Trustees OK use of eminent domain: Lincolnwood (IL) Review, 11/24/05

By Mike Isaacs

The owner of Value Transmission on Dempster Street criticized the Village Board Nov. 7 for authorizing the use of eminent domain to acquire property occupied by his business.

Avery Tarshis said his Value Transmission store at 4829 Dempster St. is a "viable business" and the property should not be acquired by Skokie.

"My business has been predicated on being on this corner for years," said Tarshis. "It's a business that's constructive to the people of Skokie. Is taking this property away good for Skokie or good for a developer?"

Village officials maintain that upgrading the area now officially known as the West Dempster Street Business Redevelopment District is good for the village. The village has not been in contact with any developer and maintains its only motivation is to improve the area.

Village Manager Al Rigoni said that the village will offer to find another location for Tarshis' business and to help pay some of the relocation costs, a common concession from Skokie for such cases.

"We're under no obligation, but we would want to do that because it's the right thing to do," Rigoni said. "We're not trying to hurt one of our businesses. We will try to accommodate the business owner in every way we can. We have even told the property owner that we're flexible on when the tenant were to move."

In addition to the 4829 Dempster St. property, the village is seeking adjoining property at 4801 Dempster. That property has been vacant for about four years. Rigoni said that the vacant property is difficult if not impossible to develop individually as evidenced by the four-year vacancy.

Village Attorney Patrick Hanley said the village would like to see a mixed-use development — commercial and residential — for the properties, which is in keeping with its vision for west Dempster Street. But the only way it's feasible to do so, he said, is for both properties to be available together.

Trustees approved a final resolution last week authorizing the village to acquire the properties at the southeast corner of Dempster Street and Niles Center Road by eminent domain if a settlement can not be reached.

But Rigoni said he remains optimistic that eminent domain will not have to be used. The village has rarely acquired property through eminent domain, he said.

The village has been negotiating with both property owners, but no timeline on a settlement has been set, Rigoni said. There has been little contact with Tarshis because the process calls for negotiating settlements with the property owners before addressing the tenants, he said.

The village created the West Dempster Street Business Redevelopment District in 2002 to revitalize the business area, which had been deteriorating for years.

The village created a special-service area that includes properties on both sides of Dempster Street from Kilpatrick Avenue on the east to just west of Lockwood Avenue on the west. The entire area occupies eight-tenths of a mile.

The improvement plan calls for $3 million in streetscape upgrades — the cost of which will be shared between the village and property owners. The village has had a longtime goal of improving the west Dempster Street area.

But Rigoni acknowledges the use of eminent domain has become controversial in recent years.

The U.S. Supreme Court this summer upheld a city's right to seize property for redevelopment projects. But a bill recently passed by the U.S. House of Representatives would take away federal funding from any municipality or state that invokes eminent domain to transfer property from one private ownership to another.

Tarshis last week gave village officials a copy of a news story about the bill as he argued against the village's use of eminent domain.

"It should be used carefully and judiciously," Rigoni said. "When eminent domain is used in the context of appropriately designed projects for economic development (purposes), then it can be an appropriate technique."

Lincolnwood Review: www.pioneerlocal.com


Mayor seeks eminent domain limits : Tri-Town News (Howell NJ), 11/23/05

By Kathy Baratta

[Howell NJ] Mayor Joseph M. DiBella was expected to ask the Township Council this week to back his proposal that they adopt an ordinance that would prohibit the practice of using eminent domain to aid a private developer in Howell.

DiBella first stated his intention to draft such ordinance at a Nov. 10 meeting of the Planning Board. DiBella and Councilman Peter Tobasco are members of the board.

The mayor was expected to act on his promise at the Nov. 22 council meeting.

DiBella said he would seek to develop an eminent domain ordinance after a series of hearings in which Planning Board members who were examining the possible establishment of a redevelopment authority with oversight for a specific property in Howell heard from residents who were opposed to the idea.

After the Nov. 10 meeting, DiBella expanded on his remarks in a press release.

Referring to a recent U.S. Supreme Court ruling in a Connecticut case (Kelo v. New London) in which a divided court said eminent domain (condemnation of property) could be used to advance the projects of private developers, DiBella said, “As mayor I am deeply troubled by this decision and believe that the power of the government must be limited so that no one can take someone’s home, business, farm or land just to help a private entity.

“I want it to be the law in Howell that the municipal government can never use eminent domain to assist a private entity or developer in any way,” he said.

Tri-Town News: http://tritown.gmnews.com

Court wants eminent domain talks in public: San Diego (CA) Union-Tribune, 11.23/05

By Martin Stolz

Downtown San Diego's redevelopment arm can no longer conduct closed-door meetings to discuss eminent domain litigation, a California appeals court ruled yesterday.

Mel Shapiro, a Hillcrest resident and government watchdog, went to court in 2004 against the Centre City Development Corp. board over its practice of discussing eminent domain in private meetings.

The board advises the City Council on downtown redevelopment and planning. The council, sitting as the San Diego Redevelopment Agency, has final say on redevelopment matters.

Shapiro argued that the board's private meetings with the council's lawyers violated the Ralph M. Brown Act, the state's open-meeting law.

Superior Court Judge Richard E.L. Strauss ruled against Shapiro, finding that the board acts on behalf of the council.

The San Diego-based 4th District Court of Appeal reversed Strauss yesterday, saying the board "may not meet in closed session" to discuss the redevelopment agency's eminent domain lawsuits.

Eminent domain is the government's power to take private property for public uses.

The unanimous conclusion of the three-judge appeals panel is included in its published decision, so it can be cited as precedent in California cities with similar development corporations.

The panel said, "We are constrained by the plain language of the Brown Act to conclude that CCDC may not meet in closed session with the agency's counsel to discuss pending litigation to which CCDC is not a party."

Peter Hall, president of the Centre City Development Corp., said his board "is going to want to discuss this with counsel before we have any formal reaction or position about what it means to us."

City Attorney Michael Aguirre called the ruling "a wonderful advancement of the public's right to know."

Too many of San Diego's commissions and agencies "have forgotten that they are public agencies, and they have to conduct their business in public," he said.

Shapiro, 78, sent out an e-mail proclaiming: "I WON!"

Shapiro successfully sued City Council in 2002 for meeting illegally in private.

San Diego Union-Tribune: www.signonsandiego.com

Eminent Domain is Necessary to the Overall Function of Government: Hawaii Reporter, 11/21/05

Responding to Oped on Proposed Federal Usurpation of State and Local Eminent Domain Responsibility

By U.S. Congressman Ed Case

This addresses a recent article reprinted here with the incorrect and incendiary title: "Congressman Ed Case Votes to Take Private Property." The article, by Andrew Walden of Hawaii Free Press, disagreed with my opposition to H.R. 4128, the so-called "Private Property Rights Protection Act," which passed the U.S. House on November 3rd. This is one of those issues which, although portrayed by the author and other proponents and opponents as simple, is far more complex.

By way of background, this legislation was introduced in response to a recent U.S. Supreme Court case known as Kelo v. New London. In that case, the economically-distressed Connecticut city of New London implemented an integrated plan to redevelop ninety publicly and privately-owned acres to revitalize its blighted downtown area. While most private landowners negotiated voluntary sales to the city for fair compensation, as constitutionally required, the city exercised its power of eminent domain to acquire by eminent domain (condemnation), also for fair compensation, those properties whose owners did not want to sell. The city and owners disagreed whether the city's condemnation was for a "public use"; the Supreme Court, in a 5-4 decision, agreed with the city.

In the big picture, the power of our federal, state and local governments to acquire private properties for public uses on payment of just compensation, and the limitations on that power, have been recognized from the beginning of our country and are set forth in our federal and state constitutions. In most condemnation cases, although there may be disagreement over how much compensation is "fair" (market value), the question whether a taking is for a public use (such as land for a public highway) is not disputed because the land is to be used directly by the public.

In some cases, the question of public use may be much harder because the benefits to the public may be more indirect. For example, several decades ago Washington, D.C. redeveloped the Southwest portion of the city, then one of the worst slums in our country, partly through exercising eminent domain powers. This was much the same situation with New London, which believed that redevelopment generally would increase economic activity, reduce unemployment and crime, and revitalize the city for the common good.

The parameters of when a taking is for a public use and is therefore constitutional have been left to our courts and, since they are not set in stone and do involve takings, can be controversial. The general rule, which the Supreme Court repeated in Kelo, has been and is that indirect public use condemnation can be constitutional when it benefits the general public, but not when used to benefit "a particular class of identifiable individuals." Thus, for example, if a private company wanted to build a hotel and got government to condemn one of the lots just to get property under one owner, a taking for that purpose would not be constitutional.

