Domain bill's tough talk has holes: Fairview (TN) Observer, 5/12/06

Land can still be taken, expert says

By Travis Loller

A bill designed to make it harder for the government to seize private property talks big but may not deliver the goods.

After the U.S. Supreme Court ruled last year that the city of New London, Conn., could seize 90 acres of private land for redevelopment and sale to private individuals and businesses, legislatures across the country looked to beef up their eminent domain laws. Tennessee lawmakers filed no fewer than 41 separate bills.

The one that looks likely to become law soon clearly states that eminent domain — which allows a governmental or quasi-governmental agency to seize private land for a public purpose — cannot be used to turn over land to private developers where the sole public benefit is economic, such as increased taxes and more jobs.

But the exceptions to that clause are the very things that local governments usually use to justify eminent domain seizures: building public transportation projects (such as roads and bridges), installing utilities, redeveloping blighted areas and developing industrial parks.

"An industrial park is what they did in (New London)," Harvard Law School professor David Barron said last week.

Local lawyer Jim Murphy, who practices in the area of eminent domain, said he did not know of any land seizures that have taken place in Tennessee that were not justified by one of the exceptions the new law still allows.

The new bill would not help someone like Mark Saroff, a Knoxville developer who has been buying empty warehouses in the downtown for years, hoping to turn them into housing. The redevelopment project is under way, he said, but he is being threatened with having them condemned as blighted and conveyed to other private developers.

"Anything can be determined blight," he said. "It's totally subjective."

With the exception of South Dakota, new eminent domain legislation in other states is similar to Tennessee's law, Harvard's Barron said. It talks tough but still gives local governments a lot of leeway to use eminent domain for economic development. Taking away their ability to condemn private land "would cripple a city's ability to do meaningful planning," he said. "Legislatures have been very reluctant to restrict that."

Murphy, the local lawyer, said there has been some discussion of changing the law to make it harder to abuse. For example, blighted areas are sometimes declared in neighborhoods where only a minority of the properties fit the definition for blight.

"It's the tail wagging the dog," Murphy said. "Some states have looked at tightening up the definitions of blight and requiring more scrutiny. There've been discussions about doing that (in Tennessee), and a variety of groups are interested."

The Tennessee bill, which was crafted with the help of the Tennessee Farm Bureau, does tighten the definition for "blight" somewhat. It also specifies that agricultural land can never be considered blighted.

A proposed amendment to the bill that would have required a city or county to hold a public hearing on a seizure and approve it by a two-thirds vote was tabled in the Senate on Monday. Another amendment that would have protected buildings of cultural, historic, religious, educational or economic significance also failed.

Larry Mornadi has been tracking eminent domain legislation throughout the U.S. as part of his job as director of state policy research for the National Conference of State Legislatures. He said some states are tightening the loopholes left in their new legislation.

Alabama passed a new law last year that is "very restrictive, but with an exception for blight," he said. "And their blight statute was very general. So this year they came back and amended the definition of blight."

Something similar could be in the works for Tennessee.

State Sen. Doug Jackson, D-Dickson, who co-sponsored the bill in the Senate, said that this summer the General Assembly will form a task force, which will include eminent domain experts and other interested parties, to take a more comprehensive look at the issue.

Governments derive the power of eminent domain from the Fifth Amendment to the U.S. Constitution, which says private property cannot be taken for public use without just compensation. The recent Supreme Court decision stated that "public use" has long been interpreted more broadly as "public purpose." Courts were left to decide what qualifies as a public purpose.

Harvard's Barron said the decision held that the New London property seizure was permissible because it provided economic benefit to the larger community within a comprehensive development plan, a plan that included a public investment of $70 million to clean up contaminated industrial land, fill the flood plain, build roads and sidewalks throughout the property, and build a pathway along the Thames River.

But some people have said the decision will inevitably lead to a worst-case scenario in which a Motel 6 could be seized to build a Ritz-Carlton. Some experts say that is unlikely.

"Everybody now thinks because of (the Supreme Court decision), Wal-Mart can come into a town and say, 'Take that block,' and it would be fine," New London City Attorney Thomas J. Londregan said. "But that's not what the court said."

Scott Bullock, the attorney for the other side, disagreed. "The court clearly held if land could be put to a more productive use," he said, "that is justification for eminent domain."

The Tennessee Senate bill sponsored by Sens. Doug Jackson, D-Dickson, and David Fowler, R-Signal Mountain, passed by a 31-0 vote on Monday. The companion House bill, sponsored by Rep. Joe Fowlkes, D-Cornersville, is scheduled to be heard next week.

Fairview Observer: http://www.fairviewobserver.com