Eminent Domain: Takeaway for the public good? Beaver County (PA) Times, 8/22/05

By Robyn Russo

The words "eminent domain" had barely settled on the audience before Ambridge Council tabled the resolution.

The measure, introduced at council's Aug. 8 meeting, would have endorsed a recent U.S. Supreme Court decision allowing the use of eminent domain for economic-development purposes "as a last resort." But council quickly veered away from it as soon as residents in the audience, particularly those affected during the borough's last big eminent-domain case when property was seized for a CVS drugstore, began speaking against it.

The Supreme Court ruling sparked an almost instantaneous backlash in Congress, and heated debates in Washington, D.C., for the last month and a half. But while even mentioning eminent domain elicits emotional responses, some local officials say the ruling doesn't really change how Pennsylvania municipalities can use the law, and rushing to add limits now could hurt communities seeking revitalization projects in the future.

"Redevelopment would be much more difficult if we didn't have that tool to exercise in a reasonable and intended fashion," said Frank Mancini Jr., executive director of the Beaver County Redevelopment Authority. "Eminent domain can be abused, but it is a tool Beaver County sure needs when it is absolutely necessary."

In the week after the court's ruling, Ed Troxell, director of government affairs for the Pennsylvania State Association of Boroughs, sent out a memo to the organization's 900 members explaining the ruling and urging officials to "... continue the longstanding tradition of using eminent domain as a last resort."

The ruling, Troxell said, did not expand the power of eminent domain, but simply reaffirmed its use.

Local, state and federal governments have traditionally used eminent domain for public projects, such as roads and sewer lines, although the court has been expanding the definition over the past few decades, allowing municipalities to use eminent domain for private projects that eliminate blight and boost economic development.

The Supreme Court decision dealt with the case of Kelo v. New London, Conn. Justices ruled 5-4 that the city had the authority to take homes for a private development project. Almost immediately, federal lawmakers began introducing legislation to blunt the ruling. The House voted to deny federal funds to any city or state project that used eminent domain for a profit-making project, with a similar measure introduced in the Senate.

"It's like the Supreme Court kicked the door wide open, and then Congress tried to slam it shut again," said Ambridge Manager Pam Caskie.

Beaver County has had its share of eminent-domain cases over the past five years. For instance, proceedings were used for a New Brighton fishing park in 2000, building the parking garage by the county courthouse in 2001 and for sewer lines in Hopewell Township in 2004.

While all were public projects, Mancini pointed to a late-1970s case in Monaca, where private homes and businesses were taken to give land to Phoenix Glass, a private company. The decision was made because Phoenix's former premises had burned down and the company was going to move out of the area if it didn't get the land to expand as it rebuilt, and keeping the company in Monaca was determined to be best for the "public good," Mancini said.

But perhaps the most emotionally charged case came a little more recently, in 1999. CVS pharmacy officials decided to move the Ambridge store to the high-traffic intersection at Eighth and Merchant streets, and while several families who lived there settled immediately with the drugstore's landholding company, four held out. In a controversial September 1999 decision, the borough filed to begin eminent-domain proceedings.

Caskie said she couldn't comment on the 1999 proceedings because she was not working for the borough at that time, but said that eminent domain has not always been "used judiciously throughout history" and that the definition of "blight" is not very strict.

"And every time someone misuses it, it makes it that much harder for when it is really necessary," Caskie said.

Council President David Deiter, who was on council in 1999, said he voted against using eminent domain then because he thought the project was not a valid use of the borough's powers.

"Eminent domain should only be used for public use, and in the case of CVS, it was used for private," Deiter said.

The borough now faces its biggest redevelopment project in memory with a private developer, Australian firm Moltoni Corp. The planned revitalization project would raze the old industrial properties between Duss, Merchant, 11th and 19th streets and build a mix of offices, homes and businesses.

Right now, Caskie said, there are five property owners in the planned area. Moltoni already owns some of the land and just closed on one important sale - the former 14th Street Corporation property - this weekend. The project is planned to be built around one property owner, Steel Built Corp., leaving Edward Toth and Thomas Allen as the two major property owners in the area, Caskie said

Caskie said all of the property owners have shown interest in selling. While she refused to comment about whether any of the owners have asked for unreasonably high sums for their properties or otherwise slowed the project, Caskie said it is still in the borough's best interest to support the use of eminent domain for economic development.

"The threat of eminent domain is a tool of last resort, but it's a tool we need in our toolbox," Caskie said.

Bill Sutton, acting director for Moltoni's brownfields projects in the United States, said the company has no plans to ask the borough to use eminent domain. He refused to comment on negotiations with the property holders except to say that the company is in the process of negotiating sales with two to four owners.

"That's (eminent domain) not the issue with us, and we're not intending to ever have it be an issue," Sutton said. "We're very community-oriented."

Sutton also said the company would not make any decisions about eminent domain, as such proceedings would be handled by the county's redevelopment authority. Troxell said redevelopment authorities use eminent domain "very rarely," and there are already a lot of legal limits on Pennsylvania's local governments.

"It can be good for growth," Troxell said. "All we're asking our member boroughs to do is step back a moment and not let this whirlwind affect them."

