Fight is on to save ancient forest: Newsday, 2/3/05

By Carolyn Thompson (Associated Press)

Erie County [NY] is considering using eminent domain to seize control of a rare forest that sprang hundreds of years ago from Lake Erie's sandy shore.

The forest, with its hemlock, black cherry and oak trees, is the oldest forest in the state, experts say, but even more exceptional is its location on a sand dune.

"To find an old-growth hemlock forest on sand, well there's only one other example in the world," said Bruce Kershner of the Buffalo Audubon Society.

Kershner is among those fighting the property owner's plans to build a home on the dune, located in the town of Evans, about 15 miles west of Buffalo.

Jeffrey White has said he would build in a place where there are no trees, but authorities say even that would damage the dune and the ancient trees it supports.

Erie County's commissioner of environment and planning has asked county lawmakers for permission to pursue the land through eminent domain, saying months of negotiations to buy the property from White have been fruitless.

Commissioner Laurence Rubin said he suggested a price of $750,000 for the 18-acre parcel, more than $200,000 over what White paid the former owner's estate in 2003. The land, known as Pine Lodge, was a private camp during the first half of the last century. About five acres are considered environmentally sensitive.

"He turned that down," said Rubin, who said White named a $2 million price tag.

White, who did not immediately return a phone message Thursday, said earlier that he dropped his initial plans to subdivide and build several houses on the land after the county raised concerns about the old-growth hardwoods, deciding instead to build only one home, for his family.

"It was the right thing to do," he told The Buffalo News in January.

But an environmental consultant's report sought by the county strongly advises against any construction on the dune, warning it would increase the likelihood of water and wind erosion.

White disagrees, countering that the trees have already survived centuries of battering by lake winds and waves.

Kershner, an old-growth forest expert, estimated the age of one fallen hemlock, a kind of evergreen, at 586 years, based on a count of its rings. Other trees, still standing, are even older, he said.

"We were floored," said Kershner, author of the recently published "Sierra Club Guide to Ancient Forests of the Northeast" and several other environmental books.

"When something is this rare and unique — globally unique — one doesn't go messing around with it without saying I don't care about it's significance," he said. "This is an example of our native heritage."

The only other old-growth dune hemlocks are on Lake Michigan's eastern coastline, in Sleeping Bear Dunes National Lakeshore. Hemlocks are seldom found in sand because of their need for constant moisture.

"When you lose this, it's irretrievable," Kershner said.

The proposal to pursue eminent domain is before the Legislature's Economic Development Committee. In the meantime, the Evans Town Board will decide later this month whether to require White to perform an environmental impact study before beginning construction on the land.

Environmentalists spoke in favor of the requirement at a board meeting on Wednesday. White attended but did not comment.

If a court approves acquisition of the land by eminent domain, an independent appraiser would set the price to be paid to White.

Newsday: www.newsday.com

Key Panel Passes Bill to Ban Taking Private Land for Economic Development: Savannah (GA) Business report and Journal, 2/4/05

The Georgia Senate Judiciary Committee Thursday voted unanimously to pass legislation restricting the use eminent domain powers. Senate Bill 86, authored by Sen. Jeff Chapman (R-Brunswick), prohibits the exercise of the power of eminent domain for the purpose of transferring the condemned property to a private developer, corporation or any other private entity for the purpose of expanding the tax base or for economic development.

"This bill should help to set property owners' minds at ease that their property can not be condemned by a local government and then turned over to a private developer," Chapman said.

The intent of the bill is that the private rights of residents and businesses should be protected over the interests of private developers and corporations. If passed, it will not restrict local governments' current powers of eminent domain. However, the power of eminent domain should be used sparingly, and such laws should be strictly and narrowly construed for the sole use of legitimate redevelopment projects, Chapman said. The Committee, chaired by Sen. Preston Smith (R-Rome), approved the bill after a brief discussion period with a bi-partisan vote of 10 to 0.

"There has been a considerable amount of controversy and misunderstanding surrounding eminent domain lately," Smith said. "I applaud Sen. Chapman for having the foresight to come forward with this legislation. This should help clear up these misunderstandings and ensures that private property owners' rights are protected." As a freshman senator, this is Chapman's first piece of legislation.

The bill now heads to the Senate Rules Committee to be considered for floor debate by the full Senate.

Chapman represents 3rd Senate District which includes Brantley, Camden, Charlton, Glynn and McIntosh counties.

Savannah Businessreport and Journal: www.savannahbusiness.com

Groups Back NLDC's Eminent Domain Case: The (New London CT) Day, 2/4/05

By Ted Mann

A broad range of states, cities and economic development groups has asked the U.S. Supreme Court to uphold the New London Development Corp.'s use of eminent domain at Fort Trumbull as a proper use of the government's power to seize private land.

Among the groups coming to the defense of the city and the NLDC, in friend-of-the-court briefs filed last week, were the National League of Cities and International Municipal Lawyers' Association; attorneys general from 13 states and the District of Columbia; and the Connecticut Conference of Municipalities.

CCM assembled a coalition of more than 30 other state municipal associations to argue that “the Fifth Amendment does not prohibit the State of Connecticut from empowering a distressed municipality to use eminent domain to assemble small urban parcels into a unified package suitable for modern economic development.”

The briefs were filed as attorneys for the NLDC and the city prepare to defend their condemnation of 15 properties at Fort Trumbull, where the city hopes a planned hotel, office and residential development will generate much-needed tax revenue for the city.

The seven property owners have appealed the city's efforts to seize the land to the nation's highest court, arguing that the economic development proposals do not represent a proper “public use” for their land, and asking the court to require more stringent judicial oversight of eminent domain applications.

Oral arguments in the case, known as Kelo v. New London, will be heard by the justices Feb. 22.

A slew of advocacy groups filed amicus curiae briefs on behalf of the Fort Trumbull property owners, and by Friday a similarly large group had leapt to the city's defense, depicting eminent domain as a harsh but necessary remedy for urban woes.

“The assembly of urban lands for economic growth is a ‘public use,' as it eliminates the accretion of small parcels that has acted to hinder old cities like New London from competing in the market for economic development projects,” attorneys for CCM and 32 allied organizations wrote. “...As such, it plainly falls within the police powers of the State of Connecticut, which has determined that its municipalities need the power to assemble lands to create developable urban parcels that the market itself has been unable to supply.”

The briefs argue that eminent domain is an invaluable tool for cities and states trying to further redevelopment plans, or, as in New London's case, to boost a sagging tax base.

“We've focused on both New London and the broader question ... of the importance of economic development to municipalities, especially in Connecticut,” said Allan B. Taylor, an attorney at Day, Berry & Howard in Hartford, who wrote the CCM brief.

Attorneys from the Institute for Justice, a public-interest firm representing the property owners, have said taking land purely to bolster private business — even to improve the city tax base — is unconstitutional, and have criticized the NLDC's development plan as speculative and vague.

CCM's lawyers reject that assertion, as the NLDC and the city did in their own brief, and warned that asking the courts to make decisions on the specifics of eminent domain uses, as the institute suggests, would give the judiciary a responsibility intended for legislatures.

The Day: www.theday.com

Eminent Domain, Private Property, and Redevelopment: The Reason Foundation, 1/05

Eminent Domain, Private Property, and Redevelopment: An Economic Development Analysis

Executive Summary

By Samuel R. Staley and John P. Blair

Eminent domain is the power governments have to confiscate, or take, private property as long as it is for a legitimate “public use” and property owners receive “just compensation.” Whereas eminent domain was initially intended to ensure that public services, such as roads and highways, were available to the public, local and state governments often use eminent domain for any project that is considered economically beneficial. Public use, as a practical matter, has morphed into a more ambiguous “public benefit.”

An estimated 10,000 cases between 1998 and 2002 involved projects where private parties benefit substantially from government seizures of property under the banner of economic development or urban redevelopment.

The result of this broadening discretion may be exemplified by Kelo v. City of New London, a case before the U.S. Supreme Court in which property owners are challenging the decision of New London, Connecticut to seize their homes because the city decided redevelopment for commercial purposes would generate higher property values and taxes.

