House debates eminent domain: Jackson (MS) Clarion Ledger, 1/4/06

Bills to restrict use now move to Senate for consideration

By Laura Hipp

The ability of the state, cities and counties to take private property for stores or manufacturing plants would be stopped under a Mississippi House plan approved Tuesday.

But governments could still take an individual's land for roads, utilities and parks.

"A big multibillion company should not be allowed to take your farm, home, church or cemetery to make more money," Rep. Jamie Franks, D-Mooreville, said.

Franks sponsored two pieces of legislation changing a state statute and the Constitution to restrict the use of eminent domain, which allows the government to take land from private owners. An constitutional amendment would require a statewide vote.

The bills move to the Senate for consideration.

Franks' proposals on eminent domain were a response to a U.S. Supreme Court ruling last year that declared government could take property for any use — public or private.

Taylorsville resident Mark Bryant wants a tougher law that stops gas and oil companies from taking land as well.

He unsuccessfully fought an oil company last year that wanted a 50-foot section of his family's land. The company took the land through eminent domain proceedings.

"It took away my homesite," said Bryant, who wanted to one day build a house on the Smith County land. "They've got the money to do this, and the private land owner doesn't have the money to fight it."

House Concurrent Resolution 10 calls for a change in the state Constitution to limit eminent domain to only public uses, such as parks, road and utilities. A statewide vote in November would be required. It passed with a 117-1 vote.

House Bill 100 proposes statutory changes that would take effect immediately after approval from the Senate and the governor. It prohibits taking land for retail, commercial or industrial uses. It was approved in a 116-3 House vote.

Rep. Leonard Morris, D-Batesville, who dissented in both votes, said some property owners receive a tax break for shedding land through eminent domain when locating industrial prospects — rather than selling the land directly. He proposed an exemption for industrial uses but lost.

"We are using a sledgehammer to kill a gnat," said Morris, former executive director of North Delta Planning and Development Issues. "We are going to prohibit economic development in this state period."

The Mississippi Development Authority will comply with lawmakers' decision in economic development deals, said spokesman Scott Hamilton.

Senate Judiciary A Chairman Charlie Ross, R-Brandon, said before the House bills were approved that he has not studied the House proposals but plans to offer his own.

Last year's U.S. Supreme Court decision "goes way too far" in granting government the power to seize private property, Ross said.

His proposal would require eminent domain to be allowed only when the government seizes property for direct public use.

For instance, Ross said, using eminent domain to seize land for the purpose of increasing tax revenue would not be a direct public use.

"I believe that strikes the right balance," Ross said. "It's not a radical change from the current law and will continue to provide protection to private property owners."

Clarion Ledger: www.clarionledger.com

Eminent domain barriers proposed: East Valley (Mesa AZ) Tribune, 1/4/06

By Howard Fischer

An East Valley lawmaker hopes to throw more roadblocks in the path of cities that want to use eminent domain.

And Rep. Chuck Gray, RMesa, wants quick action. He already has proposals scheduled for a hearing — and vote — by his committee this Monday.

Gray proposes:
  • Property owners be entitled to a jury trial to decide whether seizing their property is really for a legitimate public purpose. Now, a judge solely decides if the action is legal.
  • Municipalities must prove to the court the land is needed for a true public purpose. Current law presumes government is acting legally, forcing the property owner to demonstrate otherwise.
  • Legal fees for landowners when they challenge property seizure to give their land to someone else.
  • City councils be blocked from discussing the matters behind closed doors.

The bills will get a fight from municipalities.

"They would make condemnations for economic development purposes almost impossible," said Mary Okoye, lobbyist for Tucson.

Gray — chairman of the House Committee on Federal Mandates and States Rights — is crafting an even more comprehensive measure to bar municipalities from taking one person’s property and giving it to another, no matter what the reason.

Kevin Adam, lobbyist for the League of Arizona Cities and Towns, said that could undermine urban renewal projects.

Plans often call for replacing what is on the property with hotels, shopping and other commercial development.

"Are you going to cripple the ability of cities and towns to redevelop and address slum and blight, particularly in urban areas that are undergoing significant decay?" he asked.

Gray countered that not even urban blight gives the government the right to take one person’s property and give it to someone else.

He said cities can use nuisance laws to force landowners to bring the buildings up to code.

"But to take that property away from them and then give it to another person because of the tax revenues it might bring the city has nothing to do with the blight itself, other than as a cover to take the property," Gray said.

Adam said ordering property owners to clean up or close down is not a solution to urban blight.

"I suppose you could shut them down and board up that business, that home," he said.

"Basically, you have an unoccupied building which is a potential for additional crime."

The U.S. Supreme Court ruled last year that cities can take private property and turn the land over to another private developer. The justices said increased tax revenue and new jobs were enough to qualify the action as a taking for "public purpose."

Arizona has a more restrictive constitutional provision which bars taking private property for private purposes. And Arizona judges have twice rejected efforts by cities — Tempe and Mesa — to take land to give to new private businesses as part of municipal redevelopment projects.

But Gray said cities "always see new angles and new ways to twist the laws."