My own view is that reasonable eminent domain, including some to affect more indirect public uses, is necessary to the overall functioning of government, but that it clearly should and does have its limits as already set out by the courts. I also believe that these difficult decisions are best left to the courts, who are responsible for enforcing constitutional rights and are better equipped than the legislative or executive branch to independently judge the merits of any individual case, and that, as has been the longstanding practice, eminent domain laws and guidelines are better left to the states rather than our federal government.

I opposed H.R. 4128, as it came before me on final passage, for two reasons. First, it "federalized" the law of eminent domain, and I believe this is an area of the law which should be left to individual states, as it has been for centuries, rather than usurped and standardized by our federal government through Congress. Second, it went way beyond what might otherwise have been appropriate to respond to the specific situation in Kelo and would effectively prohibit the use of eminent domain for property acquisitions related in any way to government efforts to foster economic development, which was why it was opposed by state, county and municipal governments and redevelopment agencies throughout our country.

In essence, H.R. 4128 is a well-intentioned but overbroad bill, responding to a difficult court decision, arising from a difficult set of facts. The measure is currently pending in the Senate, which thus far has not scheduled it for a vote.

I also wanted to share the attached letter I recently received from the National League of Cities offering the comparable perspective of state and local government with respect to this vote:

"On behalf of the National League of Cities (NLC), the country's largest and oldest organization serving municipal government, with nearly 1,600 direct member cities and 49 state municipal leagues that collectively represent more than 18,000 United States communities, thank you for your recent vote against H.R. 4128, the Private Property Rights Protection Act of 2005. NLC applauds your courageous position on this politically difficult issue.

"NLC acknowledges the spirit underlying this bill and does not condone abuse of eminent domain power that violates state law. However, NLC believes this bill, or any anti-eminent domain bill pending in Congress, is unnecessary at this time because of the ongoing actions of state legislatures and the absence of direct evidence confirming that alleged abuses of eminent domain authority are of a national scope and scale that demand immediate federal action.

"Again, thank you for your tremendous support on behalf of our nation's cities. NLC looks forward to future opportunities to work with you on this and other issues that impact municipalities."

Hawaii Reporter: www.hawaiireporter.com

Congressman Ed Case (D-HI): ed.case@mail.house.gov

Walls built against eminent domain: Chicago (IL) Tribune, 11/22/05

High court ruling causes backlash

By Tim Jones

The goodbyes are posted in front yards up and down Floralea Place [in Sunset Hills MO], declaring in bright orange and white lettering, "We're ready to go."

But except for a few people like Christopher McGee who, regrettably, moved out and is now paying four mortgages on two homes, no one is going anywhere because the plan to bulldoze about 250 homes in this tattered neighborhood and build a shopping mall has fallen apart.

"It's an ugly situation," McGee said.

The bitter aftermath of a deal gone sour in this St. Louis suburb has added to the rapidly growing national backlash against the decades-old, local government practice of eminent domain — condemning homes to make way for new development. In the five months since a divided Supreme Court allowed a Connecticut city to seize property for a private development, several states have lined up to ban or restrict the practice and dozens of others are expected to follow suit early next year.

The court effectively preserved the legal status quo, but the opinion — at least for the moment — has had the effect of a powerful landmark decision. Just as court opinions legalizing gay marriage galvanized a national movement claiming to protect the sanctity of marriage, the high court's eminent domain ruling has ignited a political movement and a boatload of litigation championing the sanctity of private property.

Ohio Gov. Bob Taft last week signed into law a 14-month moratorium on the use of eminent domain when the primary goal is economic development.

Legislatures in Alabama and Texas have also banned the practice, and Michigan is considering a constitutional prohibition against seizing private property for private economic development. A measure was introduced this year in the Illinois General Assembly to prohibit eminent domain for economic development, unless approved by the legislature. But the bill failed to pass before the legislature adjourned.

Angry about a plan to invoke eminent domain to build a gas station in their neighborhood, voters in a St. Louis community ousted their alderman in a recall election in September.

And in Washington, a congressional committee approved a measure that would strip all economic development-related federal dollars from any city or state that uses eminent domain to transfer private property to another private owner.

Issue has `legs'
"It's a hot-button issue and it's a non-partisan issue. And it's got legs," said Larry Morandi, an analyst at the National Conference of State Legislatures.

"So many people see this as `no house is safe.' . . . It is a gut issue," Morandi added.

Typically, eminent domain battles have been framed in David versus Goliath terms — homeowners battling private developers and city councils.

But people familiar with the workings of local government emphasize that eminent domain should not be viewed in such black-and-white terms. Sometimes the development tool is abused, ignoring the wishes of homeowners. Other times it is heralded as a vehicle to revive economically troubled areas, to the benefit of entire communities. In Sunset Hills, a southwestern suburb of St. Louis, the vast majority of homeowners in the tired neighborhood along Interstate Highway 44 supported the demolition of their modest, one-story wooden homes.

"It was a good deal for me," said Dennis Smith, a salesman. "But right now the neighborhood's a mess and everybody's in limbo."

Financing for the demolitions and creation of the new shopping mall did not materialize, so the project has fallen apart, though it's possible that it could be revived at some point. Finger-pointing is in abundance. Some residents blame the city. Others blame the developer, Novus Development Co., which in turn blames the owner of a nearby shopping mall for filing lawsuits against the project.

Phillis Hardy, a local accountant who said she had no intention of moving, is delighted the deal collapsed.

"You reach a point where the area becomes saturated with retail and there aren't enough homes," Hardy said.

Blame is not on the mind of McGee, a 27-year-old junior high school science teacher who has four mortgages — one on each of his two homes, plus a bridge financing loan and a home improvement loan. "At the end of the month I have $13 left after I have paid my [mortgage] obligations," he said.

"I don't think the blame can be placed on just one person," McGee said, pointing to the developer, the city and the poor communication all around.

Missouri Gov. Matt Blunt has appointed a task force to address eminent domain issues. But a one-size-fits-all answer does not seem imminent. The U.S. Supreme Court was sharply divided, with the majority saying promotion of "economic development is a traditional and long accepted governmental function." But Justice Sandra Day O'Connor, in her dissent, warned 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," O'Connor wrote.

Eminent domain supporters warn that prohibiting condemnations for private development will provoke more urban sprawl and the economic decline of established communities.

Reversal in Michigan
In Michigan, where the state Supreme Court authorized in 1981 the demolition of more than 1,000 homes, businesses and churches to clear the way for a General Motors assembly plant in Detroit, legal opinion is shifting. The court last year effectively reversed itself by forbidding condemnations that transfer property to private owners for economic development.

The issue is expected to come into sharper focus in January, when most state legislatures come back into session, Morandi said.

Paul Farmer, executive director of the Chicago-based American Planning Association, welcomes a legislative review of eminent domain "so that the potential for abuse can be minimized." But he also worries that "laws will be enacted in kind of a knee-jerk fashion, laws that go beyond what is necessary."

Chicago Tribune: www.chicagotribune.com

Jaxport exercises eminent domain: Jacksonville (FL) Business Journal, 11/20/05

By Tony Quesada

The Jacksonville Port Authority has begun the process for taking about 90 acres by eminent domain.

The Jacksonville General Counsel's Office on Nov. 14 filed a petition for condemnation in circuit court on the former Jefferson Smurfit Paperboard plant property north of the authority's Talleyrand Marine Terminal.

The authority is pursuing a slow take, an exercise of eminent domain power in which a property's value is determined — possibly through a trial — before the governmental entity assumes title. The process allows the entity to walk away if the price is deemed unacceptable.

The property owners, Jax Maritime Partners LLC, have 20 days after being served to respond.

But Jax Maritime Partners, which is jointly managed by Jacksonville's The Haskell Co. and Evergreen Paper Co. in New Hampshire, isn't the only company involved.

Jacksonville Assistant General Counsel Bruce Page said the petition was also sent to Keystone Industries LLC, a coal company that announced in October plans to develop 61 of those acres into a bulk materials handling terminal. Keystone has signed a purchase agreement with Jax Maritime Partners.

"We have to serve everyone with an interest in the property," Page said.

Keystone President Tom Scholl said the company was aware of the port authority's interest in the property and had already retained eminent domain lawyers. He declined to comment further.

In May, the port authority's board authorized staff to initiate condemnation so it could assess environmental impact.

The port authority had hoped to buy the property to lease to Mercedes-Benz USA so it could consolidate its vehicle processing operations in the Southeast. But the automobile company has yet to decide where it wants to consolidate, and the port authority has since had to forfeit a low-interest state loan earmarked for the project.