Eminent domain in urban development projects tends to be:
  1. Arbitrary, driven by local politics rather than standards and objective criteria;
  2. Inequitable, giving large and well-connected property developers an advantage over existing homeowners and businesses;
  3. Serving private purposes, effectively becoming a legal way private developers can circumvent the conventional real estate market and force other property owners to sell their property to developers while reaping substantial financial gains;
  4. Without substantive limits, because statutory criteria for blight determinations are so broad they fail to constrain eminent domain’s use for redevelopment purposes.
Economic development planners and city officials claim that redevelopment could not happen without an ability to consolidate property and comprehensively redevelop it. They also claim that eminent domain is only used as a last resort after less intrusive and aggressive approaches have failed.

Two Case Studies: Mesa and Lakewood
The two cases studied here — Mesa, Arizona and Lakewood, Ohio — show that eminent domain is not treated as a last resort, but as just another strategy in the redevelopment tool box.

In Mesa, Arizona, eminent domain was used by the city to promote downtown redevelopment. A detailed analysis of city procedures involving a redevelopment project intended to encourage the expansion of a local hardware store revealed:
  • Eminent domain was a tool of first resort, not last resort.
  • Properties targeted for redevelopment were identified by potential private investors, and the city then proceeded to condemn the properties in order to sell them to the private developers.
  • The city’s redevelopment agreement with private developers would have amounted to effective subsidies ranging from $176,000 to $592,000 dollars.
  • Existing small business owners and homeowners were effectively shut out of the negotiations and redevelopment decisions.
  • Many properties seized were viable and growing. Property values in the neighborhood increased by 19.3 percent between 2000 and 2002.
In Lakewood, Ohio, the city’s redevelopment plan for the area estimated that the total tax value of real estate in the West End could increase from $31.3 million to $131.1 million by transforming the area from an older, affordable residential neighborhood to a mixed-use “lifestyle center” with offices, high-end restaurants, luxury apartments, and movie theaters. To use eminent domain the City had to declare the entire West End neighborhood “blighted” or “deteriorating.” An analysis of trends in the neighborhood found:
  • Property values in some parts of the West End were increasing faster than for the city as a whole, suggesting a strong real estate market.
  • Residential vacancy rates for homeowners were falling faster in the West End neighborhood than for the city as a whole.
  • Homeownership rates had increased in the West End neighborhood between 1990 and 2000.
  • The West End neighborhood was healthy, growing, and stable using standard criteria of neighborhood development.

Policy Implications
The study recommends urban policymakers refocus urban redevelopment policy by:
  1. Focusing on the achievable, not grand visions for change, transformation and redevelopment;
  2. Using the private sector whenever possible, but ensuring projects with local government involvement serve a legitimate public purpose (not net fiscal benefit);
  3. Focusing on core competencies, such as providing key public services well to lay a foundation for broadbased investment and economic development;
  4. Creating sustainable economies through private investment;
  5. Providing leadership that is focused and transparent to create accountability;
  6. Respecting the rights of all citizens, not just those able to access the political process;
  7. Encouraging voluntary and incremental redevelopment to build a strong foundation for future development by securing property rights for a broad-based citizenry and business community, not those with political access to economic development initiatives;
  8. Rigorously evaluating blight determinations to limit the arbitrary and often capricious use of eminent domain to serve narrow public and private interests.

The Reason Foundation: www.reason.com

A complete copy of the report is online at www.rppi.org/ps331.pdf


Norwood holdouts pack up, move out: Cincinnati (OH) Enquirer, 1/3/05

By Steve Kemme

After fighting for more than two years to stay in the house they have lived in for half their lifetimes, Joy and Carl Gamble Jr. have decided to pack up and move out.

A small moving van on Wednesday took some of the Gambles' possessions from their Atlantic Avenue house while they live temporarily at their daughter's house in Independence.

A large moving van will be there today to take the rest. The Gambles will move out on Friday.

"It's a very unhappy situation here," Joy Gamble said. "We're in our late 60s. It's a heck of a thing to be going through at our age."

The Gambles and four other property owners have waged a legal battle for two years to try to stop Norwood from using its eminent domain power to seize their property and turn them over to the developers of the proposed Rookwood Exchange.

This development, a $125 million complex of offices, shops, housing and restaurants, is expected to generate about $2 million a year in earnings tax revenue for financially struggling Norwood.

The Institute for Justice, a civil liberties law firm in Washington that has been representing the holdout property owners for free, still has pending court appeals.

But the Gambles' decision to leave means the end of this legal fight could be near.

During the contentious eminent-domain battle, 66 other families in the triangle-shaped neighborhood between Edwards and Edmondson roads and Interstate 71 have been eager to sell to developers and move out. But the legal battle has kept them in limbo and forced some families to pay two mortgages a month.

The Gambles' neighbors are not shedding any tears for them. Some blame them for the long delay and are angry with them.

"I don't have feel any sympathy toward them at all," said Anita Jones, who lives on Garland Avenue, one block from the Gambles. "In fact, they aggravate me."

Her husband, Rolston, needs an oxygen tank. They have been waiting for two years to close a deal on a house near a daughter in Mount Orab.

But they couldn't close until they sold their Norwood house.

"We've been sweating this out," Anita Jones said.

Paul Triance, who lives a few doors from the Gambles, was glad to hear they're leaving.

"It's a very happy day that they're moving out," said Triance, who lives with his wife, Lisa, and their two children. "It's been difficult for us. You hope nothing breaks down in your house. You basically just exist, waiting until the final outcome."

Seventeen months ago, Bob and Donna Laake moved out of their house in the proposed Rookwood Exchange site and bought a house in another part of Norwood.

"We thought we would make payments on two houses for just a couple of months," said Donna Laake, who is Norwood's health commissioner. "But we've been doing it for 17 months."

The Gambles don't walk away empty-handed. A jury awarded them $280,000 in a property valuation trial. The developers also agreed to give them $2,500 for moving and storage expenses.

"We lost - somewhat," Joy Gamble said. "We're still going to fight it. But we have to get out of our house."

Bert Gall, an attorney for the Institute for Justice, criticized the Rookwood Exchange developers, Jeffrey R. Anderson Real Estate and the Miller-Valentine Group, for not allowing the Gambles to stay in their house until the Ohio Supreme Court rules on their motion to stop their home from being demolished while their appeal in another court is decided.

"It's cruel to insist that they must leave while their motion before the Ohio Supreme Court is pending," Gall said.

The Institute fights eminent domain actions throughout the country. The law firm has an eminent-domain case before the U.S. Supreme Court that has similarities to the Norwood case.

Richard Tranter, attorney for the Rookwood Exchange developers, declined to respond directly to Gall's statements about the developers.

"Rather than dignify Mr. Gall's comments with a direct response, I merely note that the Institute continues to pour gasoline on a matter that has been resolved," Tranter said. "The focus now should be the 66 property owners who are counting on us to close on their properties without further interference or delay imposed by the Institute."

Donna Laake, who moved into the neighborhood in 1975, said it was a wonderful place to live. But the noise, traffic and lights brought on by the growing commercial development hurt.

"It's a shame they couldn't have picked up the whole neighborhood and moved it somewhere else," Laake said. "But we still keep in touch with our old neighbors. The friends we had when we lived there are still our friends."

The Cincinnati Enquirer: www.enquirer.com

Hearing imminent on fate of depot site: Pawtucket (RI) Times, 2/3/05

By Douglas Hadden

To seize, or not to seize.

That is the basic question city officials will trot out before the public in a public hearing in three or four weeks.

And on it turns who will own the former train depot site straddling the line with Central Falls, what would get developed there and whether the blighted 90-year-old building survives.

The land-taking process is called eminent domain, and before city resident Jean Vitali’s property could be taken, there are many legal hoops to jump through, which City Planner Michael Cassidy outlined Wednesday to a City Council panel.

Cassidy, who is also executive director of the Pawtucket Redevelopment Agency, said PRA would function as owner. Steps involved in taking the land include having two property appraisals done for review by a third appraiser to arrive at what is called "fair market value."

That figure would be used as the starting point for negotiations with Vitali, Cassidy said. If talks did not produce an agreement, the next move by the PRA, which would also be acting for Central Falls, is to Superior Court to take the property and put its offering price in an escrow account.