In Tempe, the city tried to use eminent domain to force industrial businesses off their property to build the planned Tempe Marketplace. Several property owners sued successfully to block condemnation.

In the Mesa case, judges said Mesa could not force brake shop owner Randy Bailey off his land and transfer it to a hardware store owner.

East Valley Tribune: www.eastvalleytribune.com

Housing Plan Progresses as Officials Seek Eminent Domain: Lakeland (FL) Ledger, 1/3/06

By Rick Rousos

The city [of Lakeland] is moving ahead with its plan to turn a 14-acre mess near downtown into a residential mecca.

The land behind the Massachusetts Avenue Lakeland Police Station is slated for about 400 town houses and condominiums, with the possibility of at least some "work force housing."

The reconstruction of the neighborhood is a crucial element in the city's plan to bring residents to a downtown and make the core of the city more vibrant.

Construction should begin in mid-2007, city officials say. But just what will be built remains to be determined.

The city has bought 53 parcels in the neighborhood, which backs up to the In-Town Bypass. Initially, the city worked through an agent, who told the property owners he "represented a buyer" but did not say the buyer was the city. City officials say this was meant to keep real estate speculators at bay.

A 54th property is slated for a May real estate closing. Anne Furr, the executive director of the Lakeland Downtown Development Authority, said the city "has so far been unable to work with five property owners."

In other words, those property owners are asking for what is being deemed by city officials as an unreasonable amount of money.

For that reason, city commissioners today will be asked to grant the authority for the community redevelopment agency to use eminent domain — a legal proceeding that forces a sale to the government, in which a judge sets the price — to acquire the remaining five properties.

"We have been abundantly fair, even to the point of being generous," said Joe Mawhinney, a former city lawyer and an LDDA board member.

Just because eminent domain will be an option doesn't mean the city will use it, Mawhinney said. He said it can get expensive because lawyers are in on the act.

Many of the homes, including some apartment buildings, have been bulldozed. But several remain, and 14 families are still living there, Furr said. Most of the people still there have leases that expire in the next few months.

The area now resembles a near ghost town, a no-man's land dotted by empty lots where homes were destroyed, a smattering of mostly rickety homes and few people walking the streets.

That's a far cry from years past, when drugs, crime, prostitution and violence dominated the neighborhood and law-abiding people had little choice but to stay inside. City officials say the only fix for the neighborhood was to start over.

The city will end up spending about $5.2 million to buy the land and another $1 million for demolition, all of which and more will be paid for in the end by whoever develops the property.

The city is considering four developers to do the massive refurbishment, including the Carlisle Group, which turned the old Regency Hotel into Lake Mirror Tower.

The size, type and cost of the housing in the redeveloped area for the most part will be determined by the developer, not LDDA and other city officials.

"We don't want half-million dollar homes there," Furr said.

She and other city officials would like to see a mix of middle-priced condominiums, in the $300,000 or so range, and work force housing, maybe in which a police officer or firefighter might be able to live — and walk to work, for $150,000 or $200,000.

Jerry Herring, a developer and LDDA board member, is building Lofts on the Park, a 14-condominium residential project on a vacant lot at 125 N. Kentucky Ave. He said people across America are moving back downtown.

"I agree, this (Lakeland project) should have some work force housing. It should be market-rate housing, whatever the market locally will support. We believe the market will support work force housing anywhere from about $150,000, with midrange housing from $250,000 or $300,000," Herring said.

"The developer should determine the risk, the comfort level. It's their risk, not ours. The city shouldn't force anything on private enterprise. We shouldn't force, we should enable."

Mike Hickman, the president of Lakeland-based Hickman Homes, said work force housing, for people like police, teachers and nurses, "has to be in a high-density setting."

"We are facing a crisis in the affordability of housing. A building permit in the city is over $20,000 before you do anything. Single-family homes are almost a thing of the past. This should be 10 or 15 (residences) per acre — a high-density use with green space. Let the free market prevail, but high density at a reasonable cost."

But the city can make some demands, Hickman said. "The city is in a unique position, because it owns the land."

Furr, the LDDA boss, said the city has been helpful, considerate and compassionate to the people being displaced by the redevelopment.

But among the people who are still there, some of whom feel like they're being treated like squatters, the opinions of the treatment from the city vary.

Jason Yohn, 30, whose East Bay Street lease in half of a duplex expires in a few months, said the city has been better to land owners than renters.

"They're just trying to run the low-income people out, and that's wrong," he said. He said that now that the apartments have been demolished, "it's nice around here, quiet."

Yohn said he didn't know where he'll go after the lease expires. "This place is for $275," he said. "Where can we find that?"

Iowa Avenue runs north and south behind Massachusetts Avenue and the LPD station. The parcels of land on the east side of Iowa are being bought by the city, the west side is being left alone.

Lorraine Smith, 38, who rents a home on the west side of Iowa, said the neighborhood has improved dramatically since the apartments have been razed.

"This was a very scary place," she said. "There's still some people loitering around here at night, but it's not so bad."

