New Jersey Eminent Domain Law Blog

William J. Ward, Esq, a principal of Carlin & Ward (Florham Park NJ), is now publishing the New Jersey Eminent Domain Law Blog. This Internet resource features legal commentary on legislative issues and cases from the New Jersey Superior Courts to the United States Supreme Court, and their effect on New Jersey residents and business owners.

The blog is dedicated to informing the general public, as well as attorneys and real estate professionals, about current condemnation and redevelopment procedures and their impact on private property.

Mr Ward honed his skills as a Deputy Attorney General, litigating cases for the Department of Transportation and as secretary and general counsel for the New Jersey Sports and Exposition Authority. After twenty years as the leader of the eminent domain practice in a law firm in Hudson County, he established a new firm with John J. Carlin, Jr. in 2002. Mr. Ward’s practice is concentrated exclusively in eminent domain litigation and appeals. He represents residential, business, and commercial clients in matters including real estate property valuation, access modification, relocation, condemnation, and riparian claims. He handles cases for property owners against condemning authorities including municipal, state, and redevelopment agencies. His extensive career spans more than three decades in this practice are. He has appeared before the federal courts, the N.J. Superior, Appellate and Supreme Courts. Articles about his verdicts and settlements have frequently appeared in the New Jersey Law Journal.

New Jersey Eminent Domain Blog: www.njeminentdomain.com

Looking on the bright side of Kelo: Pacific Legal Foundation, 6/24/05

By Timothy Sandefur

Kelo is, obviously, a deplorable example of what happens when we start tinkering with property rights to begin with. Once someone says “it’s okay to steal the property of a rich man and give it to a poor man,” it’s not long before the rich man figures out how to exploit that power himself. This is what explains the apparent paradox of the supposedly liberal members of the Court writing an opinion that vastly expands the opportunities for corporate welfare programs at the expense of the poor and underrepresented. The only solution to this problem is to take property rights seriously for everybody, and to recognize the fact that government has no business stealing things from people who earn them, and giving them to people who do not—white or black, rich or poor, politically powerful, or politically weak.

That being said, there is room for optimism. Kelo really does little that Berman v. Parker, 348 U.S. 26 (1954), did not already do. Berman was an obscenity—a bitter decision written by one of the Court’s greatest antagonists to property rights, that asserted such explosive dicta as “when the legislature has spoken, the public interest has been declared in terms well-nigh conclusive,” id. at 32—and it was unanimous.

Hawaii Housing v. Midkiff, 467 U.S. 229 (1984), was almost as deplorable. There, the Court held that public use is “coterminous with the scope of a sovereign’s police powers,” id. at 240, meaning that the clause provided no more protection than the Due Process clause already does. And of course, that involved a practically insurmountable degree of judicial deference: “There is, of course, a role for courts to play in reviewing a legislature’s judgment of what constitutes a public use...[b]ut...it is ‘an extremely narrow’ one.... [D]eference to the legislature’s ‘public use’ determination is required ‘until it is shown to involve an impossibility....’ [W]here the exercise of the eminent domain power is rationally related to a conceivable public purpose, the Court has never held a compensated taking to be proscribed by the Public Use Clause.” Id. at 241. And it was unanimous.

Unless I’m seriously mistaken, Kelo represents the first time since the Civil War that any Justice of the Supreme Court has ever seriously defended the proposition that the Public Use Clause limits the power of eminent domain. This, I think, is reason for optimism. Not only that, I don’t even know of any lower court decisions that criticize Berman outright. I think it is a genuine accomplishment to have four members of the Court so severely criticize cases that are unquestionably controlling, unanimous, and so extremely opposed to the dissenters’ point of view.

Consider—Berman was unanimous and its holding crystal clear. The same can’t even be said of such atrocities as Dred Scott, Korematsu, Plessy, or Nebbia. Can you imagine, fifty years after the holdings in those cases, four justices writing as powerful a dissent challenging those cases? I cannot.

There’s all this talk about the property rights revolution being dead. While it’s true that talk of such a “revolution” was quite overblown to begin with, and that cases like San Remo, Lingle, and Kelo, were all losses for property owners, we can’t lose sight of the fact that legal revolutions start slowly. Justice Field’s dissent in Slaughterhouse was eventually to (more or less) win the day; Justice Holmes’ dissent in Lochner (which nobody joined at the time) was eventually to prevail. In Kelo, we have managed to persuade almost half of the court that the Public Use Clause is meaningful—a proposition that the Supreme Court has never embraced before, and has resoundingly and unanimously rejected in the past.

Making lemonade? Sure. Kelo is a severe loss, and is execrable constitutional interpretation. But baby steps, people. Baby steps.

Timothy Sandefur: tms@pacificlegal.org

THE KELO EFFECT: New Jersey Eminent Domain Law Blog, 6/23/05

Supreme Court Defeats Property Owners in Eminent Domain Decision 5-4

By William J Ward, Esq

“Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.” – Justice Sandra Day O’Connor, dissenting

Today the Eminent Domain trilogy is complete. In May, the Supreme Court affirmed long standing regulatory takings stands in Lingle v. Chevron USA. Today, Kelo v. New London affirms long standing decisions regarding takings for public use in Midkiff and Berman. And last Monday, in San Remo v. San Francisco, the Court said property owners could not litigate in both the state and federal courts at the same time. In other words, don’t call us, and we won’t call you.

The decision was 5-4 in favor of the City of New London, Connecticut and affirmed the Supreme Court of Connecticut. Justice Stevens wrote for the majority with Justices Souter, Ginsberg, Kennedy, and Breyer concurring.

Justice Kennedy wrote a separate concurring opinion which did not address the “scope of the project” rule as we anticipated. Justice Stevens, who delivered the opinion of the Court, suggested that the ball was in the court of the state legislatures as to defining what property could be taken for public use:
“We emphasize that nothing in our opinion precludes any State form placing further restrictions on its exercise of the takings power. Indeed many States already impose ‘public use requirements’ that are stricter than the federal baseline.”

The impact on current New Jersey practice is negligible. Redevelopment projects will move forward and private property rights will be subservient to what the Court has deemed the public good — development and economic benefit, such as increased taxes.

What could New Jersey do? We would like to see amendments to the Local Redevelopment Housing Law (LRHL) which places a cap on the length of time that a declaration of blight (now, declaration of “area in need of redevelopment”) would be effective. We suggest that five to six years would be an appropriate amount of time for a municipality to declare blight and institute a redevelopment project.

In far too many instances, such as Long Branch and Asbury Park, the blight declarations go back ten years or more. This is an unconscionable burden to the property owners within the affected area. They cannot sell, except at a discount; they are reluctant to invest in their properties because of the fear of Eminent Domain; and many municipalities neglect to enforce their building codes once the areas have been determined to be blighted. This only exacerbates the impacts on the property owners.

We’ve had many inquiries today concerning what the property owner can do. The only answer is for the property owner to be vigilant regarding proposed municipal action and to participate in and contest the blight studies when they are presented to the municipal Planning Board. If the property owner sits on their rights and does not do this, they will have a very difficult time filing a Prerogative Writ suit contesting the municipal action.

The law requires an appeal of the municipal action within 45 days of the adoption of the ordinance authorizing blight or “an area in need of redevelopment.” This is the first step toward condemning the properties. Many owners come to us well after the municipal action was undertaken. Often, they were not even aware of the municipal action and received no notice of the proposed ordinance.

Absent a viable Prerogative Writ suit on the blight declaration, property owners will be left with what they have in every condemnation case: A contest over what amount of money constitutes just compensation, and payment of relocation assistance to owner/occupants dislocated by the public project.

In her dissent, Justice O’Connor said:
"Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded, i.e. given to an owner who will use it in a way that the legislature deems more beneficial to the public – in the process."

Flashback to February and the oral argument, when Justice O’Connor asked: “Motel 6 and the city thinks, well, if we had a Ritz-Carlton, we would have higher taxes. Now is that okay?”

The simple answer, according to five Supreme Court justices, is yes.

But, we’ll leave the light on for ya.

