Mayor eyes eminent domain in property battle: Reno (NV) Gazette-Journal, 4/7/05

By Sandi Hoover


Eminent domain is the government’s right to acquire private property for public use. The governmental entity may be a federal, state, county or city government, school district, hospital district or other agency.

They can take the property with or without the owner’s permission. The Fifth Amendment to the Constitution provides that “private property (may not) be taken for public use without just compensation.”

The eminent-domain process usually involves the acquiring governmental entity to pass a resolution to take the property (condemnation). That includes a declaration of public need. It’s followed by an appraisal, an offer and negotiation.
Some of the public uses supporting eminent domain include schools, streets and highways, parks, airports, dams, reservoirs, redevelopment, public housing, hospitals and public buildings.

Carson City could consider using powers of eminent domain for the first time to acquire the former Wal-Mart property on South Carson Street if the site is added to the city’s redevelopment district.

On Thursday, officials instructed their redevelopment director to look into including the nearly 13-acre site now owned by former television star Max Baer Jr. in the district for possible retail development.

“If we’re going to look at redevelopment areas, then we better start looking at that property,” said Mayor Marv Teixeira. “One of the things redevelopment looks at is blighted areas, and I absolutely would embrace eminent domain.”

Baer, who starred as the Jethro Bodine on the long-running TV show, “The Beverly Hillbillies,” bought the Wal-Mart site after the retail giant moved across the county line to Douglas County in July 2002. But after his plans to build a casino complete with a flaming oil derrick were quashed, he refused to budge.

“It isn’t that he hasn’t had offers to purchase that property and it isn’t that we haven’t had conversations with him. He has a sign up that says, ‘This Building is Not for Sale or Lease,’” Teixeira said.

“Does that show he cares about this community? Well, I care about this community, and with this property-tax cap, if we don’t pick up more sales tax revenue, we are going to have to cut services,” Teixeira said.

Carson City Economic Development and Redevelopment Director Joe McCarthy said that eminent domain requires that any property taken be put to public use.

“We are heavily reliant on sales tax here and I think a case could be made for bringing in retail to maintain services such as fire and public safety,” he said.

Teixeira said enough is enough.

“He’s been holding onto that property and won’t do anything with it. Well, guess what? This city does have power.”

But Baer said it isn’t going to be that easy.

“When you condemn something as a blight, the problem is, ‘What is the market value?’ And that was established by Sam’s Club’s offer to me, which was substantially higher than I paid,” Baer said.

“The second thing is that it has to be taken for public, not private, use — for a park or a swimming pool or something like that. You can’t just condemn it and give it to some other developer,” he said.

“And the third thing is that deed restrictions travel with the property and I’ll do whatever I need to do to protect myself within the law,” he said.

“This is called America, and the U.S. public believes, ‘Don’t tell me what to do with my piece of property,’” he said.

Baer also said he has gotten a bad rap in Carson City and that he bought the property because he was led to believe he could build his casino as he envisioned it.

“I would not have bought that Wal-Mart if I’d thought nobody wanted my casino, or that restrictions couldn’t be worked out, but I was led to believe there was a solution,” he said.

McCarthy said the eminent-domain process is a last resort and one the city never has used in its history.

He said that including the Baer property in the city’s redevelopment district could work to the owner’s advantage.

“There are restrictions on the property now, but if he can meet those requirements, we will aggressively help him,” McCarthy said.

“But this gives the city the authority to be proactive. The message I got from the board was that they’re not comfortable with that property sitting there vacant,” he said.

Reno Gazette-Journal: www.rgj.com


Eminent domain bill would affect Nevada land controversy: Las Vegas (NV) Sun, 4/6/05

By Elizabeth White, Associated Press

A new amendment to a developer-backed bill reviewed Wednesday by Nevada lawmakers would block conservation advocates from preserving 1,000 acres of prime land south of Reno as open space.

SB326, proposed by Sen. Terry Care, D-Las Vegas, would prohibit state and local governments from using eminent domain authority to acquire property for open-space or wildlife habitat preservation.

Washoe County is trying to designate the Ballardini Ranch area as open space. Advocates of public acquisition say the ranch would provide a needed link to U.S. Forest Service land in the Sierra foothills.

But Minnesota-based Evans Creek LLC, which paid $8.5 million for the ranch in 1998, wants to build nearly 200 upscale homes on part of the property and is in a court fight over Washoe County efforts to acquire the land.

As originally written, SB326 would have applied to cases that arise beginning July 1. But Care proposed an amendment Wednesday that would make the bill retroactive to include all pending cases in the state - including the Ballardini Ranch.

Care said that while he's hesitant to propose legislation that would affect a specific case, "in this case, where I would regard it as an abuse of power, I think we're right to make an exception."

Care also said he wasn't pushing the bill for Evans Creek. He told the Senate Judiciary Committee that the ranch wouldn't be used for a bridge, school or firehouse or other public uses that can justify eminent domain authority.