Furr said the apartments that Yohn and Smith talked about greatly accelerated the downfall of a neighborhood that thrived several decades ago.

Benjamin Knight, 24, who owns a home on the east side of the street, said the redevelopment is good only for the wealthy.

"I guess the rich can do whatever they want to the poor," he said.

Knight said he was contacted by a "real estate man" several months ago, but has heard nothing since.

Furr said Knight was one of the five property owners who were hard to bargain with.

She said the city has made repeated attempts to contact Knight, including sending him registered mail, which comes back.

LPD Chief Roger Boatner's officers have spent an inordinate amount of time in the neighborhood that abuts the back door of the police station. Boatner said he's no real estate expert, but does have feelings for what he'd like the neighborhood to become.

"I would just like to see the neighborhood become stable," Boatner said. "In the old days, it was stable. People came and went, and they went to work. Kids played outside. People walked to downtown. A stable downtown neighborhood brings vitality to the area — and to the rest of the city."

Boatner said he spoke recently with a lady who had dinner in a downtown Lakeland restaurant with a female friend from a big city.

He said that as the two women walked a few blocks to their car, and the out-of-town woman "went on and on about how beautiful it was."

The Lakeland woman thought her guest was raving about the beauty of downtown and Munn Park, but that wasn't it.

"Nope," Boatner said. "It was that two ladies could walk safely around downtown at night."

"And if it's that kind of an area we're talking about building, then I'm all for it."

Lakeland ledger: www.theledger.com

Eminent domain now big business: Chicago (IL) Tribune, 1/3/06

Lawmakers, owners confront land grabs

By Crystal Yednak

One day at the age of 82, Irene Angell received an unexpected letter. The city of Des Plaines needed her home and planned to use eminent domain to force her to sell it.

Angell lived in the home for more than 80 years. Before that, it was her father's home, and before that it was her grandfather's home.

And now, it's a Walgreens.

Opting to trade in Angell's home for a retailer with jobs and more tax revenues, Des Plaines invoked a power that local governments have used more than 250 times over the past five years for economic development, a Tribune review of court records shows.

With the national debate over eminent domain expected to sweep into Springfield in January, municipalities are cautioning against overreacting to a recent U.S. Supreme Court ruling that upheld the use of eminent domain for private economic development.

But property owners who have been forced to clear out for strip malls or big-box stores hope the public outcry against eminent domain will prompt Illinois lawmakers to act.

"I still don't think that with private property, a city or state should have the right to go in and force someone out to give it to someone else," said Angell, now 86 and living in Florida.

Overwhelmingly, the eminent domain cases filed in Cook, Kane, DuPage, Lake, McHenry and Will Counties are for traditional public purposes, such as highways, schools, libraries, police stations — projects that will be owned by the government for the public use.

But a review of court cases filed since 2001 shows local governments have used eminent domain powers in many redevelopment projects where private companies end up in control of the land.

Municipal officials say this is nothing new and the current system should not be changed. Chicago area communities have used eminent domain in this way for decades to dream up new plans, they say.

Recent cases range from Chicago's efforts to remake decaying blocks in Englewood and the stockyards area to St. Charles' attempt to replace businesses along the Fox River with condos and retail.

"When the city is taking land for economic development, it's taking it in terms of advancing the public purpose of eliminating slum and blight," said Steve Holler, chief assistant corporation counsel for the City of Chicago's real estate division.

Without eminent domain, Holler said, the city would not see the Wilson Yards project now underway at Montrose Avenue and Broadway. The project will bring senior housing, a Target store, movie theaters and other businesses to the site of a former CTA railyard and a building that housed an adult bookstore.

City officials say they need ways to move out holdouts who can stand in the way of projects that can benefit the whole community.

For example, Chicago recently used eminent domain to obtain land from some owners who were sitting on property along 79th Street, said Langdon Neal, a Chicago condemnation attorney.

"These were absentee landlords, and tax buyers not motivated to do a market transaction," he said.

In some cases, property owners are willing sellers, officials say.

But sometimes they are not.

Even condemnation cases filed for traditional public purposes sometimes provoke passionate speeches about the forefathers' intentions toward property rights.

For people like Clifford Heverly in Elgin, the outrage is compounded when eminent domain is used to make way for private development.

Heverly is still angry that the city condemned his coin and stamp business to make room for what he calls "grass and a tree " — or landscaping for a new downtown condo development.

Heverly said that once a city partners with the developer, it wipes out the need for any sort of market transaction.

"Why should the developer have to come to me and pay me fair market value when you can convince a group of politicians to take it?" Heverly said.

In Illinois, governments can use eminent domain to force the sale of private property and transfer it to another private owner if the property is found to be blighted or on its way to blight.

The state has a list of 13 factors that prove blight, such as dilapidated buildings, obsolete uses or code violations.

"In the Chicago metro area, I think we can all agree there are properties that truly are blighted," said Thomas Geselbracht, a Chicago attorney specializing in eminent domain. "Sometimes municipalities try to use eminent domain where there's not quite as much agreement as to what's blighted."

