Shopowners cry foul: The Atlanta Journal-Constitution, 7/4/05

Stockbridge couple says city blocked sale to seize property

By Christopher Quinn

Mark and Regina Meeks' Stockbridge Florist and Gifts has been part of "downtown" Stockbridge for more than 20 years.

But there's no room in the Henry County city's future for the little refurbished house from which the Meekses operate.

Stockbridge, a sad-looking row of businesses and its loose conglomeration of nearby offices, houses, strip centers and restaurants, is about to get a town-sized makeover.

For the Meekses and other landowners, it looks more like a power play in which the city condemns their land — forces them to sell out using the power of eminent domain — in the name of redevelopment and the public good.

City leaders have laid out a well-planned future that looks a lot like the new and improved downtown Smyrna — new multistory townhomes, brick offices, cute retail shops, and in the middle of it all, a new City Hall and town green.

In their minds' eyes, it is all rising right there along East Atlanta Road and North Henry Boulevard, where the Meekses and 17 other landowners sit — looking a little too much like, well, old Stockbridge.

The owners can sell for what the city has offered, or, as an April letter from the city attorney to the Meekses reminded them, Stockbridge could use its power of eminent domain to force them to sell for that price.

Twelve owners have reached amicable agreements to sell to the city, according to A.J. "Buddy" Welch, the city attorney. Others have not, including Marilyn Gramm, who owns a real estate development and brokerage firm.

"We are all for growth and I know the area needs to be cleaned up," she said. "But they need to pay us what our property is worth."

Gramm, without using specific numbers, said the city's offer for her property is "several hundred thousand less" than what she believes it is worth.

Mark and Regina Meeks have what they believe is proof that the city is offering less than the market value for their shop. The city offered $205,000, according to a letter from Welch.

Not bad for a half-acre. But not nearly what they were offered by a development company in 2003 before the city undercut that deal by creating a zoning overlay and redevelopment plan.

The Meekses and several adjoining landowners had been negotiating with a company that was planning to build an Eckerd drugstore.

Mark Meeks, sitting in the florist shop, pulled out a signed copy of the option to sell his property.

The agreed-upon price: $388,000 — plus the company was going to give the Meekses a lot behind the Eckerd drugstore where they would relocate their shop.

A month before they were to close on the deal, the city passed its redevelopment plan — a plan that limited drugstores in the new town district to 5,000 square feet of floor space.

Eckerd had wanted a 14,000-square-foot store, Meeks said. The deal collapsed.

"This is what the ordinance did, diminish the value of our property so [the city] could get our property cheaper," Regina Meeks said.

Welch said the city is trying to be fair and has had two appraisals of the Meeks' land and house.

"Tax money is being used to buy their land, and we can only pay the fair market value of what we are taking from those people," not what they claim it's worth, he said.

Mark Meeks said he is getting his own appraisal done and has hired an attorney.

"We'll take this and let a jury decide, because we are not going to take a lot less for our property than we already had it sold for," he said.

GOP rethinks position
The case may never make it to a judge.

Stockbridge's plan might get condemned itself. And by extension, plans across metro Atlanta to rebuild, refurbish and reshine downtowns could suffer.

Gov. Sonny Perdue and legislative leaders are vowing to protect private property rights in the wake of last month's Supreme Court decision allowing local governments to condemn private property to make way for private economic development.

Many Republican leaders backed a bill earlier this year that critics said would have encouraged the use of eminent domain to acquire land for private development. But that bill died in committee.

And in response, Sen. Jeff Chapman (R-Brunswick) introduced a bill that would have prevented eminent domain from being used for the purpose of economic development and improving a government's tax base.

The bill passed the Senate but failed in the House.

The controversy got a fresh dose of fuel with the high court's decision and subsequent outcry from the public and talk radio hosts.

A justice noted that the ruling would not prevent states from writing stricter laws to limit the use of eminent domain.

Jim Smith, a law professor at the University of Georgia, said, "What [the high court's decision] tells Georgia landowners is that their only prayer is not going to federal court, but trying to get state courts to protect them and narrow the definition of what a public purpose is."

Chapman hopes his bill will be received more favorably by an election year Legislature, and it seems headed that way.

'Who has the right?'
Senate President Pro Tem Eric Johnson (R-Savannah) has appointed Chapman to head a committee to gather information on making his proposed Georgia law work.

Chapman said he hopes to hold a meeting within 45 days and take testimony from interested parties.

