Eminent domain law could impact riverfront redevelopment plans: Memphis (TN) Business Journal, 6/11/06

By Christopher Sheffield

Eminent domain legislation signed by Gov. Phil Bredesen this week could give renewed hope to those opposing the redevelopment of Downtown property by the Riverfront Development Corp.

Although House Bill 3450 is one of the least restrictive of several bills introduced by lawmakers this past session, certain provisions give landowners some real recourse to having their land taken for economic development purposes, says Kevin Walsh with Harris Shelton Hanover Walsh, who primarily represents landowners in eminent domain disputes.

In the session that just ended, 59 bills were filed by state Democrats and Republicans in both the House and Senate to limit the use of eminent domain by local governments.

The flurry of activity on the issue was in response to the U.S. Supreme Court 5-4 ruling in 2005 that found that the New London Development Corp., acting through the City of New London, Conn., had the authority to take homes for a development plan that included a resort hotel and conference center, a new state park, 80-100 new residences and various research, office and retail space. The case is now often referred to as the Kelo Case, named after local homeowner and lead plaintiff Susette Kelo.

"I do think it is a good step toward addressing the Kelo issue in Tennessee," Walsh says.

Walsh says the legislation, which was signed June 5 and is still being digested by the legal community, clarifies the limited nature of public use for the stated purpose of taking a property for economic development.

"That should provide some comfort to owners of property that there is a recognized prohibition of taking property solely for economic development," Walsh says.

Test case in riverfront redevelopment?
Locally, the most prominent case that may test the legislation is the RDC's $50 million plan to remake 6 acres of prime riverfront property that now contain the Cossitt Library, Fire Station No. 1, the old Customs House (future home of the University of Memphis School of Law) and Confederate Park.

Private developments, including three proposed new buildings, would pay for projects like a two-level promenade and the relocation of parking garages underground. The buildings would be mixed-use, with restaurants and shops lining the bottom floors. Ground leases would keep the property under the control of the city. The plan also calls for pedestrian bridges that would stretch across Monroe and Court and for improvements to sidewalks on the promenade. Grand staircases would provide access to the upper level of the pedestrian walkways.

RDC president Benny Lendermon, who says he had not seen the new legislation as of Wednesday, didn't express much concern about the impact of the new law on RDC's redevelopment plan.

While saying that the RDC has hoped to never use eminent domain to obtain property, he says the process "is important for municipalities to grow and prosper."

Eminent domain is not a favorable option because the governing authority often pays much more than the fair market value to get it.

"The courts always make sure the property owner is duly compensated," he says.

But in the case of the property in question, it may be a question of actual ownership.

There has long been a legal dispute about the use of the property and who has the authority to decide it.

The property was apparently donated by the city's founding fathers for use as a public promenade decades ago, although the heirs of the founders reportedly still hold title.

Legal showdown may be afoot
Arguments over aspects of the donated land have gone all the way to the Tennessee Supreme Court in the past. Some members of the legal community see another legal showdown brewing between the City of Memphis, RDC and the heirs, chiefly the Overton family, whose name is attached to one of the city's largest recreation areas, Overton Park.

The riverfront land in question "was given to the citizens of Memphis," says Virginia McLean, an Overton heir and president of the Friends for Our Riverfront. "The city acts as a trustee of the land."

It was the intention of McLean's family that the land be used as a public promenade or public open space like Boston Common.

She says she is not against the property being developed and improved, "but the question is who is the land being improved to benefit? Improved for a public promenade or private development?"

Despite Lendermon's stated hope that eminent domain would not be involved, McLean says she is confident the city plans to initiate eminent domain proceedings.

Lendermon says since the project was approved by the City Council in 2004 there has been little movement due to the city's budgeting problems and other priorities. But with a new budget approved and those problems seemingly behind it, talks can now begin on how to proceed.

"Dealing with the promenade property in the future will be some target on that schedule," he says.

City attorney Sara Hall did not return calls seeking comment.

RDC's first move is with the city
Whatever direction RDC and the city attorney's office take will first come before the City Council's economic development, tourism and technology committee chaired by attorney Dedrick Brittenum Jr., managing partner of Farris Mathews Branan Bobango Hellen & Dunlap PLC.

Brittenum, who joined the City Council in November and has handled eminent domain cases in his practice, says he was briefed on the RDC and progress on the promenade project by Lendermon just two weeks ago.

He says if any eminent domain proceedings are to begin, the RDC would first have to make the request to the city.

Brittenum says he was about to ask Lendermon if RDC planned to take that step when a fire alarm in One Commerce Square abruptly ended the meeting before Lendermon could answer.

"He was, literally, saved by the bell," Brittenum says.

Memphis Business Journal: www.bizjournals.com/memphis

Developer Wants Eminent Domain Used if Negotiations Fail: WSYR-TV9 (Syracuse NY), 6/13/06

The developer looking to purchase the Warren Street Garage from Miami Investor Eli Hadad says if negotiations to purchase the structure are not successful by July 2nd, he wants eminent domain used so he can take control of the garage.

The developer, Tony Fiorito, tells NewsChannel 9 that he wants to take ownership of the garage, which was closed by city inspectors almost two months ago due to structural issues. Fiorito says he wants to develop the garage, and the entire block it sits on.

So far, Hadad has offered to sell the garage, but Fiorito says he price he wants for it is “outrageous.”

If Fiorito is able to take control, his plans for the renovation include 985 parking spaces, which is something that Excellus Blue Cross/Blue Shield employees should be happy to hear.

Why? They have just learned another garage that’s been offering them a special rate is increasing their prices. The price to park used to be $35 a month, but now it’s going up to $45 a month.

The company that manages the garage says the price increase is a direct result of supply and demand.

The closure of the Warren Street Parking Garage brought a wave of new business to Shopper’s Garage in Armory Square. It’s just a few blocks from the Excellus office, and from the Warren Street Garage, where many employees used to park.

Most who park in the garage say if they have to pay more, they would like to see some improvements.

“I’m willing to pay the extra money if they fix the garage up, but if they are just going to take our money and let the garage fall apart, it’s just going to turn into another Warren Street Garage situation,” one worker told us today.

While most employees say they are frustrated by the rate hike, they say they’ll stay there because it’s still pretty cheap. Most other garages in the area cost between $60 and $80 a month.

The company that owns the garage says the increase is not necessarily permanent, and that prices may go back down when the Warren Street Garage reopens.

WSYR-TV9: http://www.9wsyr.com

Business owner fighting eminent domain: 9news.com (Denver CO), 6/12/06

By Dan Viens

A [Sheridan CO] business owner is trying to stop the city from taking his business by eminent domain.

Richard Downey owns 'Almost Anything Stored.' It is a 16-acre storage lot on the 3800 block of Santa Fe Drive.

Sheridan Police forced the business to close last week because it's within a 300-acre area being redeveloped.

Eighteen landowners in the area have agreed to sell their properties to the city. Ten of the sites were condemned.

The land is being cleared to make room for a Target and other large retailers.

9news.com: http://www.9news.com

A Survey of the Not So “Willing” Sellers: Washington County (ME) Alliance

By Bo W. Thott

A study by the Washington County (Maine) Alliance shows how the Federal Government uses eminent domain to force property owners to become “willing sellers” under threat of condemnation.

The study was done in response to a disingenuous claim in the New York Times by George Frampton, head of the Wilderness Society and later a high-ranking Clinton-Gore Interior official. Frampton wrote that there is no threat of eminent domain against private land owners by Federal preservationist agencies and accused those of opposing the national environmentalist lobby's arrogant plans for the National Park Service and other Federal agencies to take control of most of rural Maine as “whip[ing] up hysteria” over the threat to private property rights. He dishonestly implied that those forced to sell to the National Park Service had no personal interest in their property and so should be of no concern.

An analysis based on a national survey shows that private landowners ostensibly selling their properties to the National Park Service as allegedly willing sellers are in fact not bona fide “willing” sellers. Rather, they give up their titles to escape the futility of legal expenses against a foredoomed condemnation that cannot be legally stopped.

A complete copy of the study is online at http://willingseller.net

The Washington County Alliance is a grassroots, property-rights organization formed in 1988 in response to due-process violations by the National Park Service in a federal/state secret survey for 10 years of a 20-mile coastal area with a view to designate it a Natural Landmark and thus make it a candidate for a National Park.

Washington County Alliance, HCR 69 Box 336, Cutler, ME 04626

Don't falter on eminent domain: Charleston (SC) Post & Courier, 6/11/06

Editorials - Opinion

We're told there's still a good chance that South Carolina voters will get the opportunity this fall to ensure that a government can't use its power of eminent domain to take property from one private citizen and transfer it to another private party under the guise of a so-called 'public purpose.' That actually happened last year in Connecticut and was sanctioned by the U.S. Supreme Court because it was allowed by that state's law. Putting a constitutional amendment on the ballot to make certain it never happens in this state should be an obvious priority when the Legislature returns to Columbia on Wednesday.

Charleston Sen. Chip Campsen is a member of a conference committee working on a House-Senate compromise. Under consideration is a three-part proposal that includes the constitutional amendment and an accompanying new state law that would carry out the intent of the amendment if it is approved in November. The senator also noted that the constitution now allows slum clearance in nine counties. Not only is it unclear why those counties were singled out for that authority, but he said the language needs to be tighter and a statewide policy established.