Critics say blight definitions are written in a way that allows city councils to use the power of eminent domain by citing issues such as cracked sidewalks, buildings older than 30 years, or the lack of a community plan when a place was built. A building with a poorly planned parking lot does not automatically signal blight to some, which has led to extensive criticism of the law in Illinois and elsewhere.

"Blight removal was meant to take away property that was dilapidated and falling down, with high rates of communicable disease and infested with vermin," said Steven Anderson, coordinator of the Castle Coalition, which has led a national campaign against what critics call eminent domain abuse. "Now it means taking a perfectly fine house that happens to be in a nice location."

Nationally, a band of politically diverse groups, including conservative grass-roots groups, civil rights organizations and farmers, have come together to say the pendulum needs to swing back in favor of property owners.

Both Democrats and Republicans in Illinois plan to propose legislation this year.

After being flooded with calls from constituents and holding hearings, state Sen. Susan Garrett (D-Lake Forest) is floating a draft bill that would give landowners more standing in court to contest a government's finding of blight.

State Sen. Ed Petka (R-Plainfield) said the process is now lopsided in favor of the government.

"[The local governments] can use taxpayer money to hire consultants and lawyers," he said.

Government officials argue that Illinois law already includes protections for property owners because the courts are there to prevent abuses.

Also, they point to a 2002 Illinois Supreme Court ruling in a case involving the Southwestern Illinois Development Authority and a metal-shredding facility located near a racetrack.

Racetrack representatives approached the authority about condemning the property on its behalf, offering to pay the acquisition costs and legal fees. They planned to build a racetrack parking lot and argued it would attract other development. Because it would also increase profits for the racetrack, the Illinois Supreme Court found that although governments did have an interest in promoting the local economy, the purpose of eminent domain was not to help a private company avoid the open real-estate market.

The court batted down the agency's attempts at condemnation.

A few years ago, a suburban car dealer wanted to locate a new Volvo dealership along the Eisenhower Expressway in Forest Park, on a site where a U-Haul rental facility had been operating since 1978.

Without making an offer to the U-Haul owners, the developer asked village officials to use eminent domain power to obtain the U-Haul property so the car dealership could be built on the site, according to court records.

Hoping for increased tax revenues, the town found the property blighted.

U-Haul owners contested the decision. A judge later killed the plan, although on a more technical issue. The Volvo dealership is now across the street in Oak Park.

While attorneys for the U-Haul argued eminent domain was being misused, Forest Park village attorney Michael Durkin said the municipality needed to attract the redevelopment project for its financial health, especially when facing escalating costs and static revenue.

Before the redevelopment started in Des Plaines, buildings located near the city center sat vacant, said David Wiltse, Des Plaines city attorney.

City officials saw a way to redraw its downtown into one that would include condos and retail, bringing people and their dollars back into the city center.

Using eminent domain to take about two-thirds of the property in the area, the city constructed a new public library, parking garage and a strip of retail on either side.

"It could not have been done without eminent domain," Wiltse said. "You only need one holdout."

Some of the businesses were relocated to other sites in town, and property owners received fair market value for their properties, Wiltse said.

In the case of Angell's home, the city filed the condemnation suit to build a municipal parking lot, though a Walgreens is now in its place.

Eventually, she and the city worked out a settlement. Her former homestead looks out over other redevelopment projects.

Friends have sent her photos of the Walgreens, but Angell, who once worked at a Walgreens soda fountain, can't quite bring herself to look at them.

"I probably will always get angry about it," she said.

Chicago Tribune: www.chicagotribune.com


Eminent Domain Abuse in Cinnaminson NJ

New Plan Excel to Redevelop Condemned Suburban Philadelphia Mall: Commercial Property News, 9/23/05

By Michael Fickes

A New York City-based retail real estate investment trust (REIT) will redevelop a 40-acre condemned mall located along Route 130 in the Philadelphia suburb of Cinnaminson, N.J.

Under an agreement with the Cinnaminson Township Committee, New Plan Excel Realty Trust Inc. will take possession of Cinnaminson Mall, which was condemned and taken over by Cinnaminson Township last month. New Plan will pay the former owner, Yardley Associates, an unspecified amount for the property, which has been assessed at $3.7 million.

The redevelopment calls for the construction of a 310,000-square-foot grocery store-anchored, open-air community shopping center with several junior anchors and a mix of national and regional in-line retailers.

New Plan would not comment on the deal, and a Cinnaminson Township Committee representative did not return calls asking for comment. But in a statement, the Committee said that the new center would stimulate Cinnaminson’s local economy.

The deal comes after New Plan sold 69 community and neighborhood shopping centers to Galileo America LLC for approximately $968 million in August, pruning the REIT’s portfolio to 461 properties, including 150 held through joint ventures.

Commercial Property News: www.cpnonline.com

Cinnaminson set for retail renewal: (Camden NJ) Courier-Post, 10/2/05

By Lavinia DeCastro

Nearly 200 people gathered on Saturday morning to witness the first step toward the redevelopment of the long-ailing Cinnaminson Mall.

Wearing commemorative hard hats, onlookers watched as a bulldozer tore down a portion of a long-vacant Caldor store.