New Jersey Eminent DomainLaw Blog: www.njeminentdomain.com

Ruling supports eminent domain: (Brazoria County TX) Facts, 6/24/05

By Michael Smith

A split U.S. Supreme Court issued a 5-4 ruling Thursday that could put more wind in the sails of the Freeport marina project plan backed by city officials and developers.

In Kelo et al v. city of New London, the court upheld a March 2004 Connecticut state court ruling and ordered that a local government's power of eminent domain can trump individual property rights to seize land for economic development.

Eminent domain is a government entity's power to take or condemn property it
deems is necessary for "public use." Thursday's ruling is significant because it includes economic development in the definition of public use.

The decision comes at the end of a five-year legal journey. Susette Kelo and other homeowners filed suit against the city of New London, Conn., in 2000 to prevent it from taking their property to build a hotel and conference center complex.

New London city officials cited higher tax revenues and economic improvement as the project's goal.

In his majority opinion, Justice John Paul Stevens wrote local officials should decide whether development projects benefit communities. States can pass additional laws restricting condemnations if necessary, he wrote.

"It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular project area," Stevens wrote.

Justice Sandra Day O'Connor argued in the dissenting opinion that the ruling gives large corporations and developers a dangerous amount of influence in the political process.

"As for the victims, the government now has a license to transfer property from those with fewer resources to those with more," O'Connor wrote.

While the case is based in Connecticut, the ripple effect will be felt nationwide and in Freeport, where the city's marina project has been stalled by legal action.

Western Seafood Co. is battling the city of Freeport and the Freeport Economic development Corp. over 330 feet of the company's property along the Old Brazos River that the city wants for a marina.

Wright Gore III, son of the company's president, has said the land is crucial to his family business since shrimp boats offload their catch there.

The city and developers say the $7 million project - paid for by $6 million committed by the city and $1 million by private developer Walker Royall - will net eight times the $50,000 in revenue the city gains from the 1,800-foot strip of land.

Between 100 and 150 jobs will be produced by the first of the two-phased construction, said Lee Cameron, executive director for the Freeport Economic Development Corp.

O'Connor's dissent is on target in theory, but accountability of elected officials keeps the political process free of undue influence, Cameron said.

"If they were to exercise (eminent domain) to the extreme, then they wouldn't be in office for very long," Cameron said.

Gore filed suit to block Freeport in 2003. U.S. Southern District Judge Samuel Kent ruled in favor of the city in August, and the case has been stalled in the U.S. 5th Circuit Court awaiting the outcome of the Kelo case.

John Hightower, a Houston attorney who represents Freeport and its economic development group, said his office will notify the U.S. 5th Circuit Court of Appeals in New Orleans of the decision to get the case moving again.

The Kelo ruling gives his clients a little more weight going into the process, Hightower said. "The courts continued to hold that governmental entities have wide
discretion in how to use their condemnation powers," Hightower said.

Gore maintains the purpose of Western Seafood's suit is not meant to impede progress.

"We are for anything that could possibly bring prosperity to the city of Freeport, but not at the expense of losing our jobs and our businesses of over 50 years," Gore said.

The second phase of the project would double the size of the facility and future plans include a possible condominium complex nearby, Cameron said.

No condemnations are planned for the placement of the condos, he said. "We wouldn't have done these if we weren't forced to," Cameron said.

Freeport City Manager Ron Bottoms said the city is ready to move forward and hopes the ruling will encourage Western Seafood to negotiate.

"We would still rather settle this thing out of court but we've never gotten close before," Bottoms said. "Now, hopefully there's a little more motivation for them to sit down with us."

Gore said negotiation always has been an option, but Royall and the city haven't budged during previous talks.

While a disappointing setback, Gore said Western Seafood plans to continue the fight.

The city has other condemnation suits pending against the company, and Gore said the legal standoff is far from over. "The most important part at this juncture is the court of public opinion," he said.

Gore said O'Connor's dissenting opinion accurately captures what is happening in Freeport and leaves homes, businesses and churches vulnerable to the city's grab.

"In this case, it's purely for the benefit of a private developer who would be given title to our property," he said. "In that case, no one is safe."

The voting breakdown of the Supreme Court's 5-4 ruling in favor of allowing local governments to seize property through eminent domain for economic development projects.

IN FAVOR: Stevens, Souter, Ginsburg, Breyer, Kennedy

OPPOSED: O'Connor, Rehnquist, Scalia, Thomas

The Facts: www.thefacts.com

Freeport moves to seize 3 properties: Houston (TX) Chronicle, 6/23/05

Court's decision empowers the city to acquire the site for a new marina

By Thayer Evans

With Thursday's Supreme Court decision, Freeport officials instructed attorneys to begin preparing legal documents to seize three pieces of waterfront property along the Old Brazos River from two seafood companies for construction of an $8 million private boat marina.

The court, in a 5-4 decision, ruled that cities may bulldoze people's homes or businesses to make way for shopping malls or other private development. The decision gives local governments broad power to seize private property to generate tax revenue.

"This is the last little piece of the puzzle to put the project together," Freeport Mayor Jim Phillips said of the project designed to inject new life in the Brazoria County city's depressed downtown area.

Over the years, Freeport's lack of commercial and retail businesses has meant many of its 13,500 residents travel to neighboring Lake Jackson, which started as a planned community in 1943, to spend money. But the city is hopeful the marina will spawn new economic growth.

"This will be the engine that will drive redevelopment in the city," City Manager Ron Bottoms said.

Lee Cameron, director of the city's Economic Development Corp., said the marina is expected to attract $60 million worth of hotels, restaurants and retail establishments to the city's downtown area and create 150 to 250 jobs. He said three hotels, two of which have "high interest," have contacted the city about building near the marina.

"It's all dependent on the marina," Cameron said. "Without the marina, (the hotels) aren't interested. With the marina, (the hotels) think it's a home run."

Since September 2003, the city has been locked in a legal battle to acquire a 300-by-60-foot tract of land along the Old Brazos River near the Pine Street bridge as well as a 200-foot tract and 100-foot tract along the river through eminent domain from Western Seafood Co. and Trico Seafood Co.

Eminent domain is the right of a government to take private property for public use upon payment of the fair market value.

The tracts of land would be used for a planned 800- to 900-slip marina to be built by Freeport Marina, a group that that includes Dallas developer Hiram Walker Royall. He would buy the property from the city and receive a $6 million loan from the city to develop the project.

Freeport Marina would then invest $1 million in the project and contribute a 1,100-foot tract of land, valued at $750,000, to it before receiving the loan.

Western Seafood spokesman Wright Gore III said the wholesale shrimp company was disappointed with the Supreme Court decision, but believes the ruling does not apply to the city's eminent domain proceedings.

He said there is a provision in state law that allows residents of a city to a circulate a petition to call a vote on whether the city can take property using eminent domain.

"(This) is far, far from over," Gore said. "(We) would have liked to have seen a victory on the federal level, but it is by no means a settled issue."

Gore said Western Seafood's 30,000-square-foot processing facility, which sits on the 300-by-60-foot tract, would be forced to close if the land were seized.

That facility earns about $40 million annually, and Western Seafood has been in business in Freeport since 1946, he said.

City officials, however, have said the marina will still allow Western Seafood and Trico Seafood, which did not return telephone calls or e-mail Thursday, to operate their facilities.

In August, U.S. District Judge Samuel Kent ruled against a lawsuit filed by Western Seafood seeking to stop the city's eminent domain proceedings. The seafood company then appealed its case to the 5th U.S. Circuit Court of Appeals in New Orleans, a request that initially was denied.

The appeals court then decided it would take the case, but not rule on it until after the Supreme Court made a ruling on the New London, Conn., case.

Houston Chronicle: www.HoustonChronicle.com

Home seizure ruling doesn't play in Texas: Houston (TX) Chronicle, 6/23/05

After decision, an amendment is proposed to limit local powers of eminent domain

By Mike Snyder and Matt Stiles

Texas' cultural commitment to private property rights surfaced quickly Thursday as a state legislator moved to blunt the impact of a U.S. Supreme Court ruling that local governments may seize land for private development.