Beaver County Times: www.timesonline.com

Eminent Domain Ruling Paves Way for $120M Redevelopment: GlobeSt.com, 8/22/05

By Alex Finkelstein

Home to Nascar, the International Speedway and spring break college students, [Daytona Beach FL, an] oceanside city of 68,000 permanent residents, is about to usher in a new attraction with the planned $120-million redevelopment of its 73-year-old decaying beachside boardwalk area.

After 24 years of planning the redevelopment, the city received court permission Aug. 19 to seize three beachfront businesses that have been blocking a 20-year-old, mixed-use venture proposed by Los Angeles developer Bill Geary and his Carlsberg Management Co.

State Court Judge John W. Watson III ruled the city may take title to the three properties by making an $8.85-million down payment to the court. A 12-person jury later in the year will decide the final price the city has to pay to owners of Capt. Darrell’s Oyster Bar, the Midway Fun Center and the Fun Fair Go-Cart Track. Lawyers for the three businesses have told the city they will appeal the Circuit Court’s ruling to the 5th District Court of Appeal in Daytona Beach.

Judge Watson based his ruling on the recent landmark US Supreme Court decision that held municipalities may seize and pay fair market value for businesses or homes that are hindering the economic redevelopment of a crime-ridden or blighted area, area retail marketers and brokers who attended the Aug. 19 court session tell GlobeSt.com.

Geary plans to build twin 23-story hotel-condominium towers and develop 50,000 sf of retail and restaurant space on the five-acre site, as GlobeSt.com previously reported. Daytona Beach taxpayers have voted to use about $12 million of public funds to help finance the boardwalk redevelopment. Carlsberg Management has purchased the boardwalk’s pier from local owner Theresa Doan for $3 million, as GlobeSt.com also previously reported.

GlobeSt.com: www.globest.com

Eminent domain up for action: Whittier (CA) Daily News, 8/21/05

Both parties strive to rein in cities

By Mike Sprague

Forty years ago, the city of Santa Fe Springs used eminent domain to acquire several hundred dilapidated homes many having cardboard walls and no plumbing. Today, the Flood Ranch area of modern homes stands on that property.

A recent U.S. Supreme Court decision upholding and expanding the use of eminent domain the taking of private property by government to improve the property and get rid of blight backs up the city's right to take substandard houses for redevelopment.

But a move is now under way by Democratic and Republican lawmakers to rein in the use of eminent domain.

Legislators have introduced bills that take varying approaches. Republicans have proposed banning the taking of private property for private use. The Democrats' proposals would not allow governments to use eminent domain to take owner-occupied residential homes.

"To take your home to give it to me for my profit because I have friends on the City Council and you don't is abhorrent to every tradition of American and English law," said Sen. Tom McClintock, R-Thousand Oaks. "A very alien doctrine has subverted our historic property rights."

McClintock has proposed a constitutional amendment that would ban all governments from taking private property if it is to be used by a private developer but would continue to allow the use of eminent domain for public purposes such as building new freeways and schools.

But Whittier-area city officials say that proposal would cause economic development to suffer.

"These bills are ill-advised because they would put a chilling effect on a community's ability to reinvent itself," Whittier City Manager Steve Helvey said.

"The real issue is a city's ability to redevelop itself when there's a recalcitrant business owner or property owner. Do you build a property around a holdout?"

McClintock said eminent domain used for private development is too much power for local government to have.

"It is now entirely permissible for government to seize the home of one person for pennies on the dollar to give it to another not for some vital over-arching public necessity but simply because the new owner can pay more taxes than the old," he said.

La Mirada Councilman Hal Malkin said property owners are still protected under the law, even with eminent domain in place.

"Is it unfair?" he asked. "Not as long as they're fairly compensated. They are to receive a fair (market) value."

The McClintock proposal could short-circuit some on-going development plans, local officials said.

La Mirada officials are prepared, if necessary, to condemn some commercial properties to allow a new Home Depot to be built and also are working to improve other shopping centers.

Another project to build 44 single-family homes where a small shopping center is located also could be jeopardized if the city is stripped of its eminent domain power, La Mirada City Manager Andrea Travis said.

Santa Fe Springs is prepared to use eminent domain or the threat of it to acquire property for a 500-unit housing development, officials said.

Both projects will help meet state housing requirements for cities, officials said.

"It's an absolute contradiction," Latham said. "How can the left hand demand we meet housing requirements and then the right hand hinders our ability to do so by taking away a tool?"

The Democrats also have proposed changes to eminent domain laws.

State Sen. Christine Kehoe, D- San Diego, and Sen. Tom Torlakson, D-Antioch, have proposed placing a two-year moratorium on eminent domain when used to take owner-occupied residential property for private use. They also propose a constitutional amendment that could make such a ban permanent.

Torlakson said the proposal offers a balanced approach.

"I've introduced legislation to control some of the abuses where eminent domain has been used with the heavy hand of government, not looking at the interests of single-family homeowners," he said.

"We've also understood there are many positive aspects of redevelopment and the use of eminent domain to fight crime, get crack houses out of neighborhoods and clean up neighborhoods so all property values can rise," Torlakson added.

If it passes, the Kehoe-Torlakson proposal is not likely to have much of an effect on Whittier-area cities in the near future, local officials said.

When the Whittier City Council created the Whittier Boulevard Redevelopment project, it excluded single-family homes situated on the boulevard from eminent domain.