"I think this is great," said township resident Faith Steinfort. "This has been an eyesore for so many years."

The mostly vacant mall will be replaced with 330,000 square feet of retail space, said Anthony Minniti, the township's economic development director.

Minniti said he hopes to attract a regional grocer as an anchor, a national retailer and roughly 10 smaller stores to the 39.5-acre site.

"It'll be a similar fashion to what you might see at East Gate (in Mount Laurel)," Minniti said.

Minniti said he expects a New York firm, New Plan Excel Realty Trust, to submit a site plan application to the planning board next week. Construction could begin early in 2006 and be completed by November, he said.

"Just in time for Christmas shopping," Mayor Sandra K. Iaquinto added.

New Plan Excel officials have said they will help relocate the half-dozen businesses that remain at the mall. Most of those businesses are in a building fronting Route 130, one of several structures on the site.

The project is the second-largest redevelopment effort in the Route 130 corridor, after the Willingboro Mall project.

Steinfort said the project will help lower taxes.

"People are always concerned over tax issues," she said. "One of the best ways to help out is to bring ratables to the township."

Richard Charles, also a resident, said a new shopping center will provide a much-needed boost.

"Route 130 is the face of Cinnaminson," Charles said. "This is very exciting for the town. It shows that Cinnaminson is a great place to do business."

Courier-Post: www.courierpostonline.com

Mall to make way for new retail spot: Philadelphia (PA) Inquirer, 9/22/05

By Frank Kummer

Cinnaminson authorized a deal yesterday to redevelop a large shopping center long considered an eyesore by officials and turn it into a modern retail destination.

The Township Committee passed a resolution approving the agreement with NewPlan Excel Realty Trust, which will be designated the redeveloper of Cinnaminson Mall, a 40-acre parcel at Route 130 and Cinnaminson Avenue.

The property, owned by Yardley Associates of Bala Cynwyd, was declared a redevelopment zone in 2002 by the township, but committee members and Yardley could never come to an agreement.

Last month, a Burlington County Superior Court judge ruled that the township could take the site through condemnation.

Under terms of the agreement, the property will now be transferred to NewPlan Excel, and Yardley Associates will be paid an amount not yet made public. The property is assessed at $3.7 million.

"It's wonderful news," said Committeeman Anthony V. Minniti, who oversees economic development for the township. "We've been trying to effect this redevelopment project for three years. It's the gateway to Burlington County. It's a cornerstone."

The property is just north of the Pennsauken Mart, near the Camden-Burlington County border.

NewPlan Excel says the company is "one of the nation's largest owners and managers of community and neighborhood shopping centers," with 450 properties in 39 states.

The property currently contains a complex of buildings in various stages of vacancy. The large Caldor store is closed, as are several smaller stores. But Bank of America is open in a free-standing building. Manhattan Bagel and Eckerd Drugs are open in other buildings.

Plans call for all buildings to be razed and the land graded into a new layout. NewPlan Excel will build a new shopping center, with 310,000 square feet of space. It will include a supermarket of at least 70,000 square feet. Seven to 10 smaller retail shops would be included.

NewPlan Excel will help pay for major improvements to the road intersection at the mall. The state and county would pay for the rest. Improvements would include a traffic signal and lane realignment.

Minniti said the new shopping center would be like a smaller East Gate, a large, popular shopping area on the Moorestown-Mount Laurel border.

The new property will be assessed at about $40 million when fully built, he said.

The judge's order calls for NewPlan Excel and Cinnaminson to complete the transferral of property by Dec. 31. NewPlan officials hope to have a detailed site plan by then and have scheduled an Oct. 1 groundbreaking, which will include smashing a wrecking ball into the Caldor.

Leases on the mall stores still open will be terminated under the court order. However, those stores are free to work with NewPlan Excel.

Philadelphia Inquirer: www.philly.com

People losing their places of business aren't quite as happy
A letter to Eminent Domain Watch

The Cinnaminson Township was able to obtain the right for Eminent Domain on the Cinnaminson Mall in August/September. As a result, the Township was able to force the former landlord, Baker Associates, to sell the property to New Plan Excel, Realty Trust.

The action came about when Baker Associates did not renovate or upgrade or lease the property in a way to benefit the Mall. About 90% of the property was vacant with only a few tenants. The Township saw that surounding cities were building and attracting "big box" stores to their areas. In order to capitalize, they decided to take authority for eminent domain on the property and give it to a firm that would attract and build a better Mall. As a result, the current tenants are being pushed out.

The property is valued at $66 million in tax revenue for Cinnaminson Township.

We own a dry cleaning business at the Cinnaminson Mall and have a lease for another three years. The Township is offering us relocation (we have to pay for replacement/broken machines during the move) to another plaza. But the new plaza is across the street from the original Cinnaminson Mall. The new plan for the Mall also has a plan for a dry cleaning shop, so we will have new competition. So, as a result of the action of begining to tear down the Mall, we have lost over 50% of our business. We do not believe that relocating is going to save us from going broke.