Vitali could sue over the compensation amount as inadequate, but not stop the process.

The problem for the PRA — and for the Pawtucket Foundation, which has its own concept for the site that centers on saving the depot — is that Vitali in 2003 granted a $1.4 million purchase option to a private developer, Warwick RICS LLC, an entity of Memphis-based SMPO Properties Inc. and its partners, Oscar "Ike" Seelbinder and Jack Mitchell.

The partners, seeking final council passage of a zone change from residential to commercial for 40,000 square feet of the site on the Pawtucket side, need that approval to close the deal and launch their $30-$40 million project, in which the depot would be torn down.

But if they get the rezoning, a court setting the property’s value would have to take into account not only the $1.4 million purchase cost, but also four long-term commercial leases lined up for the site, said John Garrahy, an attorney for Warwick RICS.

Another potential difficulty, according to Garrahy, is whether the law that grants PRA eminent domain power would apply where a developer is in place to put up a project and thus cure the blighted condition.

There are other obstacles too: Cassidy said PRA currently has only about $642,000 set aside to take the depot property as well as five much smaller, blighted properties elsewhere in the city. He said an appraisal of the property was done about two years ago but did not reveal what value it determined; Seelbinder has said he thinks it was $400,000 or less.

Garrahy also noted the U.S. Supreme Court has agreed to look at a Connecticut eminent domain case, which may indicate the court wants to take a closer look at the widening use of that governmental power in recent years.

But an attorney for the foundation, Michael Horan, downplayed the severity of the seizure power. "When people hear eminent domain, they think it’s this Draconian slice," when "it’s clearly not," he told the meeting of the council Ordinance Committee.

Councilor Thomas Hodge said there was a "big misconception" that "we’re going to steal the property."

The panel’s chairman, Councilor David Moran, said the public perception of eminent domain as a severe move has been "a problem from day one" for the depot issue.

Councilor Robert Carr had several sharp questions about the consequences of eminent domain, which brought out that PRA could sell the property to its chosen developer for less than it bought it for; and that SMPO, which would put up commercial buildings first then seek to bring back commuter rail in its second phase, could also negotiate with the state, federal and other agencies involved in the rail project.

But Cassidy said the agencies would rather deal with the two cities.

Cassidy also said "it’s possible" the PRA’s chosen developer may also determine the depot lacks structural integrity or would be too expensive to repair. He said if the building, eligible but not on the National Historic Register, was placed on that list, PRA could not use federal or state dollars to tear it down.

Cassidy also noted there are extensive federal and state tax credits available for historic buildings that would make saving it more attractive to developers.

While the property remained in PRA hands, Cassidy said, the agency would continue to pay property taxes on it here and in Central Falls.

"But they would be paying taxes on a blighted building," Carr said, well below what a new development there would bring in.

Pawtucket Times: www.zwire.com/site/news.cfm?brd=1713

Getting a primer in eminent domain: Somerville (MA) Journal, 2/3/05


By Roger Kolb

The paths to expertise are many, but they usually originate at a place called youthful experience.

That went through my head the other day as I sat in the living room of Highland Avenue's Jim Campano. Campano, a self-described street guy who's more likely to know the definition of "sowsky" than "syzygy," is an expert on something you wouldn't figure him for in a million years. But an expert he is, someone whose views are eagerly sought in private conversation, on college campuses and by nationwide political action groups.

Campano is an authority on the phenomenon known by the legal and not particularly grammatical phrase, "eminent domain." As I understand it, the term originated in the Middle Ages. Before legislation became the responsibility of parliaments and congresses, the king was the preeminent institution in the land, and the entire country was his personal domain. If His Excellency coveted your property badly enough, you, your spouse, kids, pigs and chickens would soon find yourselves out on the street. But with the slow growth of democracy and individual property rights, that changed. The U.S. Constitution, for one, guaranteed property rights and declared that property could only be taken away from the citizen after "due process of law." As interpreted by the courts, the state had to have a compelling reason to purchase your house or business, and the reason had to take the form of a desperately needed public works project - road, bridge or school - from which everyone could theoretically benefit.

"All that changed in 1954," said Campano, "in the Supreme Court decision Berman vs. Parker." A Pandora's box was opened, one that our founding fathers would have abhorred, he continued, "when the court changed one little word in its definition of "eminent domain." It changed the phrase "public use" to "public purpose." And a few years after that, "public purpose" became "public benefit." "Public benefit" has meant that a local government can take property away from one private home or business owner and give it to another."

"Why would it do that?" I asked.

"The mayor, either to keep a campaign promise or because he faces re-election, has to keep property taxes down. He studies your street and learns that you and your neighbors' annual tax bill, combined, is $98,000. Hell, ninety-eight grand is chicken feed compared to what the city could get if your street had a Wal-Mart and a Home Depot on it. Next, someone from City Hall walks up and down your block and notices that number 12 has paint peeling off and that number 28 has a lot of junk thrown around in the driveway. He recommends to the mayor that your street be declared blighted - "blight" being a word you hear a lot in eminent domain discussions. The city publishes a tiny announcement in some section of the local newspaper no one ever reads. It says that your street, now a slum, is being taken and that everyone has to be out by July 1. A few weeks later, an official from City Hall knocks on your door and reminds you that you have exactly one month to vacate. Then he says the city is prepared to pay you $25,000 for the house or business you probably could get $300,000 for on the open market."

Campano is himself a victim of eminent domain. He was a teenager in Boston's West End in 1958 when, four years after the Berman vs. Parker ruling, the entire neighborhood was gutted to make way for privately owned Charles River Park.

"Surely the situation you describe," I said to him incredulously, "doesn't happen in the United States."

"That's what Don Hewitt, the producer of '60 Minutes,' said two years ago," Campano observed. "In Lakewood, Ohio, the mayor was trying to kick residents out of a lovely neighborhood to make way for luxury condos. An anti-"public benefit" activist from the Institute for Justice made phone call after phone call to '60 Minutes,' but no one would pay any attention to him. Finally, he got through to Hewitt himself, who said he was shocked to find out that this could go on in the U.S."

"'60 Minutes,'" Campano continued, "ended up doing a story about it, a story that woke a lot of people up. The mayor had declared the neighborhood blighted because a few houses had paint peeling off and because none had an attached garage. When the '60 Minutes' people pulled up in front of the mayor's house to interview her, guess what they found. The mayor lived in a house that had paint peeling off, and that didn't have an attached garage!"

Somerville Journal: www2.townonline.com/somerville

Eminent domain case on trial: Salina (KS) Journal, 2/3/05

Foley Equipment wants compensation

By David Clouston

How much is land in proximity to Wal-Mart stores worth? The answer may decide a civil case on trial in Saline County District Court.

Foley Equipment Co. is appealing the award of court-appointed appraisers for its land that was acquired as part of the reconstruction and reconfiguration of the highway interchange at Interstate Highway 70 and Ohio Street. The jury is to determine just compensation and any damages allowable by law.

The case centers on 4 acres of land, two permanent easements and a temporary construction easement. Foley seeks compensation of $665,000. A panel of three appraisers awarded the company $229,016.

Salina Journal: www.saljournal.com

Jersey localities back eminent domain power: Newark (NJ) Star-Ledger, 2/3/05

By Tom Hester

The New Jersey State League of Municipalities yesterday joined with leagues in 30 other states to enter a U.S. Supreme Court case that will determine whether municipal governments can take private property for economic redevelopment.

The leagues filed a friend of the court brief on the side of New London, Conn., in the case, which is to be heard by the high court Feb. 22. The case pits seven New London homeowners against their city, which is trying to take their property so a developer can build an office, hotel and residential complex. A decision is expected by June.

Historically, cities and towns have used condemnation to clear land for new schools, parks, highways, and other public facilities. A series of laws passed in the mid- 1900s enabled municipalities to take land they believe is blighted and turn it over to a developer. A 1954 U.S. Supreme Court decision affirmed that right. Opponents argue that in some cases cities and towns are taking well-kept homes and viable businesses for the benefit of private developers.

In Newark, residents of the city's Mulberry Street urban renewal neighborhood have filed a lawsuit to stop the government from declaring their property blighted to make way for a $550 million, 2,000-condominium project. Eminent domain has also been used to clear the way for redevelopment projects in New Brunswick, Perth Amboy and Jersey City.