Care also said the legislation tightens provisions relating to the designation and seizure of blighted property, and that he originally learned about the Ballardini Ranch issue because of a newspaper article.

Tim Nelson of Evans Creek said the land for a long time has been zoned for residential use and that "a layman can see that this is an infield property" that sits five minutes from downtown Reno. He also said development plans include a large amount of green space and public trail access through the property.

Frank Thompson, a lawyer who represents Evans Creek, said "open space and wildlife habitat have never been grounds for the exercise of eminent domain."

"We believe that SB326 simply clarifies and reinforces existing law," he said.

Judiciary Chairman Mark Amodei, R-Carson City, pressed those trying to keep the area open for evidence of the authority to use eminent domain in this case and whether there's a need to declare all of the acreage open.

"No one has testified to the need for 1,000 acres for access," he said. "Tell me why 180 (housing) units can't be clustered somewhere. Why does the county need the whole thing?"

Karen Mullen, director of the Washoe County regional parks department, said picnicking and watershed and wildlife preservation are other reasons to keep the space pristine.

Michael Chapman, a lawyer representing Washoe County, said he has no doubt that state law already covers open space under the acquisition authority because the law includes a provision for "public uses."

"It does not contain the two words 'open space,'" Chapman said. "(But) this is a public purpose for the benefit of the inhabitants of the county."

Las Vegas Sun: www.lasvegassun.com

UA going after acre next to its tech park: Tucson (AZ) Citizen, 4/6/05

By La Monica Everett-Haynes

A local landowner may be forced to sell the UA [University of Arizona] a one-acre plot of Southeast Side land that skirts UA's Science and Technology Park.

The Arizona Board of Regents, on behalf of the UA, filed an eminent domain lawsuit in March against Dennis Keith Luttrell, according to Pima County Superior Court documents.

Eminent domain, which has disgruntled property owners for centuries, allows government entities to buy private property for public use when an owner refuses to sell. Sometimes government is successful; other times, it fails.

The parcel is a patch of desert land at 8650 S. Rita Road. Given the UA's desire to develop the Science and Technology Park, regents hope the courts will condemn the land, forcing Luttrell to let it go, court documents show.

The land would become a parking lot or be used to expand the park, said Paul Allvin, a UA spokesman.

The land is littered with old vehicles and airplane parts and poses environmental and safety problems, Allvin said.

"They may be leaking oil or gas into the ground and that lends a sense of urgency to this," Allvin said.

Vina Paulette Waters, Luttrell's ex-wife who is listed in the documents as a property beneficiary, said Luttrell purchased the plot more than 20 years ago.

Waters said the two divorced 22 years ago and she didn't know what Luttrell intended to do with the land. But, Waters said it isn't the first time Luttrell has had to protect his land from outside interests.

"It's sad," Waters said. "It's just the corporation going after the little guy."

Luttrell did not return messages left yesterday and Monday at Spanish Trail Apartments, 305 E. Benson Highway, which he owns.

Luttrell's desert land is worth $27,000, according to the Pima County Assessor's Web site. Allvin said the UA has made an offer and is awaiting Luttrell's reply.

Philip S. Abromowitz, a local attorney who specializes in eminent domain cases, said property owners generally can't stop agencies from taking their land once a decision has been made.

"The whole idea is in balancing private rights against public need and good," said Abromowitz, who has been involved in more than 220 such cases.

Yet the U.S. Constitution Fifth and Fourteenth amendments and the Arizona Constitution grant private property owners protection through court proceedings.

Pima County Superior Court has scheduled a May 9 hearing on the matter.

While no one can predict the outcome, Abromowitz said government has had success in the past.

Tucson won about 40 eminent domain cases while expanding Speedway Boulevard during the 1990s, he said.

In 1996, regents allowed UA to force three East Sixth Street property owners to sell their property for a future parking lot.

Other entities have also used eminent domain in recent years, but weren't as successful.

Last month, city council members withdrew the authority they gave to begin the eminent domain process against the Flowing Wells Irrigation District.

In 2000, the Tanque Verde district bought the East Side EmKay Ranch with plans to build the district's first high school. But the Tucson Unified School District sued, challenging Tanque Verde and, eventually, construction was halted.

Abromowitz said that in most cases, entities try to negotiate settlements before going to court, but property value opinions get in the way.

"It's a myth to believe that just because the government makes an offer it's correct," he said. "Unfortunately, people are intimidated and don't know their rights."