Two years ago, La Mirada added the Foster Park area to its redevelopment area but also waived the power of eminent domain for the area.

Fred Latham, Santa Fe Springs city manager, said that his city, too, is unlikely in the near future to condemn any owner-occupied homes. But that might change someday, he added.

"Twenty to 30 years from now, we may have to go in and do a project similar to Flood Ranch," Latham said. "Houses can last only so long. Otherwise we could wind up with deteriorating houses and substandard neighborhoods."

Whittier Daily News: www.whittierdailynews.com

Debate over eminent domain rages on: Fairfield County (CT) Business Journal, 8/05

By Joan Stableford

While homeowners, outraged by the U.S. Supreme Court's ruling in late June on eminent domain, are urging legislators to create stricter state laws to prevent cities from seizing private homes for economic development, local business groups stress the process is essential to revitalize blighted inner cities.

On June 23, the court ruled that the city of New London could force seven homeowners to relinquish their property rights to allow redevelopment of a waterfront property into a hotel, office park and urban-style townhomes to expand the city's tax base and create jobs.

"There is no doubt in my mind that the court's decision was the right one," said Paul Timpanelli, president and chief executive officer of the Bridgeport Regional Business Council.

"Eminent domain is essential to centers which are urban in nature and when it is used for economic development, when there is a much greater need to remove blighted real estate and grow the tax base," he said.

He argued the laws governing eminent domain offer enough safeguards for property owners. Projects seizing private property need legislative approval, a process that ensures adequate public input.

"The principle of eminent domain is a very necessary tool for cities to have. I know of few instances where it was used otherwise," he said.

Yet, Connecticut voters reacted strongly to the ruling, according to a Quinnipiac University poll that found eight out of 10 voters want state lawmakers to limit the use of eminent domain. In fact, 61 percent of those polled disagreed "somewhat" or "strongly" with the traditional use of eminent domain to take private property for public uses, such as schools and roads. At least 88 percent disagreed "strongly" or "somewhat" with the newer applications for economic development projects.

Right after the court decision, Gov. Jodi Rell called for a moratorium on eminent domain seizures, labeling it "the 21st century equivalent of the Boston Tea Party."

Connecticut's House Republican Minority Leader Robert M. Ward introduced legislation to ban the seizing of private property for development projects and urged lawmakers to take up the issue in a summer session. However, several Democratic leaders blocked its passage, saying they should wait until the regular session to study the issue.

"It is a popular thing for politicians to do. They are taking the easy way out instead of explaining the real reasons behind eminent domain for the economic development of our cities," Timpanelli said.

Ward proposes to delete six lines from the existing state statutes that allow development agencies to seize private property under eminent domain.

"That is very ludicrous, overkill," said Joseph McGee, vice president of public policy and programs at the Business Council of Fairfield County. "Eminent domain has really helped rebuild cities with blighted buildings and rundown areas. It has been an indispensable tool and very valuable to the economic development of cities throughout the state."

When eminent domain is used successfully in urban areas, it is used to put parcels of abandoned land and rundown buildings together for new economic development. About 30 years ago, he pointed out, Bridgeport used it to redevelop Bridgeport Center by building the new headquarters of People's Bank, where McGee was a vice president. He was involved in that construction, which revitalized downtown Bridgeport.

"The ultimate test is you have to put (eminent domain) to the public test. Will it benefit the greater good — have a greater public purpose and benefit," McGee said.

Yet, McGee said, he understands fully the concern for homeowners-rights issues and that eminent domain must be used cautiously when it involves someone's home. It must be "gut-wrenching to have your property seized," he said.

McGee said the merits and ground rules of the statutes on eminent domain in the state legislature should be revisited. "The legislators should not be hasty, but look again at the whole issue carefully and debate it. If need be, modify it, but with caution," he said.

Ed Musante, president of the Greater Norwalk Chamber of Commerce, said the chamber has not taken a position on the issue. "The ruling has produced strong reactions in people and has brought up the question ’Äî what is reasonable when using the powers of government to seize private property," he said.

Musante said he knew of several Norwalk businesses concerned about the potential of the city taking over their property for a development project.

"There clearly needs to be more judicious use of the power and it should be looked at carefully," he said.

Fairfield County Business Journal: www.fairfieldcbj.com

Eminent domain a hot-button issue: Westchester County (NY) Business Journal, 8/05

Local officials debate pros and cons of seizing private land

By Joan Stableford

While homeowners and politicians nationwide are reacting angrily and swiftly to the recent U.S. Supreme Court ruling on eminent domain that allowed a Connecticut city to seize seven personal homes for a private developer's project, leaders from communities and business in Westchester County were much more cautious on the issue last week.

"We can't comment on this. Our organization has not yet taken a position," said Marsha Gordon, president and chief executive officer of The Business Council of Westchester, which represents 1,400 local businesses.

On June 23, the Supreme Court ruled that New London, Conn., could force seven homeowners to relinquish their property rights for economic development to redevelop a waterfront property into a hotel, office park and urban-style townhomes to expand the city's tax base and create jobs.

When eminent domain is used successfully in urban areas, it is used to put parcels of abandoned land and rundown buildings together for revitalization, city economic development officials said.

The main controversy in Kelo vs. The City of New London centers on whether government can force one property owner to sell for the benefit of another, typically a large developer, in the name of economic development.