Hours after the court's 5-4 ruling came down, Rep. Frank Corte Jr., R-San Antonio, said he would seek "to defend the rights of property owners in Texas" by proposing a state constitutional amendment limiting local powers of eminent domain, or condemnation.

Houston Mayor Bill White and Harris County Judge Robert Eckels offered assurances that the city and county do not intend to condemn land for private development projects.

But officials in the beachfront town of Freeport, south of Houston, said they would move aggressively to condemn property owned by two seafood companies to clear the way for an $8 million private marina.

The Supreme Court ruled against a group of property owners in New London, Conn., who challenged a city plan to demolish their riverfront homes to make way for offices, a hotel and other commercial buildings.

Justice John Paul Stevens, in the majority opinion, said such projects are within the scope of a clause in the Fifth Amendment to the Constitution that authorizes condemning property for "public use."

Stevens wrote that promoting economic development, the stated goal of the
New London project, "is a traditional and long accepted governmental function, and there is no principled way of distinguishing it from the other public purposes the court has recognized," such as taking land for roads, parks or libraries.

In a sharply worded dissent, Justice Sandra Day O'Connor said the majority's
interpretation of "public use" was so broad that "the specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."

Joining Stevens in the majority were Justices Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer. Dissenting with O'Connor were Chief Justice William Rehnquist and Justices Antonin Scalia and Clarence Thomas.

The opinion said states concerned about excessive use of condemnation were free to pass laws restricting it, and Corte said he intended to do just that. Corte said he would ask Gov. Rick Perry to add the condemnation issue to the agenda of the special legislative session now under way so that the proposed constitutional amendment could appear on the November ballot.

Perry spokeswoman Kathy Walt said the governor would consider requests to add items to the agenda, but probably not until legislators resolve the school finance issue. She said Perry supports property rights and was concerned about the Supreme Court ruling.

Corte said in a news release that his proposed amendment would "limit a local governmental entity's power of eminent domain, preventing them from bulldozing residences in favor of private developers."

White and Eckels said such concerns were unfounded in Houston and Harris County. "The city of Houston has not, and likely never will, use eminent domain powers as aggressively as some cities simply for the purposes of economic development," White said in a statement. "We do respect property rights, and believe that eminent domain should not be used in a way that might simply benefit one rconomic interest versus another."

The mayor said, however, that he is pleased the court upheld the use of eminent domain to reduce blight.

Eckels said Commissioners Court has shown no inclination to condemn land for private development, and he would not support any move to do so.

The Metropolitan Transit Authority, empowered by the law that created it to condemn property within 1,500 feet of transit stations, is not "currently planning" to use that authority for projects along the Main Street light rail line or elsewhere, spokesman Ken Connaughton said.

Asked if the agency might exercise the authority in the future, Connaughton said, "Who knows what happens tomorrow? But there are no plans to do it."

Barry Klein, president of the Houston Property Rights Association, said he
considers Metro's condemnation authority excessive. He said quasi-governmental agencies such as management districts and tax increment reinvestment zones might also try to take advantage of the court ruling.

"I'm sure there are some self-servingly creative people in the leadership of
these organizations who will try to find a way to do this," Klein said.

Developer Ed Wulfe of Houston-based Wulfe & Co. said Houston's public
entities have long resisted acquiring property through eminent domain unless it was for road improvements or other public uses.

Wulfe said, however, that governments and developers can use the type of condemnation cited in the New London case as a tool to redevelop inner-city neighborhoods that stand to benefit economically.

"I think on a very, very careful and selective basis it could be used to improve neighborhoods," said Wulfe. "Whether it's creating affordable housing or jobs, it could be an interesting way to remove blight."

Matthew Deal of Lewis Realty Advisors, a property appraisal and consulting firm that deals in condemnation, said Houston's new downtown sports arenas offer a good example of the benefits of local governments taking full advantage of their eminent domain powers. The sports arenas energized parts of downtown that were "ridden with crime, boarded-up buildings and dangerous to be in," said Deal, calling the Supreme Court ruling "a score for governments and their development partners."

The case is Kelo et al v. City of New London, 04-108.

Houston Chronicle: www.chron.com

The US Supreme Court Misses Historic Moment: Develop, Don't Destroy Brooklyn, 6/23/05

Press release

Develop Don’t Destroy Urges Albany to Curb Eminent Domain Abuse

Today the U.S. Supreme Court rendered its decision in Kelo v. City of New London, deferring to the City of New London’s determination that the destruction of homes in a working class neighborhood in order to build a commercial development is not unconstitutional. The decision stands in sharp contrast to the unprecedented public outrage over eminent domain abuse across the U.S. Nevertheless, the decision will do little to dim civil rights advocates' efforts to curb the actions of developers–and their sponsoring state and municipal agencies–who intend on making the U.S. Constitution's Fifth Amendment a dead letter.

"Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random," Justice O'Connor wrote in the dissenting opinion. "The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms."

O'Connor's words should strike fear in the hearts of all citizens around the United States.

"Justice O'Connor is absolutely correct, and the Ratner project's use of eminent domain is a poster child for what she describes," said Daniel Goldstein, spokesperson for Develop Don't Destroy Brooklyn. "Today the Court has kept and reaffirmed the status quo, but in a severely split decision. The Court has made a federalist decision, which means it is now Albany's responsibility to curb and restrict New York's abusive eminent domain laws; here in Brooklyn and all over the state where private corporate powers are benefitting off the backs of everyday citizens."

In December 2004, Develop Don’t Destroy Brooklyn (DDDB) was one of 25 organizations that filed amici curiae briefs in support of the homeowners in Kelo. The briefs represented an extraordinary expression of solidarity among the disparate groups, cutting across racial, political, and social lines. The briefs in support of the City of New London, in contrast, were predictably filed in large part by developers and municipal agencies. To legal observers, the overwhelming public support for the homeowners and recent state court decisions reining in eminent domain abuse signaled a sea change, which the Supreme Court would likely acknowledge in its decision. Regrettably, the Court failed to seize the historic moment and tamely deferred to the City of New London’s determination that an increase in tax revenues justifies the destruction of homes.

Despite the ruling, Bruce Ratner’s plans to build a high-rise and arena complex in Prospect Heights, Brooklyn still contemplate an illegal and unnecessary use of eminent domain to force tenants, homeowners, and businesses from the footprint. DDDB spokesperson Daniel Goldstein said, "If Ratner uses eminent domain, it will be up to him to make the case that the neighborhood is blighted, which it patently is not, or the project makes economic sense, which is pure fantasy. We will pursue all legal channels available to us, and we are confident that a court of law will see the project for the boondoggle that it is." Indeed, Goldstein sat on a panel on Kelo held at the Association of the Bar of the City of New York on June 8 where even pro-eminent domain panelists were deeply disturbed by the Ratner project’s reliance on eminent domain.

DDDB calls on Albany to follow the lead of states like Utah, whose Governor on March 17 signed into law a bill effectively banning the use of eminent domain for economic development. As DDDB’s retained counsel Norman Siegel said, "So long as the Supreme Court will defer to the states, it is up to our legislators to take up the challenge in putting an end to egregious eminent domain abuse."

Develop, Don't Destroy Brooklyn: http://developdontdestroy.org

Condemnation: Detroit (MI) Free Press, 6/24/05

Although there is no denying that the Supreme Court ruling is a disaster for private property rights, there is a way to fix it

The U.S. Supreme Court appeared Thursday to declare open season on private property with a decision affirming the power of governments to condemn land to make way for projects that promise economic development. But before developers and planners across Michigan start huddling over the ideal location for the next strip mall, they should note that Justice John Paul Stevens, writing for the 5-4 majority, left an out for places such as Michigan, where the state Supreme Court last year considerably tightened up government condemnation powers.

"We emphasize," Stevens said, "that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power. Indeed, many States already impose public use requirements that are stricter than the federal baseline. Some of these requirements have been established as a matter of state constitutional law."

In a footnote, Stevens cited specifically the Wayne County case settled by the state Supreme Court last year in its landmark reversal of the 25-year-old Poletown standard for taking land. That 7-0 decision runs quite contrary to Thursday's Supreme Court ruling. The Michigan justices said the 1963 state Constitution severely limits the ability of governments to condemn private land for public use, then effectively transfer the land to another private owner for a project that promises jobs or increased tax base.