"The league has joined to support New London in this matter to protect the right of New Jersey municipalities to use the important power of eminent domain to promote economic development," said William G. Dressel, its director. "That power, even though it may not be used except in rare situations, is important so municipalities in New Jersey can continue to rebuild their tax bases and revitalize their economies."

Star-Ledger: www.nj.com/news/ledger


Mistrial in property case — Cincinnati (OH) Post, 2/2/05

House display 'outrageous'

By Kimball Perry

Attorney Gary Powell thought the camera inside his Treo 600 cell phone was something he would never use -- until Monday.

"I didn't see a use for it. I'd just as soon not have it. Now, I'm glad I do," Powell said Tuesday, after a judge saw the pictures Powell took with the phone camera and granted his request for a mistrial.

Powell and attorney Tim Burke were hired to represent Norwood in the fight to use its power of eminent domain to seize private property and sell it to a private developer to build Rookwood Exchange, a commercial, office and residential complex.

Monday's trial, before Visiting Hamilton County Common Pleas Court Judge John O'Connor, was to determine the value Norwood would have to pay for the 3811 Edwards Road property owned by Motz Properties. An appraiser valued the property at $175,000.

After the jury was selected Monday, the judge ordered jurors be given a tour of the property to give them a better sense of its worth. Once inside the building, though, the jurors, court workers and attorneys got a surprise.

The owners had festooned the interior with signs, banners and a mannequin dressed in clothes attacking the government's use of eminent domain to seize private property.

That was done, Burke and Powell argued Tuesday, to convince the jury to award Motz a higher price.

"(Motz's) outrageous conduct was calculated to serve no legitimate purpose, but rather to illegitimate(ly) injure the City of Norwood's position in front of the jury," Powell and Burke wrote in their request for a mistrial.

Inside one room of the building, the owner posted editorial cartoons attacking Norwood's use of eminent domain and a photo of a group of protestors in the legal fight over the issue.

The building's back door, which jurors passed to get to the basement, bore a sign reading, "Government Quit Selling Us Out to Developers."

In the basement, jurors saw a banner proclaiming "Fight Eminent Domain Abuse in Norwood" next to a mannequin dressed in a T-shirt that sported an anti-eminent domain message. The dummy also was holding a sign that read "Being Forced to Sell is Just Not Right."

A stunned Powell couldn't believe his eyes, so he whipped out his cell phone and started snapping away.

"Pictures say a lot," he said Tuesday.

"You could not have described it. You needed the pictures," Burke added.

The judge granted the request Tuesday for a mistrial.

The case will be back before O'Connor Thursday for another attempt at a trial, but Powell said Tuesday the sides have agreed in principle on a price for the property and might tell the judge the case has been settled.

Norwood has argued it needs the properties for Rookwood Exchange, planned for 200 condominiums, apartments, retail space and 550,000 square feet of office space. The project and its tenants are expected to pump an additional $1.8 million annually in earnings tax into the coffers of the financially strapped city. The development also will generate an additional $300,000 per year for Norwood schools.

Property owners who didn't sell to the city and critics have argued that using eminent domain to take private property to sell to a private developer is unfair.

The Cincinnati Post: www.cincinnati.com

How eminent domain is done elsewhere — Haddon (NJ) Herald, 2/2/05

By Dan Keashen

The foundations of liberty were reinforced in California by the Anaheim City Council in November. It passed a resolution, 3-1, with one abstention, prohibiting the city from using the power of eminent domain.

The local ordinance stopped the land grab vehicle from taking one piece of private property for the benefit of another private person or business.

According to the City of Anaheim meeting minutes the new City Council Policy No. 220 stipulates, "It is the policy of the City of Anaheim that the power of eminent domain not be used by the City Council or Redevelopment Agency to acquire property from private parties, for the express and immediate purpose of conveying such property to any other private person or entity for commercial uses, when there is no public purpose for the acquisition except the generation or increase of sales tax or property tax revenues to the City."

Many people who live in the Westmont section of Haddon Township, and all over New Jersey are experiencing the effects of eminent domain. It is used for the condemnation of private property by local municipalities in redevelopment projects under the supposed benefit of the public.

Although the Anaheim ordinance has no bearing nationally on New Jersey redevelopment law, according to the Institute for Justice, it is a positive reinforcement to people's personal property rights.

"Anytime a city reins in its power to condemn private property it's a step in the right direction and we support it. This will give private property owners a guarantee that they will be protected from a project that has no public purpose," said the coordinator of the Castle Coalition, Steven Anderson.

He said the city has highlighted what eminent domain was created for and quashed the speculative definitions of public use.

According to Anderson, The Castle Coalition - located in Washington D.C. - is an effort by private property activists to take matters into their own hands. "It was inspired by watching several communities defeat seemingly unstoppable projects to take homes and businesses to give to other private parties," said Anderson.

According to Douglas Gershuny, deputy director of the South Jersey Legal Services, many municipalities in New Jersey - including Haddon Township and Westville - will use eminent domain to build their tax rateables base.

"They've used municipal economic impact for the definition of public use. The same with the big corporations like Wal-mart...they operate under the guise of creating jobs as contributing to the public good," said Gershuny, adding these definitions are skewed towards developers.

While the legislation from Anaheim did not make national news it gave hope for the thousands of threatened property owners watching the Kelo vs. City of New London Supreme Court case.

The Castle Coalition hopes to see more municipalities honor their residents by protecting their liberties with similar legislation.

The Haddon Herald: www.zwire.com/site/news.cfm?brd=1695


Eminent domain takes aim at life's work — St Louis (MO) Post-Dispatch, 1/31/05

By Jake Wagman

Every month for 20 years, Gentle "Jim" Day mailed his $1,222.22 mortgage payment on his business, Royal Auto Repair.

He finally paid if off last year. But now Day, the son of Arkansas sharecroppers, faces losing his land and business.

An agency backed by the city is preparing to take Day's business by eminent domain to make way for something called a "Media Box."

Day can take the offer of $67,500 for his property - less than the city says it's worth - or continue with an already drawn-out court battle. Either way, he has little chance of keeping his shop on a triangle of land at Spring Avenue and Olive Street.

Critics say Day's situation is a classic example of the abuse of eminent domain. A case pending before the U.S. Supreme Court could affect thousands of similar cases nationwide.

In St. Louis, Day is one of a growing number of property owners angered by the methods being used to redevelop the city's arts district, an effort that has been led by a former mayor.

"Coming up, I was afraid of losing my property for tax purposes, lack of payment," says Day, 57. "I paid the property off, and I still lose the property. That's a bad feeling."

Compounding his frustration is that he knows little about what the plans are for the land, nor what a "Media Box" is.

Day's business is just steps way from the Fox Theatre, Powell Hall, the Contemporary Art Museum and other cultural institutions. The area is struggling and has been targeted for redevelopment by the city. Leading the charge is Grand Center Inc., a nonprofit organization headed by former Mayor Vincent C. Schoemehl Jr.

The redevelopment plan passed in 2002 by the Board of Aldermen names Grand Center as "master developer," giving the agency broad and almost unilateral powers to control land use. As president and chief executive of the agency, Schoemehl is the mini-mayor of a swatch of midtown roughly the size of 20 Busch Stadiums. Grand Center can approve or reject building designs, dispense up to $80 million in tax incentives and acquire land by eminent domain.

Grand Center's vision has the area becoming the "cultural soul" of the city, a residential and commercial district that will rival the Delmar Loop and Central West End.

The vision does not include an auto repair shop. The Post-Dispatch obtained a map of Grand Center's "Strategic Development Master Plan" that shows the "Media Box" in the same spot as Royal Auto Repair.

"Can't talk" about it

So just what is a Media Box?
For weeks, officials in Grand Center and others involved refused to discuss the plan.

The redevelopment plan originally given to the city called for a park, open space or residences on the site; an artist with a history of multimedia projects is involved.

"I can't talk to you about the Media Box," Eric Friedman, a real estate agent who describes himself as a principal in the project, said earlier last month.

But last week, Michelle Cohen, a public relations executive recently hired by Grand Center, said the "Media Box" is a building that will hold a design studio and apartments or condominiums.