Nevertheless, the port authority said it is still interested in the property and has received proposals from several potential tenants.

One sticking point, however, was that the owners asked the authority to indemnify them and the previous owners for any environmental problems that might be discovered.

Port officials said they can't do that legally and that they would need to investigate the site. The board authorized staff to initiate a slow taking in order to access the property to do so.

The authority is essentially out of waterfront land after Japanese ocean carrier Mitsui O.S.K. Lines Ltd. committed to building a 158-acre terminal on Dames Point. The authority says it needs such land to further its mission of creating economic development.

"It's very important for us to get the Smurfit property," said Roy Schleicher, port authority senior director of trade development and marketing.

But Keystone also said its project will stimulate the economy. The company plans to build one or two deep-water piers, conveyor systems and storage buildings to handle its coal and other companies' bulk cargoes. It estimates its project will involve a $20 million-plus initial investment and will create 60 jobs with an average annual wage of $45,000.

Jacksonville Business Journal: www.amcity.com/jacksonville

Eminent domain didn't dominate: Asbury Park (NJ) Press, 11/21/05

Wasn't a major factor in results of campaigns

By Carol Gorga Williams

At a recent [Long Branch] City Council meeting, where talk of eminent domain again dominated the public session, part-time resident Harold Bobrow rattled off some recent favorable events for his side.

The House of Representatives has voted overwhelmingly to deny federal funds to communities that use eminent domain for economic development, and closer to home, Bogota, in Bergen County, has voted in a nonbinding referendum against the use of eminent domain.

"You've heard it here again: You feel what you're doing is the right thing to do, but take under consideration all that is going on right now," said Bobrow, who could lose his vacation home in Beachfront South if redevelopment proceeds there. "All these things are happening right now."

But there was another dynamic in play during Election Day closer to home. Eminent domain did not appear to be a determining factor in a number of races.

In Neptune, where people campaigned heavily against Mayor Thomas J. Catley for his position on redevelopment, he held off a challenge from Democrat Ava Johnson. Catley has said eminent domain is a tool but one he hoped he would not have to use in the redevelopment of West Lake Avenue.

Johnson, meanwhile, had called for a moratorium on the use of eminent domain and argued that the original West Lake Avenue redevelopment plan would have let residents stay in their homes, with new development to have been built around them.

Johnson, who said her campaign did not spend money on signs linking the mayor with eminent domain, said Catley succeeded because big money won out.

"I believe the developers also had a hand," she said.

Meanwhile, in the 11th District, which includes Neptune, Long Branch and Asbury Park, the three towns where eminent domain is emerging as an issue, Republicans won re-election to the Assembly. Their Democratic opponents had made fighting what they called eminent-domain abuse a top priority.

In the 12th District, Democratic Assemblyman Michael J. Panter narrowly won re-election while his running mate, Assemblyman Robert L. Morgan, did not. Panter and Morgan had introduced anti-eminent domain legislation in the Statehouse.

Panter's victory came from Mercer County votes, not Monmouth County ones, while the 11th District Democrats, Matthew J. Doherty and Jim Reilly, captured the majority of votes in typically Democratic towns such as Long Branch.

Other concerns
Bobrow said he doesn't think people should read too much into the failure of the anti-eminent-domain candidates.

"People vote for people not on one single issue," Bobrow said. "It was an extremely important issue, but people just don't vote for someone on a single issue."

Bobrow said action in the House — the bill heads to the U.S. Senate now for consideration — is part of the "upheaval" going on in the country in the wake of a recent Supreme Court decision that upheld the use of eminent domain for economic development projects.

"If it wasn't for this upheaval . . . none of this would be going on," Bobrow said. "There were some defeats, but that may not have been the sole issue why these people were defeated. I feel this is a strong issue for me and a lot of other people."

William Giordano, whose family has owned a home in the proposed second phase of Beachfront North in Long Branch — also known as the Marine Terrace-Ocean Terrace-Seaview Avenue area or MTOTSA — said he believes the closeness of the races shows eminent domain resonates with voters.

"The way I look at it, the fact they were against the use of eminent domain made it a close race," Giordano said of the Democratic races for the Assembly. "We all know Monmouth County is a Republican area, more so than a lot of other counties in New Jersey."

"Poster child"
Long Branch Mayor Adam Schneider — who has been roundly criticized, primarily by MTOTSA members, for his support of eminent domain as what he called a necessary tool for redevelopment of distressed urban areas — described himself as the "poster child" for the anti-eminent-domain movement in a speech Wednesday in Atlantic City in a State League of Municipalities-related event sponsored by K. Hovnanian, a developer with ties to Long Branch.

Schneider is up for re-election in May, and said during the speech that he intends to seek another term. He recalled the redevelopment was an important issue when he first began his public life. He told people then it would be a 15-year process.

"I realized when you've got a four-year term, a 15-year plan is a problem," Schneider said in Atlantic City.

"I definitely want to (run) one more time because there is too much work up in the air."

Schneider talked about how his other campaigns have focused on redevelopment, and even though eminent domain was a part of that, he did not generate the amount of controversy it has since MTOTSA came on the scene.

He said in 1998, when redevelopment was an issue, he won re-election with 70 percent of the votes. Four years later, the same thing happened. "Six months from now, I'm going to run again," he told the crowd at Bally's Park Place. "I don't know if the Institute of Justice is going to fund the campaign against me, but I can live with that."

The Institute for Justice is a nationwide group fighting eminent domain. It has been advising eminent-domain opponents in the city.

"We've taken a city where the crime rate was a major issue in my first term," Schneider said. "In the last 11 years, the crime rate has gone down every single year, and now I have 100 cops," referring to the city's decision to continue to fund salaries of police officers who were initially hired with federal grants.

"We're talking about a town where you can walk anywhere," said Schneider, who added that portions of the oceanfront were not safe before redevelopment.

Emerging issue
Avery Grant, who ran against Schneider in 2002, also focused on redevelopment as an issue. He said he ran, in one sense, so Schneider would not be unopposed in the election. But he also said he had ongoing concerns about the amount of affordable housing being generated by redevelopment. Grant said he will not run again in 2006.

Grant said he believes the issue will dominate in the May race because by then, the city will likely be actively in court, defending its decision to use eminent domain in the MTOTSA area.

"The thing is going to be a national issue," Grant said. "My problem with the publicity is we've got to show there are two major players in it: the city and the developers. We have not pinpointed the developers are just a part of it. They are just as much bad players as the city is in displacing people."

Schneider, who noted he has not taken campaign contributions from any builders involved in the city's redevelopment, said eminent domain has only been used in between 8 and 10 percent of the cases.

He said the redevelopment process, which he said was "open and transparent," has deteriorated because "it fits so well into sound-bite journalism and sound-bite politics. If you're against what we're doing, you can sum up in 10 words or less why you're against it. On the opposite side, it gets complicated."

Asbury Park Press: www.app.com

Some owners may want eminent domain: North County Times (Escondido CA), 11/19/05


By Iris Siefert, Escondido CA

The Escondido Union High School District's recent set of five new school sites in suburban neighborhoods has met with the usual resident opposition.

Board members must now be tired of this search and its angry public debates, irate e-mails and press coverage of countless negative critical comments. Most of them probably joined the board hoping to focus on improving Escondido's educational system. Yet year after year, front-page news focuses around this bitter, emotional site search. They clearly have other important issues on which they need to concentrate.

Three years ago, when this search started, several of us suggested that the board appoint a citizen's task force to specifically attack this site issue. Some board members said that they would do so when the time came.

Is that time now? The five new sites are again in American dream neighborhoods. These are owner-occupied, wonderful places with single-family homes, low crime rates, and room for gardens, kids and dogs. Over the years a number of speakers have said that if eminent domain must be used, why not look at troubled inner-city neighborhoods rather than beloved suburban ones?

Three years ago district administrators told me that some people actually like to have their properties taken by government. I was told that business owners and landlords are often happy with it because not only do they receive market value, but they also get lost-income revenues and huge tax benefits. Tenants get not only a lump-sum relocation allowance but, if paying less than market rent, also can get an additional payment covering a number of months rent differential. This can sometimes be a good deal for them as well.

Redevelopment of an urban neighborhood is expensive, but perhaps less so than building a highway ramp to the Dorn site (at Del Dios Highway and Via Rancho Parkway). One of the speakers a few months ago even mapped out a possible 50 acres in a crime-ridden area off 9th Avenue. Task-force members could meet with owners and tenants in a few locations to provide compensation rights information and assess the degree of resistance and/or cooperation in the neighborhood. This would all be done with volunteer time and without the acrimony of the public meetings.

