Some fear new eminent domain law will hurt redevelopment: Virginian Pilot, Norfolk VA, 4/7/07

By Meghan Hoyer & Matthew Jones

Local officials say they'll have to change the way they manage and redevelop cities after the General Assembly's passage this week of a law that limits local government's power to take property.

In Norfolk and Portsmouth, where the new legislation will have the most effect, this means some projects will be placed on hold and greatly modified.

The new law, among other things, requires that the process known as eminent domain be used only to take properties for public uses, not for resale to developers. And it specifies that the property itself must be blighted and not merely in a blighted area, as was previously allowed.

The legislation also raises the bar on what is considered blight, from "dilapidated or deteriorated" to "beyond repair" or "unfit for human occupancy or use."

The changes were driven by those who felt the previous law gave localities too much power to take people's property.

"I think it's overdue," said Joseph T. Waldo, a lawyer who often represents clients in eminent domain cases. "All they're saying is, do your redevelopment projects, that's OK, but you just can't take someone's home who's done nothing wrong and kept their home up."

Norfolk has long used these powers to either conserve areas - which makes them candidates for programs such as renovation grants - or perform wholesale redevelopment, in which entire blocks are razed and rebuilt from the ground up.

The Norfolk Redevelopment and Housing Authority has two redevelopment areas and 11 conservation areas for which it may need to acquire more land.

"This new legislation affects all of that," said the agency's Jim Gehman, adding that it "eliminates the idea of redevelopment areas. We have to focus on individual houses. It changes the definition of blight and makes it much harder to get a property declared blighted."

The housing authority has acquired all the property the city requested under its current plans, Gehman said. But if any more land is needed, it would require a new plan under the stricter law.

The legislation spares the Kroc recreation center, which the city hopes to build as part of its Broad Creek development. But it will have an effect elsewhere.

An example is Park Place, where the authority and a citizens group have been working for nearly a year to craft a plan, which will now have to be reworked.

Another example is Wards Corner, where the housing authority wrote a plan to conserve the neighborhoods of Oakdale Farms and Monticello Village and completely redevelop the northwest corner of Denby Park.

"Now we'll have to start all over again," Gehman said.

In Denby Park, the new rules may mean the agency would be able to acquire only a portion of the properties, Gehman said, leaving a handful of homes among a checkerboard of unusable vacant lots.

"I'm not sure that's better than what we have now," he said.

"If the definition of blight is so high that you can't take the properties, then your most effective tool in the worst neighborhoods is taken away from you."

In Portsmouth, officials decided last year to concentrate all their acquisition dollars on redeveloping Cradock, where residents have pleaded for years with the city to help them reclaim their neighborhood.

Last May, Portsmouth's Redevelopment and Housing Authority deemed a small section of the historic neighborhood blighted.

In many cases, the houses aren't "beyond repair," as the new eminent domain law states - they are simply vacant or not maintained, said Kathy Warren, the authority's development director. In most situations, the city and the owners can agree on a sales price, so the city never moves to take the property.

But Warren said she believes that, many times, the threat of eminent domain brings people to the table and without that tool, owners won't be as willing to negotiate with the city.

Warren anticipates having $700,000 to spend on acquisition starting July 1. But instead of designating specific properties to buy - the authority usually targets the area's worst houses first - officials may just move to the open market, buying houses as they go up for sale, she said.

"We're going to continue to try," she said. "We'll do our best. But if we have someone who's a holdout, there's nothing we can do."

Clarissa McAdoo, executive director of the Suffolk Redevelopment and Housing Authority, said the new legislation will make it extremely hard - and perhaps impossible - for her agency to rehabilitate blighted areas.

She cited The Fairgrounds, the city's only redevelopment project, which calls for 170 homes and a small business district near the Planters factory downtown. The authority still needs to acquire 20 out of 60 properties to complete the 17-acre plan.

She said the new law will result in the authority having to spend more money to buy land for redevelopment.

In Chesapeake and Virginia Beach, the new legislation will have little, if any effect, city officials said.

Both cities say this is because they do not take property for economic development purposes.

In Portsmouth, both Warren and City Attorney Tim Oksman worry that without eminent domain, neighborhoods will slowly decline and the city will be powerless to step in to take abandoned or neglected buildings.

Localities are "without a doubt" going to lobby hard to reinstate looser rules, Warren said. "Our focus has already shifted to how we attack this from the other side, next year."

Norfolk's Gehman said he is organizing a meeting with other housing authorities from around the state so they can take the new law's language apart and figure out how best to proceed.

"We're going to go through this line by line and try to understand what it really means."

Meanwhile, Waldo calls the legislation "a major turning point."

"It all comes about," he said, "because in increments, all the housing authorities have become more aggressive over the years."

Virginian Pilot, Norfolk VA: http://content.hamptonroads.com