South Carolina lawmakers were among the first to express concerns after the controversial U.S. Supreme Court eminent domain decision last summer. The high court was careful to note that the decision only applied to those states that have statutes similar to Connecticut where property can be taken for a 'public purpose,' as opposed to a 'public use.' In the Connecticut case, the court stretched the definition of 'public purpose' to economic development and allowed a private developer to acquire private property the city had condemned.

Fortunately, to date in South Carolina, our Supreme Court has consistently ruled that the power of eminent domain can be employed only when there is a 'public use' involved. But Sen. Campsen is among those who point out that a change in the court's membership could eventually change that view. The current court's philosophy simply needs to be written into the constitution. Sen. Campsen said the language being considered would continue to allow the court to decide what constitutes 'public use' on a case-by-case basis. But it would prohibit the court from allowing condemnation for 'public benefit or public purpose' - phrases the Connecticut case proved could be far too broadly interpreted.

Despite the support for tightening the eminent domain provisions, passage unfortunately has been delayed primarily by an effort to include a highly controversial regulatory takings provision that would require compensation to landowners if the use of their property were diminished, primarily through zoning. But Sen. Campsen tells us he doesn't expect that battle to be renewed on Wednesday. Instead, that issue is expected to be carried over for study next session. 'I'm very optimistic,' he said about passage of the eminent domain package.

Failure to agree to the conference committee report would mean a two-year delay in allowing voters the opportunity to strengthen the state's protection of private property through a constitutional amendment. That would be inexcusable.

Charleston Post & Courier: http://www.charleston.net

Eminent domain hard to reverse: Everett (WA) Herald, 6/11/06

By James McCusker

It was the writer Dominick Dunne, I believe, who first noted that the attitude toward the Menendez brothers, both in the courtroom and in Los Angeles society, had changed in response to one word: reloaded.

The two brothers had repeatedly shot their mother and father at their family home in Beverly Hills. The mother somehow survived the initial attack. When the jury heard that one of the brothers then got more ammunition and reloaded the shotguns to finish the job, the character of the trial changed completely.

In our justice system we take into account that we are not always rational, judicious beings. Sometimes we say and do things in the heat of the moment that we wouldn't say and do otherwise. More importantly, we make a distinction between an action taken in the grip of some emotion or in instinctive response to an event, and one taken when there is time to reflect and consider.

The Seattle Monorail Project was not pressed for time. As part of the development plan, the Monorail Project had used eminent domain proceedings to acquire some of the real estate it needed for the elevated rail line. In these proceedings, a government agency exercises its right to take property, provided that the owners are compensated for the fair market value of their holdings.

After the monorail project was rejected by the voters last autumn - the history of voter preferences on this project is a story in itself - the project managers decided to dispose of the property that had been acquired.

Instead of selling it back to the original owners, at least to those owners who wanted their property back, the project managers decided to sell the parcels at public auction. Actually, by their reckoning it wasn't much of a decision, for they believed that the law gave them no choice; it required them to do so.

Bear in mind, though, that there was no unreasonable pressure being applied for an immediate decision on this matter. There were no angry villagers with torches stomping around outside the building. The project management had time to reflect and consider its actions.

It is difficult to imagine, then, why they chose not to do the right thing.

Instead of selling the property to the highest bidder, there were two other options, either of which would have made more sense from the standpoint of logic, of law, of economics, of fairness and of equity.

Clearly the right thing to do was to return the property to the owners from whom it had been taken. The monorail project management believed that the law would not permit a sell-back but only a public auction. Still, with time to reflect, they should have considered that nothing in the law prohibited them from leasing it to the previous owners temporarily while the project management sought legislative relief to sell it back. That was the first do-right option.

Option two was to consider the fact that the public auction itself contained elements that had already violated the economic and possibly the legal foundations of eminent domain. Whatever its faults and limitations, eminent domain is based on the idea of just compensation for any property seized. Seizing property for public use was never intended to be a profit-making enterprise - at least since Henry VIII.

If a public auction is authorized because management believes that it will net the government more money than selling the property back to the owner, this is irrefutable evidence that the property owner was not paid full market value. This was not fair compensation.

There are possible exceptions, of course. Sometimes in particularly large projects property is taken and held for a considerably long time - many years, even decades in some cases. Real estate values can change dramatically in such situations.

But this was not the case with the monorail project, whose ill-starred life was mercifully brief. Moreover, a considerable amount of the property value increases that did occur were caused by city actions, including zoning changes and, most importantly, the abandonment of the eyesore aspect and surface traffic disruptions of the monorail project itself.

In some cases the property value increases were so dramatic that the original owners couldn't compete in the bidding. (How would you like the chance to buy your house back for ten times what you were forced to sell it for?).

The Legislature has taken no action on the eminent domain issue. The people hurt by the seizure process represent a very small constituency. Those small numbers, though, are a reminder of a sad truth: We need to revise the law to force government to do the right thing. Maybe the legislators will consider that in the fall. Certainly they will if we ask them to.

Everett Herald: http://www.heraldnet.com


Eminent Domain Ombudsman, An Important First Step: Westport (CT) News, 6/9/06


The U.S. Supreme Court in the summer of 2005 caused a stir nationwide with its decision in a Connecticut case of eminent domain.

The Court ruled 5-4 in Kelo vs. New London, allowing the City of New London, on the east end of this state's shoreline, to use the power of eminent domain to dispossess the residents of Fort Trumbull, a blue-collar neighborhood once a haven for early 20th-century immigrants and cradle of industrial workers, of their homes. What caused such a commotion was that in this case, eminent domain was being used not to make land available for public projects, such as schools, highways or hospitals, but for private development.

Five justices, however, were satisfied that the increased property-tax revenue that could be expected from development was sufficient public good for taking this residential property.

The state Legislature, much to the chagrin of some of its members, including New Canaan's Rep. John Hetherington (R-125), did not pass any bill limiting Connecticut's power of eminent domain. It did, however, establish an Office of Ombudsman for Property Rights, with a budget of $200,000. Connecticut thus becomes one of 18 states concerned enough with possible abuses of eminent domain to establish such an office.

Sen. Orrin Hatch of Utah spoke out in his home state less than one week after the Kelo decision, boasting of the Utah Property Rights Model, which included the establishment of an ombudsman. He claimed great successes in the model for property owners in that state, not in changing the standards government can use to apply eminent domain, but in making sure those standards are in fact followed.

It is only fair to point out that eminent domain attempts thwarted in Utah may have less dire consequences for the intended projects than in Connecticut, a far more densely developed state.

Hatch has introduced legislation that would take the Utah model to the federal level, establishing a national property rights ombudsman.

Until such legislation passes Congress, however, we can only hope that Connecticut's ombudsman will ensure property owners' rights, long held as among the basic rights on which this country was founded. We also should point out that this should be an elected position the legislation passed provides for appointment by the governor. A position designed to protect private citizens from abuses by their government should answer to them, not to the government.

As for the application of eminent domain for private development, it has not proven popular with voters nationwide, and couching it in the promise of increased tax revenue even if that is ultimately for the good of all has not been enough to convince them. A recent example of how little citizens think of increased tax revenue as a public good took place this year in New Canaan, where a vocal opposition stopped at least for the time being the sale of unused, town-owned land to developers as a revenue driver for the town. If the hue and cry against the sale of open land was so high, it only goes to show how distasteful many must find the use of eminent domain for residential property for revenue generation. And blight laws and building codes should suffice in the oft-cited cases of residential property that has been neglected.

We hope the Office of the Ombudsman, which goes into effect July 1, will be successful in ensuring that property rights are not taken away in a manner that falls outside the established eminent domain laws. Perhaps that is a first step toward further legislation that expands the laws in ways that our society democratically decides are appropriate for protecting residential property.

Westport News: http://www.westport-news.com

Eminent-domain land buy adds to Restaurant Row: The (Riverside CA) Press-Enterprise, 6/9/06

It brings the city a step closer to having a dining district on Merrill Avenue

By Doug Haberman

The [Riverside] Redevelopment Agency this week signed a deal to buy a parcel it was seeking for a proposed Restaurant Row on Merrill Avenue across from Riverside Plaza.

The agency agreed to pay owners Joseph and Mary Yoder $1 million for the parcel holding the Audio Shoppe, deputy city attorney Eddie Diaz said.

Alan Hickman, owner of the Audio Shoppe, said he has been there 22 years and is irritated he has to leave.

But he hopes to draw on his contacts around town to find a new location.

"All in all, it might be OK," Hickman said. "I'll make it all work."

The deal with the Yoders takes the city one step closer to turning Merrill between Riverside and De Anza avenues into Restaurant Row.

The agency previously bought two parcels for a combined $1,683,200, Diaz said.

The city is seeking to acquire three remaining parcels, owned by the Garner Family Trust, by eminent domain.

These parcels include two that hold boarded-up, vacant buildings and one that houses auto-related businesses.

A Riverside County Superior Court judge granted the agency an order of possession May 17, but the Garners haven't been served with the eminent domain complaint yet and they have 90 days after that to contest the order, said Mark Easter, an outside attorney for the city.

Roscoe Keagy, an attorney representing the Garners, said his clients had not decided if they would dispute the agency's right to take their property by eminent domain or if they would simply go to trial over the fair-market value.

The city deposited $2,639,000 with Riverside County Superior Court as probable just compensation for the three Garner parcels, court records show.

The idea of a Restaurant Row on Merrill has been around for years but the revitalization of Riverside Plaza has given the city new impetus to pursue the project.