The original ruling arose from the City of Detroit's razing of a neighborhood known as Poletown to make way for a General Motors Corp. plant on the Detroit-Hamtramck border. The subsequent ruling stopped Wayne County from condemning land for its Pinnacle Aeropark project near Metro Airport.

While the state Supreme Court ruling has made it harder for Michigan communities to clear the way for what is often desirable development, it also stopped governments from acting, in effect, as real estate agents for developers who promised more than they could deliver.

The revised Michigan standard for exercising the government condemnation power known as eminent domain remains the more responsible one. The powers spelled out by the U.S. Supreme Court are too easily abused, as some Michigan governments demonstrated during the years that Poletown was the state standard.

Detroit Free Press: www.freep.com

Homeowners Lose Eminent Domain Case: Institute for Justice, 6/23/05

Press release

Institute for Justice Warns:
Supreme Court Leaves Homeowners Vulnerable
To Tax-Hungry Bureaucrats & Land-Hungry Developers

Today, the U.S. Supreme Court delivered a blow to home and small business owners throughout the country by allowing the government to use eminent domain to take homes so that businesses can make more money off that land and possibly pay more taxes as a result.

The Institute and its clients issued the following statements after learning of today’s decision.

Chip Mellor, the president of the Institute for Justice, said, “The majority and the dissent both recognized that the action now turns to state supreme courts where the public use battle will be fought out under state constitutions. The Institute for Justice will be there every step of the way with homeowners and small businesses to protect what is rightfully theirs. Today’s decision in no way binds those courts.”

“The Court simply got the law wrong today, and our Constitution and country will suffer as a result,” said Scott Bullock, senior attorney for the Institute for Justice. “With today’s ruling, the poor and middle class will be most vulnerable to eminent domain abuse by government and its corporate allies. The 5-4 split and the nearly equal division among state supreme courts shows just how divided the courts really are. This will not be the last word.”

“One of the key quotes from the Court to keep in mind today was written by Justice O’Connor,” Bullock said. “Justice O’Connor wrote, ‘Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.’”

Dana Berliner, another senior attorney with the Institute for Justice, said, “It’s a dark day for American homeowners. While most constitutional decisions affect a small number of people, this decision undermines the rights of every American, except the most politically connected. Every home, small business, or church would produce more taxes as a shopping center or office building. And according to the Court, that’s a good enough reason for eminent domain.”

Mellor said, “Today’s decision doesn’t end the Institute for Justice’s fight against abuses of eminent domain. We will work to ensure not only that the property owners in New London keep their homes, but that all home and small business owners are protected from these unconstitutional land grabs by governments and their business allies. This is a terrible precedent that must be overturned by this Court, just as bad state supreme court eminent domain decisions in Michigan and Illinois were later overturned by those courts.”

Susette Kelo, one of the homeowners challenging eminent domain abuse, said, “I was in this battle to save my home and, in the process, protect the rights of working class homeowners throughout the country. I am very disappointed that the Court sided with powerful government and business interests, but I will continue to fight to save my home and to preserve the Constitution.”

Mike Cristofaro, another one of the homeowners whose family has owned property in Fort Trumbull for more than 30 years, said, “I am astonished that the Court would permit the government to throw out my family from their home so that private developers can make more money. Although the Court ruled against us, I am very proud of the fight we waged for my family and for the rights of all Americans.”

Institute for Justice: www.ij.org

Court widens scope of property seizure: The Christian Science Monitor, 6/24/05

It rules 5 to 4 that local governments can take homes and other property for private development

By Warren Richey

Government officials do not violate the US Constitution when they seize and demolish homes and businesses to make room for private development.

In a major decision that narrows the constitutional protection of property owners, the US Supreme Court ruled Thursday that the Fifth Amendment's Takings Clause authorizes government seizure of private property even when it merely offers a benefit to the public, rather than actual public use.

The 5-to-4 decision means that state and local officials can continue to use the government's power of eminent domain to take private property and turn it over to a private builder as a form of economic development. Writing for the majority, Justice John Paul Stevens said that a century of case law interpreting the Takings Clause "dictates" that the court adopt a permissive interpretation of the government's eminent-domain power.

In a dissent, Justice Sandra Day O'Connor warned that the ruling could bring dangerous consequences for owners of homes and other properties. "Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded," she writes.

The ruling is a major victory for planning and development officials in economically depressed regions struggling to spark economic renewal. The decision will make it easier to encourage some private development projects by exempting them from the usual requirement that property be purchased on the open market.

At the same time, the court's action marks a crushing defeat for a group of New London, Conn., residents who filed suit in December 2000 to block efforts by the city to seize and demolish their homes and businesses to make room for a 90-acre office, hotel, and housing complex. Facing the wrecking ball are 15 homes and businesses owned by seven families in the city's Fort Trumbull neighborhood.

Scott Bullock, a lawyer with the Institute for Justice, which represented the homeowners, said the court's decision marks "a sad day for the country and a sad day for the Constitution."

"The fight against eminent-domain abuse will now turn back to the state supreme courts, where the battle will be fought out under state constitutions," he says. "We and many other people will be there to fight [on behalf of] homeowners."

City officials said the riverfront project was necessary to boost New London's sagging tax base, and thus it qualified as an economic development project, justifying the city's use of its eminent domain power.

Residents countered that the project was a land grab, since their property was being turned over for $1 a year to a private developer who would retain all profits from the completed project. The benefit to the city was an anticipated boost to local tax rolls.

The Constitution's Fifth Amendment says that private property may be taken by the government if fair compensation is paid to the owner. But there is a second requirement: The property may be taken only if it is for "public use."

The precise issue before the Supreme Court was whether a privately owned development project amounts to a "public use" of the homeowners' former properties.

Such public uses include a public highway, public school, or military base. Public use also includes the taking of property for privately owned businesses such as railroads, power companies, and other firms that need contiguous land to offer regulated services to the public. Elimination of urban blight has also been identified as a public-use taking.

The New London case raised the most controversial application of public use.

"While the city is not planning to open the condemned land - at least not in its entirety - to use by the general public, this court long ago rejected any literal requirement that condemned property be put into use for the public," Justice Stevens writes.

"Promoting economic development is a traditional and long accepted function of government," Stevens writes. "There is no principled way of distinguishing economic development from other public purposes."

Stevens's majority opinion was joined by Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg, and Stephen Breyer.

Justice O'Connor was joined in her dissent by Chief Justice William Rehnquist and Justices Antonin Scalia and Clarence Thomas. She writes that the high court has opened the door for cities to in effect turn over private property from one person to another.

"Today, nearly all real property is susceptible to condemnation on the court's theory," she says. "Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random."

"The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms," she says. "As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result."

In a separate dissent, Justice Thomas says that the court's ruling erases the public-use clause from the Constitution. "Today's decision is simply the latest in a string of our cases construing the public use clause to be a virtual nullity, without the slightest nod to its original meaning," he writes.

David King, a professor at Quinnipiac School of Law in Hamden, Conn., says O'Connor's dissent is "an exaggeration."

"This case is quite consistent with the court's jurisprudence of the last 50 years," he says. "I don't think this is something the average American has greatly to fear."

In siding with city planners against the homeowners, the high court declined to draw a bright-line distinction between projects involving a public use and those implicating a public purpose. The court said a project that benefits the public in some way can rise to the level of public use needed to satisfy constitutional protections of private property.

State supreme courts have been divided on the public-use issue. Eight have ruled that private economic development does not amount to a public use and have barred condemnations in such cases. They are Arkansas, Florida, Illinois, Kentucky, Maine, Michigan, South Carolina, and Washington.

Six state high courts have ruled that private economic development projects are a public use. Those states are Kansas, Maryland, Minnesota, New York, North Dakota, and Connecticut.

In March 2004, the Connecticut Supreme Court ruled that the New London project was a public use because it is aimed at bringing higher tax revenues and jobs to the economically depressed city. The state high court employed an expansive reading of the term. Public use can mean "public usefulness, utility, or advantage, or what is productive of general benefit," the state high court said.