"The 'Media Box' is really the working title for the design studio piece of it," Cohen said.

Friedman is working with the city's postmodern standard-bearer, an asbestos lawyer turned multimedia artist named Paul Guzzardo. Guzzardo has been involved in creative presentation of images, including projecting the last episode of "Seinfeld" on the side of a building on Washington Avenue. He also owned an "interactive" nightclub, Cabool, where dance moves were broadcast over the Internet.

"I have an interest and kind of obsession with information culture and urbanism," Guzzardo said recently - although he also refused to discuss the Media Box.

The proposal submitted to the city by Grand Center says nothing about using Day's property for commercial purposes. Still, Schoemehl says the intended use of the land is consistent with the redevelopment plan.

"It is not simply being condemned in furtherance of a piece of abstract art," Schoemehl said.

Fighting Grand Center
Day developed a knack for engine repair while working on farms in Crawfordsville, Ark., where he grew up.

He came to St. Louis as a young man for formal training as a mechanic. Before he bought Royal Auto Repair, Day worked jobs including on an assembly line at an envelope factory and in the kitchen of Uncle Bill's diner.

In October 2003, Schoemehl offered Day $125,000 for his land. Day rejected it. Two months later, Schoemehl cut the offer to $67,500. That is $12,800 less than the city's official appraisal.

"Let me put it this way - $67,000, if you give me three months, I could probably make that here," Day said in an interview in his cramped office at the repair shop.

After Day rejected the second offer, an arm of Grand Center filed a lawsuit to have the property condemned. It is pending in St. Louis Circuit Court.

Other property owners have sued Schoemehl and Grand Center over tactics they consider heavy-handed and bullying.

A group of property owners led by the Masonic Temple sued Grand Center in October in federal court. They charge that Grand Center has wrongfully threatened property owners with eminent domain "in an effort to get them to sell at a distressed price, sometimes offering only $1, which itself carries an ominous implication."

The company that operates the Fox Theatre sued Grand Center over parking spots, accusing it of seeking the "gentrification" of the area. That suit was dismissed, but, in a separate suit, Grand Center sued the company that owns Fox in a land dispute that was dismissed in circuit court. That suit is now pending in state appeals court.

Even the alderman who sponsored the measure to give Grand Center its power now says they might be taking those powers too far.

"Eminent domain should be the exercise of last resort," said Alderman Mike McMillan, D-19th Ward. "I do not think that, long term, it is the best thing for the development of the district because it creates a lot of bad will."

McMillan says he was surprised to learn about Day's situation.

"Had I been aware of it, I would not have supported the way it was done," McMillan said.

What is blight?
The Fifth Amendment allows local governments to take private property for "public use" as long as "just compensation" is provided. In the two centuries since those terms were inked, it has been up to judges and lawmakers to decide what they mean.

Grand Center's eminent domain powers stem from the designation that the area is "blighted."

And just what is the definition of blight?

"Bottom line is anything a local legislature says is blight is blight," says Stanley J. Wallach, a lawyer who is chairman of the Missouri Bar's Eminent Domain Law Committee. "Absent fraud or collusion or bad faith, courts will not second-guess it."

For instance, the campus of St. Louis University was deemed blighted by the Board of Aldermen. That made the university eligible for tax breaks on building its 13,000-seat arena.

Day's property also is blighted, which means it is ripe for acquisition, regardless of whether the Media Box is for the public good.

Clients who come to Wallach with eminent domain complaints get this advice: "Get to City Hall with everybody you can, bang on some pots and pans, and try to stand up for your rights at the political level. Because by the time it gets to me, you are fighting an uphill battle to say the least."

The case before the Supreme Court could change that. Residents of New London, Conn., sued the city in 2000 after the City Council gave permission to a development agency to take their homes by eminent domain to build office space and a hotel. The city's rationale was that the new projects would provide more tax dollars and economic development than the homes. The nation's highest court will hear the case Feb. 22.

If it issues a broad ruling against the city, the decision could affect eminent domain disputes everywhere. That includes fights in Arnold, Sunset Hills and Maplewood, where developers are seeking to take private homes for shopping centers.

Day is waiting for his day in court. A hearing set for Jan. 18 was postponed to March 7. If Day and Grand Center don't settle, the court could condemn the land and set compensation for Day.

"I sleep at night so I can defend myself from it," Day says. "I try to have a nice sleep and a clear mind because every day I have to defend myself from this."

St Louis Post-Dispatch: www.post-dispatch.com


Metro mixes rail and real estate — Houston (TX) Business Journal, 1/30/05

New initiative raises questions about use of eminent domain

By Jenna Colley

Under a new Metro real estate initiative, owners of land within a 1,500-foot radius of a light rail station could stand a higher chance of having their property condemned by the transit agency.

The power of eminent domain first granted by the Texas Legislature and approved by local voters in 1978 authorized Metro to seize vacant land, homes and businesses following payment of a "fair market price."

Thirty years later, use of eminent domain in construction of the initial 7.5-mile segment of rail followed the original intent of the state legislation by keeping private property interests from blocking public rail.

Now, Metro is taking a more active role in stimulating real estate development along rail corridors....

As a result, development activity within the 1,500-foot limit could extend the transit agency's influence far beyond the actual tracks.

Metro's eminent domain reach covers a span of five football fields in any direction. The surroundings of a single urban rail station can encompass several square blocks occupied by scores of buildings.

The potential for more property condemnations not directly related to rail has some local property rights groups concerned.

While Metro prepares to implement the plan with an inaugural project in the Texas Medical Center, opponents of the new policy argue that properties blocks away from the rail stations could be potential targets of speculative real estate deals transacted by transit officials.

Metro Board Chairman and real estate developer David Wolff says there is no set policy in place regarding the condemnation of land for development purposes.

"I feel it's a discussion that would be best for the Metro board of directors and management — and just for land around stations," Wolff says.

He sees the use of eminent domain as a last resort.

"If you have a large tract of land around a station and one piece is needed, then it might happen that it could go to condemnation," Wolff says. "But we would try to negotiate first."

Todd Mason is equally cautious on the issue of condemnation.

The principal of McDade Smith Gould Johnston Mason + Co., who was recently hired to handle Metro's real estate portfolio, says he encourages development on property already owned by the transit agency, but could make additional purchases as needed.

"We are considering buying additional land where it's appropriate," Mason explains.

"It's sort of 'in the eye of the beholder' as to what's appropriate," he adds. "I'm going to be very conservative with the public's money here in the beginning."

Like Wolff, Mason emphasizes that condemnation should be directly related to Metro operations.

"Philosophically, I'd have a little bit of a hard time condemning somebody's property to put it in some private developer's hands," Mason says. "I don't have any problem condemning a property if we need it for Metro operations."

But Mason says he can imagine an exception to the rule, for instance, if the owner of a small parcel of land was holding up a larger development.

"I could conceive that that would happen, but we're really going to try and avoid that type of situation," Mason says. "It's not my intention to condemn somebody for development purposes."

Metro's emphasis on widening the scope of a 30-year-old condemnation power to stimulate new development raises even more red flags than usual for veteran anti-rail crusader Barry Klein.

The president of the Houston Property Rights Association argues that the concept can't be economically justified.

"There is no real evidence that rail enhances development," says Klein.

On Dec. 6, the executive committee of the Harris County Republican Party adopted a resolution pushed by Klein claiming voters should have a say in Metro's decision-making process regarding real estate development.

Klein and his organization are now hoping the issue will be pushed by like-minded legislators in Austin during the current session of the Texas Legislature.

The condemnation pendulum
Condemnation was confined to the proposed rail route when Metro mapped out the initial 7.5-mile line now up and running between downtown and the Texas Medical Center area.

Property owners in the path of the first rail segment were represented by Houston-based Lewis Realty Advisors.

Lewis Realty consultant Matthew Deal says the property owners were less angry over the fact that Metro wanted to condemn their property than they were with what they considered to be too low of a price for their land — a common argument in eminent domain cases.

Lewis Realty has worked both sides of the track in public projects involving the use of eminent domain. The firm represented Metro in the transit agency's acquisition of property for the West Park Tollroad, and negotiated on behalf of the Harris County Sports Authority in acquiring property through condemnation for the downtown baseball stadium.