The attorney for the Township claims that their efforts to offer us relocation has fulfilled their responsibilities. Relocating the business is futile and almost all of our machines are highly likely to be damaged. We are at a loss to know how we might approach the Township legally to obtain fair compensation for the current value of the business.

To make matters even worse, the Township is classifing our business as "displaced" even though we are in business, paying rent, and have a landlord. This classification allows us to be eligible only for the NJ WRAP program — which gives us at most $10,000 for a business for which we paid $175,000. All this, before the township has actually executed its eminant domain authority.

We are investigating the possibiliies of a lawsuit against the township and also against the current landlord for not disclosing the situation to us prior to our signing the lease.

Eminent Domain in Sunset Hills MO: St Louis (MO) Post-Dispatch, 11/16/05 & 12/21/05

Sunset Manor residents demand city terminate Novus deal

By Steve Birmingham

Sunset Hills should terminate its redevelopment contract because the developer cannot follow through on promises to buy out the Sunset Manor neighborhood, residents and others told the Board of Aldermen last week.

More than 100 people jammed the Nov. 8 board meeting with many registering the same complaint: Novus Development Company never had the money to pay for any of its scheduled closing dates with over 200 property owners in the neighborhood and the city should have known that.

The city granted $62 million in Tax Increment Financing (TIF) and Transportation Development District (TDD) assistance to Novus to build a $165-million "lifestyle" shopping center in the 300-parcel Sunset Manor neighborhood. The area, bounded by Watson Road, South Lindbergh Boulevard and Interstate 44, contains about 254 residences.

Gerald Carmody, an attorney representing several Sunset Manor neighborhood residents in lawsuits brought against the city, told the board its redevelopment contract should be terminated because Novus never had the financing in place for its scheduled Aug. 22 closing date nor its Sept. 31 rescheduled closing.

He also said the city should have sent the redevelopment plan back to its Tax Increment Financing (TIF) Commission for reconsideration when the physical size of the plan was changed.

"I'm here tonight to ask you to take a step forward, not look back, take a step forward in assessing where we are today with respect to the Sunset Manor redevelopment project, to accept the realities of the situation which is that this redeveloper cannot, and will not, develop the project that you all had envisioned when you approved these redevelopment ordinances, " Carmody said.

Carmody told the board "there is sufficient evidence that you now have before you to accept the fact that this not going to happen and that you need not wait any further to make that determination."

Carmody said he had evidence that what was going on was not what the board thought was happening when it approved the redevelopment ordinances.

"First and foremost, you assumed at the time you entered into these agreements that this developer had the financing to at least close on the houses that he promised these people that he would buy," Carmody said. "That was not the fact, that is not the fact and will never be the fact. He represented to you all that he had the financing that the lending institution has said he never did. Despite his claims that there are other reasons why and why not, the fact is he never did have financing, which I know each of you assumed was in place at the time you enacted these ordinances."

Carmody said that at the time the city approved the redevelopment plan, "it was for a different project than will ever be built."

According to Carmody, during the discovery process involved in the lawsuits, "it is without question that the lifestyle center that has been represented to you will not be there." What was represented to you to be the major anchor (Famous-Barr), a 200,000-square-foot anchor, was not in fact the anchor presently contemplated. And what was represented to you was not that they (Novus) were going to go to an adjoining municipality (Crestwood) and grab a retailer, something you all have said historically that you did not want to have happen."

Carmody also said Famous-Barr was Novus' only announced tenant and that they were going to have to pay that tenant $10 million to move from Crestwood to the city of Sunset Hills.

Not only were they going to have to pay $10 million to move Famous-Barr, "thereby putting in jeopardy all the TIF money that would be generated by that large square-footage, that tenant was not going to pay one dollar in rent for that 150,000 square feet of space," Carmody said.

Finally Carmody said the reduction in square footage for the entire project, which was smaller that what the TIF Commission considered, meant the city should have remanded the matter back to the TIF Commission for more consideration.

"Instead, you went forward," Carmody said. "Your consultant (PGAV) has admitted under oath that based upon that change the project should have gone back to the TIF Commission and should not have been approved by you. That did not happen."

The smaller project area (722,000 square feet) means "six acres of this project for which you have authorized Novus to condemn property will never be developed. These people will be forced out of their homes and businesses will be vacated. Tell me why that is not a substantial change to this project.

"Those are changes that have now been admitted that you did not know then," he said.

Will Aschinger, a member of the Stop The Sunset Hills Land Grab, told the board the neighborhood's residents needed the city's help in restoring the neighborhood.

"We want to hear the city's plans to put our neighborhood back together,' Aschinger said. "You allowed this to happen; you favored the developer over your constituents; now the burden is on you to fix the problem. It is your responsibility to develop a plan. You chose to run for office. We need a plan. It's your responsibility."

Aschinger said the residents would be happy to meet with the city to discuss ideas they have, such as applying for grant funds to restore the neighborhood.

"We need some of you to speak up, any of you that have a conscience about what is going on, to speak up and try to help save this neighborhood," Aschinger said. "We come here for accountability. You've not held Novus accountable for their failure to act and their misrepresentations. We hold you accountable because you were elected to protect us. Enough is enough. End the Novus development agreement tonight and begin to put our city back together. Do your duty and end this madness."