The Christian Science Monitor: www.csmonitor.com

Supreme Court Decision in Eminent Domain Case a Victory for Cities: National League of Cities, 6/23/05

Press Release

By Sherry Conway Appel

Cities across America will be able to continue to use the power of eminent domain -one of their most effective tools for ensuring economic development - under a US Supreme Court ruling issued today. In upholding the city of New London in the Kelo v. City of New London case, the Supreme Court reaffirmed that cities can continue to take private land for private development if it will fulfill a "public purpose."

"The National League of Cities (NLC) is pleased that the Supreme Court upheld 50 years of precedent today, allowing local officials the continued use of eminent domain to bolster depressed economic neighborhoods," said NLC President Anthony A. Williams, mayor of Washington, DC. "It's important to note that the Court did not expand the power, but reaffirmed its current use, which has been indispensable for revitalizing local economies, creating much-needed jobs, and generating revenue that enables cities to provide essential services. With cities and towns facing ever-shrinking resources, we need all the help we can to redevelop our neighborhoods and provide jobs for our citizens."

Williams said, "Eminent domain is not a power to be used lightly. We must be sensitive to those who may be displaced. However, as part of a legislative process, with citizen input and discussion, it is one of the most powerful tools city officials have to rejuvenate their neighborhoods." Williams said that the redevelopment of the Skyland Shopping Center in southeast Washington is an area where eminent domain could be used for the good of the entire community since it would bring in 300 jobs and $3.3 million in new tax revenue annually.

NLC officials responded to concerns raised in the opinion that the power could be improperly used by pointing out the significant checks and balances offered through the legislative process. "City officials use the power of eminent domain very selectively and very carefully," said Indianapolis, Indiana, Mayor Bart Peterson, NLC's 2nd Vice President. "Generally, property is taken only in the context of an overall economic development project that will provide significant benefits to a neighborhood. This usually involves public hearings or some other type of public process. In addition, the Constitution's Just Compensation requirement ensures that cities treat property owners fairly, as do state and federal laws that govern the use and limits of eminent domain. And the media demands that we be accountable."

NLC officials acknowledge that regardless of today's ruling, the Kelo case foreshadows greater scrutiny and accountability going forward when municipalities use eminent domain for economic development purposes.

Eminent domain has been upheld through 50 years of judicial rulings, including seven previous cases in the Supreme Court and is used to help cities assemble parcels into developable tracts.

Williams noted that eminent domain has been especially effective in cities and towns in mature and older communities that often do not have sufficient undeveloped land. "Where would Baltimore be without the Inner Harbor, Kansas City without the Kansas Speedway, Canton, Mississippi, without its new Nissan plant?," Williams said of recent economic projects that used eminent domain. "We applaud the Court for allowing us to continue to use this important tool."

National League of Cities: www.nlc.org/home

Supreme Court Expands Power of Eminent Domain: Los Angeles (CA) Times, 6/23/05

By David G. Savage

The Supreme Court gave local governments broad power today to bulldoze homes and other private property to make way for business development, a ruling that could encourage more city-backed plans to replace small stores with big-box retailers.

The 5-4 ruling upheld a plan by officials in a coastal Connecticut town to condemn nine homes of longtime residents that would be replaced with an office complex and a marina.

The dispute between the homeowners and the city officials became a classic test of government power versus individual rights. It pitted a community's hopes for economic rebirth against an individual's right to keep one's home.

Economic development emerged as the clear winner.

The high court's opinion goes further than before in allowing the government to invoke its "eminent domain" and to seize private property from unwilling sellers.

The Constitution says government may take private property "for public use" if it pays the owners "just compensation." Originally, public use meant the land was used for roads, canals or military bases. In the 19th century, railroads were permitted to take private lands because they served the public.

In the mid-20th century, the court said officials could condemn homes and stores in "blighted" areas as part of a redevelopment plan. That 1954 decision helped trigger various urban renewal projects across the nation.

In today's decision, the court went a step further and said officials need not claim they were condemning blighted properties or clearing slums. Now, as long as officials hope to create jobs or raise tax collections, they can seize the homes of unwilling sellers, the court said. This "public purpose" is a "public use" of the land, the court said in Kelo vs. New London.

The justices said they were unwilling to "second guess" local officials on what is best for their communities.

"Promoting economic development is a traditional and long accepted function of government," said Justice John Paul Stevens.

Judges should give city councils and state legislatures "broad latitude in determining what public needs justify the use of the takings power," he added.

Justices Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer joined him.

The dissenters said the court was ignoring the basic rights to private property that were written into the Constitution.

Justice Sandra Day O'Connor said all property was now potentially subject to seizure.

"Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory," she said.

Justice Clarence Thomas said that the impact of these redevelopment plans falls heaviest on the poor, minorities and the elderly.

"Over 97% of the individuals forcibly removed from their homes by the 'slum clearance' project upheld by this court (in 1954) were black," Thomas said.

Suzette Kelo, the New London, Conn. homeowner who sued to save her home, said she was "very disappointed the court sided with powerful government and business interests."

Dana Berliner, one of her attorneys at the Institute for Justice in Washington, called it a "dark day for American homeowners. Every home, small business or church would produce more taxes as a shopping center or office building. And according to the court, that's good enough reason for eminent domain."

Los Angeles Times: www.latimes.com


Supreme Court rules against Kelo

More on this soon. But for now, the multi-part text of this defeat for the rights of all Americans is on-line at:

Online "Regulatory takings" resource

By Joel R. Burcat

The United States Constitution protects private property owners from confiscation of their property by the government. The Fifth Amendment provides in part, "nor shall private property be taken for public use, without just compensation." When government condemns property, it is required to pay compensation in all cases.

When government regulation of private property "goes too far" and deprives the landowner of the value of his land through enactment of a statute, promulgation of a regulation, refusal to issue a permit, or declaration of land as a wetland, as endangered species habitat or as unsuitable for mining, such a taking also may be compensable. This is known as a regulatory taking or inverse condemnation.

[A web site is online to serve as a resource for] private property owners seeking information regarding regulatory takings. Links are provided to enable the user quickly to jump to articles, cases and organizational web sites... The site is:

For a comprehensive review of the law of regulatory taking ... review the article, The Law of Regulatory Takings, Part I: Development of the Law, written with Julia M. Glencer [— online at:

This article traces the law from its Constitutional roots, through early case law and is current through early 2002. The article discusses and summarizes the major cases on regulatory takings. More recent cases are summarized in the articles listed [on the website].

Joel R. Burcat, Esq., Saul Ewing LLP, 2 N 2nd Street, 7th Floor, Harrisburg, PA 17101, 717-257-7500, fax 717-257-7501, e-mail jburcat@saul.com

Hollywood moves to seize woman's storefronts so developer can build condos: South Florida Sun-Sentinel, 6/22/05

By Shannon O'Boye

Over the objections of a man who said Hollywood is stealing his family's land to enrich a powerful developer, the City Commission voted Tuesday night to begin eminent-domain proceedings on a small retail building downtown to make way for a $100 million condo project.

"I don't appreciate ... what's being done in this matter on behalf of these developers," said David Mach, whose recently deceased father bought the building near Young Circle in 1971. "There's no reason to have to attract developers to Hollywood anymore. There's no reason for any incentives. There's no reason to eminent domain any properties. Let them work it out themselves."

"I ask you to vote not with your hearts because I know you won't, but with your heads," he told the commission.

Commissioners Beam Furr and Sal Oliveri were the only two to vote against taking the Mach property, on Harrison Street and South 19th Avenue, by eminent domain.

In voting to do so, the commissioners were following through on a promise they made to developer Charles "Chip" Abele in July 2004. They signed a contract agreeing to condemn the property if the developer was unable to strike a deal with David Mach's father, George.

Now that the commission has launched the legal proceedings, the city's community redevelopment agency must offer within 30 days to buy the property for fair market value from Mach and his mother, Katalin. The developer must pay the city's eminent-domain costs, city attorney Dan Abbott said.

"I'll tell you, and Mr. Mach and everyone here, the only reason there will not be a deal cut that puts the eminent domain aside ... is because of an unwillingness by Mr. Mach to accept a number markedly above the fair price for his property," Abele said.

