Property case upholds owners' rights: Sarasota FL Herald-Tribune, 4/4/07

Judge sides with Olympia owners on case that tests state eminent domain law

By Anthony Cormier

Joel and Cindy Jarvis, husband-and-wife developers who dabble in small-time projects in Palmetto, bought the Olympia Theatre from the city in 1995 for $1 and promised sweeping changes to the historic building.

Twelve years later, though, the Olympia is still in bad shape. It's rarely open to the public. There is no indoor stage. The once glorious movie house is a shell of its former self.

Frustrated with the pace of renovations, Palmetto officials tried to take it back through eminent domain and do the renovations themselves.

But a judge ruled this week that the Olympia is private property - and the city cannot take it back - in a case that some observers are calling the first of its kind for Southwest Florida.

The Olympia decision is this region's first test of a new law that protects property owners and limits the government's ability to take land for redevelopment.

It also underscores the complex debate over individual rights and public goals, which took hold during a controversial U.S. Supreme Court ruling two years ago.

"There is no reason governments should step in when they see a property they like and say, 'We'll take it from here,'" said Bill Moore, a Sarasota land attorney who represented the Jarvises.

Moore's firm helped lobby the state Legislature in 2006 to tighten eminent domain laws, which came under fire after a Supreme Court decision that gave wider discretion to governments and developers.

Eminent domain cases are rarely noticed, and most often are tools that help widen roads and build sidewalks. In many cases, the government buys property from a landowner and uses that property for the greater public good.

But in February 2005 the federal Supreme Court ruled that New London, Conn., officials could take private property that had fallen into disrepair and give it to a developer who wanted to build a shopping center and business plaza.

The decision shocked many observers and drew near universal scorn. For Florida legislators, the worry was potential for abuse in cities where wealthy and well-connected developers could eye valuable waterfront properties for redevelopment into condominiums and shopping plazas.

So legislators changed Florida's laws and said that governments could not use eminent domain for their own economic or redevelopment goals. Essentially, legislators made one thing clear: The government cannot take property in order to turn a profit.

"They looked at the law and found it very skimpy," Moore said.

In this case, Palmetto leaders wanted to turn the Olympia into a municipal auditorium - for public and private community use, such as senior nights, holiday gatherings, even wedding receptions. Many in the city felt the Jarvises, who paid $1 for the title in 1995 and were recently offered as much as $600,000 by the city, were not holding up their end of the deal to refurbish the Olympia.

The auditorium would be the centerpiece of a downtown renewal, which could transform 10th Avenue West back into "Old Main Street" with quaint shops and restaurants surrounding the Olympia. So, after negotiating for months with the Jarvises, the city filed suit against the couple in July 2006.

In Florida's eminent domain cases, the burden is on the government to show two things: a public purpose and reasonable necessity for the taking. Circuit Judge Peter Dubensky agreed that Palmetto had a public purpose in mind, but that they didn't need to have the Olympia.

In fact, the judge said that Palmetto never did traffic or demand studies, didn't budget for a new auditorium and never mentioned the building in long-term development plans. Officials were "clearly disturbed" at the slow pace of renovations, Dubensky wrote, but "declared the theater a public necessity - out of necessity."

For Tanya Lukowiak, director of the Community Redevelopment Agency, this week's decision is not a surprise - but is certainly a disappointment. The CRA, a tax arm of the city government, paid for nearly $30,000 in repairs in what some feel was a bad investment.

"It was always our intention to finish the theater as a theater," Joel Jarvis said during a February hearing.

With the Jarvises' job unfinished, the city wanted the building back. But even staffers such as Lukowiak admit that eminent domain is tricky - and the questions are nearly always the same:

How far should a government go to spur change? And what role do private property owners have in public renewals?

"It's a touchy subject," Lukowiak said Tuesday. "It's about public benefits and private property rights. But the city's position has always been: 'If you can't do it, we'll do it for you.'"

So, more than a century after the Olympia opened in 1916 as one of the first movie houses on Florida's west coast, the history-rich building will not be a symbol of the city's downtown renewal.

At least not for now. City officials have not decided whether to appeal the ruling, and the Jarvises' attorneys say they want to work on a public-private partnership that would restore the Olympia to its former glory.

Mayor Larry Bustle says he is all for a solution, and the city could appeal the decision, refile another eminent domain petition or go back to the drawing board with the Jarvises.

"I'm really open to any option," Bustle said. "I do feel, though, that we would do a great job of turning what is a shell of a building into a fantastic multi-use structure for our citizens. That's what this has always been about."

Sarasota FL Herald-Tribune: http://www.heraldtribune.com