Showdown looms over eminent domain power: Silicon Valley/San Jose (CA) Business Journal, 9/11/05

By Timothy Roberts

The San Jose [CA] Redevelopment Agency is gearing up for a battle next year over the use of eminent domain in private developments.

The redevelopment agency, the largest in California, is concerned about a series of legislative attempts and two proposed constitutional amendments that would limit or even take away its power to take property and sell it to a private developer.

The legislative efforts have all bogged down in the last weeks of the legislative session that was expected to end as early as Sept. 8. But more than one of the four bills is expected to return next year.

The San Jose Redevelopment Agency says it rarely undertakes eminent domain proceedings, but that it needs that power to negotiate deals.

"Having it as a tool of last resort makes it clear that you are serious," says Patty Deignan, chief deputy general counsel for the redevelopment agency. "It gets people to listen to you."

Among the properties that the agency is attempting to buy now are the 14 acres south of Diridon Station to be used for affordable housing — or a baseball stadium.

The use of eminent domain, the power of government to take property for roads, and dams and other public projects often stirs controversy. More controversial still are cases in which cities and redevelopment agencies take property in order to spur economic development.

After the U.S. Supreme Court upheld the latter use of eminent domain in a New London, Conn., case in June, California legislators jumped into the fray.

State Sen. Tom McClintock, R-Thousand Oaks, proposed a constitutional amendment that would prevent government from taking land and giving it to a developer for a private development.

Under McClintock's proposed amendment, the government entity that took the land would have to occupy it. It couldn't be turned over to an office or retail developer.

Mr. McClintock called the proposal "The Homeowner and Property Protection Act."

Another constitutional amendment filed by Tom Torlakson, D-Antioch, would prohibit the taking of owner-occupied property for private use. And two other bills would declare a two-year moratorium on taking property for private use and call for a study of the use of eminent domain.

The McClintock amendment was voted down in the Senate Judiciary Committee. The other proposals were set aside for further study until next year. Mr. McClintock says he will reintroduce his proposal next year.

The San Jose Redevelopment Agency is gathering facts for a historic review of its own use of eminent domain so that it can testify against enactment of the limitations, Ms. Deignan says.

In announcing his proposal in July, Mr. McClintock said the Supreme Court decision "breaks the social compact that gives government its legitimacy. ... It used to be that if a widow didn't want to sell her home to a developer, she didn't have to. ... The government was there to protect her. Now government has become the thug."

State Sen. Abel Maldonado, R-Santa Maria, a co-author of the McClintock bill, says the U.S. Supreme Court "made it easier for government to take property away from private citizens. That should be harder, not easier."

He says if the Legislature won't pass the constitutional amendment, he would support putting it on the ballot.

John Shirey, executive director of the California Redevelopment Association, calls the constitutional amendment "a nuclear bomb."

"This is a whole lot about politics and not much about policy," says Mr. Shirey. The association represents the state's redevelopment agencies.

The U.S. Supreme Court case (Kelo v. City of New London) had no impact on California, Mr. Shirey says. Here, as in most states, a condemnation cannot take place unless the government agency can show that the area to be taken is blighted.

"We have strong laws in California that strike a balance between redevelopment and property rights," he says.

The California Redevelopment Association was joined in its opposition to the bills by the California League of Cities.

The Santa Clara County Supervisors, however, sent a letter in support of one of the bills. Signed by Supervisor Liz Kniss the letter says the power of eminent domain should be used sparingly.

The county supervisors have often been at odds with the City of San Jose over its use of the redevelopment agency, which siphons off property tax revenue that the county says would otherwise go to schools and health care.

State Sen. Elaine Alquist, D-Santa Clara, preferred less drastic means of limiting the use of eminent domain that a constitutional amendment. She coauthored two bills that would call for a moratorium and further study.

"Eminent domain has proven to be an important tool to address blight," she said in a statement to the Business Journal. "However, we need to ensure that government takes a balanced approach when it uses this very powerful tool."

Silicon Valley/San Jose (CA) Business Journal: http://sanjose.bizjournals.com