Deal says, as a whole, more public entities are pushing the limits on their ability to use condemnation.

"If you are going outside of pure transit and you want to condemn land to do some mixed-use development, that's something that the court would have to decide whether you have the power to do that," says Deal.

Several current cases before the U.S. Supreme Court deal with the right of public agencies to buy property for real estate development.

But the tides are always turning on the issue of eminent domain, Deal says, sometimes in favor of public agencies and sometimes against.

"The pendulum is always swinging," he says.

Houston Business Journal: http://houston.bizjournals.com/houston/

They're Coming for Your Land! — Liberty, 03/05

Big Business wants your house, and the government is going to take it from you and give it to them

By Timothy Sandefur

"With no power, of which they are possessed, do [legislatures] seem to be less familiar, or to handle less awkwardly, than that of eminent domain. . . . At times they fail, or seem to fail, to distinguish accurately between public and private ends, and if their terms and language be alone consulted, to pervert the power to uses to which it cannot lawfully be applied."

— Sherman v. Buick
(California Supreme Court, 1867)

Frank Bugryn and his three elderly siblings owned two houses and a Christmas tree farm in Bristol, Conn. The 32-acre family homestead had been in the family for over 60 years when city officials decided the land would produce more tax revenue if it were transferred to industrial use. Specifically, the city wanted to give the land to the Yarde Metals Corporation, which hoped the state highway frontage area would allow them to construct a large sign and entranceway. When the Bugryn family turned down the city's offers to buy the property, the city began eminent domain proceedings.

In May 1998, Bugryn and his family asked a state court to bar the condemnation of his property. "I don't want to go anywhere," he told the court. "My parents built the family house in 1939, and I built my own house on the property 42 years ago. I'm almost 78. Where am I going to go now?" But Mayor Frank Nicastro testified that the industrial park was "in the best interest of the future growth of the city," because it would "build up the tax base." The court denied the injunction, holding that the condemnations of the Bugryns' homes "do not . . . constitute serious or material injuries." In the face of unremitting pressure from the community, and particularly from the Hartford Courant, which editorialized repeatedly against them, the Bugryns appealed. But the Court of Appeals also refused to stop the taking, and the city continued its plans even when Yarde Metals chose to relocate due to the legal delays.

Finally, in 2004, when the family refused to leave their homes, the city initiated proceedings to evict them. Once again, the Courant decried them in an editorial, calling their resistance a "public farce," and a "melodrama," and denouncing the family for "stall[ing] and draw[ing] upon the public's sympathy." Meanwhile, 76-year-old Michael Dudko, husband of one of the Bugryn sisters, and a Polish immigrant who at the age of 15 had been taken from his home by the Nazis and forced into farm labor, suffered a relapse of cancer and died. After a nearby radio station ran a story about the Bugryns' plight, an anonymous, irate telephone call forced the police to post a guard in the mayor's office. Relations within the Bugryn family itself became strained; when one sister failed to leave her house in time, her nephew took the city's side, telling reporters "people are pointing the finger at the mayor and the council and city officials, but all they're really doing in taking the property is using an eminent domain system that was given to them by the legislature." The reverberating effects of eminent domain not only disrupted the family and community, it also bred a sense of disillusionment best expressed by Frank Bugryn himself, who told a reporter, "I'm a veteran of World War II, I fought for our freedom, democracy. But it seems 60 years later it doesn't work."

Eminent domain — the government's power to force a person to sell real estate against his will, at a price the government deems "just compensation" — is one of the most extreme forms of government coercion, and today, among the most common. Used for centuries for building railroads, highways, and post offices, eminent domain is now a multi-billion dollar industry, and a classic example of rent-seeking run amok. Governments throughout America routinely seize property to transfer it to private companies to "create jobs" and increase the tax base in a community. In 1999, the city of Merriam, Kan., condemned a Toyota dealership to sell the land to the BMW dealership next door. That same year, Bremerton, Wash., condemned 22 homes to resell the land to private developers. In one especially notorious case, billionaire Donald Trump convinced the government of Atlantic City, N.J., to condemn the home of an elderly widow so that he could build a limousine parking lot. As attorney Jennifer Kruckeberg puts it, "Whether you know it or not, your house is for sale. Corporations, using cities as their personal real estate agents, are proposing the following assignment: 'Find me your most prominent location, get rid of what is on it, help me pay for it, and maybe you will be lucky enough to have me move to your city.' Such is the state of the current eminent domain power."

With the eminent domain power unmoored, the power to redistribute property fell into the hands, not of the most deserving, but of the most politically adept.

The exploitation of eminent domain by such private interests is a relatively new phenomenon, and is explicitly prohibited by the U.S. Constitution, which holds that "private property" may be taken only "for public use." But a series of court decisions beginning in the first years of the 20th century, and culminating in the 1954 decision Berman v. Parker, eroded the "public use" limitation to such a degree that, as Richard Epstein once noted, some law professors have taken to replacing that clause with an ellipsis when writing out the text of the 5th Amendment.

In Berman, the Supreme Court held that eliminating slums was a public use because once the legislature deems a project worthy of its attention, that project is necessarily a public one: "[W]hen the legislature has spoken, the public interest has been declared in terms well-nigh conclusive," wrote Justice William O. Douglas for a unanimous Court. "In such cases the legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation."

This level of deference from the Court had become standard fare for property rights and economic liberty by 1954. With the coming of the New Deal, the Supreme Court had decided to take a hands-off approach to regulations of economic rights, which it decided — without the slightest constitutional basis — were "lesser" rights, deserving only "rational basis scrutiny." Under "rational basis," a law regulating economic or property rights is presumed to be constitutional unless it is shown to lack a "rational relationship to a legitimate government interest" — a standard so advantageous to the government that laws hardly ever violate it. But if government's decisions regarding property rights are supposed to be related to a "legitimate government interest," what interests are not legitimate? Are there goals that are off-limits to the state, or beyond the acceptable use of eminent domain? Berman was followed by the Michigan Supreme Court's 1981 decision of Poletown Neighborhood Council v. Detroit, which held that the state could seize an entire working-class neighborhood and transfer it to the General Motors Corporation to build an automobile factory. Since the factory would "create jobs," and creating jobs is a legitimate government interest, the public use clause was satisfied. A few years later, the United States Supreme Court came to a similar conclusion in Hawaii Housing v. Midkiff, holding that the Hawaii legislature was within its constitutional limits when it wrote a law allowing renters to buy their landlords' property at a fraction of the actual value. Decisions like this rendered so little protection to property owners that the Ninth Circuit Court of Appeals once declared that "the whole scheme is for a public agency to take one man's property away from him and sell it to another. The Founding Fathers may have never thought of this, but the process has been upheld uniformly by latter-day judicial decision. . . . Our hands are tied — if the book on the procedure is followed."

By failing to define, let alone limit, the scope of "legitimate government interests," the courts sparked an explosion of condemnations in the service of any interest that the legislature decided to pursue. "The 'legitimate state interest' test in vogue today," wrote Epstein shortly after Midkiff, "is a bare conclusion, tantamount to asserting that the action is legitimate because it is lawful. . . . As such, it functions, at best, as a convenient label for serious inquiry, without defining the set of permissible ends of government action."

With the eminent domain power thus unmoored, the result was predictable to public choice theorists: the power to redistribute property fell into the hands, not of the most deserving, but of the most politically adept. As government became capable of transferring unlimited amounts of land between private parties, the business community began investing an ever-increasing amount in lobbying to persuade it to give the land to them. These companies portray the redistribution of land as a benefit to the community, in the form of job creation and increased funding for public services, as well as an eradication of "economic blight," a vague term attached to any neighborhood that is less than affluent but not an actual slum. Meanwhile, government officials have come to see their roles, not as defenders of the public's safety and welfare, but as sculptors of neighborhoods, for whom citizens and land are raw materials to be formed into the ideal community.

