By Karen Holzmeister
In a national decision with local implications, the U.S. Supreme Court ruled Thursday that local government agencies can use eminent domain on behalf of private development projects that will raise tax revenue.
Eminent domain is the power of a government agency to take private property — including homes — for public use through condemnation and compensation.
Writing for the court in the 5-4 ruling, Justice John Paul Stevens said local officials, not federal judges, know best in deciding whether a development project will benefit the community.
The case represented a defeat for some New London, Conn., residents who sued after city officials announced plans to raze their homes in a working-class neighborhood for a riverfront hotel, health club and offices.
The court essentially ruled that even a private development can be considered a public use if it raises tax revenue or benefits the public in other ways. It also ruled that property can be taken even if it isn't blighted.
However, the public shouldn't interpret the ruling as "government running amuck and using its powers of eminent domain to help out developers," James Sorensen, Alameda County's Community Development director, insisted Thursday.
"The court took great pains to point out the public purpose, and New London demonstrated a legitimate public purpose of boosting economic growth," Sorensen said.
However, he called the decision "pretty significant" for the county's redevelopment agency in particular, and California in general, since it reaffirms an agency's ability to use eminent domain to eliminate blight or to create economic development opportunities. At issue was the scope of the Fifth Amendment, which allows governments to seize private property through eminent domain if the land is for public use. City officials in New London envision a commercial development that would attract tourists to the riverfront, near a research center and proposed Coast Guard museum.
Justice Sandra Day O'Connor argued against the ruling — a ruling that could lead to the elimination of the New London neighborhood of Victorian-era houses and small businesses. In dissenting, she said cities should not have unlimited authority to uproot families — even if they are provided compensation — simply to accommodate wealthy developers.
Castro Valley resident Ken Carbone, a county Planning Commission nominee, sees both sides of the issue. He's concerned about proposed county designations for low- to moderate-income residential sites in unincorporated areas that could hurt neighborhoods.
"If a property owner spitefully holds out, we need to get around that," he said Thursday. "But that doesn't mean that the county should just walk in and take (the property)."
In Hayward's latest eminent domain proceeding, the City Council has authorized its redevelopment agency to file a complaint of eminent domain against the owner of a B Street building. The property has not been improved in compliance with a years-old city ordinance requiring downtown property owners to update unreinforced masonry buildings. The issue has not yet been resolved. While Hayward City Manager Jesus Armas said the ruling is a positive development for cities, he said Hayward rarely uses eminent domain — and then only as a last resort — when negotiations don't work.
He also noted that in California there already are strict requirements on how redevelopment areas can be established and how properties can be deemed blighted.
San Leandro City Manager John Jermanis said the ruling is an important decision because it reaffirms cities' ability to use the powers of eminent domain when it is absolutely essential.
"Our council will continue to be very cautious in use of eminent domain and reserve it for public purposes that benefit the community, such as parks, street widening and other public facilities," he said.
Jermanis said San Leandro has used eminent domain in the past in the creation of the Marina Boulevard Auto Mall, which in the long run has been successful for the city during recent economic setbacks.
Nationwide, more than 10,000 properties were threatened with condemnation, or condemned, in recent years, according to the Institute for Justice, a Washington, D.C., public interest law firm representing the New London homeowners.
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