Lawmakers may curb eminent domain use: (Louisville KY)Courier-Journal, 11/27/05

Taking of property for profit at issue

By Lesley Stedman Weidenbenerand Ben Zion Hershberg

State legislators are poised to pursue changes to the Indiana law governing eminent domain in the wake of a controversial U.S. Supreme Court decision earlier this year that expands its use.

But it's not clear whether they will succeed in their quest to restrict eminent domain — the government seizure of private property — to government projects, including roads, airports and stadiums.

"I would love to see that," said one of the General Assembly's most ardent property-rights advocates, Rep. David Wolkins, R-Winona Lake. "But I don't think we can do it. So my approach is going to be more expensive, significantly more expensive … for private developers."

The debate's outcome could affect a number of projects and property owners in Floyd County, where developers may try to use eminent domain to extend privately owned sewer lines.

Jack Vissing, a lawyer representing some Floyd County property owners who have been threatened with eminent domain, said the law "needs to have some limits."

And Sen. Connie Sipes, D-New Albany, said she plans to seek them. Forcing property owners to sell just so private developers can make more money is unfair, she said.

But in a decision in June, the Supreme Court said governments can force property owners to sell for private economic development if local officials determine that the project is in the public's best interest.

That has outraged property-rights advocates. They say it greatly expanded the authority traditionally granted under eminent domain and makes it possible for local officials to destroy neighborhoods in favor of shopping malls, condos or other development.

"We were all really amazed when the Supreme Court ruled that a private entity could take private property for their own gain," said Rep. Paul Robertson, D-Depauw.

In fact, lawmakers last year postponed making changes in the eminent domain law because the Supreme Court was deliberating the case. Few lawmakers believed the justices would expand what had traditionally been the purpose of eminent domain.

The justices did leave room for states to impose restrictions. Now, energized by the court decision, lawmakers are doing just that.

Earlier this month Sipes and Robertson met with a group of Floyd County homeowners to discuss the issue.

Households in two neighborhoods have gotten letters from developers this year asking them to sell easements for sewer lines across their land and threatening to take the property through eminent domain by privately owned sewer utilities if the owners won't sell.

For the Heritage Springs subdivision near Greenville, Thieneman Development LLC and a sewer company it's forming need the easement to discharge treated sewage to nearby Jersey Park Creek.

For his planned Lafayette Landings and Lafayette Ridge subdivisions near Stiller Road, developer Robert Lynn needs easements across several neighbors' property to pipe sewage about a mile and a half to the Wymberly Woods sewage-treatment plant.

Lynn said that, if the neighbors aren't willing to sell the easements, the Wymberly Woods utility will use its powers of eminent domain to take the easements.

Tom Cairns is one of the neighbors who could be affected by Lynn's plans.

"To me," said Cairns, 83, "this is a real threat, and it's something you worry about and agonize over."

He said he has been tending his 60 acres, keeping it "pristine," for the past 15 years, since his retirement. The pressurized sewer line Lynn wants to install across 3,269 feet of his property, Cairns said, "would wreck it."

Lynn has offered him $12,258 for the right to install the line, Cairns said, but he doesn't believe that would even cover the cost of the damage the sewer line would cause, much less his loss in property value.

He hopes the General Assembly will take action to protect private property owners like himself, Cairns said, with an immediate moratorium on the use of eminent domain to give lawmakers time to study the issue.

Lynn, who is considering at least one other route for the line, said he is prepared to ask the Wymberly Woods system to use its powers of eminent domain to obtain easements because sewers are necessary for the subdivisions he's planning.

He acknowledged that the use of sewers generally allows more homes to be built in subdivisions, providing a larger return on a developer's investment. But new sewer lines also provide many public benefits, Lynn said, including more efficient use of available land and higher property values.

He said he doesn't believe the General Assembly will impose stricter limits on the use of eminent domain in Indiana because "nothing would ever get done if eminent domain wasn't used."

But such efforts are likely to be made. Last week Sipes and Rep. Bill Cochran, D-New Albany, met with Gov. Mitch Daniels, a Republican, to express their concern about the issue.

"We wanted him to know what some of our constituents are dealing with, how this affects people," Sipes said. "We want to see where he's headed with this."

Daniels has not weighed in publicly about eminent domain. But through his press secretary, Jane Jankowski, the governor said he believes "we should be very careful about its use" and it should be reserved for "truly public purpose."

He did not say whether he believed eminent domain should ever be used for transactions that involve private landowners.

But some, including Sen. Brent Steele, R-Bedford, said it should never be used to take property from one private owner and provide it to another for financial gain -- no matter the public purpose or the compensation provided to the original owners.

Steele called the Supreme Court's decision "erroneous" and "wrong-headed."

"To take my home away from me — where I've raised my kids and my members are so a developer can make a profit and government can tax it more is contrary to what our forefathers believed about owning property," he said.

The Association of Cities and Towns opposes such restrictions. They say local officials rarely use the procedure, although the threat of it often prompts residents to sell their land.

Cities also claim that they need the authority to eliminate blight and foster economic development, although lawmakers say both terms are undefined in state law, leaving the option open to abuse.

This summer a legislative committee assigned to study the issue recommended that lawmakers better define blight and economic development.

Following the group's other recommendations, Wolkins plans to introduce legislation that would put other requirements on private-to-private land transactions through eminent domain. Property owners would receive at least 150 percent of the fair market value of their owner-occupied homes, plus compensation for their relocation costs and attorney fees for fighting the seizure under his proposal. "We're going to work to make sure people get something out of this," he said.

Wolkins also wants a law that prohibits eminent domain for private development unless the next-best alternative would increase the project's cost by 10 percent or more.

Even if Indiana lawmakers aren't successful in imposing restrictions, Congress might be.

The U.S. House of Representatives has passed the Private Property Protection Act, which would withhold all federal development funds from any city or other local jurisdiction that takes property for economic development, said Rep. Mike Sodrel, R-9th District.

As passed by the House, the act includes an amendment written by Sodrel that would give the government — rather than the property owner — the burden of proof in determining whether the project is economic development.

The Senate is now considering the bill.

Sodrel said he believes the Supreme Court's decision "was a bad interpretation of the 5th amendment."

"Public use has always meant a highway, an airport, a sewage disposal plant, some public need," he said. "We can't allow property to be taken from one private property owner and given to another private property owner."

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