No restaurants are lined up yet but "we do have a lot of people who have called," Development Director Belinda Graham said.

The plan is for the agency to ask developers to submit proposals.

The agency would sell the six parcels to the developer chosen, Graham said.

But the agency isn't waiting to make what progress it can.

Workers this week were demolishing a building on the westernmost of the six parcels, the former home of Riverside Plaza Tire & Auto. It is one of the parcels that the agency bought.

The Restaurant Row project only affects the six parcels in the middle of Merrill.

The Staples store and VIP Nightclub & Restaurant on the west end of the block and America's Tire Co., Market Broiler and Marie Callender's restaurant on the east end will remain where they are, officials said.

Councilman Art Gage, whose ward includes the Plaza neighborhood, said the tire store does not fit in but has been renovated and nicely maintained.

The Restaurant Row project might not be only restaurants, he and Graham said.

The council's Development Committee approved guidelines for the project that call for two- and three-story buildings with restaurants, stores and entertainment outlets on the ground floor and office space or even residential units above. A parking structure also would be needed.

Rodney Couch, owner of the Market Broiler, said Riverside could use more mid-priced casual-dining restaurants like his and the El Torito that is set to open soon at the Plaza.

"I think it's a wonderful idea," he said.

The Press-Enterprise: http://www.pe.com

Many large redevelopment projects on hold: Fresno (CA) Business Journal, 6/9/06

Forest City, other developments in limbo because of eminent domain initiative

By Adrian Rodriguez

Forest City Enterprises is not going to bring forward plans for the south stadium project while a proposed initiative takes shape that could effect private developers’ ability to develop private property.

The city council had asked Forest City to submit alternative site plans for their proposed 85-acre mixed-use project in downtown Fresno, in a project area south of the Grizzlies Stadium. Forest City was due to present those plans at the end of this month, but because it appears one initiative will make the state ballot in November, Forest City won’t make its next move until after that time, said Marlene Murphey, director of Fresno’s Redevelopment Agency.

An initiative to amend the California Constitution is being proposed that would bar state and local governments from condemning private property for private projects or uses.

The initiative also would limit the government’s authority to adopt certain land use, housing, consumer, environmental and workplace regulations, unless “regulations are adopted to preserve public health or safety, or comply with specified land use planning and property rights limits.”

Supporters will need to gather 598,105 signatures by July 7 in order to place the initiative on the November ballot. State Senator Tom McClintock (R-Northridge) and the Howard Jarvis Taxpayers Association have teamed up for the campaign and have formed a political action committee. An up-to-date listing of contributions to help pass the initiative was not available at press time.

Murphey said the uncertainty has put many proposals, such as Forest City’s, in question.

Dave Spaur, executive director of the Economic Development Corporation serving Fresno County, said that large redevelopment projects are on hold – not just in California, but across the United States.

“The International Economic Development Council is following eminent domain very closely,” he said. “Nobody has to wait, but developers are putting everything on hold because it’s created a huge question mark.”

Spaur said some of the proposals winding their way through the legislative process may be “bad apples” that have likely spoiled many deals already.

“It’s just this legislation hanging over people’s head,” he said. “It’s a national story, and then it’s a state story, and you have several large redevelopment agencies in the state, [that] have millions tied up in redevelopment.”

While Spaur said that Fresno has been “fairly prudent” about its redevelopment projects, cities such as Los Angeles, San Jose, San Diego and Anaheim have multiple projects with multi-year timelines.

San Diego and San Jose in particular are beyond the point of no return, he said.
Spaur said eminent domain has been a national issue since cases in other states, such as New Jersey and Arizona, put a spotlight on the practice. In Arizona, the City of Mesa had proposed to use eminent domain to acquire a bike shop and transfer the land to a privately owned hardware store so that it could move to the more desirable location.

In October 2001 the bike shop’s owner filed suit, asserting that Mesa was abusing its power of eminent domain, according to the Institute for Justice, which represented the bike shop owner.

This is just one case of many, Spaur said.

Fresno Business Journal: http://www.thebusinessjournal.com

A Whalom's tale — Eminent domain not the answer: Fitchburg (MA) Sentinel & Enterprise, 6/7/06

[Fitchburg] Selectman Steven deBettencourt surprised selectmen and residents earlier this week with a proposal to take the former Whalom Amusement Park site by eminent domain and create a development to residents' liking there.

Global Property Developers Inc. has proposed a 240-unit condominium project for the site.

"We've seen the plans, it's not how we want to go," deBettencourt said. "We'll put together a project and sell it back to a developer."

Selectmen approved putting the proposal on the June 27 special town meeting warrant by a 3-2 vote.

Board of Selectmen members Dan Cronin and Paula Bertram, along with deBettencourt, voted in favor. Chairman Robert Bowen and Selectman Tom Alonzo voted against the proposal.

"The timing is right," deBettencourt said. "I haven't seen anybody put their neck on the line lately."

Unfortunately for town residents, deBettencourt's proposal to take the 31-acre property by eminent domain is putting more than just his neck on the line, it's putting the future of the area on the line as well.

The former amusement park has sat abandoned and neglected for years.

It is an eyesore, health threat and public safety threat that diminishes the value of all the properties around it.

We don't agree with all of the components of the plan by developers to put upscale condominiums and townhouses on the site — in particular we think there should be a significant amount of affordable units included for local residents — but trying to take the land by eminent domain makes no sense at all.

Town officials should be working with developers to get the kind of plan they want, not launching some farfetched proposal to take the land by eminent domain, which will inevitably end in failure, after years of legal battling.

Any attempt to take the land by eminent domain will no doubt lead to a years-long legal battle over what the fair market value of the property is.

Considering how much land we're talking about, its location — just over the line from North Leominster in Lunenburg — and its proximity to Lake Whalom, the town is looking at a huge pricetag to compensate the owners.

Would $20 million really be an unreasonable amount for the owners to expect?

And considering voters won't even pay for small increases in the town's operational budget, do you think they would be willing to kick in millions of dollars to buy a vacant, burned-out amusement park?

We don't think so.

Then there's the question of what to build there instead of a housing development.

There's a lot of nostalgia surrounding Whalom Park, and many people would no doubt like to see the amusement park rebuilt and reopened.

That will never happen.

And no company is going to come in and put a major business at the site, which is located up Route 13 and several miles from Route 2.

There's basically two options for the park: It can become a housing development, or it can sit there unused, looking more run-down every day.

Sadly, no one is going to bring back the old days.

It's time to move on.

Fitchburg Sentinel & Enterprise: http://www.sentinelandenterprise.com

City's attempt to seize business through eminent domain laws fails: WAVY-TV (Portsmouth VA), 6/7/06

The Virginia Supreme Court has ruled that the City of Norfolk overstepped its authority in trying to seize a junkyard through the use of eminent domain laws.

Junk yard owner Chuck Andrews sums up Coca-Cola's attempt to get his land cheap by having the Norfolk Redevelopment Housing Authority [NRHA] condemn it through eminent domain by saying "they thought they could get it for nothing so [they] found [they] can't get it for nothing".

The Supreme Court ruled the NRHA did not deny Andrews due process - that taking his private property to stem blighting and deteriorating conditions is a public purpose.

Even if the land would be given to Coke for a parking lot.

However the Supreme Court ruled the authority's plan was flawed, and overbroad.

The court also ruled the authority failed in not giving Andrews a one year notice to correct the blight - to make it right.

Noted property-rights attorney Joseph Waldo had argued the authority didn't want Andrews to correct the blight, they just wanted him to leave so the property could be leased to Coca-Cola.

The authority had no comment at all - especially on the question of will it now give Andrews a one year notice.

WAVY-TV: http://www.wavy.com

Send eminent domain bill back to the drawing board: Clinton (IA) Herald, 6/7/06


With one stroke of his executive pen, Iowa Gov. Tom Vilsack on Friday vetoed the eminent domain restrictions approved earlier this year by the Iowa Legislature. The result is that nothing has changed from where we were six weeks ago, except now several Republicans are mad at the Governor for yet another reason.

This is of interest to us in Clinton because many people, including our mayor and state senator (political opponents as of today, of course, as she seeks his seat) have intimated the power may be needed to acquire South Clinton properties as part of the Archer Daniels Midland/Metabolix PHA plastics plant.

It was concern about the ADM project — and its $280 million investment, not to mention millions in annual salaries — that was the main reason lawmakers passed the laws in April while voting not to enact them until October.

If lawmakers felt so strongly about the need to protect the rights of property owners, then why not make the rules effective immediately? By agreeing to delay them for six months, lawmakers basically conceded that such laws could have damaging effects on important capital projects such as this ADM expansion. They were more than willing, it seemed, to risk the future of unannounced efforts, no matter how great the promise, but had no desire to stymie that which already was on the drawing board.

We continue to believe this process can and should happen without eminent domain as did the last South Clinton buyout, but that’s not today’s issue. Today’s issue is why other states — notably Minnesota, Kansas, Nebraska, Vermont, Pennsylvania, Wisconsin and Connecticut — can reach reasonable compromise on eminent domain legislation and yet Iowa’s 150 lawmakers and governor are unable to do the same.

Is it because, at just four months, the legislative session is too short to give due focus to important issues? Is it because election year politics played a larger part than an honest concern for what’s right? Is it because Iowans are so much more complicated than Minnesotans and Nebraskans that crafting a compromise policy would be too daunting a task? Is it because Iowa’s law was simply a knee-jerk reaction to a Supreme Court case that originated in Connecticut and therefore does not address a tangible problem in this state? Is it because the power is divided so evenly at the Statehouse that the majority party has a total of just two more votes between both chambers?