"The ruling has not actually made anything different in that it doesn't grant any more authority to the city than it already had before. In my administration, we have not used eminent domain and we don't plan to," said White Plains Mayor Joseph Delfino.

Mount Vernon Mayor Ernest D. Davis said eminent domain is a very useful tool for cities to implement, if the economic development project benefits the greater public good.

"We would not take someone's property without considering all of the future benefits and impacts upon the homeowner or business. We do not seek to take property unless we absolutely have to. In our case, we have used eminent domain very sparingly. And, we work with the property owners," Davis said.

For example, he pointed to the revitalization of Sandford Boulevard, in which property was seized to build a 285,000-square-foot retail complex to house such big-box retailers as Target, TJ Max, Best Buy, creating thousands of jobs and generating $4 million in sales-tax revenues for the city.

"We approached these property owners in an amicable way, helping them understand the greater benefits of the project to the community and then compensating them fairly for their property and helping them find other suitable places to relocate," Davis said.

Even with eminent domain property seizures, Davis said the retail project was held up for four years in court, not because of eminent domain, but because of lawsuits from its next-door neighbor, Pelham, which raised traffic-congestion issues.

"We take eminent domain very seriously. With any big economic development project, we consider all of the environmental and economic impacts before moving forward. Eminent domain should be used as a last resort," the mayor said.

Richard Halevy, director of communications for Yonkers, said eminent domain is a tool the city has used rarely. It is a valuable tool for economic development, but should be used as a last resort, he said.

"Instead, we have preferred to negotiate with the few property owners affected. It's a balancing act. You have to weigh a project for the greater good, such as the number of jobs it will create and its benefits (a thriving economy). We have had a lot of economic development projects — over $2 billion — in the past five years, and I don't know of any instances where we have used eminent domain. I would have to do some research," Halevy said.

After the Supreme Court decision in late June, Assemblyman Richard L. Brodsky acted swiftly, introducing legislation in July to reform the state's eminent domain law.

"We need to protect homeowners' interests, while, at the same time, allowing economic development to occur. We need to put eminent domain back under the control of elected officials," Brodsky said.

His proposed Eminent Domain Reform Act focuses on the injustice of condemning private property for economic development and transferring the property to other private parties, as in the New London case.

Under his proposal, the time frame for a property owner to appeal a condemnation would be increased from 30 to 90 days. Property owners would also be allowed to appeal the condemnation if the project had been substantially changed.

A second key part of his proposal would require local government to use a public planning process to develop a comprehensive economic development plan for the affected area and then vote it into law. The government must also prepare a homeowner impact assessment statement, comparing the harm to the affected property owners with the project's expected community benefits and justify the taking of the private property in writing.

In addition, this bill proposes increasing the compensation to the affected homeowners to a minimum of 150 percent of the fair market value of their property and added compensation for the displaced residents.

Davis reacted strongly to the proposal to compensate property owners a minimum of one-and-half times the fair market value of their property.

"That part of his proposed bill would set a dangerous precedent. It would make it harder for cities and urban areas to revitalize," Davis said.

But Halevy said he believes that a property owner whose property is seized under eminent domain should receive a premium over the fair market value of his property. It is a fair concept, he said.

"But what amount is right? Is 150 percent more too much, too little or just right? Who should determine that?" Halevey said.

Finally, the legislation calls for creating a temporary commission to examine the constitutional and legislative standards to reform the eminent domain procedure where private homeowners are affected, when eminent domain is used for economic development.

Davis said he believes statutes provide enough safeguards for property owners.

"When the case is weak, the property owners win out. The courts can also decide which property values are fair and realistic. The bottom line is that I think the system works. If it isn't broken, it doesn't need fixing," he said.

The issue is, and will be, a political hot button for homeowners and communities and politicians in the year ahead. In fact, the issue is so controversial right now that some leaders preferred not to respond to questions on changes to statutes on eminent domain and the future of economic development.

For example, a spokeswoman for Sal Carrera, director of Westchester County's Office of Economic Development, said Carrera did not want to comment. Likewise, calls to Theresa Waivada, executive director of Westchester County's Industrial Development Agency, went unreturned.

"This is a very complex and difficult issue. After the summer, we will consider it and study it with our membership this fall," said Gordon of The Business Council of Westchester.

"It gets down to the basic concept of home rule. Each community will have to deal with the current and future laws on eminent domain," Halevy concluded.

Westchester County Business Journal: www.westchestercbj.com

Supreme Court Won't Revisit Eminent Domain Case: Fox News, 8/22/05

The Supreme Court, given a chance to revisit a heavily criticized ruling, refused Monday to reconsider its decision giving local governments more power to seize people's homes for economic development.

So contentious was the court's narrow 5-4 ruling in the so-called eminent domain case earlier this year that some critics launched a campaign to seize Justice David Souter's (search) farmhouse in New Hampshire to build a luxury hotel. Others singled out Justice Stephen Breyer's vacation home in the same state for use as a park.

Both Souter and Breyer voted on the prevailing side. Justice Sandra Day O'Connor, who did which had been expected because requests for a reconsideration of rulings are rarely granted.

O'Connor, whose decision to retire created the opening that Washington lawyer John Roberts now seeks to fill, wrote in her angry dissent of June that "the specter of condemnation hangs over all property."