Tucson Citizen: www.tucsoncitizen.com

The Bill of Rights: Eminent Domain: Freedom Daily, 4/6/05

By Jacob G. Hornberger

One of the bedrocks of a free society is a system of private property. The concept of economic liberty is founded not only on principles of free enterprise but also on the principle that people have the right to accumulate the fruits of their earnings. If government has the power to arbitrarily seize a person’s wealth or property, then a person cannot truly be considered free in an economic sense. That is why our ancestors deemed it critically important to protect people’s property from governmental assault through their enactment of the Fifth Amendment, which reads in part as follows:
No person shall be . . . deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Notice that there are two pertinent “takings” clauses in the Fifth Amendment — the due-process clause and the just-compensation clause. The due-process clause empowers government to take a person’s property but only after following the principles of due process of law, specifically, notice and hearing. That is, suppose a person is accused of defrauding the federal government. Before the government can punish him through incarceration and fine (i.e., deprive him of liberty and property), it must provide him with notice and hearing, where he is entitled to contest the charges against him.

The just-compensation clause works differently. It empowers the government to take anyone’s property, so long as two conditions are met: the taking is for “public use” and “just compensation” is paid to the owner. This clause refers to the age-old government power of “eminent domain.”

The original purpose of eminent domain was to enable government officials to acquire property to establish places from which to run the government. The idea was that in order for the government to operate, it would need, for example, courthouses. Thus, eminent domain supplied government officials with the power to seize a person’s property for that purpose but on the condition that government officials paid the owner for it.

While the “public use” and “just compensation” limitations serve as a check on the power of eminent domain, over time the power has increasingly been abused, especially with respect to the concept of “public use.” In an era of confiscation and redistribution of wealth through the welfare-state functions of government, public officials have increasingly expanded the meaning of “public use” to the point where they are now using the power of eminent domain to take one person’s property in order to give it to another person albeit by paying “just compensation” to the original owner.

Keep in mind that the Fifth Amendment applies only to the federal government, not the state governments. However, by Supreme Court interpretation, the due-process clause of the Fourteenth Amendment incorporates the Bill of Rights and thus applies the restrictions of the Fifth Amendment to the states.

The Berman case
In 1954, the U.S. Supreme Court decided one of the major eminent-domain cases, Berman v. Parker. The case arose from the D.C. government’s condemnation of slum areas in Washington for purposes of “urban renewal.” The process involved throwing people out of their homes for the purpose of beautifying blighted neighborhoods in D.C. While the D.C. government was compensating people for the taking, some residents nonetheless objected to being forced to sell their homes, arguing that the power of eminent domain did not extend to such government projects as urban renewal.

A department store was in the affected area. In addition to questioning the use of eminent domain for urban renewal, the store’s owners argued that their store didn’t even constitute blight.

The U.S. Supreme Court ruled in favor of the government. The Court reasoned, first, that urban renewal was a proper governmental purpose:
Miserable and disreputable housing conditions may do more than spread disease and crime and immorality. They may also suffocate the spirit by reducing the people who live there to the status of cattle. They may indeed make living an almost insufferable burden. They may also be an ugly sore, a blight on the community which robs it of charm, [348 U.S. 26, 33] which makes it a place from which men turn. The misery of housing may despoil a community as an open sewer may ruin a river.

We do not sit to determine whether a particular housing project is or is not desirable. The concept of the public welfare is broad and inclusive.

The Court then proceeded to hold that eminent domain could be employed for urban renewal even if title to the property would ultimately vest in private hands rather than be held by the D.C. government:
Once the object is within the authority of Congress, the means by which it will be attained is also for Congress to determine. Here one of the means chosen is the use of private enterprise for redevelopment of the area. Appellants argue that this makes the project a taking from one businessman for the benefit of another businessman. But the means of executing the project are for Congress and Congress alone to determine, once the public purpose has been established. . .. The public end may be as well or better served through an [348 U.S. 26, 34] agency of private enterprise than through a department of government — or so the Congress might conclude. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects.

The Poletown case
In 1981, the Michigan Supreme Court decided one of the most controversial cases involving eminent domain. In that case, the city of Detroit had seized thousands of homes, businesses, and churches in an area called Poletown (named for the large Polish population in that area) so that General Motors could build a plant on the site. The city claimed that the “public use” limitation was met by virtue of the fact that the new plant would “create jobs” and increase the city’s tax base. Opponents contended that this wasn’t truly a “public use” because the property owners’ property was simply being taken from them to be given to General Motors.

The Michigan Supreme Court ruled in favor of the city, and the effects of that decision rippled out nationwide. As an article posted on NationalReviewOnline entitled “This Land Is Your Land,” by Timothy Sandefur, observed:
Eminent domain, once limited to public uses like roads or post offices, was unleashed in the service of any well-heeled private party able to persuade the local government to see things its way. In the years since Poletown, eminent-domain abuse has exploded nationwide. As Ramesh Ponnuru has pointed out, powerful corporations frequently send representatives to lobby cities for “free” real estate. The city takes a neighborhood, usually of modest homes, and gives it to a developer or a megastore, and then rakes in the higher taxes. The only losers are the home- and small-business owners, who lack the political influence necessary to persuade local officials to respect their rights. Poletown has become the leading symbol of eminent-domain abuse.

