Panel tackles eminent domain: Indianapolis (IN) Star, 8/11/05

State legislators want to make sure property owners are protected under law

By Michele McNeil

The 12-member Interim Study Committee on Eminent Domain will meet again in September to hear more testimony about how governments use their power to take private property for public uses.

The committee plans to meet again in October to offer legislative proposals.

Indiana lawmakers want to make it harder for the government to seize a home or business in the wake of a landmark U.S. Supreme Court case that some fear tramples on property owners' rights.

But the challenge for a legislative committee, which met Wednesday for the first time to study the issue of eminent domain, is to balance private property rights with the economic development needs of local governments.

"(Hoosiers) want to make sure you don't come knocking on their door because someone thinks it's a good place to throw up a strip mall," said Rep. Ryan Dvorak, D-South Bend, who serves on the committee.

At the very least, lawmakers say, they want to ensure Hoosiers get a fair price when eminent domain is used.

In June, the U.S. Supreme Court ruled that a government may use eminent domain to obtain private property that later can be used in a private development if that development is deemed a public benefit.

The case sparked opposition from those who fear the use of eminent domain will be broadened and homes could be seized to make way for a new superstore or parking garage.

Already, Alabama has passed a law barring the use of eminent domain for private development, and at least eight other states are considering similar restrictions.

The legislative committee, which heard more than three hours of public testimony, will meet again in September, and will have recommendations for legislative proposals in October, said Rep. David Wolkins, R-Winona Lake, who is leading the committee and efforts to clarify the state's eminent domain laws.

Eminent domain is typically used to build new roads or a new school or to make way for a utility pipeline. Governments also use eminent domain to buy rundown properties and revitalize a neighborhood. State and federal constitutions require governments to pay if they take land.

But, "Indiana is getting more aggressive," warned Steven Anderson, of the Washington-based Institute for Justice, a national advocate for property owners' rights.

Mishawaka Mayor Jeffrey L. Rea said eminent domain is a tool -- although some lawmakers called it a "threat" -- that helps his northern Indiana city transform rundown areas into revitalized neighborhoods that attract more jobs.

"Eminent domain is used as a last resort," said Rea, who said his city acquired 60 properties to allow for the AM General Corp.'s Hummer plant to expand. Eminent domain didn't have to be used, he said.

In Indianapolis, eminent domain was used to transform a crime-plagued area into Fall Creek Place, the highly successful neighborhood revitalization project on the Near Northside.

Eminent domain also may be used to make way for a new stadium for the Indianapolis Colts.

John Klipsch, the stadium building authority's executive director, said eminent domain is a possibility for three of the last six properties the authority does not own on the site. City officials negotiated a price for two and the authority is working with the U.S. Postal Service on another one.

Negotiations continue with the private owners of the last three properties, and the authority has sent letters to start the eminent domain process, which can take 60 to 90 days, Klipsch said.

Rick Hurst, and his company that sells dry beans to grocery stores, is one of the last three holdouts in the path of the new stadium. His situation illustrates the problem facing Hoosier lawmakers -- how to make sure governments adequately compensate residents who lose their property.

Hurst told the committee the cost of relocating his business far exceeds the appraised value of his company, N.K. Hurst Co. There's the cost -- and difficulty -- of finding another facility that can handle cleaning and packaging millions of beans. And there's the cost of moving his employees or finding new workers.

There's an emotional cost as well. In the 1970s, when businesses and residents were fleeing downtown for the suburbs, he said: "We stayed."

Indianapolis Star: www.indystar.com