Justice John Paul Stevens wrote the majority opinion and defended it last week in a speech in Las Vegas. The ruling was legally correct, he said, because the high court has "always allowed local policy-makers wide latitude in determining how best to achieve legitimate public goals."

But Stevens said he had concerns about the results.

"My own view is that the allocation of economic resources that result from the free play of market forces is more likely to produce acceptable results in the long run than the best-intentioned plans of public officials," Stevens told the Clark County Bar Association.

Legal experts had said they did not expect the court's ruling, involving an economic development project in New London, Conn., to prompt a rush to claim homes.

Stevens said that "the public outcry that greeted [the ruling] is some evidence that the political process is up to the task of addressing such policy concerns."

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

Fox News: www.foxnews.com


Eminent domain — Some want Wisconsin lawmakers to step in: Lacrosse (WI) Tribune, 8/21/05

By Anita Clark

A recent U.S. Supreme Court decision on a Connecticut city's condemnation powers has sparked an emotional reaction among citizens concerned about government's ability to seize private property.

From Congress to county boards to Wisconsin's Legislature, the eminent domain issue has drawn attention from property-rights groups and opponents of big development.

"I call it the Wal-Mart syndrome," said Donald Downs, a professor of political science at UW-Madison.

In the Connecticut case, called Kelo v. New London, the high court upheld the city's use of its condemnation powers for private commercial development.

Does Wisconsin need to review its laws on eminent domain? It depends on whom you ask.

"This is just ludicrous. People want their land protected," said state Sen. Dave Zien, R-Eau Claire, who has introduced a bill called the Property Rights Protection Act.

But Madison's city attorney, Michael May, stated flatly: "Our state does not allow a taking similar to that utilized in Connecticut."

Wisconsin law allows condemnation of land for public use and creates a process for condemnation of blighted areas slated for redevelopment.

And "(the) Kelo decision has opened the door to an even more expansive reading of that language," Assistant Attorney General Daniel Bach concluded.

While Madison has had a few long and well-publicized condemnation struggles — most notably with Dotty Dumpling's Dowry, when the restaurant was forced to move to make way for the Overture Center — condemnation for development is "something we do as an absolute last resort," said Mark Olinger, director of the city's Department of Planning and Development.

Soon after the June 23 court ruling, Attorney General Peg Lautenschlager scheduled four public meetings around the state seeking citizens' opinions.

At the first one, in Janesville, about two dozen people showed up and 10 of them spoke, all politely expressing a deep distrust of governmental ties to developers.

It felt like a threat, said Michael Krafjack, when a developer called him the day after the court decision to talk about 10 acres he owns in the town of Rock that has a sewer line adjacent to it.

"He threw that (court ruling) in my face first thing," Krafjack said.

Laws protect citizens
Another speaker, Alfred Lembrich of Janesville, said governments promise things, but the people in office change and "the only way the citizen is protected is by the laws."

Despite such worries, many people familiar with eminent domain in Wisconsin say the law is not abused and that condemnation actions are pursued carefully in a public process by elected local officials.

There are two routes for government to condemn property in Wisconsin:
  • Acquiring land for traditional public use — generally for streets, parks or water and sewer systems.
  • Redeveloping a blighted area, which requires a specific process and a finding that at least half of the property is blighted.

"Eminent domain in Wisconsin is overwhelmingly used for acquiring property for what would clearly be public use," usually for streets or roads, said Michael King, administrator of the Community Analysis and Planning Division of Dane County.

"The issue before the Supreme Court was whether economic development could be a public use," he said.

That's the problem, skeptics say.

'In a real bind'
Municipalities say they need condemnation as a tool in times of tight budgets. In Sun Prairie, for example, the city used condemnation to acquire property, including a few homes, for its successful $44 million public-private downtown revitalization project. Paul Evert, the city attorney, described the land acquisitions as friendly and said they were vital to the project's success.

"Municipalities are in a real bind," said Michael Christopher, attorney for the Wisconsin chapter of the American Planning Association. "There's no money. So the only way that economic revitalization is going to occur is to have government use its resources with the private sector in order to get something done."

Even so, he said, municipalities try hard to avoid condemnation, which for both sides can lead to time-consuming, expensive legal battles with uncertain outcomes.

One Madison area facing redevelopment is near Todd Drive and the Beltline, property acquired from the town of Madison and part of a proposed $18 million office, retail and parking project.

City officials hope most of the property will be sold voluntarily, but the city may have to condemn an adult video store, Selective Video, and find a new home for it.

What is blight?
Also in the development path is the nonprofit Madison Bridge Club, 2318 Todd Drive, where members gather to play cards. It's owned by Duane Steinhauer and two partners.

Steinhauer is suspicious about the definition of blight.

"All you have to do is have a crack in the foundation or a shingle out of place," he said. "Ninety percent of the blight they find is normal routine maintenance that everybody does every year or two."

A long paragraph in state law defining a blighted area includes such criteria as dilapidation, deterioration, age or obsolescence, inadequate ventilation or light, high density of population and overcrowding and conditions conducive to ill health.

Is Steinhauer bitter about the possibility of his property being condemned for redevelopment?

"We took blight (a former machine shop) and we fixed it and this is how we get repaid," he said. "I'm not bitter as much as disappointed that the city treats taxpayers like that."