This search has dragged along and torn the community apart for well over three years. Perhaps a task force could do no better than what has transpired so far. But considering what is at stake, isn't this effort worth a try? Do we really want a school where suburban homes sit now or on the Dorn land? Let's let those community volunteers who feel vested in this search have a shot at the problem while freeing the board to focus on educational issues.

We have the best site for a new, state-of-the-art high school to possibly gain. What do we have to lose?

North County Times: www.nctimes.com

Eminent domain debated: Davis (CA) Enterprise, 11/18/05

By Elisabeth Sherwin

Superior Court Judge Tim Fall made one thing perfectly clear on the first day of Yolo County's eminent domain hearing: He is not interested in whether eminent domain is a good thing or a bad thing, only whether it is legal.

“The court's job is to decide whether the law allows the taking,” he said Thursday, addressing attorneys and members of the public gathered in his courtroom.

“This is not an issue of wisdom but law,” he added.

Fall made it clear he did not want to decide on the wisdom of eminent domain, the right of government to take private property for public use.

“This court runs screaming in the other direction from attempting to do so,” he said.

With that, Fall dispensed with opening statements from the attorneys and spent the morning ruling on nine motions that will help shape evidentiary and other matters connected to the case. The case was scheduled to continue today.

The issue to be resolved is the right of Yolo County to take a 17,300-acre piece of property known as the Conaway Ranch, which is west of Sacramento between Davis and Woodland. The ranch is privately owned by a group of Sacramento developers and investors headed by developer Steve Gidaro. Gidaro says he does not want to sell his land.

Defendant Gidaro was present in the courtroom all day Thursday.

“It's interesting, I'm learning a lot,” he said during a break.

Attempts to reach a settlement before going to trial were not successful.

Supervisors Helen Thomson of Davis and Mike McGowan of West Sacramento and County Administrator Sharon Jensen are listed as witnesses for the plaintiffs but were not in the courtroom.

Attorney Stuart Somach and co-counsel Kirk Trost are representing Yolo County, and attorney Gary Livaich and co-counsel John Feser are representing the Conaway Preservation Group.

Those who did not already know that Fall keeps a tight rein on his courtroom learned quickly.

When Fall asked Feser a question, Feser started to reply by saying, “You put me on the spot ...”

Fall quickly said: “The statement that the court has put you on the spot can be interpreted as a criticism; rephrase.” Feser did so.

The county says it wants to buy the land to preserve status quo and prevent it from being developed. With the land come valuable water rights from the Sacramento River.

The county has said the protection of the water resources is a health and safety issue; likewise, the flood control benefits the ranch has to offer is a health and safety issue, the county argues.

“The court is hoping for more evidence than a staff person writing in a report that if someone buys (the ranch) they might sell (the water),” Fall said. “It needs credibility.”

During the afternoon hearing, Somach walked the judge through the administrative record detailing for him, page by page, the various health and safety issues authorities say would be remedied by the eminent domain action.

Somach said he was troubled by the suggestion that he had to show an imminent threat to water rights or flood control options before invoking eminent domain.

“This notion that somewhere there has to be a threat - I don't know where that legal standard is,” Somach said. “It's enough to say that keeping water in the county is important and flood control is important.”

“I will put the defense to the test of supporting what they have proffered,” Fall said.

The hearing was scheduled to continue at 9 a.m. today, with the defense presenting its case.

The county filed its intention on July 8, 2004, to acquire the property through eminent domain by forcing the owners to sell. Gidaro and his partners bought the property in December 2004 for $60 million.

In an earlier interview, Gidaro said he and his partners could realize a return on their investment without developing the ranch land. The county is worried that Gidaro would do that by selling water.

“Water is the most significant issue,” Supervisor Thomson maintained earlier. “It is the main reason we got into this. People should be very worried about having water sold out of county.”

The county has maintained that if it buys the property, it will protect status quo while the property is managed through a Joint Powers Authority.

To that assertion, Gidaro asks: “Why is it necessary for the county to take my land and continue doing what I'm already doing?”

In anticipation of acquiring the ranch, a Joint Powers Authority has been formed, which includes representatives from the county's four cities, the county, plus UC Davis and the Yolo County Flood Control and Water Conservation District.

The Rumsey Band of Wintun Indians has agreed to finance the purchase of the ranch for the county.

Although a legislative effort was made to give the tribe a seat at the JPA table, Gov. Arnold Schwarzenegger vetoed that bill last month.

Davis Enterprise: www.davisenterprise.com

Ethical domain: Stillwater (OK) News Press, 11/15/05

Letter to the Editor

By Ted Nelson, Stillwater

The meeting held by OSU [Oklahoma State University] officials Nov. 10 for residents of Stillwater was predictably attended primarily by residents of the some 400 houses in the area pictured in the Nov. 5 News Press as property required for an expanded athletic complex.

They were obviously scared as hell over what might happen to them with the confiscation of their homes, the destruction of their neighborhood and the uprooting of their very lives.

Most of them had been oblivious to the planning process which had been going on for months, despite the affirmation of the presenters that some 20 “public” meetings had been conducted in a careful process of developing the plan presented.

This was happening soon after the highly-publicized and fractious Supreme Court case regarding the Connecticut eminent domain action versus homeowners.

Matters were (as is often the case in these kinds of efforts) made worse by numerous rumors and assumptions about how and when the acquisition of property by OSU would take place. There had been stories (undocumented) circulating over the weekend about heavy-handed takeovers with stingy compensation and sudden eviction of owners of recent taking of tracts by the university.

This disturbed crowd was then subjected to 90 minutes of a professional tutorial on campus planning which, at this time in their disturbed lives, was of tertiary interest, at best; and possibly demeaning.

These people who have lived much of their lives in the houses being taken were much afraid they were being had. The process which could be taking place is imagined something like this. 1. Public announcement to the real estate world that these homes are doomed. 2. Property values erode. 3. Appraisals are made at “Fair Market Value” 4. The choices appear to be: (A) Accept what is offered believing that it will be far from adequate to even buy an equivalent property (which will be extremely difficult to find in this city. Or (B) Enter expensive litigation which could result in eviction long before the outcome is determined, but certainly at risk of substantial legal costs and an unknown outcome.

Some of these troubled folks are of a mind to stop it. They cannot see how the “public good” is served by awarding their homes to use by transient athletes. They are hoping for ways to prevent the taking of their neighborhood. This posture is understandable, but the chances of this endeavor succeeding are practically nil. What the state wants, the state will get. But ALL U.S. citizens are entitled to “Fair and Just Compensation” when their property must be taken for the “public good” as determined by elected and appointed officials.

Fair and just compensation has not always been provided in all other cases of eminent domain, but citizens of Oklahoma in general and OSU fans in particular have a moral obligation to see to it that those who now live in and/or own property taken here are fully compensated, not just for the “fair market value” of their real estate but to provide for better housing in a better neighborhood, moving expenses and something for this major disruption of their lives.

This manner of compensation will be expensive. OSU might have to either search out more donations or scale down the area to be taken for some years. But neither the university nor the city nor the state can benefit in the long run by abusing the eminent domain privileges to treat some citizens in a cheap or shoddy fashion.

Stillwater News Press: www.stwnewspress.com


Perryville case avoids use of eminent domain: Rockford (IL) Register Star, 11/17/05

By Pat Milhizer

Taxpayers would spend $475,000 for the last piece of land needed to extend Perryville Road under a proposed deal reached Thursday.

Attorneys for Machesney Park and Winnebago County agreed to the proposal in court with Nebahat Olcher, who owns 12.3 acres at 8122 Mitchell Road that the county threatened to acquire through eminent domain.

The county plans to extend two lanes of Perryville about two miles north from ShowPlace 14 in Machesney Park to Swanson Road. Construction, estimated at $2.8 million, is expected to begin next summer and finish next fall.

Negotiations with Olcher began in October 2003. According to the settlement, Olcher and her son would receive $366,816.16. Olcher was represented by Robert Fredrickson and Jack Ward of the Reno Zahm Law Firm, which would get $108,183.83.

Initially, Olcher requested at least $1 million for the land, but a county appraisal put the value at $419,101. If the case would have reached an eminent domain trial, a jury would have decided how much money Olcher would have received.

In all, the payments equate to about $38,617 per acre.

Excluding Olcher’s property, the county has paid an average of about $22,724 to acquire the other 42.3 acres to extend Perryville from Illinois 173 to Swanson Road.

Before Thursday’s settlement was agreed to in court, Fredrickson and Ward withdrew from representing Olcher.

The attorneys took issue with a statement Olcher filed in court without their knowledge, saying the statement contained false and defamatory comments.