Or is it simply because no one with the power to make laws has done a good enough job learning what eminent domain is about, why we do or do not need it and what it should or should not be used for?

This issue does not require a special legislative session, as top lawmakers from both parties have indicated. It requires all elected to officials to spend some time over the next few months looking at a wide variety of sources — private property owners, commercial, residential and industrial developers, city administrators and elected officials, economic development officials and similar legislation in other states — and heading back to Des Moines in January with a blank slate and fresh ideas about what can be done to make this right, that is if anything needs to be done at all.

This time, let’s do it right.

Clinton Herald: http://www.clintonherald.com

More limits on eminent domain in St. Charles: St Louis (MO) Post-Dispatch, 6/6/06

By Mark Schlinkmann

The [St Charles MO) City Council on Tuesday night passed new restrictions on the use of eminent domain, believed to be tougher than statewide changes approved last month by the Legislature.

"From a local standpoint, I just don't think they really understand how volatile this issue really is," the main sponsor, Councilman John Gieseke of the 8th Ward, said of the state lawmakers.

Under the St. Charles measure, property could be condemned to make way for a shopping center or some other tax-producing project only in limited situations - such as when there is "a harmful or unproductive use of land."

As examples, the bill cites abandoned property, public nuisances and structures beyond repair or unfit for habitation. Also allowed would be the forced buyout of property with at least a 50 percent decline in assessed valuation over two years or nonresidential buildings lacking a business license for a year.

Eminent domain also could be used to acquire residences occupied by renters, whatever the condition of the buildings. The measure, which was approved on an 8-0 vote, would continue to use existing standards of condemnation to obtain land for public purposes such as building roads, parks and sewers.

In February, a similar council bill narrowly failed. In the meantime, the council considered a controversial redevelopment plan for part of the Frenchtown neighborhood.

After weeks of discussion, the council exempted existing businesses in that area from eminent domain by applying restrictions similar to those approved for the entire city Tuesday night.

The statewide bill passed by the Legislature requires cities to pay owners of homes bought through eminent domain 25 percent more than the property would command on the open market. People who had owned their homes for 50 years would get 50 percent more. That also would apply to businesses with fewer than 100 employees.

The state measure drew criticism because it did not change the definition of blight. That allows condemnation of land for having a defective or inadequate street layout, improper subdividing or obsolete platting, among other factors. The new St. Charles measure would not allow use of eminent domain for economic development for those reasons.

St Louis Post-Dispatch: www.stltoday.com

Napolitano rejects eminent domain reform: East Valley Tribune (Mesa AZ), 6/7/06

By Dennis Welch

[Arizona] Gov. Janet Napolitano has rejected a measure she says would keep cities from rejuvenating older, more rundown areas of town.

Napolitano vetoed a bill Tuesday that would have kept local governments from condemning property to make room for other types of development. The bill made it harder to declare eminent domain, unless there was a clear public need for things such as roads or parks.

It also would have forced cities to give a slum or blight designation to individual properties, instead of large swaths of land. And property owners would have had a chance to make improvements before the government forced a land sale.

But the governor said the bill went too far by severely limiting the ability of cities to deal with urban blight. She argued that local governments need to balance the rights of private property owners with the need to redevelop rundown areas.

“Without such a balance, slum areas can go unabated and become epicenters of criminal and gang activity,” Napolitano said.

The bill’s supporters say it would have given property owners further protections against local governments looking to take their property and turn it over to private developers to raise sales tax dollars.

Sponsor Sen. Chuck Gray, R-Mesa, likened the use of eminent domain to “tyranny.”

Gray introduced several eminent domain reform bills this session and has vowed to take the issue to the voters on the Nov. 7 ballot.

But lawmakers killed a similar measure earlier this year that would have let voters decide the fate of eminent domain.

Jennifer Perkins, an attorney with the Arizona chapter of the Institute for Justice, said local governments have far too much discretion when deciding to use eminent domain.

The institute successfully defended Mesa brake-shop owner Randy Bailey against the city’s effort to condemn his downtown property in order to build a hardware store. Appearing on television’s “60 Minutes” in 2003, Bailey’s story put the East Valley in the center of a national controversy over appropriate use of eminent domain.

Intensity on the issue increased last year when the U.S. Supreme Court ruled that a small town in Massachusetts could take private homes for economic development.

Between 1998 and 2002, there were more than 10,000 reported cases of cities and towns attempting to use eminent domain, according to the institute.

“This bill was an opportunity to break up the unholy alliance between tax-hungry cities and money-hungry developers,” Perkins said.

East Valley Tribune: http://www.eastvalleytribune.com

Eminent domain bill approved: Kinston (NC) Free Press, 6/7/06

By Barry Smith

The [North Carolina] state House on Tuesday gave its unanimous approval to a bill intended to prevent local governments from taking private land for private economic development purposes.

“It” will protect the private property rights in North Carolina,” said Rep. Bruce Goforth, D-Buncombe, who introduced the bill.

The bill’s other sponsor, Rep. Wilma Sherrill, R-Buncombe, told fellow House members that the bill would repeal nine laws giving certain local governments the authority to use eminent domain for economic development purposes.

The U.S. Constitution allows governments to take land from private owners for public use, provided that “just compensation” is paid to the owner.

Last year, the U.S. Supreme Court, in giving states some leeway in defining public use, allowed a Connecticut town to take private homes for private development.

Following the case, which became known as the Kelo case, the House set up a committee to study the issue.

Sherrill said that the committee would continue to look into other issues related to eminent domain, including whether the state should be required to pay attorneys and appraisers fees in some cases.

The bill passed the House by a 115-0 vote. It now goes to the Senate.

Rep. Skip Stam, R-Wake, would like to see lawmakers go farther than just approve a new law. He wants to see the General Assembly approve an amendment to the N.C. Constitution banning such uses of eminent domain and giving property owners just compensation and trial by jury rights in disputed cases.

“We need both bills,” said Stam, who has gotten 88 House members to sign on to his proposed constitutional amendment.

He said that if the state constitution isn’t changed to protect property owners, provisions could be slipped into bills allowing local governments to take such action.

“People need to be secure that their homes or property can’t be taken for this purpose,” Stam said.

Stam said that North Carolina is one of the few states that don’t have a constitutional “just compensation” requirement for eminent domain cases. And he said that while the state statutes require jury trials in disputed cases, that guarantee should be written into the N.C. Constitution.

Amendments to the N.C. Constitution require a three-fifths majority in both chambers of the General Assembly. That translates in to 72 votes in the 120-member House and 30 votes in the 50-member Senate. Then the proposed change would be submitted to the voters of North Carolina for approval.

If the General Assembly approves the proposed change in the N.C. Constitution, it would go to the voters on Nov. 6, 2007.

Kinston Free Press: http://www.kinston.com

Eminent domain could hit home with new development: Hammonton (NJ) News, 6/7/06

Letter to the Editor

By Ann Tomasello, Hammonton NJ

I wrote this letter in July of 2003 and never mailed it. Now is the time.

It is good to see that some members of Town Council are aware of the trauma involved with the loss of your home. Here is one story about Dominic (Buddy) Zinno. The school board decided they wanted Buddy's property to build a new school. They told him there was no sense fighting it — it would be expensive to fight and they would get it anyway.

He was born in that house on the White Horse Pike and he planned to die there. He worked in the fields during farm season and did other tasks at other times of the year. He asked if he might live in that house until he died. He was told no, that they needed the piece of ground that his house was on.

An auction was scheduled for Saturday, April 8, 2000, to sell farm equipment and anything else he wanted to auction. On Friday, April 7, he was on his way to the DMV at 7 a.m. to get a title on a vehicle to be sold. On Tilton Road, (his first trip on that road in 30 years) a driver fell asleep, crossed the line and hit him head on.

His good friend was a passenger and is now confined to a wheel chair and has many other problems. It was touch and go with Buddy and of course he has had continuing problems. While in the emergency room about eight hours after the accident, he asked to get the auction postponed. They refused to do this and sold things he wanted to keep. Some of the prices were ridiculously low, but no one could stop it.

Some time later, Buddy read in the paper that the valuable frontage where his house was would be sold for a great price to make money for the school system. This was the land that was "needed." Since they would be selling it for more than they paid Buddy, someone stopped it (at least temporarily). We still wonder why others were permitted to keep their houses in that "needed" area.

Farmers get a tax break on land used for farming. If they choose to sell this ground for other than farming they must pay the higher back taxes for three years. The school board representatives asked the town to waive these back taxes. The tax person said that Buddy sold his property "voluntarily" so he had to pay those back taxes. How is that for a kick in the teeth?

Buddy had bypass surgery in September 2002 and is now again very ill in the hospital. I do not know if any of these horrible problems were caused by this terrible stress but they were not helped. He worked hard all his life and asked nothing of anyone. It would have been nice if his last years could have been lived in peace.

For those of us who never care until a problem hits us, do not be complacent. With new schools, new town halls, new recreation departments and whatever else the powers can think of, some of the rest of us may know how it feels to lose a home.

In October 2003, Buddy died of cancer. His house still stands as an awful reminder of what we do to people. He was unnecessarily rushed out. Can we keep this in mind for the next eminent domain situation?