The Georgia Municipal Association is one of those.

It supports the use of eminent domain and feels the public is adequately protected by current law. Landowners can appeal condemnation cases to local authorities or go to court.

Many cities, like Smyrna, which has been praised as a model of urban redevelopment, used eminent domain to assemble parcels from unwilling owners.

Other cities, from Duluth to Marietta, are in the midst of similar downtown redevelopments designed to make them more compact and put people in new houses closer to jobs. The redeveloped cities are supposed to cut down on driving and smog, enliven areas that have been blighted and create new centers for jobs and entertainment.

Susan Pruett, the association's general counsel, said the group is concerned about restrictions that could tie cities' hands to do almost any kind of improvement.

"You could argue every time you use eminent domain that it is for economic development. Whether you are putting in a road or when a power company is extending utilities, it's all done to make a better, more prosperous community," she said.

Sen. Doug Stoner (D-Smyrna) said, "I know Smyrna would not have been rebuilt had [Chapman's bill] been the law in Georgia."

Chapman said he is not anti-growth, but he does think people's property rights should take precedence over the desire of a government to hand over property to private firms for redevelopment.

He plans to hold his hearing in Stockbridge.

The Meekses, he said, "have a clear example of a local government rough-treating these people and possibly costing them a lot of money."

"Who has the right to take it from them at a fraction of the cost so someone else could benefit from it? That is not the American dream."

Atlanta Journal-Constitution: www.ajc.com

Eminent domain: boon or bane? St Louis (MO) Post Dispatch, 7/23/05

By Tavia Evans

Developers are finding more corners of the metropolitan area ripe for retooling, and they're staking their claims to land for new projects.

Their plans include multimillion-dollar retail and commercial centers and industrial parks, aimed at creating jobs and revitalizing neighborhoods. And more often, those plans include the use of eminent domain to acquire the properties.

The recent Supreme Court ruling expanding the power of eminent domain has captured the interest of state governments and cities, and riled critics and property owners who say it is a violation of their constitutional rights. In Kelo vs. City of New London (Conn.) the Supreme Court ruled in June that the government can use the power of eminent domain to take private property for economic reasons.

Missouri Gov. Matt Blunt has created an eminent domain task force to review state and federal laws on its use, especially in connection with tax increment financing in large-scale developments, according to Gerard Carmody, a St. Louis attorney appointed to the task force.

City planners and municipalities defend the Supreme Court's ruling. They believe eminent domain is necessary to revitalize "blighted" areas and secure financing that will make redevelopment projects feasible.

John Brancaglione, an urban-development consultant with the architectural firm Peckham Guyton Albers & Viets, said eminent domain is commonly used as part of city planning.

"It's a natural evolution of cities who stay on top of their growth and development issues. They look at land use and try to figure out what's going on, what's happening to property values and what's the best economic use of the land."

But critics say the way eminent domain commonly is used in Missouri as an economic-development tool runs counter to its original purpose as a way for cities to acquire land for public use.

"None of the controversies have swirled around cases where the government needs to build a road, a school or a firehouse, where it's clearly a public use," said Jerome Wallach, a local attorney who represents home and property owners in eminent domain cases.

"Curing blight has become a public purpose now by city governments, and they're using private enterprise as their method."

Developers argue that tax increment financing is necessary to complete the redevelopment.

For example, Novus Development Co. will receive $42 million in TIF funds to build a retail lifestyle center in Sunset Hills; the total project is expected to cost $160 million. The land, at the southeast corner of Interstate 44 and South Lindbergh Boulevard, is a transportation development district. The project is expected to generate $20 million for highway and road improvements.

"Without TIFs, this would not happen. It levels the playing field," said Jonathan Browne, president of Novus Development. "The TIFs offset the costs, because you couldn't go and pay what we're paying for ground and develop it."

In return, Novus says, the redeveloped area will generate $2 million a year in property taxes for Sunset Hills, up from $400,000 in taxes produced by homes now in the Sunset Manor area. Novus also projects retail sales taxes of $200 million, up considerably from the $5 million generated by commercial property in the area. But developers aren't always the first to speculate on possible land for redevelopment. Cities often initiate the process.

The Hazelwood Commerce Center, a proposed $250 million business park, has been in the works for several years. The city of Hazelwood issued requests for proposals on the old Robertson neighborhood, just north of Lambert Field. Most residents left in an airport-noise buyout in the 1980s. The city had already designated the area blighted.