Recent city appraisals estimated the property at $725,000 and $850,000. But Mach said he doesn't care what price the developer offers. It was the first building his father bought; his father ran the beauty salon in the building for many years, and his family does not want to sell.

"Not everyone can be bought," Mach said. "We don't want to be bought."

That was all many of the residents at Tuesday night's meeting had to hear.

"I ask the commissioners of this city to take pause before you make such a decision and to vote no in principle on the eminent-domain issue," said Kerry Sisselman, who lives on the beach. "If the commission takes this property in this way and we don't speak out, and the commission takes our property in the same way ... who will speak out for us?"

Commissioner Cathy Anderson and Mayor Mara Giulianti made the argument that the eminent domain is justified because the developer has agreed to restore two of the outer walls of the historic Great Southern Hotel, which is located next to the Mach building. But, early on, the developer brought the city a plan that spared the Mach building.

The city rejected that plan because traffic experts said traffic would flow better if the Machs' land was included in the project.

Commissioner Peter Bober said he regretted agreeing to take the property by eminent domain last year and would learn from it in the future, but he said he had to vote for the proposal because backing out of a contract would expose the city to a huge lawsuit.

"Eminent domain really is a big deal," Bober said. "It's not just a legal concept. It's real. You're dealing with real property and real people.

Sun-Sentinel: www.sun-sentinel.com

Decision delayed on eminent domain request: (Syracuse NY) News 10 Now, 6/22/05

By Adam Chodak

This spring, representatives for DestiNY and OCIDA crafted an agreement regarding the proposed R&D Park in Salina. Wednesday morning, the OCIDA Board held a meeting to discuss the agreement and possibly vote on it. But neither a discussion nor a vote took place.

"Members of the agency are in favor of the project and would like the project to succeed. At the same time, we have an obligation to those families who own businesses and work for the businesses that are in Phase 3," said OCIDA Chairman Robert Baldwin.

Phase 3 beings the part of the agreement in which OCIDA agrees to use eminent domain to condemn more than two dozen Salina businesses to make way for the R&D Park.

Phil Jakes-Johnson represents Solvents and Petroleum in Salina. He sees OCIDA's decision to hold off on a vote as a sign the board is seriously considering his group's objection to eminent domain.

"OCIDA Board members, volunteer board members, are giving due deliberation to magnitude of this agreement," he said.

Not all in attendance applauded the postponement. Deputy County Executive Ed Kochian thinks the delay only frustrates the developer's grand design.

"They're spending money at a rapid rate and I'm pretty sure there comes a point where they say we have to know that we're going to recover some of that money or else we can't keep spending it at the rate we're spending it," said Deputy County Executive Ed Kochian.

Baldwin hopes this impasse doesn't translate into a complete melt down of the project. Instead, he thinks a step back and reflection will open the door to an acceptable compromise.

We tried to contact DestiNY officials Wednesday for comment, but, as usual, they did not return our phone calls.

News 10 Now: http://news10now.com


Timberwolf could become new honors college: Arizona State Univ Web Devil, 6/21/05

Regents approve use of eminent domain to buy pub property

by Jason Ludwig

The Arizona Board of Regents unanimously approved on Thursday ASU's request to initiate eminent-domain proceedings for the empty property at 740 E. Apache Boulevard that once was the site of Timberwolf Pub & Grill.

The motion came despite the objections of local real-estate lawyer and ASU adjunct professor Grady Gammage, Jr. and the property's current owner, Ray Evans.

Rich Stanley, ASU's University Planner at the meeting of the board, said ASU will move forward with its desires to expand the Barrett Honors College on the property.

"At this point, we have been unable to reach an agreement with the owner of the property," Stanley said.

The University has commissioned two appraisals on the property, the first valuing the land at $1.2 million and the second valuing it at $1.7 million.

ASU wants the land, which is surrounded on all sides by University property, to expand the honors college. A University memo stated the owner was unwilling to sell for less than $2 million, and "the only way to acquire the property for the fair market value will be through an eminent-domain proceeding."

The memo also said "the property owner is amenable to a sale via eminent domain and has indicated that he is willing to allow the sale price to be determined in this way."

Gammage, addressing the Board from a letter read aloud by a spokesperson on Evans' behalf, condemned the use of eminent domain as a means of acquiring the land and denied that Evans was "amenable" to setting the price that way. Gammage said Evans did not want to sell the property at the university's offered price of $1.6 million because it was "10 percent less than the University's own appraisal," and that he believes the actual value of the property is between $2.75 million and $3.5 million.

Gammage closed by saying that the letter did not represent "a friendly condemnation proceeding," and noted that Evans had retained counsel with the intention of fighting eminent domain acquisition.

"The statement that the property owner wanted to retain and develop the property is not consistent. The idea... is a new one to us," Stanley said.

ASU President Michael Crow said he would try other methods of acquiring the property, adding that mediation and further appraisals were possible.

"Only as a last resort [will we] exercise the right of eminent domain."

Crow said ASU wants to pay the value of the appraisal that it gathered.

"This is a dispute over price," Crow said. "At the end of the day it always comes down to price. We can use eminent domain to set that price."

ASU Web Devil: www.asuwebdevil.com

WAITING FOR KELO: Will it have an impact on Eminent Domain in New Jersey? New Jersey Eminent Domain Law Blog, 6/21/05

By Bill Ward

Kelo v. the City of New London (04-108) should be decided this week by the United States Supreme Court. Don’t hold your breath, property owners. It may be a non-event.

Berman v. Parker, 348 U.S. 26 (1954) created the narrow exception that led to eminent-domain abuse. Jeff Jacoby wrote in the Boston Globe:
Cities and states, eager for new development, began pronouncing neighborhoods blighted when they were simply working-class. Some went further, stretching the meaning of "public use" beyond "public purpose" into mere "public benefit." They condemned and seized private property on the grounds that another owner could use it to make more money, create more jobs, or generate more business -- all leading to more taxes, the supposed public benefit.... That 1954 ruling weakened the very foundation of our liberty: the right to own and lawfully enjoy property.

The question presented to the Supreme Court by the plaintiff Susette Kelo is this: What protection does the Fifth Amendment’s public use requirement provide for individuals whose property is being condemned, not to eliminate slums or blight, but for the sole purpose of “economic development” that will perhaps increase tax revenues and improve the local economy?

Are there limits on government’s use of eminent domain power under the public use requirement of the 5th Amendment? This is how the question was posed by attorney Scott Bullock (Institute for Justice)for the plaintiffs at the beginning the oral argument on February 22.

The colloquy between the Court and counsel is enlightening.

New London was in a depressed economic condition…The critical fact on the city side, at least is that this was a depressed community and they wanted to build it up, get more jobs. — Justice Ginsburg

Oh, but Berman spoke, in the opinion, said that the determination of the legislature about these things is virtually conclusive, that there is only the narrowest, narrowest role for the judiciary. What kind of standard are you proposing we should get into here to second-guess the public use aspect? — Justice O'Connor

But there is no taking for private use that you could imagine in reality that wouldn’t also have a public benefit of some kind, whether it’s increasing jobs or increasing taxes, et cetera. That’s a fact of the world. And so given that fact of the world, that is law, why shouldn’t law say, okay, virtually every taking is all right, as long as there is some public benefit which there always is and it’s up to the legislature. — Justice Beyer

But that’s what they were being used for in Berman...everybody knows that private developers were the beneficiaries in Berman.... You want me to make a distinction between blight which is a permissible governmental use, governmental objective and economic revival, which isn’t?....Blight is in the eye of the beholder.... — Justice Kennedy

Therein lies the legacy of Berman. Here’s your one hope, property owners:
Let me ask you this, and it’s a little opposite of the particular question presented. Are there any writings or scholarship that indicates that when you have property being taken for one private person ultimately to go to another private person, that what we ought to do is adjust the measure of compensation, so that the owner--the condemnee--can receive some sort of premium for the development? — Justice Kennedy

Possibly in takings for so called “economic benefit” the court will fashion a rule that the owner may claim value based on the positive influence of the project. This would set the “scope of the project” rule on its ear. See Jersey City Redevelopment v. Kugler 58 NJ 374, 379 (1971). This case stands for the proposition that any increase or decrease in value attributable to the project of the condemning authority should be excluded by the fact finder.