Boynton Beach, Fla., for example, is gradually implementing the "Heart of Boynton Redevelopment Plan," an immense redesign involving potentially hundreds of condemnations. After an attorney from the Pacific Legal Foundation attended a community meeting to challenge officials about the plan, City Redevelopment Director Quintus Greene gave a presentation to the city council entitled "Why We Are Doing This." Greene told the council that although the cities of Boynton Beach and Delray Beach have almost the same population, "when comparing median household incomes, Boynton Beach ranks lower at $39,845 than Delray at $43,371. Boynton Beach ranks higher in median household income than West Palm Beach at $36,774. . . . The purpose of this redevelopment, is to compensate for the loss of one of the City's major taxpayers. Our property tax values are meager compared to other cities and this redevelopment is our attempt to enhance property values within this City. Our choices are to expand our tax base, raise property taxes or reduce services to our citizens. . . . In Boynton Beach, there is a significant amount of property that pays little or no taxes. Given that reality, we must do other things to compensate for that loss of tax dollars."

In plain English: throw poor folks out of their homes, and the city's median income will be higher. Well, that is undeniably true.

But this marriage of government and private industry doesn't just benefit bureaucrats eager to be seen as "creating jobs" and "cleaning up the community." It also yields enormous boons for companies that are adept at political persuasion. Recent articles in The Wall Street Journal and Mother Jones have detailed the enormous pressure that Home Depot, Bed Bath & Beyond, Wal-Mart, Target, and especially Costco, exert on governments to give them somebody else's real estate. These efforts can be extremely enticing to government officials pursuing "the vision thing," not to mention local residents desperate for new jobs. The plans are presented with a smooth and authoritative style — with sophisticated PowerPoint presentations including lovely artist's renditions of gleaming new streets and bustling pedestrian malls — that is hard for bureaucrats to resist. There's even a website, eminentdomainonline.com,, which bills itself as "an internet based business to government (b2g) clearinghouse for professionals in the eminent domain, right of way, and infrastructure development fields." If the lobbying efforts should include donations to mayoral election campaigns, and promises to fund giant public works projects on the side, so much the better. As one city planner told Mother Jones, "The reality is that you need to rely on developer interest in order to facilitate projects. We're not paying for this party." (Conveniently enough, the Internal Revenue Code allows money expended by a company seeking to persuade a city official to exert eminent domain to be deducted from the company's gross income when determining income tax liability.)

Industry uses sticks as well as carrots when prodding officials to use eminent domain on its behalf. The Poletown case is a prime example: GM presented its plan to the city in July of 1980. On Sept. 30, the city's Economic Development Corporation approved it. Eight days later, GM chairman Thomas Murphy wrote the mayor and the chairman of the Detroit Economic Development Corporation, strongly urging them to adopt the plan: "I firmly believe the prospect of retaining some 6,000 jobs, and the attendant revitalization of these communities is a tremendous challenge," he wrote, adding ominously, "it also is an opportunity and a responsibility which none of us can ignore." This letter and GM's other maneuvers, Michigan Supreme Court Justice James Ryan later said, "suggest the withering economic clout of the country's largest auto firm," and indeed Detroit was more than eager to do GM's bidding. Preliminary paperwork was finished within days, and the city council and mayor approved the final documents less than a month after Murphy's letter. Action in the courts moved with the same rare speed, culminating in oral arguments before the state Supreme Court on March 3, 1981, and a decision only ten days later. Meanwhile, wrote Justice Ryan, an "overwhelming psychological pressure . . . was brought to bear upon property owners in the affected area," as a "crescendo of supportive applause sustained the city and General Motors. . . . The promise of new tax revenues, retention of a mighty GM manufacturing facility in the heart of Detroit, new opportunities for satellite businesses, retention of 6,000 or more jobs . . . all fostered a community-wide chorus of support for the project."

Other cases present similar David-and-Goliath scenarios. In 2001, Mississippi redevelopment officials gave the Nissan Corporation 1,300 acres of state-owned land to construct an auto factory. When Nissan hesitated, the state condemned a middle-class black neighborhood to give Nissan another 23 acres. James Burns, Jr., executive director of the state's development authority, told the New York Times that the property was not actually a part of the project: "It's not that Nissan is going to leave if we don't get that land. What's important is the message it would send to other companies if we are unable to do what we said we would do. If you make a promise to a company like Nissan, you have to be able to follow through." Attorneys from the Institute for Justice, a Washington, D.C.-based libertarian law firm, managed to fight off the state, and the residents kept their homes. Less fortunate were the residents of the Toledo, Ohio, neighborhood that was taken to build a Jeep factory, which received the blessing of Ohio courts in the fall of 2004, or the property owners in Redwood City, Calif., where the city condemned land to build a movie theater. Knowing that a theater is probably not a "public use," the city declared it was really building a parking lot — and it just happened to include a theater above the parking lot.

The precise amount of money involved in the eminent domain industry is impossible to assess, but Mother Jones' Gary Greenberg notes that one project in Ohio — an attempt to condemn 13 acres for the benefit of a shopping mall called Rockwood Pavilion — involves about $125 million in planning and construction costs, and promises the local city some $1.5 million per year in tax revenue once completed. Multiplied by countless cases, as well as the legal expenses and the detriment to property values caused by a city's unpredictable tendency to exert eminent domain, the costs are incalculable.

Eminent domain abuse can have perverse social consequences, too. One of the most commonly voiced justifications for eminent domain is that it is necessary for cleaning up unsightly neighborhoods, which include "adult" businesses or other low-class uses. But in 1997, a consortium of Las Vegas casinos persuaded the city to take the retail property owned by Greek immigrants John and Carol Pappas to build a parking lot for the "Fremont Street Experience," a pedestrian mall including such adult attractions as the "Topless Girls of Glitter Gulch." Moreover, the concept of "blight" is so elastic that economic interest groups can easily exploit it. A mall in St. Louis was recently determined to be blighted, despite the fact that it was 100% occupied and had $100 million in annual sales. And a prep school in Wisconsin was declared blighted despite its elite $10,000 tuition price (which conveniently enough qualified it for a $5.6 million tax-exempt bond issue).

Costco, the nation's leading corporate abuser of eminent domain, has persuaded cities across the nation to engage in such transfers. Lancaster, Calif., tried to condemn a 99 Cents store to transfer it to Costco, even though Costco already had a store in the same mini-mall with the 99 Cents store. The city did so, not on the grounds that the property was blighted — it wasn't; in fact, it's probably the cleanest 99 Cents store in America — but on the grounds that the neighborhood might be blighted in the future, if the government did not act now. A federal court struck down this condemnation (an extremely rare occurrence) after noting that "by Lancaster's own admissions, it was willing to go to any lengths — even so far as condemning commercially viable, unblighted real property — simply to keep Costco within the city's boundaries. In short, the very reason that Lancaster decided to condemn 99 Cents' leasehold interest was to appease Costco. . . . " It is impossible to tell how many properties Costco has taken through eminent domain because the company hasn't released exact figures and has tried to stifle shareholder attempts to reverse the company's policies. But the cases abound. Institute for Justice lawyer Dana Berliner, who recently published a catalogue of some 10,000 instances of eminent domain abuse, reports that "of the big-box retailers, Costco shows up the most." But the company is unrepentant. Asked for an explanation, Costco senior vice president Joel Benoliel told investors that if they didn't exploit eminent domain, "our competitors . . . would . . . and our shareholders would be the losers."

It's hard to deny that assertion. So long as the power is available to the highest bidder, Costco executives would violate their duty to investors to withdraw from the scramble for other people's land. Although it is easy to damn powerful companies so insensitive to homeowners unable to afford a legal defense — a Costco attorney once told the city council of Lenexa, Kan., that the property he wanted condemned was "not much of a neighborhood, anyway" — the blame rightfully rests on the courts that have gradually erased the public use clause.

But in confronting this problem, the courts suffer from a serious intellectual handicap, which dates back to the Progressive Era at the opening of the 20th century. During this period, leading intellectuals came to reject the individualistic natural rights premises of the American founding. As Michael McGerr writes, the Progressives "wanted not only to use the state to regulate the economy; strikingly, they intended nothing less than to transform other Americans." But remaking Americans meant inverting the premise that the state was a tool of the people. John Dewey, philosophical champion of the Progressives, denounced "the notion that there are two different 'spheres' of action and of rightful claims; that of political society and that of the individual, and that in the interest of the latter the former must be as contracted as possible." Such a notion, he said, would be replaced with "that form of social organization, extending to all the areas and ways of living, in which the powers of individuals shall not be merely released from mechanical external constraint but shall be fed, sustained and directed."