Olcher filed the document, dated on Oct. 29, saying she didn’t understand another $475,000 settlement she signed on Oct. 26. The statement says that Fredrickson and Ward used Olcher’s “emotional stress to their benefit” so she would sign a deal she never intended to sign.

Olcher’s statement also said she is “innocent” and a minority who can’t read English easily.

As part of Thursday’s deal, Olcher denied in court that she said that the attorneys had “cheated” her. She made that statement to a Rockford Register Star reporter last week.

The settlement is subject to approval by the County Board, which meets Tuesday.

But Machesney Park would pay the cost due to an agreement between the village and county. The county has to pay the cost up front, and the village would pay off the debt without interest in $150,000 annual installments.

Rockford Register Star: www.rrstar.com

Town-church property rift up to federal judge: Rochester (NY) Democrat and Chronicle, 11/16/05

By Fernando Diaz

A federal judge on Tuesday heard arguments over a motion to dismiss a lawsuit that alleges Brighton's eminent domain of a church's land restricts the church's right to practice religion.

U.S. District Judge David Larimer said that he would issue his decision "very soon."

Faith Temple closed on the purchase of 66 acres of land along Westfall Road near Winton Road to build a religious complex on July 15, but Brighton wants the land to expand the adjacent Buckland Park.

The town initiated eminent domain proceedings shortly thereafter, because by then it was prepared to pay for the parcel with voter-approved bonds.

Faith Temple countered by filing lawsuits in both federal and state courts.

In May, the church lost its fight in the state Supreme Court, which ruled that the church failed to prove the town was attempting to limit the church's exercise of religion.

So far, Larimer has allowed the church to finish its purchase of the land and kept Brighton from fully undertaking eminent domain proceedings.

The state ruled on constitutional grounds and could not issue a ruling on a federal statute, which is where the case is currently being contested.

Brighton's attorneys said Tuesday that Faith Temple's argument is based on a statute enacted by Congress that does not apply to the law of eminent domain procedure.

Attorneys for both sides agreed that the Religious Land Use and Institutionalized Persons Act, passed in 2000, codified provisions guaranteed by the Constitution intended to protect religious exercise.

But William Bauer, who represented Brighton, said the law specifically referred to "land use regulation," such as zoning or landmarking laws, and a government's eminent domain powers are neither.

But an attorney for Faith Temple cautioned Larimer that he could set a dangerous precedent by throwing out the lawsuit.

"It would be ironic for the town to do by condemnation what it could not do by zoning," argued David Cook, who represents Faith Temple.

Cook argued that the Religious Land Use Act was intended to protect religious organizations from governments specifically targeting them. Dismissing the lawsuit could allow municipalities to circumvent its intent in the future, he said.

Brighton Supervisor Sandra Frankel said the town is "confident that Judge Larimer will give this matter his thorough and thoughtful consideration."

Democrat and Chronicle: www.democratandchronicle.com

Mayor sees developing problem in Ventnor: The Press of Atlantic City (NJ), 11/21/05

By Michael Pritchard

Ventnor Mayor Tim Kreischer has only to look to neighboring Atlantic City's Southeast Inlet to see his biggest fear for his city. Or rather, it's what he doesn't see - a big shiny casino with the MGM Grand logo on it.

Kreischer sees a parallel between the nonexistent casino - which was proposed, but never built because MGM-Mirage could not acquire the land - and Ventnor's redevelopment plans. Last week, the principal developer in the city's plan to redevelop its northeast section, Pulte Homes, backed off from the project, citing the high cost of land acquisition and a reluctance to turn to eminent domain, which has become increasingly unpopular in the country.

Suddenly, Kreischer is seeing the same "what might have been" in Ventnor as he sees in the Inlet.

"There's a lot of people who feel that MGM would be in the Southeast Inlet right now if they hadn't had the problems they had with acquisition," Kreischer said. "Dealing with land speculators who drive up prices is one of the reasons that you have eminent domain involved with these types of redevelopments. Without it, it's going to be very difficult for any municipality to put forward a redevelopment plan."

And for right now, Ventnor is without it.

Ever since the U.S. Supreme Court ruled in June that New London, Conn., was able to legally seize houses in a middle-class neighborhood through eminent domain and turn them over to a private developer, a backlash against eminent domain has swept the country. Several state legislatures, including New Jersey's, are working to curb municipality power to use eminent domain as have several bills in Congress.

In New Jersey, a proposal has been made to place a two-year moratorium on using eminent domain.

Ventnor is now faced with trying to salvage it's own redevelopment plans in that climate.

"One of the things people don't always realize is that I disagreed with the Supreme Court decision," Kreischer said. "Land shouldn't be taken just because you can find a better use. But I've always said that I don't think it applied to New Jersey. The state has a very stringent set of criteria for proving that an area is depressed and in need of redevelopment. And I think we met that standard every step of the way."

However, telling people that their homes are blighted, even if it meets court standards, is always going to be an emotional issue.

"I don't think politicians ever understand the passion they ignite when they try this," said Richard Gober, who led a legal challenge to Ventnor's redevelopment plan. Though the challenge failed in court, it delayed the project nearly four years, enough time for both land values to rise in the area and eminent domain to come under attack.

"These are people's homes," Gober said. "It doesn't matter if you have a $50,000 house or a $500,000 house. It's their home and people want to be safe in their homes. If you come in and try to just take them, people are going to get their backs up and fight.

"And that's what we did," Gober said. "It's just unfortunate that we had to wait until there was a national outcry against eminent domain to win, but it's wonderful that for the moment, people's homes are safe."

But eminent domain can still be a very instrumental part of redevelopment. Kreischer can point to projects in Atlantic City, where almost 2,000 properties have been acquired over more than 10 years for projects such as rebuilding the city's Northeast Inlet, The Walk and for infrastructure improvements for the Borgata Hotel Casino & Spa. Many of the properties were acquired through eminent domain.

Jim Whelan, who was mayor of Atlantic City during the beginning of many of those projects, understands the dual nature of using eminent domain. During his recent successful run for state Assembly, Republicans attacked him for using eminent domain. At the same time, Whelan could point to the success of those projects in the campaign.

In the end, Whelan won his seat, including winning the vote count in Ventnor.

"I've said all through the campaign that there is a lot of grandstanding going on," Whelan said. "Eminent domain isn't new. It's been around forever. And the New London decision didn't change anything. Politicians that are making an issue of this are just pandering. The state has put in sufficient safeguards to make sure it isn't used too broadly."

Whelan, who advised Ventnor on redevelopment issues, however, stressed that eminent domain will always be an issue that causes political divisions.

"There are always differing opinions on projects, but I think anyone who has ever considered using eminent domain has thought about using it only as a last resort," he said. "It's an emotional issue and it can throw people into turmoil. No one wants to use it lightly and move people out of their homes.

"But at the same time it's a necessary, if difficult, tool for redevelopment," Whelan said. "This is a political climate right now which could kill the redevelopment hopes of cities like Newark and Camden. We were lucky in Atlantic City to get a head start on this. But for officials in those towns, if this attitude continues, it could severely handicap any plans they have."

In the meantime, Ventnor officials are hoping that they can salvage some of their redevelopment project. Although Pulte Homes has backed out of a major redevelopment, Kreischer hopes they can still be involved in a smaller scale project.

However, whether the city will be able to look to eminent domain for an assist will depend on whether opposition to eminent domain remains high and the state Legislature approves the moratorium.

"Things could go two ways," Kreischer said. "This could stop any redevelopment project people are considering, including ours, and nothing gets done. Or communities could just go forward, but without eminent domain they are going to have to pay speculator's prices. Maybe they'll pay four times what a property is worth to put together these projects and it will just cost everybody a lot more money."

The Press of Atlantic City: www.pressofatlanticcity.com

A Pre-emptive Strike in Eminent Domain Battle: New York (NY) Law Journal, 11/16/05

By Terry Sheridan

A prominent redevelopment group is fighting a high-stakes battle to keep control over the use of eminent domain by proposing changes in Florida's takings law that are friendlier to property owners.

In an attempt to blunt a statewide backlash, a bill by the Florida Redevelopment Association [FRA] would reassure property owners that government agencies could seize property through eminent domain only as a last resort.

The Tallahassee-based consortium primarily of municipal redevelopment officials and planners is proposing to give property owners advance notice of condemnation hearings and as much as 150 percent of the government-appraised value of their land.

Currently, property owners get no notice of hearings and only the appraised value of their land. But critics say the proposal is merely a token effort and that the bill is unclear about how much deference property owners would get before losing their land.

