Public use or abuse of power?: The Dallas (TX) Morning News , 2/19/05

Landowner, council at odds over use of eminent domain

By Wendy Hundley

For more than a dozen years, Xavier Hernandez has sold icy treats from a small shop on the edge of the old Canyon Creek Shopping Center.

Last week, the Richardson City Council approved a measure that could force him to sell his property for the II Creeks project, an upscale retail and residential development going up on adjacent land.

City officials said the eminent domain action benefits Richardson by boosting the economy and revitalizing a dying retail center.

"Economic development is a public purpose," City Manager Bill Keffler said.

But Mr. Hernandez sees it differently. "It's unbelievable that they can force me to sell so somebody else can make a profit," he said. "It's un-American."

On Tuesday, the U.S. Supreme Court will hear arguments to determine whether seizing property for a private developer is unconstitutional.

The Kelo vs. New London case involves homeowner Susette Kelo in New London, Conn. The city sought to seize all the land in Ms. Kelo's neighborhood so a private developer could build a hotel, homes and offices to complement a new nearby Pfizer Corp. plant.

If this use of eminent domain is upheld by the Supreme Court, "no one's home or small business is safe in this country," said Steven Anderson, coordinator for the Castle Coalition, a national organization fighting what it believes is the abuse of such powers.

He considers Kelo vs. New London one of the foremost property rights cases in 50 years.

Eminent domain has traditionally been used to acquire private property for parks, roads and other projects that benefit the public.

That began to change in 1954, when the Supreme Court ruled in Berman vs. Parker that private property could be taken to revitalize blighted urban areas.

"Since that case, the floodgates have opened," Mr. Anderson said. "The government is trying to take land that truly isn't blighted."

The Castle Coalition is supporting Arlington property owners who fear their land will be seized for the new Dallas Cowboys stadium.

In Richardson, City Council members said last week that they struggled with the decision to authorize condemnation of the Hernandez property.

"But they were trying to look at the long-term public good," said Michael Wanchick, an assistant city manager. "We're not unsympathetic to Mr. Hernandez."

Nevertheless, the city attorney believes Richardson is on firm legal ground, Mr. Wanchick said. "Clearly we have a right to do this under state and federal laws."

There's little doubt that the new II Creeks project will revitalize the old Canyon Creek Shopping Center. In the 1960s and '70s, it was a thriving retail site with a theater, restaurants, a bank and doctors' offices.

Over the years, the development at the intersection of Lookout Drive and Custer Parkway was eclipsed as businesses moved into high-traffic malls or along busy thoroughfares.

The final blow came three years ago, when a Tom Thumb store, the anchor tenant, closed.

The city tried unsuccessfully to find interested developers until last year, when three homeowners in the nearby Canyon Creek neighborhood decided take a chance on the old retail center.

Their vision for the $40 million II Creeks project will replace the vacant storefronts and empty parking lot with upscale retail stores and town homes selling for as much as $575,000.

Richardson officials say II Creeks is a model redevelopment that will create jobs, pump up the city's sagging tax base and generate new sales tax revenue.

It will also provide upscale housing for employees at the new $3 billion Texas Instruments semiconductor plant and the $85 million engineering and research facility at the University of Texas at Dallas.

"We wanted to do everything we could to support redevelopment," Mr. Wanchick said. "There is a lot of support for [II Creeks] in the Canyon Creek neighborhood."

He tried to serve as an intermediary between II Creeks and the Hernandez family but was unable to negotiate a settlement.

The Hernandez property is valued at $47,158 on Collin County tax rolls. A certified appraiser hired by the city set the market value at $94,000. The family has said a potential buyer once offered $375,000, but Mr. Wanchick said the city is not aware of any such proposal today.

The owners of II Creeks offered to buy the three-tenths of an acre site for $125,000 and provide four years of free rent elsewhere in the development.

"It appears the landowner is unwilling to sell the land at a fair and reasonable price," Mr. Keffler said at last week's City Council meeting, where the eminent domain resolution was approved 6-to-1.

City officials said they hope that the action prompts the property owners to reach a compromise and that condemnation wouldn't be necessary. Mr. Wanchick said the city is looking for other Richardson locations for the snow cone shop.

Mr. Hernandez, whose family owns six seasonal TC Shaved Ice locations in the Dallas area, said the Custer Road site is profitable, with an established customer base.

He said the $125,000 offer wouldn't allow him to buy another piece of land, construct a new stand and rebuild the business.

"If you're going to force me out, at least compensate me for what it's worth," he said.

"It doesn't make sense that I have the property and they're setting the price."

Dallas Morning News: www.dallasnews.com