In August 1999, I wrote a Letter to the Editor to the papers saying we voted for the new school after being told our property taxes would not increase. I suggested that with the interest on the loan and unforeseen expenses, the cost would be millions more than the price quoted. Perhaps we should wait to see the tax impact before starting other projects.

We voted for the current School Board to straighten out the mess created by prior boards. It seems like more of the same. This Board in its infinite arrogance has disregarded all the work done by a quite impressive group of financial people without even exploring their suggestions. Is this to make a point, whatever it might be?

There is unrest in this town, and the people are angry. The board seems intent on rushing us to further disaster, and this may include the teachers' contract.

The first qualification for teaching should be that you must work out in the world before you teach in a school. No matter how teachers complain, three months off in the summer is not a bad deal. Arrange to get your checks spread over 12 months. With lunch and planning time, how long is your day? I am not talking about the dedicated ones who work hours at home. While I am talking about good deals, who in the work force today does not contribute to their medical coverage?

Perhaps if greed and ego were put aside, we could find a satisfactory compromise to straighten things out without harming anyone.

The Hammonton News: http://www.thehammontonnews.com


Bill would guard against abuse of eminent domain: Asbury Park (NJ) Press, 6/6/06

Some critics doubt proposal would protect homeowners

By Gregory J Volpe

[New Jersey] Assemblyman John Burzichelli has proposed legislation giving residents more protection against government's use of eminent domain, though it left some critics unconvinced that it will accomplish that.

Burzichelli, D-Gloucester, chairman of a committee that held a series of hearings this year on the topic, proposed a bill last week that would ensure property owners receive fair market value; give them more notification when a municipality is looking to redevelop; and shift the burden on government to prove redevelopment is necessary.

"The goal here has been to restore public confidence that government is not just waiting in a corner somewhere to take your home at a whim," Burzichelli said. "When you look at this structure from top to bottom, there will be no whim involved."

Jeff Tittel, director of the New Jersey chapter of the Sierra Club, said the proposal wouldn't ban pay-to-play for those involved in redevelopment projects nor significantly alter the definition of the term "blighted" — which over the decades has come to mean property that could generate more tax dollars if redeveloped.

"Basically, you're going to be told up front you're going to be screwed, where now you'll be told later," Tittel said.

Bill Potter, chairman of the New Jersey Coalition Against Eminent Domain Abuse, said the bill does not do what state Public Advocate Ronald K. Chen recently recommended: provide a limited, objective definition of blighted areas.

"There are some useful procedural improvements, but I don't think it deals with the fundamental issues of what properties are blighted," Potter said.

The bill's language says underutilized property can still be taken, but Burzichelli said it would prevent towns from irresponsibly taking land.

"There's been considerable work done by all parties to make the delineation process tighter and giving less of an opportunity for ambiguous interpretations," Burzichelli said.

Will Senate follow suit?
Michelle Bobrow, who owns a seasonal house in Long Branch's Beachfront South zone that is threatened by eminent domain and who is active in a statewide group opposing eminent domain abuse, said Burzichelli's bill is a positive step but only if it is echoed in the Senate.

"If there is action in the Assembly, that does not guarantee action in the Senate, and therefore it will be as good as nothing happening," she said. "The other thing is, of course the public has become outraged learning what is going on in our state regarding eminent domain abuse."

She also talked about the court cases that could affect the direction of redevelopment in Long Branch, particularly one in which 24 property owners in the Marine Terrace, Ocean Terrace and Seaview Avenue area are challenging the right of the city to condemn their parcels for use in the second phase of the Beachfront North luxury project.

A decision in that case in imminent.

Long Branch Mayor Adam Schneider noted he has not yet read the bill so he didn't want to comment extensively on it. But he endorsed the legislator's ideas for giving displaced property owners the right of first refusal in a new development, and for more transparency, both of which were done in Long Branch, he said.

Pay-to-play an issue
Assemblywoman Amy Handlin, R-Monmouth, a member of the Assembly Commerce and Economic Development Committee, said redevelopment plans need a six-year political contribution ban from companies and individuals involved.

"No matter how many safeguards we build into new legislation, the public perception remains that redevelopment is a matter of back-room tricks and sweetheart deals," Handlin said.

Burzichelli said redevelopers would be subject to pay-to-play laws already enacted by the Legislature.

His bill was crafted in response to last year's U.S. Supreme Court decision that upheld government's right to take land for commercial redevelopment. The Supreme Court said the constitution allows eminent domain but that states could limit its use.

The New Jersey State League of Municipalities, which has argued that eminent domain is a necessary redevelopment tool, said the proposal is a fair compromise to calls for banning the practice.

"Generally speaking, the direction that they're moving in is a great step forward," said William Dressel Jr., the league's executive director.

The proposal is expected to be formally introduced Thursday. Burzichelli — who expects the proposal to change — said it will be the only item discussed when his commerce committee next meets, which could be June 12. He said it's possible the Legislature will approve the bill by July.

Asbury Park Press: www.app.com

Broad Eminent Domain Powers for Chicago? Gazette Magazine (Chicago IL), 6/6/06

By Vivian Malli

Small businesses and property owners beware. New Illinois eminent domain legislation awaiting Governor Rod Blagojevich's signature would allow the City of Chicago to take property on behalf of private parties, such as larger developers and businesses, so long as it serves a “public purpose,” which would include "economic development" and the "elimination of blight." Such legislation could have national implications

The City also would be free to use eminent domain for development of O’Hare Airport and within 140 existing TIF (tax increment financing) districts thanks to the lobbying efforts of the Illinois Municipal League (IML), which secured amendments excluding those projects from the original version of the State Equity in Eminent Domain Act (SB3086).

Because TIF districts can remain active for up to 23 years, the legislation would provide broad, long-term license for the City’s eminent domain powers in roughly 30% of Chicago’s land area.

Critics charge that the amended version of SB3086 does little to prevent eminent domain abuse. “As passed out of the Senate, it was a very good bill," said Jim Tarbet of Citizens Initiative Against Overdevelopment, who also criticized the bill’s effect on low income families. "These ‘little changes’ requested by IML and the City of Chicago virtually neuter the bill.

“In the case of Chicago TIF districts, you are displacing lower and moderate income families and businesses and ultimately driving up their costs and creating losses. The people lose for government gains,” Tarbet added.

The bill’s broad definition of “blight” raises concerns that any small business or property can be condemned. “In Illinois and in so many other places, ‘blight’ is really in the eye of the beholder,’ said Bert Gall, a staff attorney who works on eminent domain abuse cases nationwide for the Institute of Justice. “Unfortunately, ‘blight’ can be so expansively defined that you can be condemned for things like not having two full bathrooms, which was the case in Lakewood, Ohio.”

Although the IML officially remains opposed to SB3086, a spokesman defended the changes to the bill.

The amendments “improved the bill greatly and made it more livable,” said Roger Huebner, who serves as general counsel for the IML. The final version of SB3086 is “going to make the taking of property for economic development more challenging. It’ll make it more costly, but it sets up a process where you’re able to take property under certain subsections for economic development.”

Real estate policy expert Jon Devries believes municipalities have a legitimate need to protect the use of eminent domain to promote their local economies. The original form of SB3086 was “an excessive reaction to a few abuses” that would limit the ability of mayors and city planning departments “to better assist projects for job creation in the future” according to Devries, who serves as director of the Marshall Bennett Institute of Real Estate at Roosevelt University in Chicago.

Chicago Mayor Richard M. Daley’s office did not respond to the requests for comments regarding the bill.

Amendments to SB3086 allow properties to be condemned for "blight" so long as they are located within a designated "blighted" area, such as a TIF district, even if the property itself does not have any "blighting factors."

Under the bill’s final version, the State, a school district, or any unit of local government can exercise eminent domain to acquire private property for public ownership and then transfer control to a private party to operate businesses, such as restaurants, stores, gas stations, parking garages, and rental car facilities, that are “related to the condemning authority’s operation of a university, medical district, hospital, exposition or convention center, mass transportation facility, or airport.”

Those provisions for “public ownership-private control” raise deep concerns among property rights activists, who point to the recent U.S. Supreme Court ruling of Kelo v. New London, which allowed a city to condemn 15 houses for a private developer to build a luxury hotel, condominiums, and office buildings.

“The city [of New London] was going to condemn the properties and then lease them back for 99 years at $1 a year to a developer," said Gall, illustrating the problem that SB3086 can pose for small property and business owners. "Even though the city was going to have title to the property, the developer was going to be controlling the property.”

Gazette Magazine: http://www.nearwestgazette.com

Endgame In New London, or, Another Successful Five-Year Plan: Reason Magazine, 6/8/06

Last decade's business model and this week's evictions

By Tim Cavanaugh

To understand why the last two homeowners in the Fort Trumbull neighborhood of New London, CT are now in the process of being evicted from their homes, consider this:
More than half the property in New London generates no tax revenue for the city because it's owned by several colleges (including Connecticut College, the Coast Guard Academy, and Mitchell College), by churches, hospitals, or by the city itself. The Fort Trumbull redevelopment project—in which the city took over 115 lots, forcibly removing 15 homeowners whose fight to remain in their homes has been immortalized in the U.S. Supreme Court decision Kelo v. New London—was designed to address this very problem, and the prospect of increasing the city's property tax revenues was a central factor in the high court's decision to allow the transportation by force of American citizens.