The FRA proposal comes as a special state House committee narrows its focus on issues generated by a U.S. Supreme Court ruling that strengthened government's ability to take properties. In the Kelo v. New London, Conn. decision last June, the U.S. Supreme Court backed the use of eminent domain for private development.

The redevelopment group released the measure last month at its annual conference in St. Petersburg.

"The efforts of FRA are to give as much protection to property owners as possible but still maintain the right to use eminent domain," said Jeff Oris, president-elect of the association and government operations director for PMG Associates in Deerfield Beach.

But attorney Amy Boulris of Brigham Moore in Miami, who specializes in property rights litigation, said the group's proposal gives "only a nod to the concerns of property owners. It's not the real remedy that they want people to believe it is."

The legislative battle began to take shape shortly after the release of the Kelo decision, in which the justices urged state legislatures to take up the issue of takings for private use.

Lead plaintiff Suzette Kelo was one of the Connecticut homeowners whose properties were targeted by the city of New London for use in a project to complement a nearby Pfizer Inc. facility.

The justices voted 5-4 in favor of New London, saying the power of eminent domain could be used for private economic development. But the opinion also said that states could craft their own laws on the subject.

The ruling set off a firestorm of opposition. Florida is among many states considering measures to limit the use of eminent domain and to better define conditions such as blight that would lead to takings.

Florida's eminent domain law allows municipalities and other governments to target property in blighted areas. But the definition of blight in Florida is considered among the loosest in the country and can be liberally applied. For example, the law says faulty lot layouts and inadequate mass transit can characterize an area as blighted.

At the federal level, the U.S. House of Representatives voted last week to withhold federal funding from local governments that use eminent domain for private economic development.

U.S. Sen. Bill Nelson, D-Fla., has co-sponsored a similar measure.

In Florida, property takings will rank among the Legislature's biggest issues in the upcoming session beginning in March, said state Rep. Jack Seiler of Pompano Beach.

Seiler, a member of the House Select Committee on Private Property Rights, expects that a committee bill will emerge from a series of hearings.

"We can craft a good compromise but everyone will have to move -- eminent domain lawyers, community redevelopment agencies, cities and counties," he said.

The FRA has its own fix. Its proposed bill helps frame the argument of government in the oncoming debate. The FRA bill would require:
  • Agencies to determine after a public hearing that a taking is essential to achieve the redevelopment plan.
  • Negotiations and "all other means" be exhausted in purchase attempts.
  • The owner receive a written offer for at least 125 percent of the appraised value at least 30 days before a condemnation.
  • Governments to pay at least 150 percent of the appraised value of a homestead property that after the taking will be sold or leased to a private party for redevelopment.
  • The owner receive a 15-day written notice of a condemnation hearing by a city commission or redevelopment agency.
  • And that if the property is a residence, the owner's relocation expenses to a comparable home be paid, not including attorney or appraisal fees.

"We're not mean-spirited people," said David Cardwell, general counsel to the redevelopment group. "We think there may be deficiencies in the notice and due process provisions for early participation by the property owner, and we're willing to get them involved earlier. The property-rights [activists'] position is that elected officials are evil and just want to take people's property."

Cardwell said the redevelopment group's compensation proposal goes far beyond the current requirement that owners be paid the appraised value of their property.

Instead, owners can be paid the value of their parcel as part of a land assembly of several owners' properties. An assembly, which allows a bigger project to be built, is considered more valuable than individual lots.

But Boulris, who represents property owners in eminent domain cases, and attorney and community and economic development professor Frank Schnidman offered a laundry list of problems in the proposal.

Schnidman, who wrote an amicus brief in the Kelo case supporting the arguments of the homeowners who lost, questioned what the FRA means when it states that a condemned property must be "essential" to redevelopment goals.

"We'll have to litigate that," he said. "What's the definition of 'essential'? I guess the Kelo property was essential because an executive in the new Pfizer building would have to look at those houses to see the river. It's 'essential' to see the river, so they had to take the houses."

Boulris questions whether appraised property values will pay property owners enough for their land.

A more apt valuation would be the fair market value determined by a jury, she said.

What's more, a 15-day hearing notice isn't enough time for owners to prepare their side, Boulris said.

Boulris and Schnidman believe one of the bill's biggest gaps is its silence on blight.

Some consider the existing definition in state law to be too easy to satisfy. In 2002, the state law was changed to allow a property taking if two of 14 criteria were met.

While Cardwell insists the change tightened the blight definition, Boulris and other attorneys believe it made eminent domain easier.

Now, while the state House property rights committee is exploring a two-pronged approach to blight, the redevelopment group is standing by the current law, Cardwell said.

The committee is exploring changes to the blight definition so that the designation would be used differently for eminent domain than in ordinary redevelopment efforts and financing.

Rep. Julio Robaina, R-Miami, and Seiler said it's not yet clear what that would mean.

The committee also is considering whether an entire area can be designated slum and blight, or if each parcel within that area must meet the criteria.

"That causes us some concern," Cardwell said.

One parcel that has been maintained and improved amid nine that are deteriorated could hold up the entire redevelopment effort, he said.

Land-use attorney and property rights advocate Brad Gould of Akerman Senterfitt in Miami, who testified before the committee in October, said it became obvious during committee hearings that the redevelopment association and Florida League of Cities are seeking a trade-off with property rights advocates.

"They're willing to provide more due process and willing to do different things on compensation, but they're very concerned about modifying the criteria for slum and blight," he said.

But Cardwell said that unless the redevelopment group agrees "to never, ever, ever use eminent domain, anything else we do is trying to slip something past everyone."

The House committee's next meeting is scheduled for Dec. 5 in Tallahassee. A final report is expected shortly before the next legislative session convenes in March.

New York Law Journal: www.law.com

Officials take on eminent domain: Today's Sunbeam (Salem NJ), 11/16/05

By Terrence Dopp

One [NJ] state Senate Republican has introduced legislation placing a two-year moratorium on the use of eminent domain by governments to acquire private land for non-public development projects. The process has caused a furor in communities such as Westville, the Cramer Hill section of Camden and other areas undergoing so-called economic redevelopment of "blighted areas."

"We don't really say what a blighted area is," said Sen. Diane Allen, R-Burlington. "It seems like we're trying to go in and weed out our poor folks and build houses for people of means. That's not what we're about in America."

The issue has been at the focus of attention since the U.S. Supreme Court ruled this summer in the case of Kelo v. City of New London, that the Connecticut community was within bounds in using the condemnation process for economic development. The city wanted to take a "blighted" neighborhood for redevelopment, arguing it amounted to the greater good because it would produce greater tax revenue.

Under her legislation, introduced last Thursday, an 11-member study commission would examine potential changes to current eminent domain laws. Eight commissioners would be appointed by legislative leaders of both parties and three ex officio members would include the attorney general, commissioner of the Department of Community Affairs and the commissioner of the Department of transportation.

"We don't have any (checks) right now and that is the problem," Allen added. "What we really need to do right now is to have the moratorium. Let's take a deep breath and look at what we really want to happen."

While acting Gov. Richard Codey's executive and Senate offices did not comment officially on the matter, Allen and others said the prospects of the bill being heard before January were slim.

"Anything is better than what we have now," said James Pennington Jr., one of two Democrats elected to the Westville Borough Council in two decades. He and running mate Woodrow Dooley focused heavily on a contested plan to include homes and businesses in the Timber Creek area in the borough's redevelopment zone.

Pennington said the cases should be heard before state or county boards specializing in condemnation instead of allowing local councils to have the final say.

Today's Sunbeam: www.nj.com/news/sunbeam

NH Supreme Court Ruling a Setback for Taxpayers, 11/16/05

Press Release

Pennichuck Corporation expressed disappointment at a recent decision by the Supreme Court of New Hampshire because it means that the lengthy and costly eminent domain battle between the city of Nashua and Pennichuck is not going to end anytime soon.

The state Supreme Court upheld a lower court ruling that the state's current eminent domain law is constitutional. "We are certainly disappointed with this decision in that it eliminates an important opportunity to bring this eminent domain battle to a conclusion," said Donald L. Correll, president and CEO of Pennichuck Corporation. "We had hoped to end this process as quickly as possible. However, it's now likely that it will continue for at least the next two years, resulting in millions of dollars in costs both for the city as well as the company."

Correll pointed out that the Court's decision is but one small piece of what is a very complex, lengthy and costly legal battle, that has already resulted in more than 200 legal filings in this case and this decision could result in hundreds more. "The city still has the obligation to demonstrate that any takeover is in the best interest of the public, that it has the financial and technical capacity to operate the facility, and ultimately, if the Commission authorizes it to acquire the utility, that it is willing and able to pay the price set by the PUC."

