11/21/2005

A Pre-emptive Strike in Eminent Domain Battle: New York (NY) Law Journal, 11/16/05

By Terry Sheridan

A prominent redevelopment group is fighting a high-stakes battle to keep control over the use of eminent domain by proposing changes in Florida's takings law that are friendlier to property owners.

In an attempt to blunt a statewide backlash, a bill by the Florida Redevelopment Association [FRA] would reassure property owners that government agencies could seize property through eminent domain only as a last resort.

The Tallahassee-based consortium primarily of municipal redevelopment officials and planners is proposing to give property owners advance notice of condemnation hearings and as much as 150 percent of the government-appraised value of their land.

Currently, property owners get no notice of hearings and only the appraised value of their land. But critics say the proposal is merely a token effort and that the bill is unclear about how much deference property owners would get before losing their land.

The FRA proposal comes as a special state House committee narrows its focus on issues generated by a U.S. Supreme Court ruling that strengthened government's ability to take properties. In the Kelo v. New London, Conn. decision last June, the U.S. Supreme Court backed the use of eminent domain for private development.

The redevelopment group released the measure last month at its annual conference in St. Petersburg.

"The efforts of FRA are to give as much protection to property owners as possible but still maintain the right to use eminent domain," said Jeff Oris, president-elect of the association and government operations director for PMG Associates in Deerfield Beach.

But attorney Amy Boulris of Brigham Moore in Miami, who specializes in property rights litigation, said the group's proposal gives "only a nod to the concerns of property owners. It's not the real remedy that they want people to believe it is."

The legislative battle began to take shape shortly after the release of the Kelo decision, in which the justices urged state legislatures to take up the issue of takings for private use.

Lead plaintiff Suzette Kelo was one of the Connecticut homeowners whose properties were targeted by the city of New London for use in a project to complement a nearby Pfizer Inc. facility.

The justices voted 5-4 in favor of New London, saying the power of eminent domain could be used for private economic development. But the opinion also said that states could craft their own laws on the subject.

The ruling set off a firestorm of opposition. Florida is among many states considering measures to limit the use of eminent domain and to better define conditions such as blight that would lead to takings.

Florida's eminent domain law allows municipalities and other governments to target property in blighted areas. But the definition of blight in Florida is considered among the loosest in the country and can be liberally applied. For example, the law says faulty lot layouts and inadequate mass transit can characterize an area as blighted.

At the federal level, the U.S. House of Representatives voted last week to withhold federal funding from local governments that use eminent domain for private economic development.

U.S. Sen. Bill Nelson, D-Fla., has co-sponsored a similar measure.

In Florida, property takings will rank among the Legislature's biggest issues in the upcoming session beginning in March, said state Rep. Jack Seiler of Pompano Beach.

Seiler, a member of the House Select Committee on Private Property Rights, expects that a committee bill will emerge from a series of hearings.

"We can craft a good compromise but everyone will have to move -- eminent domain lawyers, community redevelopment agencies, cities and counties," he said.

The FRA has its own fix. Its proposed bill helps frame the argument of government in the oncoming debate. The FRA bill would require:
  • Agencies to determine after a public hearing that a taking is essential to achieve the redevelopment plan.
  • Negotiations and "all other means" be exhausted in purchase attempts.
  • The owner receive a written offer for at least 125 percent of the appraised value at least 30 days before a condemnation.
  • Governments to pay at least 150 percent of the appraised value of a homestead property that after the taking will be sold or leased to a private party for redevelopment.
  • The owner receive a 15-day written notice of a condemnation hearing by a city commission or redevelopment agency.
  • And that if the property is a residence, the owner's relocation expenses to a comparable home be paid, not including attorney or appraisal fees.

"We're not mean-spirited people," said David Cardwell, general counsel to the redevelopment group. "We think there may be deficiencies in the notice and due process provisions for early participation by the property owner, and we're willing to get them involved earlier. The property-rights [activists'] position is that elected officials are evil and just want to take people's property."

Cardwell said the redevelopment group's compensation proposal goes far beyond the current requirement that owners be paid the appraised value of their property.

Instead, owners can be paid the value of their parcel as part of a land assembly of several owners' properties. An assembly, which allows a bigger project to be built, is considered more valuable than individual lots.

But Boulris, who represents property owners in eminent domain cases, and attorney and community and economic development professor Frank Schnidman offered a laundry list of problems in the proposal.

Schnidman, who wrote an amicus brief in the Kelo case supporting the arguments of the homeowners who lost, questioned what the FRA means when it states that a condemned property must be "essential" to redevelopment goals.

"We'll have to litigate that," he said. "What's the definition of 'essential'? I guess the Kelo property was essential because an executive in the new Pfizer building would have to look at those houses to see the river. It's 'essential' to see the river, so they had to take the houses."

Boulris questions whether appraised property values will pay property owners enough for their land.

A more apt valuation would be the fair market value determined by a jury, she said.

What's more, a 15-day hearing notice isn't enough time for owners to prepare their side, Boulris said.

Boulris and Schnidman believe one of the bill's biggest gaps is its silence on blight.

Some consider the existing definition in state law to be too easy to satisfy. In 2002, the state law was changed to allow a property taking if two of 14 criteria were met.

While Cardwell insists the change tightened the blight definition, Boulris and other attorneys believe it made eminent domain easier.

Now, while the state House property rights committee is exploring a two-pronged approach to blight, the redevelopment group is standing by the current law, Cardwell said.

The committee is exploring changes to the blight definition so that the designation would be used differently for eminent domain than in ordinary redevelopment efforts and financing.

Rep. Julio Robaina, R-Miami, and Seiler said it's not yet clear what that would mean.

The committee also is considering whether an entire area can be designated slum and blight, or if each parcel within that area must meet the criteria.

"That causes us some concern," Cardwell said.

One parcel that has been maintained and improved amid nine that are deteriorated could hold up the entire redevelopment effort, he said.

Land-use attorney and property rights advocate Brad Gould of Akerman Senterfitt in Miami, who testified before the committee in October, said it became obvious during committee hearings that the redevelopment association and Florida League of Cities are seeking a trade-off with property rights advocates.

"They're willing to provide more due process and willing to do different things on compensation, but they're very concerned about modifying the criteria for slum and blight," he said.

But Cardwell said that unless the redevelopment group agrees "to never, ever, ever use eminent domain, anything else we do is trying to slip something past everyone."

The House committee's next meeting is scheduled for Dec. 5 in Tallahassee. A final report is expected shortly before the next legislative session convenes in March.


New York Law Journal: www.law.com