Eminent domain a hot-button issue: Westchester County (NY) Business Journal, 8/05

Local officials debate pros and cons of seizing private land

By Joan Stableford

While homeowners and politicians nationwide are reacting angrily and swiftly to the recent U.S. Supreme Court ruling on eminent domain that allowed a Connecticut city to seize seven personal homes for a private developer's project, leaders from communities and business in Westchester County were much more cautious on the issue last week.

"We can't comment on this. Our organization has not yet taken a position," said Marsha Gordon, president and chief executive officer of The Business Council of Westchester, which represents 1,400 local businesses.

On June 23, the Supreme Court ruled that New London, Conn., could force seven homeowners to relinquish their property rights for economic development to redevelop a waterfront property into a hotel, office park and urban-style townhomes to expand the city's tax base and create jobs.

When eminent domain is used successfully in urban areas, it is used to put parcels of abandoned land and rundown buildings together for revitalization, city economic development officials said.

The main controversy in Kelo vs. The City of New London centers on whether government can force one property owner to sell for the benefit of another, typically a large developer, in the name of economic development.

"The ruling has not actually made anything different in that it doesn't grant any more authority to the city than it already had before. In my administration, we have not used eminent domain and we don't plan to," said White Plains Mayor Joseph Delfino.

Mount Vernon Mayor Ernest D. Davis said eminent domain is a very useful tool for cities to implement, if the economic development project benefits the greater public good.

"We would not take someone's property without considering all of the future benefits and impacts upon the homeowner or business. We do not seek to take property unless we absolutely have to. In our case, we have used eminent domain very sparingly. And, we work with the property owners," Davis said.

For example, he pointed to the revitalization of Sandford Boulevard, in which property was seized to build a 285,000-square-foot retail complex to house such big-box retailers as Target, TJ Max, Best Buy, creating thousands of jobs and generating $4 million in sales-tax revenues for the city.

"We approached these property owners in an amicable way, helping them understand the greater benefits of the project to the community and then compensating them fairly for their property and helping them find other suitable places to relocate," Davis said.

Even with eminent domain property seizures, Davis said the retail project was held up for four years in court, not because of eminent domain, but because of lawsuits from its next-door neighbor, Pelham, which raised traffic-congestion issues.

"We take eminent domain very seriously. With any big economic development project, we consider all of the environmental and economic impacts before moving forward. Eminent domain should be used as a last resort," the mayor said.

Richard Halevy, director of communications for Yonkers, said eminent domain is a tool the city has used rarely. It is a valuable tool for economic development, but should be used as a last resort, he said.

"Instead, we have preferred to negotiate with the few property owners affected. It's a balancing act. You have to weigh a project for the greater good, such as the number of jobs it will create and its benefits (a thriving economy). We have had a lot of economic development projects — over $2 billion — in the past five years, and I don't know of any instances where we have used eminent domain. I would have to do some research," Halevy said.

After the Supreme Court decision in late June, Assemblyman Richard L. Brodsky acted swiftly, introducing legislation in July to reform the state's eminent domain law.

"We need to protect homeowners' interests, while, at the same time, allowing economic development to occur. We need to put eminent domain back under the control of elected officials," Brodsky said.

His proposed Eminent Domain Reform Act focuses on the injustice of condemning private property for economic development and transferring the property to other private parties, as in the New London case.

Under his proposal, the time frame for a property owner to appeal a condemnation would be increased from 30 to 90 days. Property owners would also be allowed to appeal the condemnation if the project had been substantially changed.

A second key part of his proposal would require local government to use a public planning process to develop a comprehensive economic development plan for the affected area and then vote it into law. The government must also prepare a homeowner impact assessment statement, comparing the harm to the affected property owners with the project's expected community benefits and justify the taking of the private property in writing.

In addition, this bill proposes increasing the compensation to the affected homeowners to a minimum of 150 percent of the fair market value of their property and added compensation for the displaced residents.

Davis reacted strongly to the proposal to compensate property owners a minimum of one-and-half times the fair market value of their property.

"That part of his proposed bill would set a dangerous precedent. It would make it harder for cities and urban areas to revitalize," Davis said.

But Halevy said he believes that a property owner whose property is seized under eminent domain should receive a premium over the fair market value of his property. It is a fair concept, he said.

"But what amount is right? Is 150 percent more too much, too little or just right? Who should determine that?" Halevey said.

Finally, the legislation calls for creating a temporary commission to examine the constitutional and legislative standards to reform the eminent domain procedure where private homeowners are affected, when eminent domain is used for economic development.

Davis said he believes statutes provide enough safeguards for property owners.

"When the case is weak, the property owners win out. The courts can also decide which property values are fair and realistic. The bottom line is that I think the system works. If it isn't broken, it doesn't need fixing," he said.

The issue is, and will be, a political hot button for homeowners and communities and politicians in the year ahead. In fact, the issue is so controversial right now that some leaders preferred not to respond to questions on changes to statutes on eminent domain and the future of economic development.

For example, a spokeswoman for Sal Carrera, director of Westchester County's Office of Economic Development, said Carrera did not want to comment. Likewise, calls to Theresa Waivada, executive director of Westchester County's Industrial Development Agency, went unreturned.

"This is a very complex and difficult issue. After the summer, we will consider it and study it with our membership this fall," said Gordon of The Business Council of Westchester.

"It gets down to the basic concept of home rule. Each community will have to deal with the current and future laws on eminent domain," Halevy concluded.

Westchester County Business Journal: www.westchestercbj.com