5/08/2006

Lawmakers mull limits of eminent domain: Broomfield (CO) Enterprise, 3/22/06

Officials say bill could be bad for Broomfield

By Amanda C. Sutterer

As proposed legislation to limit the power of eminent domain is being hashed out in the capitol, some critics argue the constraints will hurt more than help.

But proponents of the limitations contend it is a crucial step in protecting property rights.

On March 14, Rep. Al White (R-Winter Park) proposed a ballot issue that would limit municipalities from using eminent domain to seize property and transfer ownership to another party for economic development.

The eminent domain controversy ignited June 23, when the Supreme Court ruling in Kelo vs. New London, Conn., enabled the federal government, states and municipalities to use eminent domain as a right to condemn property and force its sale to benefit public use.

The ruling defined "public use" as anything that could benefit the community through economic development, allowing municipalities to condemn private property and turn it over to developers for that purpose.

But the proposed constitutional amendment could be a detriment to Broomfield residents, Assistant City and County Manager Tonya Haas said.

If the legislation passed as is, it would preclude Broomfield from condemning any property to provide for the economic well-being of the community, Haas said.

"A willing property seller couldn't realize tax benefits for selling under a threat of condemnation if the sale is for the economic benefit of a community," she said.

"The only condemnation for private use that would be allowed is that which is necessary to alleviate conditions that are injurious to the public health or safety."

Broomfield has never used the power of eminent domain to seize property, but has designated commercial areas as "blighted" to set up urban renewal areas, which are vital to Broomfield, Haas said.

"Broomfield has one of the best examples of a conservative use of urban renewal in the state," she said. "We used urban renewal to build the 96th Street interchange on U.S. 36, financing it with the tax increment from the Omni Interlocken hotel and golf course."

The mall alone brings $15 million every year to the state in sales tax revenues, and another $5 million to the school district in property tax revenue," she said, because the Omni Hotel and golf course and 96th Street Interchange is an urban renewal area.

"The TIF (tax increment financing) from the Omni and golf course paid for the interchange. Without the interchange, no mall, no Interlocken, etc. Interlocken was a large, unusable cul-de-sac before the 96th street interchange," she said.

Rep. Bill Berens (R-Broomfield) said without urban renewal designation, the city would have a different face today.

"It doesn't allow any city or county to take property for urban renewal projects," Berens said. "We didn't use eminent domain powers when I was on City Council or mayor, but if one business had decided not to move, the '50s Broomfield town center may still be there instead of Target," he said. "Al White's bill would take all eminent domain powers in regard to development, taking revitalization out of the mix. If this bill passes, the north side of 120th from Sheridan to Lowell might look that way forever."

But Dana Berliner, senior attorney for the Institute for Justice, sees the proposed constitutional amendment in a different light.

"The way that it works now is a city declares an area to be a 'redevelopment area' and can take the property within that area and do whatever with it," she said.

"That 'whatever' often includes transferring it to a private developer. If this passes, it would protect Colorado home and business owners from having their property taken for private commercial development because it doesn't allow the use of eminent domain for private parties," she said.

That could become problematic for Broomfield in the future, though the city doesn't now have any such situations, Haas said.

"If we have a private developer and everybody wants the project to go forward and one landowner won't sell, it means that one landowner could kill the whole deal," she said.

Broomfield business owners and residents also could lose out on possible tax breaks, Haas said, offering the Barbers as a hypothetical example.

The Barbers own Barber's Poultry Inc. and asked the City and County of Broomfield for at least $10 million to make way for a Wal-Mart.

The retail giant offered the family $7.6 million for their land on 120th Avenue east of Sheridan Boulevard.

"If the city paid money to the Barbers to help them relocate, they could take their time doing it — two and a half years — because they could say they were under the threat of eminent domain," Haas said. "The Barbers would receive a tax benefit from being under the potential of eminent domain, because it's in an urban renewal area, even though it's not in the cards. If this law goes through, if you can't acquire property for private use under eminent domain, they wouldn't get the tax benefit."

If White's bill passes by two-thirds of the House and the Senate, voters will have the opportunity to vote on the issue in the November election.

The bill was heard on second reading on Tuesday, but no date has been scheduled for a House or Senate vote.


Broomfield Enterprise: http://www.dailycamera.com