Mayor James Hobbs said the board "would address this in due time. As you know we have three lawsuits pending and there are certain things we can do and we cannot fight the lawsuits in public and we will not do it. We're proud of you tonight for giving us your information and appreciate it very much."

Suit alleges Novus manipulated financial information

By Steve Birmingham

A lawsuit alleges Sunset Hills did not follow state Tax Increment Financing Act requirements and that Novus Development concealed financial information from the city that could have effected the TIF assistance it received from the city.

Attorneys for William and Shirley Aschinger filed a motion for summary judgement Dec. 12 in their suit against Sunset Hills that attempts to overturn two ordinances approving a redevelopment of the Sunset Manor neighborhood and naming Novus Development as the project's developer.

The motion alleges that Novus substantially changed the nature of the
redevelopment plan after the city's TIF Commission hearings were concluded this summer, during which the Commission voted against the redevelopment plan.

In his argument, Jerry Carmody, an attorney for the Aschingers, stated that both Peckham Guyton Albers & Viets, Inc. (PGAV) and the city's bond counsel, who would have been responsible for issuing the $42 million in TIF bonds approved by the city in May, told Novus the project had to be referred back to the TIF Commission because of the substantial changes made to the plan.

The motion alleges that evidence shows that between the time the city's TIF Commission concluded its hearings in April and the city approved the redevelopment plan a month later, Novus made substantial changes by switching its anchor tenant from Bass Pro Shops to Famous-Barr, revised the site plan from over 750,000 square feet to over 821,000 square feet and dramatically increased the size and cost of the project.

According to the motion, Novus concealed from the city's consultant and the TIF Commission information that the cost of the project had increased from the $162 million proposed to the TIF Commission to almost $180 million.

The motion also alleges that Novus changed the anchor store during the TIF commission hearings but did not notify the commission nor PGAV until the hearings were concluded.

Novus originally agreed to pay Bass Pro Shops $30 million to build it a 200,000-square-foot building, which bumped the cost of the project up $15 million to over $177 million. When Novus later learned Bass Pro Shops would not be part of the development Novus replaced them with a 155,000-square-foot store and entered into a deal with Famous-Barr by promising them $10 million to move from the Westfield Shoppingtown/Crestwood and promising not to charge them rent for the life of the lease.

This change, the motion alleges, had significant legal consequences because under Missouri's TIF Act, as long as Bass Pro Shops was the anchor tenant, 100 percent of the tax revenue generated by the it would go to pay off the TIF bonds: With Famous-Barr as the anchor tenant and moving from one municipality to another within St. Louis County, Missouri's TIF Act allows only a portion of the tax revenue to be used to pay off the bonds.

The motion alleges that when the city, PGAV and the city's bond counsel learned that the revisions changed the project and that it should be sent back to the TIF commission, Novus manipulated its projections to convince them otherwise.

Jonathan Browne, president of Novus Development, was out of town and unavailable for comment.

St Louis Post-Dispatch: www.stltoday.com

Eminent domain ruling targeted by Wisconsin Farm Bureau Federation: The (Milwaukee WI) Daily Reporter, 1/2/06

By Sean Ryan

The Wisconsin Farm Bureau Federation is lending its support to proposed state legislation that would narrow the applicability of eminent domain. The federation listed the Kelo v. New London U.S. Supreme Court decision as a top issue of 2005, and listed legislation to counter that decision as a priority for 2006.

The Kelo ruling affirmed municipalities' authority to use eminent domain to acquire a property and lease or sell it to a private entity for redevelopment. Wisconsin state law already allowed this. The new proposal awaiting a state Senate vote would set criteria — such as a higher crime rate — that targeted properties would have to meet.

"It (Kelo) flipped a light switch on the power that municipalities had," said Tom Thieding, executive director of public relations for the federation. He said the federation is interested in protecting property rights of people who own agricultural land around municipalities that could be targeted for redevelopment.

"From agriculture's perspective, there's a real concern for agricultural land that's right around a municipality because agricultural land is taxed at a lower rate," Thieding said. "They could pretty much straight out say, ‘We want this land, and we're going to condemn it.'"

A concern is that, even if a city sits down to negotiate a price with a property owner, its eminent domain authority would overshadow the discussion, Thieding said. "The private landowner is always at a disadvantage because it's always hanging out there," he said. "I think that allows municipalities to lowball a little bit because they know they can do that."

Williams' bill
Rep. Mary Williams, R-Medford, authored the bill the federation is supporting. It said that property a municipality targets for eminent domain with the intent of conveying it to a private entity must be blighted. That could mean it is dilapidated, unsanitary, overcrowded or too large for its lot, but it must be "detrimental to the public health, safety or welfare."

Any residential property must be abandoned and have a higher crime rate than the municipality it's located in. "It defines the term ‘blighted property,'" Thieding said. "They're trying to narrow it down, so that's a starting point."