Financing details have not been completed, but McEagle Development expects to receive some form of TIF money for the business park.

"It's a tool that cities can use to attract or encourage developments," said Bruce Sokolik, president of McEagle Development. "In our case, the city had already gone through the process of blighting the land for eminent domain, so we responded to the offer to develop it."

However, five businesses and several parcels of land are standing in the way because the property owners say they're getting a raw deal.

"The developer convinces the city they can improve the tax base, create jobs and put the land to a more profitable use at the expense of happy and thriving businesses if they can receive tax increment financing," said attorney Robert Denlow, who is representing the businesses. "The city just jumped at it."

Susan Woltering is president of C.R. Frank Popcorn Co. and Select Drinks. Her father founded the businesses 34 years ago and bought the property at 5401 North Lindbergh. Woltering said McEagle's latest offer of $325,000 would not be enough to relocate and buy new property.

"They stand to make plenty off of this development, but we can't even buy ground for the amount they're offering," she said. "In order to continue business, we need a new building to go to. The way the law is written, everything is in their favor."

St Louis Post Dispatch: www.stltoday.com

Court expands eminent domain, but some states aren’t buying it: Enid (OK) News & Eagle, 7/23/05

The recent Supreme Court decision that could allow governments to take private property and turn it over to developers has state lawmakers across the country scrambling to thwart an overreaching power.

Oklahoma is one of those states working on such legislation. Lawmakers are alarmed by the prospect of local governments seizing homes or businesses for developers that might make a better offer on sales tax revenues for the community.

Many see the action by the Supreme Court in the Kelo vs. New London case as an attack on private property rights of individuals — and while that may seem somewhat alarmist — it is a valid concern.

Most people understand the rule of eminent domain, which allows governments to take property for “the public good.” That usually means roads or other infrastructure that is pubic in nature.

And, even in those cases, eminent domain usually is rare because governments work out satisfactory financial arrangements with the people whose property is needed.

However, what galls people is the latest decision seems to allow big corporations to get their hands in the pockets of local government with promises of big sales tax revenues. That’s a whole different ball game. As Justice Sandra Day O’Connor wrote in her dissent, “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.”

Most government officials, including those in Enid, say they would be extremely careful and exercise good judgment in handing such an issue. However, this ruling provides governments with an awesome power. In communities that have no or slow economic growth, it just might be too tempting to wield such a power without the proper perspective and concern for individual property rights.

We agree legislation probably needs to be written to address this issue and strengthen individual property rights, but we also are concerned too much emotional reaction could jerk legislation into an extreme position.

We advise legislators working on such proposals to make changes with careful reflection. They need to step back and look at the issue broadly. They should visit with local government entities and constituents, then make the appropriate changes.

Eminent domain is not necessarily a bad thing, but it’s a power that must be a last resort. Individual property rights are too precious, and they must be treated with cautious regard.

Enid news & Eagle: www.enidnews.com

Eminent domain bill’s failure stuns Janek: Galveston County (TX) Daily News, 7/22/05

By Nathan Smith

State Sen. Kyle Janek says he was stunned this week when his proposal to limit government from seizing private property was not approved in this special legislative session.

Janek’s proposal would have limited state and local governments from taking private property if the primary purpose for the seizure was economic development.

The bill was filed in response to a U.S. Supreme Court ruling that lets local governments take land for private development to generate tax money.

The court ruled 5-4 last month in a case involving the city of New London, Conn., which sought to take homes to make way for a private development.

The Texas Senate approved the bill first and sent it to the House. Representatives added provisions and kicked the bill back to the Senate. Senators agreed to negotiate with the House on the differences, but the House refused Tuesday.

“Some of the House amendments contained language that needed further study,” said Janek, a Houston Republican whose district includes part of Galveston County.

“For example, an exception was allowed for the taking for ‘industrial development’ and this, to me, is the same as taking for ‘economic development.’

“Condemning someone’s land because you’ve found someone with deeper pockets is wrong — whether that someone is a retailer, a country club or heavy industry.”

Janek called the differences between the House and Senate versions of the bill major but solvable.

He pledged to try to have the issue of eminent domain added to the next special session, which began Thursday.

The Daily News: www.galvnews.com

House GOP urges Congress to limit eminent domain: The Kentucky Post, 7/23/05

By Feoshia Henderson

Kentucky's House Republicans are backing a resolution urging Congress to amend the U.S. Constitution to limit the government's authority to take citizens' property for private economic development.