As Justice John Paul Stevens wrote in his decision:
The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including — but by no means limited to — new jobs and increased tax revenue. As with other exercises in urban planning and development, the City is endeavoring to coordinate a variety of commercial, residential, and recreational uses of land, with the hope that they will form a whole greater than the sum of its parts.

This week the New London city council voted 5-2 to begin evicting the last of the Fort Trumbull property owners, Susette Kelo and Michael Cristofaro. Barring an unlikely intervention by the state of Connecticut, the Fort Trumbull neighborhood will have been vaporized within 60 to 90 days.

And the only project the New London Development Corporation is currently working on is a National Coast Guard Museum — a public building that will pay no taxes to the city.

All but one of the remaining projects associated with the Fort Trumbull development — the condominiums, the retail shops and restaurants, the hotel half of whose rooms Pfizer, Inc. promised in 1999 to keep permanently filled — are out where the woodbine twineth, vaporware with no visible means of support.

If you want another example (beyond the intrusion on individual rights) of why eminent domain abuse needs to be stopped, New London is in the process of providing it. The city is in the final stages of removing private property owners in the name of a development plan that is nearly ten years old, drafted in an era of post-cold-war base closings, soaring profits for pharmaceutical companies, and a depressed real estate market. That is to say, at a time when the local, state, and national economies were entirely different from what they are today. Pfizer, a private company, has already moved on from its entanglement in the Fort Trumbull mess. The city of New London can't. They broke Fort Trumbull, and now they've bought it.

Activists have made much of the fact that the Kelo case centered on an eminent domain taking for private, rather than public, benefit; and there have been some interesting counterarguments questioning whether there is a legal difference between the two. In the July issue of Reason, the 9th Circuit Court's Judge Alex Kozinski argues that there is not: "What's the difference between taking property for public roads or anything else?" Kozinski asks. "Do only public automobiles travel on public roads? I don't understand why it's a problem. If the government thinks the city will benefit by having a road there instead of having your house so that people can drive their private cars on it, then it has to make that decision. Who owns the road really doesn't matter. What matters is that it makes it easier for other people to get from point A to point B using their private vehicles for private purposes. You could say 'but it's my house and my private purpose is more important than your private purpose.' But we live in a society."

Whatever the legal merits of that argument, there's a strong economic argument against it. "If we throw these people out, there's no financial gain to the city," says Charles Frink, one of the two New London city council members who voted against the evictions this week. "So it's not only immoral, it's irrational."

A 2001 economic impact analysis of the Pfizer/Fort Trumbull project is a hilariously precise and airy projection of how the development would save the city. We're told, for example, that
Upon completion, these developments will directly create 4,174 new jobs in the city, of which 4,172 will be private sector, non-farm jobs. The largest employer will be Pfizer, which will add 2,040 new jobs by 2004. The other large employers will be the office complex, projected to add 1,166 new jobs; the biotech labs, projected at 942 workers; and the hotel, projected to employ 120 workers.

History had other plans. Pfizer, which built a new waterfront research facility in the late nineties as part of the original project, does not disclose how many of those 2,040 jobs were created by 2004 (nor does the New London Development Corporation reveal what those two presumably public-sector farm jobs will be). But the company is not as well positioned to shed its bounty on New London as it was in 1998. Now the world's largest pharmaceutical firm, Pfizer is operating in a business environment that could not be more different than the one it enjoyed in the late nineties, losing money, losing patents, and battling a hostile market.

As a result, the company's enthusiasm for the Fort Trumbull development has cooled, and the controversy surrounding the project has prompted Pfizer to distance itself from the NLDC and disavow any role in shaping the project. This is a considerable mood change from March of 1999, when the company's then-director of research George Milne wrote in a letter to then-NLDC president Claire Gaudiani:
The Fort Trumbull area is integral to our corporate facility and to the plan for the revitalization of New London to a world class standard. The Amended Reuse Plan will provide a waterfront hotel with about 200 rooms, a conference center and physical fitness area, extended-stay residential units and 80 units of housing.

We will use the proposed hotel and conference facility as an extension of our facility committing to 100 of those rooms on a daily basis for visiting international staff and other professionals. In addition we require conference space and are exploring a "virtual" Pfizer University to keep our researchers up to date on the most recent breakthroughs in biotechnology. The extended stay housing will provide for researchers who often stay for periods of up to 3-6 months. Year round quality housing is also crucial to recruiting top scientists.

The point here is not to play gotcha with Pfizer but to demonstrate that economic circumstances can change radically in a relatively brief period of time, and while private companies are capable of adapting, governments (and in particular "private-public partnerships") are not.

Governments can react, however, as the NLDC is also finding out. The brutality with which the Fort Trumbull residents were removed has shocked the nation, and Connecticut Gov. Jodi M. Rell, a wavering supporter of the homeowners, has a strong disincentive to sink more money—beyond the $15 million that's already going to the Coast Guard museum—into the town of 25,000.

The political fallout in New London itself has been even greater, leading to the council election of Frink and Bill Cornish under the newly formed One New London party. (Frink is a pretty fascinating figure himself: a playwright and composer who made his first foray into politics last year, going door-to-door at the age of 77), and to a continuing boil at city council meetings. "These council members always say they've received hundreds of messages of support that they never disclose," says Cristofaro, one of the two holdout homeowners. "I can tell you, I've gone to every city council meeting for the last year, and there are always at least 15 people who speak against this project, and nobody who speaks in favor of it."

After all this strife, will the Fort Trumbull redevelopment project go bust? Not likely. Government projects have a life of their own, and nobody's going to let waterfront property stand empty for long (at least, not in this market). But then, that's the whole point: Left to their own devices, and spared from this exercise in Ceausescu-style central planning, the Fort Trumbull property owners (several of whose lots, including Kelo's, have never even been included in any of the plans floated for the area) would have been improving the area for the last ten years, instead of fighting for their lives. Property values have increased in New London, as they have almost everywhere in the country. How to capitalize on that? Cristofaro has an idea.
"So far the only thing they've even started to work on is this Coast Guard Museum," he says. "I'm sure I could convert my house into the Eminent Domain Museum and I'd get more visitors."

Reason: http://www.reason.com

Reason Magazine is published by the Reason Foundation. A review of the Foundation's research on eminent domain is online at:

Legislature tightens eminent domain rules: Denver (CO) Business Journal, 6/4/06

By Michael Perrault

Three new eminent domain laws on tap in Colorado will require the formation of partnerships to condemn property for private toll roads, will list all entities with the power of eminent domain and will establish a new burden of proof to eradicate blight.

The Colorado Legislature passed three of eight eminent domain bills presented in the 2006 session.

House Bill 1411 preserves the ability of urban renewal authorities to take property to eradicate blight, but requires that the need to eradicate blight be proven by clear and convincing evidence. That could reduce the ability of municipalities to designate areas as blighted and therefore subject to condemnation.

But some opponents claim it lacks teeth and will prove prohibitively costly for small businesses and families trying to save their properties.

The U.S. Supreme Court ruled last year, in Kelo vs. City of New London, that eminent domain can be used solely for economic-development purposes. That sparked a flurry of activity by lawmakers in Colorado and other states.

"The court went on to say that state legislatures are free to pass more restrictive measures if they see fit," said Erin Goff, staff attorney for the Colorado Municipal League.

The eminent domain bills that passed were Senate Bill 78, SB 154 and House Bill 1411. SB 154 takes effect Aug. 7. SB 78 took effect March 31, when Gov. Bill Owens signed it. HB 1411 awaits the governor's decision, but will take effect June 7 if he ignores it.

Goff and Sam Mamet, the Colorado Municipal League's executive director, believe all the discussions and activity in Colorado and elsewhere generally sent a good message.

"We are fortunate that a majority of the members of our state Legislature understand and appreciate the need to maintain the ability of urban renewal authorities to use eminent domain, when absolutely necessary, to alleviate slum and blight," Goff and Mamet concluded in a summation about the legislative session.

"It was really a moving target, because there were so many bills, there were so many legislators interested, there was so much public involvement," said William Mutch, executive director of Colorado Concern, which represents 80 chief executives from across the state.

"Everyone seemed to have a plan for how to address this," Mutch said. "It was way more complicated than I ever imagined."

Even with the passage of the three bills, more action may follow.

Some property rights advocates claim HB 1141's language is "too watered down" and will attempt to place their own initiative on the Nov. 7 ballot.

Members of Colorado Citizens for Property Rights hope to gather enough signatures by the Aug. 7 deadline so voters can consider a state constitutional amendment to prevent local governments from taking any land for economic-development purposes.

Buzz and Peggy Kilker, owners of Buzz's Auto Body in Aurora, spent six years fighting off condemnation before the city of Aurora abandoned one recent project, according to Jessica Peck Corry, director of the Independence Institute's Property Rights Project, and author of "At the Crossroads of Condemnation: The Debate Over Eminent Domain For Private Development & Open Space."

The city of Aurora had included the Kilkers' business as part of a blight designation that encompassed the neighborhood surrounding the newly rehabilitated Fitzsimons Health Sciences Center, Corry said.

SB 78 requires a public/private partnership between the state and a private toll road developer to condemn property for a private toll road.

Mutch said it can be tough to get total funding for transportation projects in Colorado, so the bill made sense in that it allows private investors to pursue toll road projects.

"We supported that concept where basically CDOT does the condemnation part and private capital can be used to buy the right of way," Mutch said.

SB 154 lists all entities with the power of eminent domain.