In other words, what began as a power to seize property on which to build courthouses and police stations was extended to seizing and redistributing property to alleviate “blight” and then extended again to seizing and redistributing property to improve the economy and the government’s tax base. Of course, a cynic would be forgiven for concluding that the power was being used to take property from those who lacked political influence in order to give it to well-heeled, politically powerful friends of government officials.

A trend toward property rights
In July 2004 the Michigan Supreme Court overturned its infamous decision in the Poletown case. In Wayne County v. Hathcock, the county had condemned private property for the purpose of giving it to a private developer, arguing that the project would serve the public good through jobs and economic prosperity. The court held that the Poletown case had been wrongly decided and that the “public use” power could not encompass the taking of one person’s property for the purpose of giving it to another person. The August 4, 2004, issue of the Detroit News editorialized:
Michigan’s Supreme Court restored the sanctity of private property rights by reversing a quarter-century-old ruling that allowed the city of Detroit to uproot families and businesses in the Poletown neighborhood so General Motors Corp. could build a factory on their land. The original case was a blow to constitutional protections. The new, unanimous ruling restores the concept that government can’t just take away private property because it thinks someone else might use the property better. ... Municipalities and developers can adjust. Wayne County is going ahead with the Pinnacle Park project. The developers will now have to work harder to obtain rights to land from private owners and pay a higher price. But few constitutional rights are as important as private property rights. The court, in bringing Michigan back into compliance with the intent of the Constitution, served Michigan property owners well.

Equally significant, the U.S. Supreme Court has recently decided to revisit the “public use” issue in the case of Kelo v. City of New London, which involves the city’s seizure of property for private development to boost the city’s economic conditions. The homeowners’ argument can be summed up in their central contention: They “seek to stop the use of eminent domain to take away their most sacred and important possessions: their homes.”

Lost in all this “public use” controversy is a fundamental question: Why should government have the power of eminent domain anyway? If it needs a piece of property, why shouldn’t government officials be expected to negotiate for its purchase, just as everyone else does? If someone refuses to sell, then the government can simply go and purchase its property elsewhere.

We should also bear in mind the personal pain and sorrow that accompanies the forcible taking of people’s homes and businesses, even when “just compensation” is paid. The best example was the Interstate Highway System, a socialized project that destroyed the homes and businesses of thousands upon thousands of people. (See “Highway to Collapse: Spending on Infrastructure,” by Jacob G. Hornberger, Freedom Daily, April 1993)

Given the power of eminent domain, it should be limited to acquiring property for the legitimate functions of government. For most people, there is no such thing as “just compensation” for their home or business, especially given that value is subjective. Oftentimes, people simply aren’t interested in selling or moving, no matter how high the price.

In the private marketplace, a private buyer cannot force people to sell, no matter what the price that is being offered. As the ancient adage goes, a man’s home is his castle. Where is the morality in permitting a prospective buyer to accomplish an immoral end through the use of the government’s power of eminent domain? By limiting the just-compensation clause of the Fifth Amendment to its original intended purpose, we help to restore the sanctity of private property on which economic liberty is based. Of course, by repealing it we would help restore it even more.

Freedom Daily: www.fff.org/freedom

Jacob Hornberger is founder and president of The Future of Freedom Foundation, publisher of Freedom Daily: jhornberger@fff.org


We Condemn Thee: Voice of San Diego (CA), 4/5/05

Blight, rights and how the city can make you 'leggo your ghetto'

By Evan McLaughlin

For businessman Ed Plant and Padres owner John Moores, their respective opinions about redevelopment law aren't even in the same ballpark.

Plant, owner and operator of San Diego Refrigeration Services, Inc., was visited by the Centre City Development Corp. in November 1998 immediately following voters' approval of Proposition C, the citywide ballot initiative that kicked off San Diego's most ambitious and expensive redevelopment project to date. The Padres were going to be moving into a new downtown stadium, and in a few years, the team would be taking infield practice where San Diego Refrigeration Services' 68,000-square-foot facility stood at Imperial and Eighth avenues.

"They came to me and said, 'you are our biggest problem and we need you out early,'" said Plant, whose business now runs out of the Port and under a new name, Harborside Refrigeration Services.

Plant said he was shortchanged by CCDC, who was acting as the agent for the city's Redevelopment Agency. The financial settlement to acquire the property and compensate him for relocating as well as the bill he had to pay to clean up the site's environmental hazards almost ruined his business, he said. Among the challenges for Plant, he was given a formal 90-day notice to vacate when he estimated it would take two years to build a new facility to house the six million pounds of frozen food his company stores at any given time.

"I tried to work with them, but they got me in a corner I couldn't get out of," Plant said. "CCDC had no compassion about the situation."

The condemnation of properties has not only irked business owners, but also citizens concerned with preserving historical buildings downtown.