Louisville Rep. Scott Brinkman has pre-filed the resolution for the 2006 General Assembly session. The chamber's entire 43-member Republican delegation, including six Northern Kentuckians, has signed onto it.

The resolution, which if passed would not effect Kentucky law, is in response to the recent 5-4 U.S. Supreme Court decision that government could seize property for private development if it would result in higher tax revenues for the government.

"It goes beyond anything we have ever seen," Brinkman said. "What the court has said is you can take private property for economic development in the private sector if you can show you'll get more of a tax base and more revenue for local government."

Brinkman said he would work the Democratic majority in the House to help ensure passage of the measure.

"I think the Supreme Court decision was a huge mistake," said state Rep. Joe Fischer, R-Fort Thomas, who supports the House measure. "Public use should be only for the public itself, not for another private entity."

The resolution asks Congress to pass an amendment "prohibiting the use of eminent domain for private economic development purposes."

Historically eminent domain powers have been used for the public good for projects such as roads, railroads or utilities. Supporters of the Supreme Court ruling say the expanded authority gives governments a valuable tool in developing run down areas.

But Rep. Addia Wuchner, R-Florence, said the court overstepped its bounds and the resolution was a way for the legislature to affect change.

"It a joint resolution and we're asking (Congress) to act on behalf of the citizens of the United States," she said.

Lawmakers in two states, Minnesota and Texas, are working on legislation to limit eminent domain authority.

Kentucky is one of at least eights states that already curb that power. In the commonwealth property can be seized for public projects, or for private projects only if an area is declared blighted.

That's what happened in Newport, where the city has struck a deal with Montgomery developer Bear Creek Capital to develop a retail-office project on 55 acres between Memorial Parkway and Carothers Road, just west of Interstate 471.

The city declared the property blighted in 2002 and subject to private development under terms of eminent domain.

The project necessitated the razing of 96 houses, two churches and one business.

The Kentucky Post: http://news.kypost.com

O'Fallon states position on eminent domain: St Louis (MO) Post Dispatch, 7/23/05

header, if any

By Steve Pokin

O'Fallon [MO] aldermen last week assured residents that they will not use the city's power of eminent domain to take private property for economic development, despite the fact that the U.S. Supreme Court decided that government can do just that.

"I think eminent domain is a touchy word in this city and I hope this resolution might put some of the residents at ease," said Lyn Schipper, a Ward 2 alderman and board president.

Aldermen voted 8-0 at the July 14 board meeting to pass a resolution that states that the proper use of eminent domain is for items such as streets, parks and public water and sewer systems — not for economic development.

The U.S. Supreme Court ruled 5-4 on June 23 that the Constitution requires only the possibility of economic gain for government to acquire private property from one individual for the benefit of another.

In the eyes of the court, taking a home so a developer can build a shopping mall is as much of a public use as taking land to build an interstate highway.

In O'Fallon, a 2003 attempt by the city to use eminent domain has shaped city politics.

A different board majority gave tentative approval to a sweeping redevelopment plan, called Main Street Ventures, for Old Town O'Fallon.

The plan included eminent domain. Numerous residents and business owners would have been forced to sell their property.

Only one alderman — Bill Hennessy in Ward 4 — remains on the board since that time.

Alderman Randy Hudson, Ward 1, said his downtown business of 25 years, Randy's Jewelry, was targeted by Main Street Ventures.

"After that happened to us, I looked at the world differently," Hudson said. "I drove around St. Charles County and looked at different properties and thought to myself, ‘Gee, I bet I could replace that with something that would produce more taxes.

"We all think we have the right to own property and then we find out that we don't," he said. "I think the resolution sends a strong message that says we are no longer the same government we were two years ago."

Dennis Sherman, owner of O'Fallon Garage on South Main Street, said his business also was targeted by Main Street Ventures.

He said the fight to stop the plan is not something he wants to relive.

"It messed up my whole summer," he said. "Every week there was a meeting — whether it was with the Board of Aldermen or a fund-raiser to fight what was happening. There was all kinds of stuff going on. It took me away from my wife and kids."

St Louis Post Dispatch: www.stltoday.com

Ruling on eminent domain triggers a firestorm of ire : Minneapolis (MN) Star Tribune, 7/23/05

By Kenneth Harney, Washington Post Writers Group

Calling it a backlash would hardly do it justice. Calling it an unprecedented uprising to nullify a decision of the highest court of the land would be more accurate.