Williams' bill has 37 sponsors in the state Assembly and Senate. The state Assembly passed it on an 88-9 vote on Sept. 27. The Senate Committee on Judiciary, Corrections and Privacy — with co-sponsor Sen. David Zein, R-Eau Claire, as chairman — will consider it next. Two of its four remaining members are also sponsors.

The Daily Reporter: www.dailyreporter.com

Business groups and lawmakers join forces to tighten eminent domain rules: Ft Madison (IA) Daily Democrat, 1/2/06

By Gerry Baksys

If you go next door to ask your neighbor for a cup of sugar, chances are that you will get it. If you ask for the deed to their house so you can develop a Wal-Mart, you might not be so lucky.

However, because local and state officials can seize your property to do just that, state lawmakers - with the backing of several business groups - are planning legislation to prevent that from happening.

Under the Iowa and federal Constitutions, the government has the right to seize private property -with just compensation - for ‘the public good.' This practice is called “eminent domain,” and has been used for years to build or fix public properties like streets, parks, or highways.

However, when New Haven, Conn. decided to seize private residences in order to give that property to a private developer, a huge lawsuit arose. The case ultimately went before the United States Supreme Court who, in a 5-4 vote, upheld the city's right to use eminent domain in that instance.

The repercussions of that decision have sent numerous state legislators scrambling to enact laws that would limit the use of eminent domain in their states. Iowa is no different.

According to House Democrat Phil Wise, legislation is already being planned - even before the session starts - to limit the use of eminent domain in Iowa.

“I am working with a bipartisan group to craft legislation to make modifications in Iowa's eminent domain law,” Wise said. “It is in response to the Supreme Court decision in which they made it clear that the notion of public good can be very broadly construed. Some of us believe too broadly construed.”

Wise added that the goal is not to eliminate the power of eminent domain, but to merely limit it to what he said was its intended purpose.

“Eminent domain historically has been used for two things,” Wise said, “One is for the public-good projects like highways or streets, things of that nature. And it has been used in areas that have been designated as blighted. We are trying to find a balance of what is really for the public good. The taking of private property by government is a very powerful tool that needs to be used sparingly.”

Republican House member Dave Heaton agreed. He said that eminent domain should only be used in very specific circumstances, and not for giving private property to private developers.

“I don't have a problem with eminent domain for public projects,” Heaton said. “But I do have a problem when it is used to acquire the land and then hand it to another person for private development. That will be difficult to define. So I look forward to a lot of discussions on this topic.”

Daily Democrat: www.dailydem.com

Survey shows support for eminent domain amendment: Everything Alabama, 1/1/06

By Phillip Rawls, Associated Press

Gov. Bob Riley wants to put Alabama's new eminent domain law into the state constitution, and a survey of Alabama legislators shows many have the same goal.

In response to an Associated Press survey, about two-thirds of the House and Senate said they would support a constitutional amendment.

"As I go through my rural district, that is the number one issue," said Sen. Gerald Dial, D-Lineville.

In June, the U.S. Supreme Court issued a 5-4 decision saying local governments could use their powers of eminent domain to seize property needed for private development projects that would generate tax revenue.

A month later, Riley called the Legislature into special session and won enactment of a law preventing city and county governments from condemning property to use for private development, such as a shopping center or manufacturing plant. It retained the use of eminent domain for traditional projects, such as schools, parks and roads, and to remove blighted neighborhoods.

In a recent interview, the Republican governor said the law addressed the immediate problem, but when the Legislature convenes Jan. 10, he will ask the lawmakers to approve a proposed constitutional amendment that would put the law into the state constitution.

If approved by the Legislature, the next step would be to present the proposed constitutional amendment to Alabama voters in a statewide referendum. If the restrictions are put into the constitution, they would be harder to change than a state law, Riley said.

In an Associated Press survey answered by 73 percent of the House and 91 percent of the Senate, a constitutional amendment had support from 68 percent of the House and 69 percent of the Senate. Opposition came from 15 percent of the House and 16 percent of the Senate, with 17 percent of the House and 16 percent of the Senate undecided.

Senate President Pro Tem Lowell Barron, D-Fyffe, said he sees no need for a constitutional amendment.

"We've addressed that issue. The law we've passed is strong," he said.

Sen. Larry Dixon, who helped write the new eminent domain law, said the fight won't just be over putting the current law into the constitution. It will also be over making the constitutional amendment stronger than the law.

Dixon, R-Montgomery, said he will propose a constitutional amendment that would prohibit the use of eminent domain to remove blighted neighborhoods. Rep. Gerald Allen, R-Cottonwood, said he's working on a similar constitutional amendment that will restrict or ban the use of eminent domain in blighted neighborhoods.

Both expect opposition from city officials who want to retain the power to clean up declining areas of town.

Sen. E.B. McClain, D-Midfield, expects city officials to make a powerful argument. "I think blighted neighborhoods will have to stay in there," he said.

But Allen said Alabama landowners are calling for more protection.

"We feel like the Legislature has a responsibility to its citizens to present the constitutional amendment and let them go to the polls," he said.

Everything Alabama: www.al.com