Meanwhile, Moores will have the opportunity to see his near-$1 billion investment payoff for the Padres and his real estate venture, JMI Realty, Inc. His baseball franchise reaps the improved attendance revenue that eventually came with the attractive Petco Park, and JMI was awarded several projects within the new Ballpark district that will feed off clientele drawn to the area because of a publicly financed stadium.

While Plant acknowledged the public benefit of a new ballpark and some new housing, he said his business and others got a raw deal. Leslie Wade, who observed the neighborhood's transition as the East Village Association's executive director, said CCDC "bent over backwards" for each individual situation, but that moving was still very difficult on businesses like Plant's.

Enter eminent domain — a power granted to local governments to acquire private property for the purpose of a greater public benefit, but at the expense of property rights, the law's opponents contend.

"Every government everywhere always says it's a last resort, but it's a tool of first resort and it's the easiest," said Dana Berliner, a senior attorney at the libertarian Institute for Justice. Berliner served as co-counsel on behalf of homeowners in Kelo v. New London, Conn., a case heard by the U.S. Supreme Court in February. In the case, the Connecticut city attempted to seize the homes of several residents to add to a large development project built around a Pfizer research facility because added tax revenues would constitute public good.

In California, a locality must produce a finding of blight — not just the desire for economic enhancement, but an area's dire underutilization, physical dilapidation and social need — before exercising the power of eminent domain. However, many believe the Kelo decision, which is expected in June, will have an impact on how California's law is interpreted.

The state Legislature passed the California Community Redevelopment Act in 1951, amending the state's health and safety code to empower municipalities to improve blighted parts of California cities like San Diego, Oakland and Los Angeles. At the time, many urban areas were losing the downtown businesses as they flocked to whiter, more affluent fringe neighborhoods or in newly established burgs nearby.

In 1992, the San Diego City Council, which doubles as the city's Redevelopment Agency, established a new project area about 1,500 acres bordered by the Port and U.S. Navy bayfront properties to the west, Laurel Street to the north, Interstate 5 to the east, and the Barrio Logan neighborhood to the south. The new Centre City Community Planning Area incorporated the existing Marina, Columbia and Gaslamp Quarter redevelopment zones already in progress while expanding into the Core, Little Italy, Cortez and East Village.

The Marina and Columbia areas were declared blighted in 1976, and the Gaslamp Quarter was declared blighted in 1982. Former Mayor Pete Wilson, who oversaw the creation of CCDC in 1975, said eminent domain is vital to ensuring "the reversal of slum."

"In its own existing state, downtown was neither paying its own way in taxes nor producing jobs. To the contrary, it was producing social problems," Wilson said. "That clearly changed with the physical landscape."

After a legal finding of blight is made for a specific redevelopment project area, properties within that area may be condemned through the power of eminent domain, which is also used for public works necessities, such as extending a freeway through privately held land. In the case of redevelopment, local governments can force private property owners to sell their land in the name of public benefit.

However, the decision is made unilaterally by a city's redevelopment agency, and some believe it is easily abused. The Chargers' recently withdrawn attempt to have the city declare Mission Valley a blighted area — so that construction of a new stadium could be included in redevelopment project — was sometimes referred to as an abuse of eminent domain.

Some, like Councilwoman Donna Frye, believe the law is inflexible. She's skeptical that the Centre City project area fits the description of a blighted community today.

"In the beginning, when they started doing redevelopment downtown, it could be qualified for blight," Frye said. "I'm not convinced now that it meets that definition now."

CCDC acts on behalf of the San Diego Redevelopment Agency in this case, calling on the owner of the property the Redevelopment Agency condemns to seek a settlement and to issue an order of immediate possession. The city obtains the property 90 days later.

Historically, 90 percent of the owners will settle out of court with the agency's offer for the property, CCDC project manager David Allsbrook said. Property owners are compensated with money the city borrows with tax-allocation bonds, which are paid off over time with added tax revenue generated through increases in improved properties' assessed value.

Additionally, owners of the properties condemned by the Redevelopment Agency are also required to dole out the money needed to clean up sites where environmental hazards are left behind.

CCDC posts a description of the project they want to fill the condemned property. A firm is then selected and a price is negotiated for the developer to purchase the acquired land from the Redevelopment Agency.

"At the end of the day, you've taken a blighted area and you've done a good service to an area that has been rundown with a low tax base and high crime," said Frank J. Alessi, vice president of finance and chief financial officer at CCDC. "You wind up with a community that is no longer blighted, has more jobs than it had in the past, and now it's a community that's more viable to work and play in.

"A lot of this stuff doesn't happen on its own," he said.

Voice of San Diego: www.voiceofsandiego.org

Adding Accountability To Eminent Domain: Hartford (CT) Courant

By Annie Lux

In the 1960s, New London [CT] believed it could bring business back into the center city by using the power of eminent domain to replace historic neighborhoods with highways. The city's strategy backfired. Today, New London remains a depressed city, replete with vacant lots and a riverfront lined with obsolete industry.