‘I see the pain'
Christopher, who also represents the Open Pantry store in the Todd Drive redevelopment district, said the project reflects the balancing test between private property rights and the public good.

"This is a classic dichotomy of, where do private property rights end and when is the public good going to outweigh them?" Christopher said.

Anti-government and populist arguments — the little guy versus the big power — are appealing, particularly in Wisconsin, Christopher said. "But you've got to look at what is the overall good for the community."

He said he's not aware of any situation in Wisconsin where the condemning power has abused its authority, though "that's not to say there won't be someone who disagrees with the decision."

A relocation agent who's often involved in condemnation cases urged the attorney general to fight any expansion of laws to help developers.

"I see the hurt, I see the pain, what it does to those people," said Annette DuCharme, a real estate specialist with Earth Tech, 1210 Fourier Drive. People whose property is condemned usually are unsophisticated and lack resources to fight the government, she said.

"It boils down to money," she said, though she added that Wisconsin laws offer more protection than those in some states.

Limitless scope?
Farmers are looking at the Wisconsin condemnation process in light of the court decision, said Paul Zimmerman, executive director of governmental relations for the Wisconsin Farm Bureau Federation.

They believe Wisconsin law doesn't prevent a case similar to Kelo, he said, and "what land are they going to take but farmland?"

The Wisconsin Realtors Association has analyzed the court decision and its impact here and concluded "there's no real reason to be alarmed," said Tom Larson, director of regulatory and legislative affairs.

"It does shine the light on the authority they have now," he said, citing the "limitless" scope of the blight definition. "There needs to be a balance. There needs to be some protection for people's homes, more so than we probably have now."

Lacrosse Tribune: www.lacrossetribune.com

Eminent domain ruling spurs moves for reform: Asbury (NJ) Park Press, 8/21/05


By Dana Berliner, Institute for Justice

When the U.S. Supreme Court decided that the Constitution allows homes to be taken by the government for potentially more profitable, higher-tax uses, it touched off a popular backlash and generated political momentum for legislative reform.

Immediately, eminent domain abusers began a desperate attempt to keep the power to take homes and businesses and turn them over to private developers. The special interests who benefit from these government-forced, private-to-private takings are struggling to convince outraged Americans that they shouldn't care.

But anyone — especially anyone in New Jersey — who might be swayed by their arguments should know that developers are ready, willing and able to jump at the opportunity for private land grabs that the Supreme Court has created.

In Lodi, 200 residents could lose their little piece of the American Dream to make way for private retail development and a senior-living community. Lodi Mayor Gary Paparozzi called the Supreme Court's ruling a "shot in the arm" for the town.

In Long Branch, officials are poised to use eminent domain to take the oceanfront homes of residents who stand in the way of new luxury condominiums.

At least 64 municipalities in New Jersey have designated "areas in need of redevelopment." Although not all of these towns have or will use eminent domain, they now have the power to take any property they (or, more to the point, private developers) want within those areas.

Members of Congress and state legislatures in more than 30 states have either introduced reform legislation or announced that they will. Those who benefit from the virtually unrestricted use of eminent domain — local governments, developers and planners — will be frantically lobbying and trying to scotch any attempt to diminish their power. Here's what they will say: "Nothing's changed. We've been doing this for years."

Many commentators have tried to minimize the Supreme Court's decision by saying that it didn't change the law. This should frighten home- and business owners even more because those commentators are right — government has been using eminent domain to assist private developers on a regular basis for years. I documented more than 10,000 properties either taken or threatened with condemnation in five years by counting properties listed in news articles.

Beware when local officials say they will use eminent domain as a last resort. What they really mean is that they'll come up with plans requiring people to move and then take the property "as a last resort" when the current residents refuse to move voluntarily.

When they take someone's home for a shopping mall, they say they'll only do it for a successful shopping mall and city leaders will feel really bad about kicking those people out. They say they're not acting to benefit a wealthy developer. They say they are bravely making the hard decisions to improve the tax base and city services for everyone.

One might ask why it's so brave of city leaders to decide that someone else has to sacrifice their home or business. Where are all the city councils offering up their own neighborhoods, or their parents' neighborhoods, for private development to supposedly revitalize the city?

The final stand for the defense of eminent domain abuse is the specter that somehow the city will go down the tubes unless it can confiscate property for large development projects. These claims are at best disingenuous, at worst outright dishonest. There are many ways to encourage economic growth that do not involve taking someone else's property. Will the city be able to have condos and a Target on exactly that corner? Maybe, maybe not. Will the city be able to have business development if its bureaucrats are willing to relinquish their desire to say exactly what and exactly where development will occur? Absolutely.

Despite these spurious claims, Americans are not reassured nor should they be, and that is because city leaders have missed the point entirely. The problem is that everyone understands that the rationale of economic development — less profitable uses can be taken for more-profitable uses — goes against everything that America stands for. It enshrines power and privilege over hard work and individual choice.

The American Dream still rings true for so many. To the vast majority of Americans, that dream, the soul of our country, is more important than having a successful shopping mall.