HB 1411, the last eminent domain bill introduced, designates a new burden of proof for the eradication of blight. It also prohibits taking private property for public or private use without just compensation and consent of the owner, among other guidelines.

The bill requires condemning entities to demonstrate, by a preponderance of the evidence, that the taking of private property is for a public use, unless the condemnation action involves taking the land to eradicate blight, Goff said.

"HB 1411 clarifies that private property cannot be taken for economic-development purposes in Colorado," Goff said. "The legislation preserves the ability of urban renewal authorities to take property to eradicate blight, but requires that the need to eradicate blight be proven by clear and convincing evidence."

Corry believes HB 1411 lacks teeth for two reasons.

"First, if history is any lesson, cities will attempt to exempt themselves from the constitutional protections provided by the bill by claiming 'home rule' status," Corry said. "The litigation that will arise will prove prohibitively costly" for the families and small businesses trying to save their properties.

"Second, there is a huge loophole in the bill [in that] it still allows cities to continue eminent domain abuse through Colorado's urban renewal statute," Corry said. "It's time for government to stop putting for-sale signs in the yards of Colorado's working families. We anticipate that residents will again call on legislators for meaningful change in next year's legislative session."

Mutch believes HB 1411's new legal standards and language will create a different environment.

"It's not going to be business as usual," Mutch said.

The National Conference of State Legislatures, based in Denver, said eminent domain laws have been enacted in at least a dozen states, most leaving room for flexibility and allowing takings in certain instances while seeking to further define "public use."

Denver Business Journal: http://www.bizjournals.com/denver

Eminent Domain Overtime? KIMT-TV3 (Mason City IA), 6/5/06

By Anthony Welsch

Iowa lawmakers could be headed back down to Des Moines to talk eminent domain with Governor Vilsack.

Last week the Governor shot down a bill that would have made it tougher for local governments to take land for public use.

Vilsack says the bill lacks balance.

But both democrats and republicans in the legislature are pushing for either a veto override or a special session to work out some sort of compromise.

In order to override Vilsack's veto, the legislature would have to come up with a two-thirds majority.

Local lawmakers aren't tipping their hand as to what'll come next.

"You know, I don't know. It takes a two-thirds majority to call a special session and I think the differences now are over what the special session would take up," Rep. Bill Shickel of Mason City said.

Republicans are reportedly sending out letters to G.O.P. legislators trying to gauge where to go next and what kind of support they've got for a veto or a special session.

We should know later this week, where the debate will go next.

KIMT-TV3: http://www.kimt.com

Not for sale: La Junta (CO) Tribune-Democrat, 5/15/06

By Candi Miell

Ranchers and landowners concerned with the proposed expansion of Pinon Canyon Maneuver Site in southeastern Colorado told the U.S. Army and Sen. Ken Salazar Saturday that they want more information and that their land is not for sale.

Wearing buttons with the words “Not 4 Sale,” about 400 ranchers and others who could be affected by the proposed expansion attended a meeting in Pueblo where they grilled Salazar about what is exactly on the Army's plate concerning the expansion and over and over again expressed the land is not for sale to some landowners.

Army officials have said previously they are considering increasing Pinon Canyon up to 1 million acres. Last week, they said an additional 400,000 acres was more likely. Under Base Realignment and Closure initiatives, the Army is closing installations and realigning functions. This could cause an increase in, according to officials, at a worse-case scenario an additional 10,000 troops which would be between three and 12 times a year at the Pinon Canyon site south of La Junta for training.

Otero County Commissioner Kevin Karney said his family's ranch borders the area of interest “And, my family's ranch is not for sale.”

Karney said Otero County, along with Las Animas County, are extremely affected by the proposed expansion as far as economic development issues and he wanted to know when is the appropriate time to discuss social impact and when does the public's input become part of the process?

Mack Louden of Pinon Canyon Expansion Opposition Coalition asked Salazar, who grew up in a small community in the San Luis Valley, how he would like it if the federal government deemed that the San Luis Valley was great training ground and everyone has to move on. How could (Salazar) tell his children that they don't have a home to go to when they ask, Louden asked Salazar.

Kimmi Lewis, who is treasurer for Colorado Independent Cattle Growers Association and immediate past president of Southern Colorado Livestock Association, said, “I'm a rancher, I live 100 miles from the county seat of Trinidad, and my ranch is not for sale.”

She said at all of the meetings they have been too, Fort Carson has said they have had a stack of willing sellers this thick, she said holding up her fingers to show a measure.

“We have a stack of non-willing sellers this thick,” she said, producing a thick stack of papers.

Terry Fankhauser, executive vice president of Colorado Cattlemen's Association said the current 1,928 farms in the counties affected add $270-plus million to Colorado's economy that would be directly or indirectly affected by the expansion.

“Las Animas, Otero, Baca and Bent counties will be economically devastated according to this expansion,” he said.

Both the CICA and CCA have released statements they oppose the proposed expansion and the use of eminent domain.

Salazar said he is cosponsoring a bill with Sen. Wayne Allard restricting the use of condemnation to take land directly affected by the proposed Pinon Canyon expansion.

Salazar also said he did not know any of the specifics of an expansion and was also here to learn as much as he could. One audience member asked Salazar why it is that the audience seems to know more than he does when he, Salazar, is in the “hub of things.” Salazar said he could have spent the day at the ranch with his mother, but chose to have this meeting to gain more information.

Salazar did tell the audience that as he receives information, he will share it with the public and if the proposed expansion does move forward, he will seek public input.

Audience member Karren “Sparky” Turner said when the first acquisition of Pinon Canyon took place in the early 1980s, they were told at that time there would be no more land acquisition and no live fire. Live fire, she said, is already happening and talk of expansion is taking place.

“We were told once, we are not going to be fooled twice,” Turner said.

Another audience member asked why Fort Carson decided to bring 10,000 additional soldiers without having adequate training land available.

State Rep. Wes McKinley posed the question, “How do we be left alone?”

William Armbuster, deputy assistant Army secretary, stressed that nothing has been decided yet. He said there is no proposal and nothing has been taken to the Department of Defense in terms of an expansion.

Armbuster said the voices of those affected by the proposed expansion “are being heard in Washington” and if and when an expansion proposal is presented, those affected would be involved.

He said as progress develops when the Army looks at whether or not to expand Pinon Canyon, the Army may find “It's a dumb thing.”

Audience members responded with “It is.”

He also said the Army may decide to look elsewhere as the process continues, to which he had an audience response of, “Please do.”

Las Animas County Commissioner Robert Valdez and Las Animas County Economic Development representatives said the expansion would greatly affect all areas affected, including Las Animas, Otero, Baca and Bent counties, due to loss of population and businesses. Valdez said if an expansion is considered, an independent organization, preferably Colorado State University or University of Colorado, be allowed to do a study on the effects of such expansion.

La Junta Tribune-Democrat: http://www.lajuntatribunedemocrat.com

Note: Additional information about the opposition to the Pinon Canyon Maneuver Site Expansion is online at:

Fennell family won't sell: Cincinnati Enquirer — Northern Kentucky Edition, 5/28/06

Newport group faces threat of losing its land

By Mike Rutledge

For nine years, the family of William Fennell Sr. has lived with fear the Transit Authority of Northern Kentucky [TANK] might take its one-acre-plus of prime downtown property for a bus-transfer station at the northeast corner of Fourth and York streets.

Several years after TANK told the family eminent domain was being considered, TANK and Campbell County filed a lawsuit in early 2001 to take the property for the transit center.

"The overall idea is very similar to what we've done in Covington," TANK spokeswoman Gina Douthat said this week. "To create a place for people that are transferring routes, or collecting people from the entertainment district and from the downtown area of Newport so they can consolidate stops," and to allow "a safe and easy change of buses."

The family's lawyers long have argued the transit center was merely a ruse to capture the land for other development.

The land, directly across the street from the World Peace Bell, includes nine buildings on 15 parcels housing several businesses, including companies that rent space.

The family's Challenger Piping fabricates and installs industrial piping systems. Another firm, BIF Inc., is an equipment and real-estate holding company.

The land also includes the historic 1800s Dickerson-Fennell building at 7 E. Fourth St., listed on Preservation Kentucky's 2006 "Most Endangered" list.

" 'It's not for sale' is what my father typically states," said Bill Fennell Jr., a member of the family's fourth generation that owns the cluster of businesses. "And then, I don't think they can afford it."

In 2003, then-Campbell Circuit Judge William J. Wehr agreed that TANK couldn't afford it. He dismissed the case then, ruling that TANK lacked the money to afford the property - which the transit agency was shocked earlier that year to learn had tripled in value within two years, to $11.9 million, according to a court-ordered appraisal.

When Wehr made his ruling, TANK faced financial troubles. Those troubles are gone, its lawyers argued in March.

"There is no financial difficulty with TANK," they wrote. "TANK began the fiscal year of July 1, 2005, through June 30, 2006, with a $6.6 million reserve. Likewise, TANK has no long-term debt and the power to issue long-term bonds, if necessary, for capital expenditures."

Furthermore, "Campbell County has pledged $1 million towards the project in addition to its annual TANK subsidy," TANK attorneys had written.

The litigation is back in Campbell Circuit Court, before Judge Julie Reinhardt Ward, because the Kentucky Court of Appeals later decided 2-1 that Wehr should have conducted a hearing before his decision.

In 2002, lawyers for the family filed internal memos from the Millennium Monument Co., including a 1997 document in which company representative Ray Beil wrote that Newport's city manager would contact BIF Inc. about selling to the monument company.