In a new plan designed to increase the city's tax base and reverse decades of decline, New London seeks to use eminent domain to condemn middle-class homes in the Fort Trumbull neighborhood to make room for new mixed-use development. Several homeowners have refused to sell their properties and have taken their case all the way to the U.S. Supreme Court.

The question recently argued before the court is whether privately built "economic development" projects qualify as a "public use." Although the Constitution clearly allows government to condemn land for public uses — such as roads, schools or publicly constructed urban renewal projects — private development for the purpose of increasing a city's tax base occupies a grey area. Instead of strictly ruling for either side, the court has the opportunity to take a middle ground by requiring safeguards to ensure that "economic development" projects really do give cities public benefits.

New London undertook an exhaustive planning process and decided that it needed new development, coupled with a downtown river walk and improved infrastructure, to lure citizens to a revitalized waterfront. City officials argue that the proposed retail, housing and office project will help revitalize the city through increasing its tax base, thus increasing city services.

Several residents of the Fort Trumbull neighborhood, on the other hand, see the project as remarkably similar to 1960s urban renewal — a big government scheme that takes land from individual homeowners, with no guarantees that the project will provide the benefits that supposedly justify taking land. Even worse, land is being taken from one private owner and given to another private owner, not the state.

The Supreme Court faces a tough decision: If it rules in favor of the New London homeowners, it severely constrains the ability of depressed cities to improve the economic opportunities available to their residents. If it rules in favor of New London, it sets a precarious precedent for condemning any property that can be more efficiently run by another owner — or, even worse, condemning properties simply because politically powerful companies with friends in city hall desire them.

The court should find a middle ground by encouraging cities and companies involved in economic development plans to put their money where their mouth is through "clawbacks." Clawbacks hold developers financially accountable for doing what they say they are going to do to promote economic development. Down the Connecticut coast, New Haven uses clawbacks. So should New London.

Eminent domain is a powerful tool — one that effectively destroyed many cities in the 1960s. Yet, this same tool, if cautiously applied, can help revive these cities. Economic development should qualify as a form of eminent domain, but only if the law includes further restrictions such as clawbacks to increase its image and to minimize its abuse.

The Hartford Courant: www.courant.com

Annie Lux is an editor of The Next American City, a quarterly magazine about the ongoing transformation of America's cities and suburbs, available online at www.americancity.org.


Waiting 50 years for a dream: Philadelphia (PA) Daily News, 4/4/05

Eastwick plan never came true; now it's in court

By Carla Anderson (The Urban Warrior)

Regina Eichinger and Lois Schaub are not exactly household names.

Neither are Ethel and Windle Bird.

Maybe they should be.

They, and others like them, are victims of a certain kind of Philadelphia story - a story with no heroes, where only the rich and powerful win.

Their particular tale is an urban renewal drama that takes place in the southwest part of the city known as "New Eastwick." Even now, almost 50 years after it started, it's still being written.

And to date, the people who are supposed to be their heroes - government officials who took their land, the developer who sold them a promise of a suburban-style heaven - are totally falling down on the job.

These people spent the last 40 years feeling cheated out of the value they thought they were getting. Meanwhile, the private development company hired to build their new neighborhood is walking off with 90 percent profits on land once owned by neighbors like them.

This story started more than 45 years ago, when the Philadelphia Redevelopment Authority used its power of eminent domain to take 2,300 acres for the New Eastwick urban renewal scheme. It was the city's answer to the packaged-housing suburb known as Levittown.

The land was marshy, rural, and lacked city sewers. Redeveloping it meant kicking some 10,000 people out of their homes and acquiring rights to 2,000 separately owned parcels.

Some residents banded together to fight the takeover. But the city won, and promised to develop the land in a way that would serve the public good.

Now, more than 40 years after construction started, plans for the suburban-style development - with cul-de-sacs, shopping centers and high-speed boulevards - remain unfulfilled. Major portions of the residential plan were never built.

It was the city's decision to use 16 acres of this undeveloped land for more parking at Philadelphia International Airport that triggered a lawsuit, sparking the latest chapter in this story.

Korman Co., the Trevose-based company with a lucrative deal to develop the land, says it holds all land rights till that deal expires 10 years from now, and deserves to be paid if the deal is broken.

The 16 acres, which look over the Heinz wildlife refuge, have gained more than $7 million in value since 1958, when government officials first took them. Citing its decades-old deal, Korman says it has the sole right to purchase that property at the 1961 price, which is about $1 million, and take home the $7 million profit it's gained since then.

Common Pleas Judge Albert Sheppard Jr. agrees, and recently ruled in favor of Korman. The company had fairly negotiated this deal back in 1996, Shepperd ruled, when it agreed to give up the development rights to another parcel, the 26-acre site that's home to the PNC headquarters building.