Asbury Park Press: www.app.com

Institute for Justice: www.ij.org

Eminent Domain: Daytona Beach (FL) News-Journal, 8/21/05


State can tighten rules without banning procedure

After a study in 1981, Daytona Beach declared that the Boardwalk and much of the area surrounding Main Street as blighted. The city then used the study to create a community redevelopment area, with greater powers for renewal, including the potential use of eminent domain. Although the city has three times gone to court to force the sale of property (twice for condo/resort projects and once for a hotel expansion), most property owners in the redevelopment area agreed to sell.

In the latest case (in which the judge ruled for Daytona Beach on Friday), the city sought eminent domain because the owners of three properties along the Boardwalk were unwilling to sell. A development group plans to build a $120 million condo/resort project, and the three properties represent small but critical areas of that project's footprint.

Paradoxically, as the city was arguing its case before Circuit Court Judge John W. Watson in June, the U.S. Supreme Court ruled on Kelo v. New London (Conn.) — a 5-4 decision in which it supported eminent domain under Fifth Amendment restrictions (for public purpose with just compensation).

The high court's decision did not affect Florida law, which is stricter than Connecticut's, but it sent reverberations that has political leaders thinking state laws are not strict enough.

While a useful tool in putting parcels of property together to attract developers, eminent domain should be a last-resort action. For Volusia and Flagler counties, that has been the case. There have been no instances of abuse here and no leaders have suggested bulldozing someone's house to benefit developers. (In the case of the Boardwalk, the developers will benefit but so will the public through the amenities that accompany the redevelopment project, such as improved economic viability.)

The controversy in Florida is not with eminent domain for traditional purposes, such as for roads, utilities, airports, etc. Property owners should understand that the purchase of real estate always comes with the risk that some or all of it could be needed for such purposes.

The concern in Florida is with eminent domain under the 1969 Community Redevelopment Act. Indeed, there is room for abuse, which is why governments should vigilantly restrict new redevelopment areas to properties that meet the intent of the original CRA law — which is to assist in the renewal of a truly rundown area without hope of recovery on its own.

When it was created, the CRA law had six criteria to define blight. Regrettably, the Legislature a few years ago expanded the definitions to 14 criteria — requiring only two criteria be met to set up a redevelopment district. The criteria range from a large number of building-code violations to higher crime rates to unusual property titles to adverse environmental conditions. To prevent abuse, it makes sense to require half or more of the criteria be met before eminent domain can be used. Additionally, rules might be set that regulate conditions under which property can be taken for predominately private use.

The state, however, should not go so far as to outlaw eminent domain when there is private benefit. Without eminent domain, a property owner could block private development that not only improves a once-blighted area but also acts as a public place with parks and entertainment.

While Florida's laws restricting the taking of property would make it difficult for a city to force the sale of property for a big-box retailer, it is not impossible. Legislators should not overreact but instead seek ways to ensure that governments fully weigh the public good before using eminent domain.

What Florida allows
If an owner refuses to sell property needed for public purposes, including redevelopment, government can claim the property under eminent domain for "just compensation" — usually defined as fair market value.

Under Florida law, the state or local government (or delegated authorities, such as utilities) must first negotiate in good faith to buy the property. Before property can be taken, public hearings must be held and the government must gain approval from a circuit court judge in a public trial. Extensive legal steps must be taken to prove the need for the claim. If eminent domain is allowed, a jury then determines the amount to be paid to the property owners. The government (and/or delegated authorities) must pay all legal fees incurred by the owners fighting eminent domain.

Eminent domain is most often used to acquire property for roads, parks, sewers and other public purposes.

Eminent domain also may be used under the state's Community Redevelopment Act. In these cases, local governments may force the sale of properties for redevelopment, which is usually done by private entities. The properties must be included in a redevelopment plan and the projects must benefit the public.

Daytona Beach News-Journal: www.news-journalonline.com

Property rights and eminent domain: The Economist, 8/18/05

Hands off our homes

A Supreme Court ruling that allows the government to seize private property has set off a fierce backlash that may yet be as potent as the anti-abortion movement

If you ever doubted the importance of the Supreme Court, consider the fuss about Kelo v New London. The five-to-four ruling by the court on June 23rd, apparently giving the government the power to bulldoze homes on flimsy grounds, has set off fiery protests across the country.

Americans used to believe that their constitution protected private property. The Fifth Amendment allows the state to seize it only for “public use”, and so long as “just compensation” is paid. “Public use” has traditionally been taken to mean something like a public highway. Roads would obviously be much harder to build if a single homeowner could hold out forever or for excessive compensation. The government's powers of “eminent domain” have also been used to clean up “blighted” slums.

Kelo was about something different, however. A private developer in New London, Connecticut, wanted to raze some perfectly nice waterfront homes to build an office block and some posh apartments. The owners didn't want to sell. The city decided to force them to, calculating that the new development would create jobs and yield more taxes.

The Supreme Court took the city's side. Rejecting “any literal requirement that condemned property be put into use for the ...public”, Justice John Paul Stevens said it was enough that the seizure should serve some vaguely defined “public purpose” — such as those new taxes. This had nothing to do with slums or roads: instead, it massively expanded the government's power of eminent domain.

The backlash began immediately. Dissenting justices such as Sandra Day O'Connor (who retired last month) pointed out what extraordinary powers the court had just granted the government. “The spectre of condemnation hangs over all property,” she wrote. “Nothing is to prevent the state replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”

If people can be evicted to make way for others who might pay more taxes, added Clarence Thomas, the court's only black justice, it is not hard to predict who the most likely victims would be. “Urban renewal”, he noted, has sometimes been nicknamed “negro removal”.