If that didn't work, "then we would need to build a public park or something dedicated to the public so the property could be purchased through eminent domain," the memo stated.

In March 1999, Beil wrote a letter to Campbell County Judge-executive Steve Pendery, with copies to Newport and TANK. Because Campbell County Fiscal Court had shown willingness to work with TANK to use eminent domain a week earlier, Beil wrote, the Millennium Monument Co. would install the World Peace Bell nearby in the see-through structure that now houses it.

The transit center "seems like a ludicrous idea to me," said Bill Fennell Jr., brother of Newport City Commissioner Beth Fennell, who in recent years has not voted on eminent-domain issues to avoid perceived conflicts of interest because of her family's litigation.

But "the No. 1 reason" the family is not surrendering, Bill Fennell Jr. said, is: "It's been in our family for over 100 years and property rights are sacred to some, as well as us.... When and if the time comes, we would probably want to do something ourselves, if it would make sense. Why should the developers make all the money?"

The family has spent more than $400,000 in legal fees and lost a lot of sleep, he said. Douthat did not reveal how much TANK has spent on legal fees.

The Fennells aren't alone in opposing the location, which could require the moving or razing of the Dickerson-Fennell building.

The Newport Historic Preservation Commission and the city's Citizens Advisory Council both approved resolutions opposing the site in March.

"There are other possible locations ... that would not require the demolition of historic structures, or the dislocation of businesses," according to the advisory council resolution.

Meanwhile, "The Newport Historic Preservation Commission urges TANK to take measures that avoid such demolition, including exploration of other existing potential location alternatives," its resolution states.

Although TANK's board of directors in January 2001 announced it had agreed to move the building farther east along Fourth Street, several current and former board members testified in 2002 it might have to be razed for the project.

"I don't know how it won't fall apart (while being moved), then-board member Jack Kinsella testified.

Douthat in February said TANK still planned to move the building.

In August 2003, Federal Transit Administration Regional Administrator Joel Ettinger informed TANK it had failed to conduct a required federal review process for historic buildings before filing the eminent domain lawsuit.

For that reason, federal funds could not be used, he wrote.

"If TANK intends to use federal funds for the project, then it must have the lawsuit dismissed," Ettinger wrote. "Alternatively, the project can be fully funded with only local funds."

TANK has said it could not afford do the project using strictly local money.

Both sides have spent most of this year filing court documents, questioning each others' motives and truthfulness. After months of filings, the Fennells recently were granted permission to inspect new TANK documents and conduct new interviews of witnesses.

TANK lawyers have argued the family has merely been trying to increase the selling price.

Bill Fennell Jr. said TANK never tried to negotiate.

"The only contact we've really had from TANK, it was a single phone call, and they threatened eminent domain in that phone call," he said. "That's no way to treat a private, taxpaying entity or citizen. That was back in the early stages."

It's been tough on the family, he said. "You're not in control of your destiny. You can't make intelligent long-term decisions. Nine years, that's a long time."

Cincinnati Enquirer: http://news.nky.com

Note: The following are comments made to Eminent Domain Watch by Brian Fennell (rockstar1960@netzero.net), son of the owner of the property in question.
[The article in the Enquirer] attempts to represent both sides of the issue. The facts of the case are much more sinister. It involves some pretty heavy hitters (political and corporate) in the Greater Cincinnati area the paper is treading softly.

My father, William Fennell Sr., was approached by a fellow contractor who had become an investment player in the Newport, KY landscape. He had started a project called the Millennium Monument Project that was supposed to coincide with the turn of the century. The plan was/is to level the entire block where my father is the primary owner and then use the property to develop as he saw fit.

My father has several businesses and rents the property to others as well and said he was not interested in selling. This is when the investor then started the process of greasing the wheels of public entities to take it by eminent domain under the guise of public use.

We are victims of the process. We already won under summary judgment but the ruling was sent back by the KY Appeals court (2-1) in a ruling harshly worded against TANK that said they should have been provided "their day in court". Since that time the Judge has retired and we have spent tens of thousands of dollars getting a new judge up to speed.

Our lawyers tell us the case is a slam dunk. TANK's objective is to bleed us dry by dragging the case out as long as possible. We are receiving no support from our elected officials as the investor is a big contributor to both parties and TANK is a public entity that is supported by Campbell County.

The trial has crippled my father's business' and had an extremely negative effect on his health.

Any help would be greatly appreciated.

Government Dines on Katrina Leftovers: The Wall Street Journal, 6/15/06


By Emily Chamlee-Wright and Daniel Rothschild

With a history in the Black Panthers and Green Party, Malik Rahim does not fit the stereotype of a property-rights activist. But that is what he's become in the upside-down political world of post-Katrina New Orleans, where government response to the storm is creating some strange bedfellows.

Nine months after the hurricane New Orleans remains in tatters, its population is down to about 200,000 from almost a half-million. Large parts of the city, from posh Lakeview to working-class Mid-City, still have few habitable buildings. Many businesses have not reopened or are gone for good. Almost a quarter of voters in May's mayoral runoff election voted absentee.

To add insult to injury, the rights of property owners who had their homes and businesses damaged by Katrina's wrath now face a more powerful and potent threat. Local government officials, armed with the public health code, eminent domain powers and a bevy of dubious legal techniques, aim to demolish buildings — and, some fear, strip titles from owners — in what are being euphemistically called "forced buyouts."

Mr. Rahim is the founder of Common Ground, a homegrown group borne of the aftermath of Katrina. It has established emergency supply distribution centers across southeastern Louisiana, including in the virtually abandoned Lower Ninth Ward, where signs reading "Somebody Lives Here" and "Eminent Domain for Who?" surround the bright blue house that serves as a de facto community center.

Common Ground stepped in where government failed. Its Lower Ninth Ward headquarters is on the only street in the district with electricity or communications. Power was restored the morning after Michelle Shin, coordinator of the group's Lower Ninth Ward Project, mentioned it during an interview on ABC's Nightline. The rest of the ward remains in darkness.

In the last nine months, liberal New Orleans has seen a radical transformation in beliefs about private property. Katrina came on the heels of the Supreme Court's decision on eminent domain in Kelo v. New London. While the city is today using its public safety police powers to justify the demolition of homes, Common Ground activists fear it may turn to full-scale eminent domain takings over the coming months. New Orleans and the surrounding communities will likely serve as a major battleground between the increasingly mainstream view of neighborhood collectivism and the renegades determined to preserve the sanctity of homeowners' rights.

The fight that has been brewing since late last year is now coming to a head. Homeowners were allowed back into the area only in December, about the same time the bulldozers arrived. The city began to "red-tag" homes, or slate them for destruction. In January, residents won an injunction prohibiting the city from demolishing homes without meeting certain criteria: Notice must be given on the city's Web site and printed in the Times-Picayune newspaper for three days, and letters must be sent to the last known address of the owner.

For homes on private property, demolitions could not begin until 30 days after notification. So far, 120 homes on the public right-of-way have been cleared. Of the 5,000 buildings initially red-tagged, some of which were unaffected by the hurricane, some 2,000 (mostly in the Lower Ninth Ward) have been listed in the Times-Picayune for destruction, according to Ms. Shin. She says that the city's Web site has not been kept up to date on these properties, rendering the city in violation of the injunction. A third of the area's housing stock could be razed.

This sends a message that will chill much-needed outside investment. If bulldozing private homes and businesses becomes par for the course after a disaster, investors will take their money elsewhere. In any case, the local government's failures regarding Katrina are by now self-evident; should they just be repeated as New Orleans attempts to rebuild?

In a city with a rich history of patronage and corruption, all this is especially worrisome. Homeowners have the right to appeal the destruction of their homes. However, no process was established; it came down to city lawyers working with Common Ground to create one ad hoc. Thus far, says a Common Ground legal coordinator, every challenge has been successful.

Yet this is often moot for those tossed into the bureaucratic maw. Some — perhaps many — residents have seen their homes bulldozed, with notices either arriving late or not arriving at all. Several residents of the Lower Ninth Ward we talked to thought the city was spuriously tagging homes "in imminent danger of collapse," the criterion it is using to demolish houses not on the public right-of-way.

They also point to the presence of local development magnates on the Bring New Orleans Back Commission and its famous recommendation of extensive use of eminent domain as evidence of perfidy.

Mayor Nagin tentatively rejected calls for widespread use of eminent domain powers, so the issue has not been at the forefront of the debate. But Mr. Rahim says it "always looms over our heads," and many fear that it is being reborn as Katrina fades as an issue for the rest of the country.

It shouldn't. This has become a fight, in many respects, between those who believe in organic urban development and those who favor political central planning.

Mr. Rahim clearly falls into the former camp. While he is no defender of capitalist principles, with hundreds of thousands still displaced, he is engaged in a struggle for what he calls "self-determination." He wants to "rebuild a community that offers opportunities to all its residents." For that to happen, he adds, property rights will have to be sacrosanct.

After Kelo, property-rights activists argued, quite rightly, that the poor and disenfranchised would be most affected by the decision. Mr. Rahim's efforts demonstrate that, on the issue of private property, Americans across the political spectrum have more in common than we often admit.

The Wall Street Journal: www.wsj.com

Ms. Chamlee-Wright, professor of economics at Beloit College, is a senior
scholar at the Mercatus Center at George Mason University. Mr. Rothschild is
associate director of Mercatus's Global Prosperity Initiative.