In the four weeks since the Supreme Court sanctioned the seizure of private homes by municipal governments for private "economic development," a firestorm of reaction has broken out in dozens of state legislatures and in Congress.

At the federal level, the House adopted by a 365-33 vote a highly unusual resolution deploring the court's ruling. The House also voted 231-189 for a bill that would prohibit expenditure of any federal housing, transportation or Treasury funds "to enforce the judgment of the Supreme Court in the case of Kelo vs. City of New London." The court ruled that municipalities have the authority to determine what constitutes a "public purpose" for eminent-domain seizures — even if that means taking privately owned real estate away from one set of citizens and handing it over to private developers who promise to increase the local tax revenue base or increase employment.

In effect, the House told the court: You might have narrowly approved the Connecticut city's eminent-domain seizures of homes for a privately developed and owned urban renewal project, but we have a weapon in this fight too. If the appropriations amendment passes the Senate, the city of New London will not be able to use key federal funds in any way, directly or indirectly, to move that project forward. No transportation money, no housing subsidies, no assistance from the Treasury.

Meanwhile, bipartisan support is building in the Senate for the sweeping "Protection of Homes, Small Businesses and Private Property Act of 2005," sponsored by Sen. John Cornyn, R-Texas.

That bill declares that it is Congress' view that "the power of eminent domain should be exercised only for 'public use' as guaranteed by the Fifth Amendment, and that this power to seize homes, small businesses and other private property should be reserved only for true public purposes."

Under no circumstances, Cornyn said, should local eminent-domain powers "be used simply to further private economic development." If passed and signed into law, the bill would prohibit all uses of federal funds in connection with any eminent-domain seizures for economic development purposes.

At the state level, legislative moves are under way in more than two dozen states to rein in — or at least clarify — the powers of municipalities to condemn and seize homes. Eight states — Arkansas, Florida, Illinois, Kentucky, Massachusetts, Montana, South Carolina and Washington — already impose restrictions in some form.

In Connecticut, Gov. Jodi Rell has endorsed a moratorium on eminent-domain seizures and called the issue "the 21st century equivalent of the Boston Tea Party: the government taking away the rights and liberties of property owners without giving them a voice. But this time it is not a monarch wearing robes in England we are fighting — it is five robed justices at the Supreme Court in Washington."

The outraged reaction to the Kelo decision has erupted across the political and ideological spectrum, creating momentary bedfellows out of legislators who rarely agree on anything. Name another issue on which House Majority Leader Tom DeLay, R-Texas; Rep. Maxine Waters, D-Calif.; Senate Majority Leader Bill Frist, R-Tenn.; the House's lone self-described socialist, Rep. Bernie Sanders, I-Vt.; evangelical Christian groups; Rush Limbaugh, and Ralph Nader all are on the same side.

Waters denounced the decision — which she said would weigh most heavily upon minority and poor neighborhoods — as "the most un-American thing that can be done." DeLay called the ruling "a travesty."

A few Kelo opponents are looking to mount direct action — sometimes tongue-in-cheek. A California-based group called Freestar Media is organizing an effort to persuade the town council of Weare, N.H., where Supreme Court Justice David Souter owns property, to condemn Souter's land in order to give it to developers who promise to build a hotel on the site, substantially raising town revenue and employment in the process.

Souter voted with the majority in the case. The name of the proposed project: The Lost Liberty Hotel, which also will feature a restaurant called the Just Desserts Cafe.

Logan Darrow Clements, CEO of Freestar, insists, "This is not a prank. The town of Weare has five people on the Board of Selectmen. If three of them vote to use the power of eminent domain to take this land from Mr. Souter, we can begin our hotel development."

"Just desserts" indeed.

Minneapolis Star Tribune: www.startribune.com

Kenneth Harney is a syndicated real estate columnist: kenharney@earthlink.net

Eminent domain reform tools from The Reason Foundation

In the wake of the Supreme Court's Kelo vs. New London decision, The Reason Foundation has been inundated with requests from individuals as well as local and state policymakers, asking about reasonable measures to prevent misuse of eminent domain — especially for economic development projects.

The Reason Foundation and The reason Public Policy Institute have prepared a variety of tools that can serve as a starting point toward eminent domain reform:

The Reason Foundation, Public Policy Institute: www.rppi.org