Seven days later, by a ten-to-one margin, the Republican House of Representatives passed a motion disagreeing with the court. A constitutional amendment to overrule Kelo is before the House, while a bill that would have a similar effect is before the Senate. Delaware, Alabama and Texas have already passed laws restricting the government's power to grab private property. Legislators from two dozen other states have either proposed similar bills, or promised to do so.

Meanwhile, a grass-roots movement has arisen to keep other people's hands off private homes. Libertarian groups such as the Institute for Justice, which were campaigning against eminent-domain abuse before Kelo, report an upsurge in support, both moral and monetary.

Property grabs on behalf of private developers have been common for some time: the Institute for Justice documented some 10,000 threatened or actual cases between 1998 and 2002. Several cities, including New York, claim that without eminent domain they could never have cleaned up their shabby centres; you could not have created the big spaces that modern retailers wanted at Times Square without forcing small shops to sell.

Since Kelo, the law may have shifted in favour of the men with the bulldozers, but public opinion has swung sharply the other way. Polls suggest that 90% of Americans disapprove of the kind of seizures allowed by Kelo. Such is the anger that some developers say they are shunning even the kind of eminent-domain seizures that would have been legal before Kelo.

Property-owners fighting against local government have been buoyed by the backlash. In the town of Ardmore, Pennsylvania, for example, a small group of businessfolk received letters last year informing them that their shops were to be demolished to make way for a new development including apartments and a parking garage.

Their story is typical of the cavalier fashion with which eminent domain has been used, even before Kelo. Ardmore is part of the township of Lower Merion: its board of commissioners had decided that Ardmore's central thoroughfare needed sprucing up. They had some federal funds to build a new railway station, and they decided it would be nice if more commuters could live nearby so they could walk to the station. But instead of offering to buy out the people whose businesses would have to be demolished, they simply told them they would have to move.

“It was devastating,” says Eni Foo, whose Chinese restaurant is on the list. “I've been in the United States since 1963. I came as a graduate student and stayed because I love America. I always believed America [respected] individuals' rights.”

The local government had declared the area “blighted”. But a brief walkabout reveals that it is no more blighted than the potato you ate for lunch. A couple of shop fronts are a bit tatty, but otherwise it looks fine. Indeed, the district has been officially designated “historic”, since much of it was built in the 19th century. The condemned properties include a second-hand shop that supports the local hospital, a club for veterans of foreign wars and Scott Mahan's stationery shop, which has been in his family since 1926.

“I'm not an activist,” says Mr Mahan, “but the more I read about it, the angrier I got. If they were going to do it the American way, they'd negotiate with everyone until everyone was happy. But using eminent domain is totally different.”

Mean streets
Those who are uprooted under eminent domain must be given fair compensation. But if they have no choice but to sell, it may be hard to determine what a fair price for their property is. Developers who know the sellers have to sell will surely be tempted to “lowball” their offers.

The question is not whether the development plan is good or bad. (Some say it will make Ardmore prettier and less congested; others that it will make it uglier and more yuppified.) What matters is whether the plan represents such a pressing public good that it is reasonable to use the state's vast coercive power to execute it. For most Americans, Interstate-95 passes muster, but yuppie condos don't.

The merits or otherwise of the Ardmore plan have been obscured by the protests it has provoked. The “Save Ardmore Coalition” now has 1,000 members — not bad for such a small town. Its members have linked up with national groups such as the Institute for Justice. And since Kelo, state and national politicians have started to take an interest. The Pennsylvania legislature is considering a bill to curb the abuse of eminent domain. Mr Mahan is going to testify.

Lower Merion's board appears to be retreating. Matthew Comisky, its president, admits that it was a mistake to send out those letters summarily telling shopkeepers they were to be evicted. He says that no final decision has been made as to whether to invoke eminent domain. The plan must first undergo an environmental audit, he says, and the board will not be able to vote on a final plan until next year. He denies that the protests have prompted the board to change tack, but admits that the protestors “have done a good job of publicising themselves.”

Small-government conservatives hope that Kelo will prove to be a tipping point. “Twenty years from now, people will look back at Kelo the way people look back at Roe v Wade [the 1973 Supreme Court decision that barred the states from banning abortion],” says Grover Norquist of Americans for Tax Reform, a lobby group.

Before Roe, state legislatures were legalising abortion one by one, without provoking much protest. Roe galvanised pro-lifers by suddenly making (fairly unrestricted) abortion legal everywhere in America, and by doing so in a way that many still regard as illegitimate. The majority judges decided that the constitution contained a “right to privacy” which, though not mentioned anywhere in the text, allowed any woman to abort her foetus in the first trimester.

The Kelo ruling was less convoluted, but its opponents think it equally unconstitutional. Mr Norquist calls it both “outrageous” and “manna from heaven”, since the property-rights movement it spawned will be at least as electorally significant as the anti-abortion movement. It will be worth 3-5% of the vote, he predicts.

Meanwhile, it has trebled Mr Comisky's workload. Since he also has a full-time day job as a lawyer, this means he hardly sees his family. “Last night I put my son to sleep at 9pm and got up 3am,” he says. He adds that he will not seek re-election when his term expires

The Economist: www.economist.com