"For anyone hoping to stop the excessive drain of taxpayer dollars being spent on this takeover effort, this is clearly a missed opportunity. This is not a victory for anyone; certainly not the taxpayers of the city of Nashua who will bear the financial burden of the city's continued actions," said Correll.

Correll said it is important to recognize that the Superior Court, which issued the order that was upheld by the Supreme Court today, also said that Pennichuck can pursue potential damages against the city at the end of the eminent domain process. This action, if successful, could result in the city being liable for many millions of dollars in damages. The Superior Court further said that Pennichuck maintains the right to pursue a jury trial after a decision by the Public Utilities Commission.

"We will continue to vigorously pursue the merits of our claims before the PUC and in the Courts in order to protect our customers, employees and shareholders as we move forward," said Correll. "We continue to believe that it is wrong for government to take over a private company, especially one that has served the community for more than 153 years."

Pennichuck Corp: www.pennichuck.com

Taft signs eminent domain law: Dayton (OH) Business Journal, 11/16/05

[Ohio] Gov. Bob Taft endorsed a statewide moratorium on the use of eminent domain to seize private property for economic development efforts.

Taft signed the bill into law Wednesday afternoon. The moratorium is in place until Dec. 31, 2006.

The law halts any community from taking private property without the owner's consent if the property is to be used as part of a development project. The law also establishes a task force to study eminent domain and its application in Ohio.

The law is in response to an earlier U.S. Supreme Court decision, Kelo v. New London, which upheld the right of local governments to seize property through eminent domain for use in a private development.

Dayton Business Journal: http://dayton.bizjournals.com

Daytona residents' suit tossed: Orlando (FL) Sentinel, 11/17/05

Fearing federal seizure of homes, they challenged a 'blighted' label

By Ludmilla Lelis

A circuit judge has thrown out a lawsuit from a group of Daytona Beach homeowners who challenged what they fear is the first step toward a government seizure of homes in their historic beachside neighborhood.

Circuit Judge J. David Walsh upheld a decision by the Daytona Beach City Commission to call the beachside neighborhood "blighted" by dilapidated buildings, crime and other hazards.

A group of residents had challenged the blight designation, concerned it could empower the city to force them to sell their homes for redevelopment. The area includes 48 homes west of State Road A1A on nearly 7 acres between International Speedway Boulevard and Silver Beach Avenue.

Though city officials don't have immediate plans to condemn any homes in the neighborhood, resident Peter Colt said Wednesday that with the blight designation in place, it could easily happen.

"Nobody's home or property is safe," Colt said. "It just goes to show you how government is out of control, and there's no way around it."

He and his neighbors don't think their beachside community is a slum. The neighborhood has many older homes built during the 1920s, '30s and '40s, some of which were named to the National Registry of Historic Places. Colt lives in a historic bungalow, with neighboring houses that have coquina walls, Spanish mission-style architecture, hardwood floors and mature trees.

Since talk of takeover came to his neighborhood, he has become an activist on private-rights issues and kept a close eye on his neighborhood -- something developers are doing as well, he said.

"There's not a piece of property between the river and the ocean that somebody isn't interested in," he said.

Though the case was argued in March 2004, Walsh issued his decision Nov. 10 and quoted a recent U.S. Supreme Court ruling that local governments can seize homes and businesses for private development.

In Florida, redevelopment projects require a government agency to declare an area "blighted," giving them legal basis to potentially condemn the land or use other redevelopment powers, such as special tax financing.

Daytona Beach has declared four other neighborhoods blighted, including the Main Street area. That led to the city's ability to force three boardwalk business owners to sell to make way for a $115 million condominium and retail development.

Residents in the beachside neighborhood south of International Speedway started worrying about condemnation when city officials began working on a study of blight along the southern stretch of S.R. A1A and decided to expand the study to include 48 more homes west of the beachside thoroughfare.

Jacksonville attorney Andrew Prince Brigham, whose firm specializes in property-rights cases and represented the neighborhood association, said there had also been concern that several developers would need the land for their projects.

"Subject to the political winds blowing in a different direction, the city comes into this same neighborhood and calls it blighted," he said.

He said the city's blight study involved a drive-through of the neighborhood and didn't include any photographs showing blighted conditions. In the report, none of the homes was found to be dilapidated, and only 14 percent of the homes as deteriorating. Also, the report mentions high crime as a problem yet offers no specifics.

"This blight study is not being driven by blight first," Brigham said, but by private developers who would need to assemble larger tracts for building projects.

The city's report suggests as much, stating: "That sufficient land area is necessary to accommodate contemporary development standards, including off-street parking, stormwater management, landscaping, setbacks, etc."

Daytona Beach Assistant City Attorney Ben Gross said he realized residents feared the potential for a condemnation but that the city hasn't taken such action against these homes.

The city's redevelopment director, Laura Morgan, was not available for comment.

In his ruling, Walsh wrote that although the residents dispute what city officials decided, he couldn't second-guess city officials' opinions.

"Although it is clear there is substantial disagreement as to whether many of the conditions within the area are such as to support a finding of 'blight,' this court is restricted in its power of review," the judge wrote.

Orlando Sentinel: www.orlandosentinel.com

Peter Colt: coltpeter@hotmail.com

Court ruling a setback for city: Newark (NJ) Star-Ledger, 11/16/05

Judges say property didn't belong in Perth Amboy redevelopment zone

By Sue Epstein

A six-acre industrial site in Perth Amboy that is home to several small businesses should not have been included in a redevelopment zone, a state appeals court panel ruled in a decision handed down yesterday.

The three-judge panel ruled the city had not proven that the property owned by ERETC met the state requirements of being in need of redevelopment and remanded it to the planning board for further investigation.

"We have carefully considered the record in light of the applicable law and find that the city's decision was not supported by substantial evidence," the judges said in a written decision released yesterday.

The city planning board relied on a report prepared by its planner, Michael T. Carr, when it recommended to the city council on Aug. 1, 2001, that the property be included in a redevelopment zone.

The judges found that the report lacked an analysis of the statutory criteria and did not have any evidence supporting Carr's determination that buildings were "substandard, unsafe, dilapidated, or obsolescent," as required by state law to include property in a redevelopment zone.

The council voted on Sept. 12, 2001, to accept the planning board's recommendation that the property be designated part of a redevelopment area.

The city wanted to use the Sayre Avenue site, located just off Route 35, to build public housing that will replace the Delaney Homes apartments. The Delaney Homes are being demolished to build a high school.

The Perth Amboy Housing Authority had transferred more than half of the residents of Delaney Homes when the high school project was placed on hold. The school was to be built by the state Schools Construction Corp. because Perth Amboy is a "special needs" district, but when the state agency ran out of money, it stopped work on most of its projects.

Leon Zelcer, the managing partner of ERETC, fought the designation from the beginning, arguing that his complex has three businesses that employ 325 people and is not run down. In 2001, he filed suit against the city to stop the action.

Yesterday, Zelcer was "ecstatic."

"It has been a long trek," he said. "This has been going on for four years. Thankfully, they upheld state law. I think it's a landmark case and will make other towns in the state sit up and listen."

Perth Amboy Mayor Joseph Vas said in a written statement that he was disappointed with the court's decision.

"It is unfortunate that they have taken such a narrow view of what constitutes substantial evidence. We believe substantial evidence should be a measurement of the entire record of deliberation before the planning board and council."

The appellate panel's decision overturns a ruling by Superior Court Judge James Hurley, sitting in New Brunswick, who upheld the city's action in June 2004 following a trial.

"In our view, the evidence presented to the planning board, council, and trial court was not sufficient to sustain a finding that the properties ... met the criteria set forth in (the state redevelopment laws)," the judges said in their decision. "Absent substantial evidence, the city's decision to designate (the area) as in need of redevelopment does not enjoy the deference generally accorded such findings. We, therefore, reverse and remand to the planning board for reconsideration of its decision."

The city's efforts to take the property became a major issue in Vas's mayoral re-election campaign last year because one of the attorneys representing Zelcer and his company was Vas' opponent, Billy Delgado.

Star-Ledger: www.starledger.com

Eminent domain guidelines passed: San Mateo (CA) Daily Journal, 11/15/05

By Michelle Durand

Redwood City [CA] leaders hope to stave off future squabbles over eminent domain by unanimously adopting property acquisition guidelines similar to those a civil grand jury suggested earlier this year.

The guidelines are not mandatory but the ad hoc committee in charge of their creation hope it pushes city staff and officials toward greater sensitivity and respect when contemplating land grabs. After the eminent domain policy used in connection with the downtown cinema project came under fire, the City Council began brainstorming better methods, said Councilwoman Rosanne Foust.