The Progressives thought society should mold individuals in a manner best suited for the survival and flourishing of the state. It was during this period that various devices for controlling citizens — everything from the Pledge of Allegiance to eugenics and forced sterilization — were introduced. In his great book on this era, "The Metaphysical Club," Louis Menand explains just how opposite the Progressive idea was to the views of the Founding Fathers. To the Progressives, "Coercion is natural; freedom is artificial. Freedoms are socially engineered spaces where parties engaged in specified pursuits enjoy protection from parties who would otherwise naturally seek to interfere in those pursuits. . . . We . . . think of rights as privileges retained by individuals against the rest of society, but rights are created not for the good of individuals, but for the good of society. Individual freedoms are manufactured to achieve group ends. This way of thinking about freedoms helps explain why the . . . [Progressives] were indifferent to the notion of individual rights."

The Progressive Era began to dissolve the public-private boundary by holding that the things we think of as rights are really just permissions granted by society and revocable whenever society decides. Understandably, this period brought a corresponding explosion in the use of eminent domain. In 1923, for the first time, the Supreme Court held that government could condemn land not just for necessities, but for mere recreational facilities like scenic highways. A California court held in 1911 that "[g]enerally speaking, anything calculated to promote the education, the recreation or the pleasure of the public is to be included within the legitimate domain of public purposes" served by eminent domain.

In short, the Progressive goal of "remaking Americans" meant breaking down the limits on state power. The difference between "legitimate" and "illegitimate" government interests was accordingly dissolved. Since government would "extend to all the areas and ways of living," it would now be free to do "anything calculated to promote . . . the pleasure of the public."

It is no coincidence that the Progressive Era was the first time the word "blight" was applied to economic stagnation. The Progressives saw society as an organic whole, with each person a cell. Thus the term "blight," originally a term for a plant disease, was applied to neighborhoods that failed to perform to the standard the society desired. Private businesses were no longer private, they were a tool by which society produced a certain standard of living, and if they failed to do so, society could simply revoke the permission (formerly called property rights) and give that land to someone else.

With the boundaries of "legitimate government interests" erased, New Dealers built on the Progressives' work by establishing the concept of judicial deference. In previous decades, courts had been willing to block the more extreme Progressive social experiments, but in the 1930s they took a more deferential view. Louis Brandeis, a Progressive attorney who had once coined the term "right of privacy," was appointed to the Supreme Court, where he would instead declare that "in the interest of the public and in order to preserve the liberty and the property of the great majority of the citizens of a state, rights of property and the liberty of the individual must be remolded, from time to time, to meet the changing needs of society." President Roosevelt's other appointees (including Justice Douglas, who would later write the Berman decision) agreed not only that government could "remold" the "liberty of the individual," but that courts should not stand in the way. The result was the creation of "rational basis scrutiny."

Today, courts are unable to decide whether an asserted "government interest" is legitimate or illegitimate. Indeed, the Supreme Court has confessed that "our cases have not elaborated on the standards for determining what constitutes a 'legitimate state interest.'" But without such an elaboration, it is impossible to determine whether a law is "rationally related to a legitimate state interest." Since anything at all might qualify as a "legitimate interest," anything subject to this test will receive a pass from the Court. The result is that government's power to manipulate individuals, and their property, is limited only in the rarest possible circumstances.

There is reason for optimism, however. The severest abuses of eminent domain have already forced many people to reexamine their views about the lesser stature of property rights. When the Michigan Supreme Court indicated its willingness to reconsider its Poletown decision, the ACLU joined forces with the Pacific Legal Foundation urging the court to declare eminent domain abuse unconstitutional. The court agreed, unanimously overruling its decades-old decision. To permit the condemnation of land "solely on the basis of the fact that the use of that property by a private entity seeking its own profit might contribute to the economy's health" would "render impotent our constitutional limitations on the government's power of eminent domain," said the court. "Poletown's 'economic benefit' rationale would validate practically any exercise of the power of eminent domain on behalf of a private entity. After all, if one's ownership of private property is forever subject to the government's determination that another private party would put one's land to better use, then the ownership of real property is perpetually threatened by the expansion plans of any large discount retailer, 'megastore,' or the like."

Only months later, the United States Supreme Court agreed to hear Kelo v. New London, a case challenging Connecticut's attempt to seize a neighborhood for the benefit of Pfizer. Although it is impossible to predict what the court will do, there are three main possibilities. The first is that the court may allow government to redistribute private land of New London residents to a private company on the grounds that any benefit to the public is good enough. Second, it might hold, on very narrow grounds, that in some cases, the private benefit is just too extreme to be labeled public. This seems the most likely outcome, but it is an unsatisfying one, because it would leave the important question unanswered. The third and least likely option is that the court could invest serious thought into the difference between what is public and what is private, and could declare that attenuated social effects of private behavior aren't enough to make it into a public concern. Just because a private business affects the public in some way doesn't make it the government's business. If the court embraced this view, the answer to the Kelo case would be obvious: of course a private company is not a public use, even if the public likes to purchase its products.

It is not impossible that this will happen. In Lawrence v. Texas, the Supreme Court declared that alleged harm to society by private, adult, consensual sexual activity is not enough to allow the state to pry into people's private bedrooms. It would be refreshing indeed if it also said that alleged social effects of private business interests are not enough to make a private business into a public use. But, again, I think it unlikely. Such a decision would require the court to reexamine old and politically volatile assumptions which trace back to the Progressive abandonment of America's founding principles. To city planners, your neighborhood is theirs to shape as they please. The fact that a business uses condemned land for its own profit is irrelevant to them because private businesses are public uses, in their minds. They are the tools by which society creates jobs and provides people with goods. President Eisenhower once warned the nation about the military-industrial complex, but today local governments are wrapped up in the Costco-WalMart-Home Depot complex. They believe in what they call "partnerships" between government and private industry in which government and corporations decide the shape and layout of whole neighborhoods, with no regard for the rights of the landowners who stand in their way.

But even a favorable outcome in Kelo might come too late to help Curtis Blanc of Liberty, Mo. Through his company, Mid-America Car, Inc., Blanc owns a well-maintained brick warehouse which he leases for $1 per year to two charities: In As Much Ministries, and Love, Inc. These ministries feed more than 400 families per month — despite one city council member's statement during a council meeting that "there are no poor people in Liberty." But the council has other plans for Blanc's land: it wants to construct a business district on "Liberty Triangle," which consists of 88 acres of land, including Blanc's warehouse. The first phase of the Triangle project has already begun, and a 160,000-square-foot Lowe's home improvement store recently opened. Steve Hansen, the city's public works director, recently told businesses that those which generate high sales tax income for the city will be allowed to remain in the area, but that "most of the businesses that are there now are not high sales producers" and will be condemned to make way for companies that will raise tax revenue for the city. Blanc has received a final notice from the city requiring him to sell his property, or face condemnation. Still, Blanc is hopeful. Along with the Bugryn and Pappas families, he agreed to be represented by the Pacific Legal Foundation in a friend of the court brief in the Kelo case which urges the court to breathe new life into the "public use" clause.

It is very sad that we have come this far. For the Supreme Court of the United States to declare that "our cases have not elaborated on the standards for determining what constitutes a 'legitimate state interest'" is a shocking statement. Two hundred years after the founding, with the Declaration of Independence and the Federalist Papers at hand, and with the experiences of the Revolution, the Civil War, the World Wars, and the civil-rights movement behind us, we ought to know what a legitimate state interest is. As Hadley Arkes has put it, "this late in the seasons of our experience, federal judges should not be in need of this kind of instruction, on the rudiments of constitutional government. . . . [The Founders] did not expect that the main instruction would have to be offered to the lawyers and the judges themselves, and to the resident wits in the schools of law. . . . But that project has become, in our own day, steady work."

Liberty: www.libertyunbound.com

Timothy Sandefur is a staff attorney at the Pacific Legal Foundation, where he has written friend-of-the-court briefs in the Michigan and United States Supreme Court eminent domain cases.

Pacific Legal Foundation: www.pacificlegal.org