But the Redevelopment Authority says this deal stinks and plans to appeal.

The land is theirs, they say, and so is the profit. It was a mistake for previous administrations to repeatedly extend the 1961 agreement, they say, which signed away development rights at rock bottom prices. And because Korman is not the company that signed the original deal, but only came into the project in 1970, they claim it's not legally binding.

Besides, this isn't the last piece of land that's likely to become an issue. There are 55 acres of undeveloped residential land close by, which Korman also holds the rights to. If the company gets the same deal with these acres, they say, profits would be stunning.

"It's like winning the lottery," said Paul Sehnert, RDA board member and Director of Development Management for the University of Pennsylvania.

"I mean, if I was explaining it to my mother, I'd have to say, 'Gosh, that isn't really very fair, is it?'

"This is land speculation, and condemnation is not meant to siphon speculative land profit to a private sector player."

So the city got taken, obviously. And they've made a stink about it.

But what about the people who lost their land in the first place? The ones who were promised a better neighborhood?

Most of the diverse mix of farmers and families who once staked out their existence in these marshy lowlands of the Schuylkill and Delaware rivers are no longer around.

More than 40 years ago, when the urban renewal bulldozer came through, many took the handful of cash they got in exchange for their homes and became renters in West Philadelphia neighborhoods. Others have disappeared, or died.

But some remain.

Eichinger, for instance, considers herself lucky to still live in the house where she grew up, a modest brick home with a yard where her family once kept horses. The house sat on high enough ground to connect into the new city sewer, so 40 years ago it was one of a few buildings that escaped.

Other neighbors didn't fare so well.

"Take Mrs. Jennings, her house down by the creek, it was a perfectly good house and there wasn't anything wrong with it," Eichinger said. "When they took her house, I think it killed her. She took sick and died right after that.

"I'd say the only good thing to come out of the whole deal was the sewer," Eichinger continued. "We did need that. We used to have it so all the water ran out the kitchen sink and down along the alley there, then into the ditch out front. We called them mud gutters. They'd get to be wide enough you'd need a little bridge up over it. We used to say you weren't baptized till you fell into the mud gutter."

Schaub, who's 87 now, also remembers the mud gutters, and she, too, appreciates the sewer.

But she doesn't think the trade was worth it, either.

"They took away all our stores, all the houses that used to come right up to the street, and I think they tore down something like 30 churches," she said. "We used to have a neighborhood. It was friendly, and the people were nice."

She can't forget the bitter fight that some put up, trying to keep their land. Or the losses.

"I can remember, people coming home from the war, they couldn't understand how they'd gone over to fight for their country, and came back to find their homes were gone," she said.

Some neighbors, including Windle and Ethel Bird, once embraced the idea of redevelopment.

Their old Eastwick home went under the bulldozer in 1973. They took the $15,000 they got for it and bought a $35,000 replacement, a Korman-built single family home on Grosbeak Place.

With a new house and sewers, they thought they were living out the promise of urban renewal in a new "city within a city."

But 10 years later the basement started cracking. The house had been built on a dump, and the ground was sinking. Forty years later, they say they have nothing to show for their investment.

"We need the resale value, but as it is now, we can't get anything for this place," said Ethel Bird.

Bird, like the other neighbors, admits that the original Eastwick neighborhood was run down.

But she's not sure the new one was such a great deal.

"It really just wasn't up to date the way it was then, but people seemed happy. Put it this way: In the old Eastwick, I didn't have to call somebody to let them know I was coming over to visit," she said.

"But here, you do."

The legal rights to the latest bit of profit to come out of this urban renewal project may or may not have been settled, depending on what happens on appeal.

But sometimes there's what's legal, and then there's what's right.

I say any money gained in the battle should find its way back into the lives of those people who suffered when their neighborhood was destroyed. Whether that means building new buildings, or fixing old ones, I can't say.

But I can say the real victims here are certainly not Korman, or even the city, but the countless men, women and children who once owned that land, or bought into a project that didn't deliver.

And $7 million could go a long way toward righting past wrongs.

In the words of Ethel Bird:

"Since they were responsible for me moving here, I'd like to see them put some of that money into my basement."

Philadelphia Daily News: www.philly.com/mld/dailynews


Aurora abandons E. Colfax project: Rocky Mountain News (Denver CO), 3/31/05

Short on cash, city hopes developers will step in to fix up land near Fitzsimons

By Javier Erik Olvera

Aurora [CO] is scrapping its plans for the $50 million redevelopment of acreage across from the old Fitzsimons Army Medical Center because the land is too expensive.

For the past three years, the city has planned to transform 17 acres of aging businesses and housing at East Colfax Avenue and Peoria Street into an upscale development anchored by a grocery store.

