Eminent domain proposal approved: The Kentucky Post (Covington KY) , 3/17/06

By Stephenie Steitzer

Both chambers of the [Kentucky] General Assembly have passed a bill tweaking the state's eminent domain law, but property rights advocates say it doesn't go far enough.

The bill passed by the Senate Thursday would bar government from seizing private property and transferring it to private owners for economic development, even if the transaction would increase the tax base or create jobs. The bill does not, however, restrict government from using eminent domain to eliminate blighted areas.

The Senate approved the measure 37-0 and it now goes back to the House, which had passed it earlier, for consideration of an amendment tacked on in the Senate.

The bill "doesn't go far enough," said Sen. Damon Thayer, R-Georgetown. "Cities need to be on notice there are a lot of questions out there regarding the blight issue."

That issue was at the center of Newport's fight to take property in the Cote Brilliante neighborhood to redevelop it into a shopping center.

The city struck a deal with Montgomery, Ohio-based Bear Creek Capital to develop a retail project on 55 acres just west of Interstate 471.

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

"That piece of property was not blighted in most people's view, it was just determined to be blighted to build development," said Sen. Jack Westwood, R-Crescent Springs.

But Newport Acting City Manager Tom Fromme said Cote Brilliante deserved the blighted designation. The city's engineer estimated that it would cost $3 million to $5 million to repair Grand Avenue and fix flooding problems in the neighborhood, Fromme said, and many homes had structural damage to their foundations.

People forget that the state highway department ruined the neighborhood in the 1960s when it demolished dozens of homes to make way for Interstate 471, he said.

That's why it's crucial that the bill the Senate passed Thursday maintain the exemption for blighted properties, Fromme said.

"The blighted area issue is what the older urban areas will be concerned about," he said. "It allows them to reinvent themselves and not slowly die."

The bill also satisfied the Kentucky League of Cities, which has defended local governments' rights to use eminent domain.

"We understand how important this issue is for many of our citizens and certainly hope that this bill begins to address many of those concerns by placing statutory limits on eminent domain," said Neil Hackworth, deputy executive director of the league.

But Thayer said a joint interim committee would study the blight issue after the session ends.

"We have to tackle the blight issue to make sure the rights of private property owners are preserved," he said.

Rep. Dennis Keene, D-Wilder, said he believes the issue will resurface.

"I'm sure in the next session it will be looked at again, but it does start the conversation," he said. "At least, it's got a lot of people on both sides of the fence realizing this is an issue we have to address."

Five other states - Alabama, Delaware, Ohio, South Dakota and Texas - have passed legislation limiting eminent domain as a result of a recent U.S. Supreme Court decision. Nearly every other state that hasn't yet passed such laws is considering doing so.

The precedent-setting court decision last year allowed a Connecticut city to seize property for economic development purposes under eminent domain laws. However, justices said nothing in their ruling would preclude states from banning the taking of property under eminent domain for such projects.

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