University was deemed blighted by the Board of Aldermen. That made the university eligible for tax breaks on building its 13,000-seat arena.

Day's property also is blighted, which means it is ripe for acquisition, regardless of whether the Media Box is for the public good.

Clients who come to Wallach with eminent domain complaints get this advice: "Get to City Hall with everybody you can, bang on some pots and pans, and try to stand up for your rights at the political level. Because by the time it gets to me, you are fighting an uphill battle to say the least."

The case before the Supreme Court could change that. Residents of New London, Conn., sued the city in 2000 after the City Council gave permission to a development agency to take their homes by eminent domain to build office space and a hotel. The city's rationale was that the new projects would provide more tax dollars and economic development than the homes. The nation's highest court will hear the case Feb. 22.

If it issues a broad ruling against the city, the decision could affect eminent domain disputes everywhere. That includes fights in Arnold, Sunset Hills and Maplewood, where developers are seeking to take private homes for shopping centers.

Day is waiting for his day in court. A hearing set for Jan. 18 was postponed to March 7. If Day and Grand Center don't settle, the court could condemn the land and set compensation for Day.

"I sleep at night so I can defend myself from it," Day says. "I try to have a nice sleep and a clear mind because every day I have to defend myself from this."


St Louis Post-Dispatch: www.post-dispatch.com