The city [of Glendale WI] is using its power of eminent domain to help accomplish a $300 million makeover of Bayshore shopping center, but a lawsuit filed by one property owner is questioning whether the takeover fits the law's strict criteria.
Those involved on both sides of the case say a decision on the matter, which is expected soon, could shape the legal debate over setting limits on the state's eminent domain law, which weighs the protection of private property rights against economic development that could result in benefits for an entire community.
At issue is whether Bayshore had lost so much of its luster by late 2001, when city officials formed a public-private partnership with developers for the makeover, that it could have been labeled a blighted area.
If it were deemed blighted, Glendale could use its power of eminent domain, a tool created by state statute that allows a municipality to buy private property for a fair price and relocation fees.
While several owners quarreled with the city over the city's condemnations, none of the business owners attacked the core of the eminent domain law - allowing a municipality to forcibly purchase private property as part of a plan for a blighted area.
The Seemann Family LLC, the living trust created by Harold and Edna Seemann, owns the property in question, which is just north of the shopping center at 5960 N. Port Washington Road, where the Goodyear Auto Service Center is located. The trust is seeking an injunction to prevent Glendale from taking the land.
The two sides argued the matter before Circuit Court Judge Francis Wasielewski last week.
Glendale has argued that Bayshore, traditionally one of the top five taxpayers in the city, was on the edge of economic decline that could be devastating not only to the property owners but also to all of Glendale. It was compared to the rapid decline of the nearby Northridge Shopping Center, where the property value sank, from an assessed value of $107 million in 1990 to a sale price of $3.5 million in 2001. Glendale asserts that the Seemann property is needed to build a public road to a four-story garage that faces Lydell Ave. on the east side of the center. The property was not a part of the initial plans for the expansion of the shopping center, but it became necessary, city officials argue, to accommodate the concerns of residents who live in Whitefish Bay on the east side of Lydell Ave. Those residents were concerned that the 1,400-car parking lot would destroy the residential nature of the neighborhood.
The garage was then redesigned so that much of the traffic would enter and exit off of Port Washington Road, on the west side of the development
Glendale earlier acquired 24 properties and relocated some of the businesses housed at those locations. At least seven businesses protested, four resulting in lawsuits. All were settled out of court or dropped. None challenged the validity of Glendale's use of the eminent domain law.
Hugh Braun, a lawyer representing the Seemanns, argued that Glendale is attempting to take the land purely for economic reasons - for the benefit of the private owners of the shopping center. State law, he said, is far more restrictive and requires that the area be blighted. Alan Marcuwitz, a lawyer for the city, contends that the legal requirements have been met.
According to city records, the land where the Goodyear store is located has an assessed value of $1.225 million; the building is valued at $5,000.
Nationally, a municipality's taking private property from one owner and selling it to another for redevelopment has been controversial.
In June 2005, the U.S. Supreme Court ruled in a Connecticut case that private property can be taken by a municipality for economic redevelopment. The decision provoked a storm of protest from coast to coast, said Julian Kossow, a Marquette University law professor and expert in real estate law.
More restrictive laws created by states can trump the Supreme Court decision, he said.
"More than 30 states, either through legislation or court cases, acted to impose higher standards," Kossow said. "They said municipalities should not be able to condemn property unless it was blighted."
Despite the more restrictive nature of Wisconsin's law, Kossow said, the fact that Glendale wants the land for public purposes tips the scales to Glendale's favor.
Milwaukee WI Journal-Sentinel: http://www.jsonline.com