But the plans ground to a halt Wednesday when city officials realized there was no way around an estimated $12 million shortfall in the funding needed to get the project off the ground.

"It's frustrating," said Mayor Ed Tauer, adding that he is confident the development would have flourished with its proximity to Fitzsimons, which will have 20,000 employees when its evolution into a state- of-the-art medical campus is completed in about a decade.

Some of the 34 property owners who faced losing their homes or businesses if the project had gone forward are breathing a bit easier now, with one saying "it's nice to finally have this monkey off my back."

But Aurora officials say they aren't giving up on plans to redevelop the area but will now rely on developers rather than the city to make it a reality.

"The decision really doesn't change our commitment to the area," said Councilwoman Ingrid Lindemann, adding that she expects developers will be approaching property owners in large numbers as the remaking of Fitzsimons approaches completion.

During the past six months, the city has searched for a way to purchase the acreage, relocate businesses and raze buildings, but came to the conclusion it could come up with only a portion of the $26.8 million needed for the first phase of the project.

"It comes down to the bottom line," said Lindemann of the decision to ditch the plan. "Unfortunately, we could not bite off that big of a chunk at this time."

The project would have been a cornerstone of efforts to refurbish 110 acres around Fitzsimons that the city designated as blighted and wanted to redevelop with coffeehouses, grocery stores and restaurants.

The Peoria Street and East Colfax Avenue intersection became a redevelopment priority, with the city working with a developer to either buy or condemn the property of unwilling sellers.

Several property owners resisted, saying they didn't want to leave the area.

Plans for a 150,000-square-feet project anchored by a grocery store and a restaurant began to unravel last year when the city learned that the developer, Daniel Yacovetta, of Denver Holdings Inc., was in the middle of bankruptcy proceedings.

Some property owners claimed that Yacovetta had threatened to seize their land and made offers that were well below fair market values.

The city divorced itself from Yacovetta and began negotiating with Florida-based Regency Centers, one of the nation's leading developers of grocery store-anchored projects.

After the land was appraised, they began working on several funding options, but were unable to find a suitable one, said Dianne Truwe, the city's director of development services.

"(The city and the developer) thought the project would work . . . but we came to the conclusion that there was a gap that neither one of us could figure out how to cover," she said.

John Dare is one of the property owners happy with the outcome, saying it's the end to a long fight that he didn't want to lose.

"It's nice to finally have this monkey off my back," said Dare, who has owned Fenimore Auto Service for 32 years. "We've been fighting this a long time."

Rocky Mountain News: www.rockymountainnews.com

Government approach to eminent domain needs to be reassessed: The Desert Sun (Palm Springs CA), 4/2/05

By James K. Lewis

"Life, liberty and the pursuit of happiness" as long as so-called "public use" doesn't demand it first. Private property is a foundation of our republic; just compensation was included in the Fifth Amendment of the Bill of Rights should one's property be required for public use.

But exactly what is meant by "public use"?

Originally, it referred to government use that would necessarily and directly benefit the public good, such as transportation right-of-way, aqueducts, government buildings and the like. Now it usually means the better good of some private developer - if the government can wring more taxes out of the deal via some convoluted classification of "redevelopment."

In contrast, Michael Allan Wolf, a professor of law and history at the University of Richmond, states that recent case law now dictates: "as long as there is an incidental public benefit, the use of eminent domain is proper."

But is that what the Founders meant when they penned the Fifth Amendment?

To find out, we must do proper exegesis: studying what the reader would have understood the writer to mean at the time a manuscript was written. It helps us discern now what the writer meant then when he wrote "public use."

The Federalist Papers stand as the first authoritative interpretation of the Constitution. In Federalist 42, James Madison gives us a glimpse into the mind-set that would limit such powers when he explains, "The power of establishing post-roads must, in every view, be a harmless power and may, perhaps, by judicious management, become productive of great public convenience."

"Harmless power" and "great public benefit" don't sound like he meant incidental benefit.

Also, though Alexander Hamilton ardently championed federal authority, in Federalist 1 he reassures that the adoption of the Constitution provided for "preservation of property."

To truly understand why they composed the Bill of Rights, we would also have to realize what it was like having an oppressive government confiscate one's home and property without any just recourse, or undergo forced occupation of our homes by threat of life.

They truly comprehended what abuses government is capable of, and that its powers require constraint. They had just fought a war to make sure it wouldn't happen again.

Should government agencies have unfettered power to force the sale of privately owned land to benefit a single company - even if it provides increased jobs and taxes?

Recalling recent valley cities' acquisition of property for the use of private developers - some through aggressive application of eminent domain - should we allow such land grabbing by government agencies under the guise of "redevelopment?"

At some point we, the people, will have to say "enough" and insist on what the founders meant when they wrote the Fifth Amendment and "public use." Private property is just that, private - as is public use, public. We don't need anyone interpreting otherwise.

The Desert Sun: www.thedesertsun.com