How would such a rule change play out in blight cases in New Jersey? We’ll wait and see. Download the transcript of the oral argument of February 22:

New Jersey Eminent Domain Law Blog: www.njeminentdomain.com


Condo developer wants Hollywood to seize storefronts from uncooperative widow: South Florida Sun-Sentinel, 6/21/05

By Shannon O'Boye

A recently widowed immigrant is holding up a developer's plan to build a 19-story condo complex [in] downtown [Hollywood FL] — and the city is poised to step in to stop her.

Katalin Mach said her husband, George, never wanted to sell the small, one-story building that is home to the beauty salon he managed years ago.

"I don't care what they want to offer. I don't want to sell," said Mach, whose family has owned the property near Young Circle for 34 years.

Developer Charles "Chip" Abele is asking the city to use its powers of eminent domain to take the Mach property and sell it to him. The city commission, which agreed in a July 2004 development agreement to use eminent domain if necessary, is expected to vote on the issue today.

Mach promises a court battle.

"Basically, I'd really like them to leave me alone," she said, adding that the building provides a nice income for her family with the tenants paying rent and providing all maintenance.

Abele, who said he negotiated with George Mach before his death in April, said Mach demanded an exorbitant, unreasonable price and was "very emotional" and difficult to work with. Abele's $100 million plan calls for approximately 240 condos with 25,000 square feet of retail space on the first floor. During a commission meeting earlier this month, Abele's lawyer, Alan Koslow, blasted the Machs before he realized George Mach was dead.

"For ever and ever, the problem with the city ... to be honest with you is we're letting Mach be the tail that wags the dog," said Koslow, a former city attorney who yields great influence over the commission. "It's enough already. Send him a message: This project is going forward."

Between 1998 and 2002, there were more than 10,000 instances of governments using or threatening eminent domain to transfer property from one private owner to another, said Dana Berliner, a lawyer with the Institute of Justice in Washington, D.C.

"We think its unconstitutional, we think it's un-American and we think it's a tremendous abuse of power," Berliner said.

In a ruling expected later this month, the U.S. Supreme Court will consider whether a government can use eminent domain to take private property and give it to a developer for the sole purpose of economic development and expanding the tax base. Unless the high court stops such moves, critics say governments could condemn entire neighborhoods of single-family homes to build commercial buildings or upscale condos.

Historically, governments used the power of eminent domain to force people out of their homes or businesses if they stood in the way of projects with a legitimate "public use," such as a road, a school or a post office. Over the years, the Florida legislature began allowing governments to take property if it was blighted, or even in a blighted area the city hoped to redevelop.

Florida's definition of "blight" is so vague it essentially allows governments to declare eminent domain over "anyone's property at anytime anywhere," said Miami lawyer Toby Brigham.

Mach's property is located in such an area: on Harrison Street and South 19th Avenue.

Hollywood Mayor Mara Giulianti said elected officials who want to improve their cities have to forge alliances with private developers.

"Redevelopment is done by the private sector," she said. "The CRA exists for redevelopment ... Our job is to help effectuate that redevelopment."

Giulianti said she supports the seizure of the Mach property because the developer has agreed to save and restore the outside walls of the nearby historic Great Southern Hotel.

"That to me is the public use," she said. "I wouldn't give a nickel if it was just to build a condo. They could leave [the Mach property] and build around it."

The developer actually presented the city with a plan that left the Mach property alone, but the city rejected it because city staff thought the plan would cause parking problems on Harrison Street.

Giulianti said she feels it's time for Mach to accept a fair price for her land and move on. The mayor called Mach an "absentee landlord," even though the Machs worked in the beauty shop for more than 25 years, pay taxes on that and two other properties in the city and raised their family in Hollywood before moving to Aventura.

Frank Schnidman, of FAU's Center for Urban and Environmental Solutions, said he finds that kind of attitude deplorable.

"It's unbelievable how we demonize American citizens because they don't want to sell their property for less than it's really worth," he said.

If Mach fights the eminent domain, a judge will determine if the city is justified in taking the land, and a jury will decide how much the developer will pay. Two appraisals conducted this year for the city valued the property at $850,000 and $725,000.

South Florida Sun-Sentinel: www.sun-sentinel.com

'80s blight spurs condemnation: South Florida Sun-Sentinel, 6/21/05

Daytona lawyers tell a judge a 1981 declaration justifies tearing down waterfront businesses today

By Ludmilla Lelis

As the city's [Daytona Beach's] effort to condemn three Boardwalk properties began in court Monday, a pair of witnesses described the conditions that first led the Main Street district to be declared "blighted" in 1981.

Runaways trying to survive on the streets. Pedophiles hunting for victims. Flophouses boarding 20 people in one place. Sewage backing up to a city street.

"It was a pretty ratty area," said Jerry Langston, a retired Daytona Beach planner who testified Monday in court.

Langston later testified that redevelopment, city projects and code enforcement have improved things since then. Still, attorneys for Daytona Beach say the very conditions that made the area "blighted" 23 years ago are enough reason to let the city condemn the Boardwalk businesses today.

On Monday, Circuit Judge John W. Watson III opened a trial that will be key to the city's redevelopment plans in the core beachside tourist area. Daytona Beach wants a new $115 million Boardwalk, with a pair of condominium-hotel towers, restaurants and retail space and is in court to force the owners to sell, using the city's power of eminent domain.

However, the business owners question whether the 1981 blight designation should apply today, and whether it's right for the city to condemn their private holdings, only to give that land over to a private developer. The holdouts are Capt. Darrell's Oyster Bar and Restaurant, Midway Fun Center and a go-kart track.

The trial before Watson is expected to last three days and will determine whether the condemnation is legal. If the judge allows the takeover, a jury will later decide how much the Boardwalk business owners will be compensated.

Carlsberg Management Co., or one of its sister corporations, owns most of the parcels needed for the redevelopment project. A similar eminent-domain case ended in a settlement, in which siblings Dino Paspalakis and Lisa Psaros agreed to sell their family's Boardwalk businesses for $2.6 million.

According to the settlement agreement, which the judge refused to keep out of the trial testimony and discussion, Paspalakis and Psaros have the option of buying Capt. Darrell's for $750,000 if the developer succeeds in acquiring it. The siblings would get the restaurant as a building shell only and could not use it as a fast-food restaurant. If that deal does not work, they have the second option of buying retail space at the new Boardwalk.

Monday's trial testimony focused on the city's findings of blight in the entire Main Street redevelopment area in 1981. Langston and retired Daytona Beach utilities manager Dennis Colby testified that the area then was run-down, with outdated water and sewer systems, crime and deteriorating buildings.

Those problems prompted the blight study and Daytona Beach's effort to revitalize the beachside. A new Boardwalk could be "a key linchpin" to further revitalizing the area, Langston said.

Since then, the district has a new mall and condominium-hotel towers at the Ocean Walk, updated water and sewer lines, an expanded Hilton, a water park and parking garage and new streetscaping. And the city hasn't redone the blight study since then, according to testimony.

Under cross-examination, Langston admitted that the blight has been reduced. "I think it has substantially improved," he testified. "It does not appear we have the problems that we did back in the '70s and '80s."

South Florida Sun-Sentinel: www.sun-sentinel.com


Proposed Changes to N.J. Eminent Domain Act: New Jersey Eminent Domain Law Blog, 6/17/05

By Bill Ward

“The price of democracy is vigilance.” – Senator Bob Smith (D) Middlesex, Chairman of the N.J. State Senate Committee on the Environment

Assembly Bill No. 4089 was referred to the Assembly Housing and Local Government Committee on Monday June 13, 2005. The bill was first introduced on May 12, 2005 and referred to the Assembly Environment and Solid Waste Committee. The bill requires that contamination be considered in property valuation in condemnation proceeding and requires remediation be performed by the condemnor.

