Hollywood loses eminent domain fight: South Florida Sun-Sentinel, 6/23/06

By John Holland

The city [of Hollywood FL] cannot take a family's downtown property and give it to a private developer, a judge ruled Thursday, ending a two-year legal battle and potentially jeopardizing a $100 million condominium complex.

Broward Circuit Court Judge Ronald J. Rothschild's ruling in favor of the Mach family, which has owned the 2,900-square-foot building on Harrison Street for decades, came as a blow to Mayor Mara Giulianti and city commissioners.

They wanted to use eminent domain to replace the Mach structure with a 19-story condo and retail tower as part of downtown revitalization plans.

The ruling also means developer Charles "Chip" Abele will have to either renegotiate with the Machs or come up with a new design plan for his condos. He said he has already offered the Mach family $1.2 million for the property, which is valued at $800,000.

"This just shows that a lot of people unified can stand up to a bully, to a government that they don't think is doing the right thing," said David Mach, whose late father bought the building after immigrating from Hungary and died during the negotiation process with the city.

Mach said he and his mother have no intention of selling their building, which houses a beauty salon and other business at the corner of Harrison Street and 19th Avenue.

"I just got off the phone with my mother and she was crying," Mach said. "She was too emotional to be here, but she is very happy."

The Mach case has dragged on for two years and become a cause for property-rights advocates, particularly in light of the 2005 U.S. Supreme Court ruling, Kelo vs. New London, that said cities can take property from individuals and sell it to private entities.

Citing those two cases, the Florida Legislature earlier this year changed Florida law to ensure that private property can be taken only for public use, such as to build highways, schools, railroads or other public projects.

Judge Rothschild's ruling was very narrow and followed a three-day trial in April and May. He said testimony showed the city and Abele didn't need the building to complete the project, a must for eminent domain. And he said the city's argument that taking the property would help save some portions of the historic Great Southern Hotel had no legal basis or precedent.

As part of an agreement Abele reached with the city two years ago, commissioners agreed to use eminent domain powers on his behalf if he preserved part of the hotel. The final plans would have saved some of the facade but gutted the hotel's interior.

Rothschild also found that neither Abele nor the city did anything improper during the eminent domain process, but said they did not have legally sufficient grounds to win in court.

There was one consolation for the city: Rothschild rejected arguments by Mach's lawyers that the entire Community Redevelopment Agency, which authorized the taking, was illegal and improperly structured.

"We are extremely pleased that the judge ruled that the CRA was proper and that the city dealt with everyone fairly," Giulianti said. "I just don't want to see Chip [Abele] up his offer to the Machs, because it sends a message to property owners that they can demand whatever they want from developers."

Abele, who has already spent millions on building plans and assembling the surrounding parcels, said he's not sure what happens next. He'll likely ask the city to appeal the ruling, which they must under terms of the development agreement he reached with commissioners two years ago.

Abele will pay the costs.

"It's a little bit complicated, and I know the judge was very careful in his ruling, but I'm not sure he was right," Abele said. "If the question is, do we need that property to physically build our project, then the answer is no.

"But if you're looking at the whole needs of a community, to make sure that it's safe for pedestrians and foot traffic all around, and that you keep redeveloping the area, then there's no question that we need that property," said Abele, who is also building a $325 million condo and retail complex on the northeast side of Young Circle.

With this year's legislative changes, Mach is one of the last cases in Florida pitting private owners against developers backed by elected city officials. Now, without eminent domain powers, developers will have to deal directly with landowners.

Abele said he hopes to resume negotiations with the Machs. "I do know that if we build around his place, that 2,900-square-foot building isn't going to be worth anything near what we're offering."

South Florida Sun-Sentinel: http://www.sun-sentinel.com