Unfortunately, according to Foust, the civil grand jury delivered its scathing report on the city’s eminent domain use without first consulting the officials involved or asking what was being done. If they had, she added, the jurors would have found that the city was already creating recommendations similar to those later issued in the report.

“The grand jury never ever called any of us sitting up here. They didn’t bother to. That’s sort of an interesting statement,” Foust said.

In April 2004, Judge Quentin Kopp ruled the city unlawfully seized private property and razed a building to make room for the 20-screen cineplex and parking garage on land bound by Broadway, Jefferson Avenue and Middlefield Road. James Celotti’s two-story building was taken on the grounds that a public parking lot would be built on the land but Kopp ruled it was in fact being used to benefit a private developer.

The city declared the block a blighted area and acquired it using eminent domain. Celotti later received a $3 million settlement.

Eminent domain does have its place, said Mayor Jeff Ira, as long as it is “not done in a way that would embarrass the city.”

Foust, who served on the committee with councilmembers Barbara Pierce and Jim Hartnett, said the key component to the new guidelines is recognizing the uniqueness of each property owner and the land parcel. While city interests may be benefited by taking private land, it is important to be sensitive to the intangible impacts on a person’s connection to the community, she said.

The guidelines help residents realize the city is “not just a faceless bureaucracy that is going to take people’s land,” said Councilman Ian Bain.

The adopted guidelines also establishes the mayor as the point person for any future land acquisition issues. City Manager Ed Everett will spearhead the distribution of the recommendation to city employees.

San Mateo Daily Journal: www.smdailyjournal.com

Battling eminent domain: U S News & World report, 11/15/05

Small Biz Watch

By James Pethokoukis

In this week's issue of U.S.News & World Report, I write about how small businesses can deal with attempts by local governments to exercise powers of eminent domain, which have been enhanced by a recent Supreme Court's decision. Truth is, when governments try to seize private property, business owners don't have many options other than to sue the city or squeal to the media and raise public awareness. But those options can be effective. Late last month, a San Diego jury awarded $7.7 million to cigar-store owner Ahmed Mesdaq, who was forced to move after the city used its eminent domain powers to take his property. Although the city offered Mesdaq $3 million before the trial, the jury found that the offer took into account only the value of the property–not the value of the business due to its location and reputation.

Then there's the story of Sean Wieting, who successfully fought an attempt to condemn his restaurant in Lincoln, Neb. He says energizing the public is key. "It would have cost me $120,000 to move, so I went on TV and handed out fliers to every single customer who came into my restaurant," says Wieting. It also didn't hurt that he was a former University of Nebraska football player in the Cornhusker-crazy state.

The U.S. News article highlights the story of Scott Mahan, who owns an office supply store in Ardmore, Pa. After the local township initially tried in 2004 to use eminent domain to take over a group of downtown properties–including his own–Mahan helped organize a group called Save Ardmore. The group adopted a two-pronged strategy:
  • Sue the township.
  • Get the public on its side and use that awareness as a cudgel to change the political makeup of the board of commissioners.

So far the group is batting .500. During local elections earlier this month, five new members were elected to the Lower Merion Township Board of Commissioners, including three who signed an anti-eminent domain pledge. As Mahan stated in an E-mail to me: "We are encouraged that they will now listen to what the people want, which is local government that will protect their rights."

The group has had less success on the legal front. Last week, a U.S. district judge dismissed the coalition's lawsuit on the grounds it was premature because the township had yet to finalize its redevelopment plan. But Mahan and other local business owners are hoping the political changes will make more legal action unnecessary.

U S News & World Report: www.usnews.com

Newport defends eminent domain: Kentucky Post, 11/15/05

By Kevin Eigelbach

Four years after it held the first public hearings on a plan to redevelop the Cote Brilliant neighborhood, the Newport [KY] City Commission still finds itself defending the decision.

At Monday's meeting, Joyce Avenue resident Raymond Butts asked city commissioners to consider renouncing the use of eminent domain for economic development.

He was concerned about a recent U.S. Supreme Court ruling that upheld the practice in a Connecticut case.

In 2001, when the city commission presented a plan to build a shopping center where low-income housing was, the commission identified several other neighborhoods as potential redevelopment zones, Butts said.

Butts didn't want to see that happen, he said, and urged the board to "show leadership when it comes to property rights."

City commissioners declined, and defended their pursuit of economic development.

In the case of Cote Brilliant, 99 percent of the residents wanted to sell their property to the city, Mayor Tom Guidugli said.

The other 1 percent wanted the city to buy their property, but said, "give us an extra $100,000," the mayor said.

He blamed the media for reporting only on the few disgruntled property owners involved, and not the overwhelming majority of satisfied sellers.

The city declared 55 acres just west of Interstate 471 "blighted" in 2002, and has struck a deal with Montgomery, Ohio-based Bear Creek Capital to develop a retail project there.

Kentucky is a model state in regard to the number of safeguards it requires before a city can use eminent domain, Newport City Solicitor Mike Schulkens said.

One reason the city pursues economic development so vigorously is because only 10.6 percent of the budget comes from property tax, but 44 percent comes from payroll taxes, Schulkens said.

But Butts protested that some of the city's poorer residents don't have the resources to defend themselves against the threat of eminent domain.

"All citizens, rich and poor, should be protected," he said.

Commissioner Jan Knepshield told Butts he was painting an inaccurate picture of the city commission "swooping in" and taking all kinds of real estate.

In fact, he said, the city didn't take one property in Cote Brilliant by eminent domain.

It's impossible to find one property owner in the neighborhood who could have gotten a better price for his property on the open market, Knepshield said.

It would be easy for the commissioners to jump on the bandwagon against eminent domain, Schulkens said, but it wouldn't really have any effect, since the city's not considering any further such projects.

Butts said he brought the issue up in 2001 and would probably bring it up again.

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

Landowner group takes on eminent domain: (Casper WY) Star-Tribune, 11/15/05

By Dustin Bleizeffer

Eminent domain.


Them's fightin' words in a state that prides itself on property rights and individualism.

But some landowners say the words are now part of the common vernacular in the Powder River Basin where coal-bed methane gas developers are trenching hundreds of miles of pipe and power line to connect thousands of new wells each year.

"They've raised the level of need to convenience, and convenience should not be how we lose our property rights in Wyoming," said Johnson County landowner Steve Adami.

Adami is challenging an attempt by Gillette-based Kennedy Oil to take a 4-mile easement across his ranch via eminent domain for an underground power line. Adami said he's already granted the company an "energy corridor" easement elsewhere on his property, and the additional easement is a matter of convenience because of poor planning by Kennedy Oil.

John Kennedy, owner of Kennedy Oil, contends that he's only asking for what is economically practical and allowed for under Wyoming law. Furthermore, he and other coal-bed methane developers in the area are burying power lines rather constructing cheaper overhead power lines to avoid negative wildlife impacts and marring the ranchers' vistas.

But Adami said he's no rabble rouser. Energy companies seem to wield the threat of condemnation too loosely, he said. And too often landowners give in to avoid the expensive legal fight that seems to almost never favor the property owner.

"When you're faced with it as a landowner, you just roll over. You don't resist because the legal advice is that you will lose," said Adami.

Exasperated at a perceived increase in condemnation threats and the possible ripple effect of the now infamous Supreme Court decision in June that many believe wildly expanded the concept of eminent domain, the Powder River Basin Resource Council (PRBRC) has decided to step into the fight.

The grassroots landowner group was formed in the 1970s and is credited with helping establish a strict set of environmental guidelines for the Powder River Basin coal mining industry, which has flourished ever since and continues to receive national environmental honors.

This month, the PRBRC's board of directors passed a resolution making the eminent domain issue one of its top priorities. PRBRC staff member John Vanvig said the group will mount a campaign urging industry and lawmakers to reserve eminent domain as a last resort in power line construction.

"Suddenly, we've got a lot of people who are inquiring," about eminent domain and condemnation, said Vanvig.

Sheridan attorney Tony Wendtland said several state statutes in Wyoming extend the government's condemnation power to private companies. The test whether a taking would result in "the most public good and the least private harm."

"That standard is not enforced very strictly," said Wendtland. "It's supposed to be harder to use and used less often than it's turning out."

In Wyoming, if a private landowner fights a condemnation attempt and wins part or all of the case, the party seeking condemnation is not required to pay the landowner's attorney fees. It's a major flaw in Wyoming's condemnation statutes that needs to be changed, said Wendtland.

"I think that's incredibly unfair to the landowner, and I think it encourages companies to use (condemnation) because there's no threat there to pay anybody's attorney fees but their own."

Star-Tribune: www.casperstartribune.net