The stated purpose of the bill, and its companion N.J. Senate Bill No. S2621, is to overturn the New Jersey Supreme Court decision in Housing Authority of New Brunswick v. Suydam Investors, 177 N.J.2 (2003) and revise New Jersey's Eminent Domain Act of 1971.

A remarkable assembly occurred in Trenton in opposition to this bill: McKirdy & Riskin, Carlin & Ward, Bathgate & Weggener, Archer, Greiner & Reed, senior state Deputy Attorney General Kevin Rittenberry, and Deputy Attorney General Dale Lessne, all appeared and testified in opposition to this bill. These firms and the deputies Attorneys General represented all spectra of the condemnation bar, both condemnor and condemnee. Monday's hearing concluded with the bill reported out of the Assembly Committee with amendments, and referred to the Assembly Housing and Local Government Committee without recommendation. Listen to the Committee on Environment and Toxic Waste Hearing of June 13, 2005 at:

It was readily evident that the Middlesex County Democratic machine is pushing the bill as an answer to Middlesex County’s difficulties with the Suydam case as applied to National Lead v. SERA and the decisions of Judge Longhi in the Superior Court; Judges Skillman, Parillo and Grall in the Appellate Division; and the Hon. Neil H. Shuster, Presiding Judge of the Chancery Division. This case which involves $30M in public funds is the apparent genesis for the bill. Download the Appellate Decision in National Lead v. SERA at:

However, the legislative changes are really directed at redevelopment projects and unscrupulous redevelopers acting in concert with acquiring agencies. If passed, Suydam would be eviscerated; and a long standing public policy, developed by the bar and approved by the Supreme Court for dealing with environmental issues in the context of condemnation cases, will be abrogated. As President Bush the elder would say, “This must not stand.”

The current state of affairs in redevelopment projects undertaken pursuant to the LRHL [Local Redevelopment Housing Law] gives municipalities virtual carte blanche to acquire and redevelop real estate in conjunction with the developers, who are paying for the projects. While the concept behind the LRHL is good, and public benefit is the objective, the potential for misuse is present. If the municipality/developer is given the additional leverage of deducting environmental contamination from the fair market value of the property before the offer is made, the property owner’s worst nightmare will become reality. Properties will be acquired for a fraction of their value because unscrupulous developers will obtain greatly inflated estimates of the cost of clean up.

Assembly Bill No. 4089 was voted out of committee ”without recommendation” and referred to the Housing and Local Government Committee for further review. This was a coward’s answer to voting this legislation down from the moment of inception. Only Assemblyman Rooney (R) Bergen spoke out forcefully against this bill. Assemblyman Wisniewski, the sponsor, did not even speak in favor of the legislation he introduced. Apparently, he did not want to face the opposition.

Yesterday, the Senate's companion Bill No. 2621 was similarly held for further review without vote on the recommendation its sponsor, Senator Bob Smith (D), District 17 (Middlesex and Somerset Counties). Senator Smith is apparently seeking amendments to the bill which somehow could satisfy the opponents. We don’t think this will happen. One proposed amendment to the bill, which exempts the state of New Jersey and other state agencies from the provisions of the bill, would effectively create a two-tier system for determining just compensation – one for the state and one for other redevelopment agencies. This is blatantly unconstitutional, a violation of due process and equal protection. Redevelopment agencies would be deducting environmental costs for fair market value before making the offer to the property owners. State agencies (e.g., NJDoT, NJSCC, NJDEP) would be using the current system, which values the property as if remediated and deposits the full amount of compensation with environmental clean up costs reserved in the deposit for further determination in a separate proceeding if necessary. This is the precise procedure that the N.J. Supreme Court established in Suydam.

The proposed change by Senator Bob Smith, Chair of the Environmental Commitee would read:
The provisions if this section shall not apply to any condemnation action in which the State, or any State department, agency, corporation, authority, bureau, board, commission or instrumentality is the condemnor.

This amendment was the Senate’s answer to the opposition proffered before the Assembly by the Attorney General’s office. The amendment may eliminate their problem, but it certainly does not solve our problem, or the problem of the vast majority of property owners effected by redevelopment projects. This bill is a moving target, and we expect further amendments that try to address issues raised by the bill’s opponents. As Yogi Berra said, “It ain’t over till it's over.” And in accordance with the admonition by Senator Smith, we will remain vigilant.

New Jersey Eminent Domain Law Blog: www.njeminentdomain.com

Kelo Case Is Just Part Of Land-Grab Nationwide: The (New London CT) Day, 6/19/05


By Gregory N Stone

Susette Kelo and her neighbors aren't the only targets of eminent domain nervously awaiting the Supreme Court decision in the Fort Trumbull case.

The same matter happened to be on the mind of a stranger I met at random in JFK Airport last week. We struck up a conversation in one of the seating areas near the international arrival section of Terminal 4 while I was waiting for my wife to arrive on a flight and she waited for her son from Queens to pick her up. The woman told me she lived in Florida. She said life there was a blast, but she was thinking of moving. She said “they” were trying to take her condominium building. “They” were the city of Boyton Beach, near Palm Beach, in South Florida. The city had plans to acquire the building where she lived by eminent domain “to build bigger buildings that will bring in more taxes,” she told me.

“We're all watching this case in Connecticut,” she volunteered out of nowhere. I hadn't mentioned where I was from.

“You mean the Supreme Court case in New London?”

“I guess that's it. Have they done anything yet?” she asked.

I said they hadn't. The court is expected to hand down its ruling sometime this month.

“Well, there's a feeling that if they (the court) support the city, it will open the floodgates.”

A little research indicated the floodgates are already open. An Internet search using “Boynton Beach eminent domain” turned up hundreds of hits for lawyers specializing in eminent domain and topics dealing with condemnation proceedings by the city's Redevelopment Authority.

Boynton Beach is among coastal Florida communities that are using eminent domain powers to acquire real estate and transfer it to private developers to build luxury condominiums and shopping areas in choice waterfront locations, according to Steven Anderson, director of the Castle Coalition. The coalition, named for the libertarian motto “A man's home is his castle,” is an advocacy group associated with the Institute for Justice, the Washington, D.C.-based organization that has been representing the Fort Trumbull plaintiffs in the New London case.

The coalition has produced a report documenting 10,000 instances of such “private to private” real estate transfers employing eminnent domain in 41 states between 1998 and 2002. Many of them are in coastal Florida, where communities are seeking to displace lower valued real estate with luxury developments to enhance their property-tax lists, Anderson said. In addition to Florida, California and New Jersey stand out for the volume of such cases.

Florida made the process even easier with new legislation that liberalizes the interpretation of blight, one of the conditions that enables municipalities to take property by eminent domain. Blight was the justification when New London used eminent domain to clear areas in the Winthrop and Shaw's Cove areas of the city in the 1960s. The Fort Trumbull case revolves around another constitutionally allowable purpose, of condemning property for public purposes. The Institute argues that securing land for private developers doesn't qualify as a legitimate public purpose.

The woman at JFK said her condominium building is occupied by retirees who purchased their homes for modest prices a number of years ago. But she said with real estate prices soaring, the land they sit on is more valuable than the buildings (and their occupants, I guess).

According to John Kramer, a spokesman for the Institute, this fits into the pattern by which cities are abusing eminent domain powers.

“It falls into the category of ‘the poor don't deserve a view,'” Kramer said, in which municipalities condemn land in middle-class and lower-middle-class neighborhoods to make way for high-density, luxury developments with much higher value, and where the former occupants couldn't afford to live.

He cited the case of a town near the ocean in northern New Jersey where immigrant families from New York built modest summer bungalows decades ago and where they eventually retired. He said the community, Long Beach, went after the property using eminent domain to turn it into an upscale neighborhood of “high density, high-dollar development.”

This sounds a lot like the neighborhood where Susette Kelo has one of the nicest views in New London from the kitchen of her home in Fort Trumbull, but maybe not for long if a majority of the Justices on the Supreme Court agree with the city that they require her land for a public purpose.

And the place Kramer described isn't unlike the development where the stranger I met at Kennedy Airport is standing in the way of progress in the condo she bought for $30,000 20 years ago.

When it comes to the interest in the Fort Trumbull case, it turns out to be a small world.

The Day: www.theday.com