Eminent Domain Watch

6/13/2006

Legislators should limit use of eminent domain: (Cherry Hill NJ) Courier-Post, 6/4/06

Plan to rehabilitate an aging Winslow neighborhood should become a model for revitalizing communities
When residents of the Lehigh Manor development in Winslow heard their neighborhood had been targeted for redevelopment, they made it clear to local officials they didn't want to be evicted.

To their credit, Winslow officials listened.

A plan to rehabilitate the 30-year-old residential development in the township's Sicklerville section is expected to be approved soon.

Unlike redevelopment projects under way or proposed for the Mount Holly Gardens, the Timber Creek area of Westville and Lawnside, among others in South Jersey, longtime residents aren't expected to make way for planned improvements. Instead, Lehigh Manor folks will be there to reap the benefits.

That's the way community redevelopment ought to routinely work. Yet, that's often not the case.

In too many towns, community redevelopment not only means new housing and commercial buildings, but also new residents.

Forced to yield
Local officials looking to revitalize aging neighborhoods eagerly welcome in developers who promise to upgrade their communities as well as their tax bases.

Of course, new construction requires a clearing of the land. If property owners refuse to make way for this "progress," many local officials use the authority of eminent domain to force landowners to sell.

Longtime residents often must resort to expensive legal challenges to fight for their homes. Sometimes, as in the case of residents in the Cramer Hill section of Camden, they win. Too often, however, residents find the system is stacked against them.

A year-old U.S. Supreme Court ruling sanctioned this broad use of eminent domain. The takings law allows government officials to seize private property for projects that are supposed to benefit the general public. Historically, eminent domain has been used to take land from reluctant sellers for public works projects.

Since a 1949 state law allowing government to seize blighted property, local officials have increasingly used this authority to turn over private property to builders of upscale developments.

Redefine blight
But the term "blighted" is so loosely defined in state law, nearly any neighborhood can be razed, according to a recent report issued by New Jersey Public Advocate Ronald Chen.

State lawmakers should consider recommendations made by Chen as a starting point in limiting the authority of local officials. Chen's proposals also offer needed protection for private land owners.

In addition to more narrowly defining what constitutes "blighted," Chen has proposed requiring that landowners be compensated enough to replace their housing. Often, government usually pays the current value of land taken through eminent domain. That value often is much lower than the proposed price of new housing for the property. That means, displaced residents cannot buy back into their upgraded communities.

With the scarcity of affordable housing in New Jersey, finding shelter in other municipalities can also be difficult. Every time an affordable neighborhood is razed, it exacerbates the state's housing crunch.

Winslow's approach to rehabilitating an aging neighborhood should become a model for other municipalities. Residents helped shape the redevelopment plan and will benefit from it.

The township as a whole will win by reversing the decline of a neighborhood and the negatives often associated with it: higher crime, lower property values and crumbling housing stock.

If Winslow officials follow through on helping residents upgrade their homes and improving municipal services in the neighborhood, the proposed redevelopment should work out for everyone.

There's a lot of value in preserving such neighborhoods. State law should encourage local officials to consider building on that value. Taking private land for upscale developments should become a rare event in New Jersey.

Courier-Post: http://www.courierpostonline.com

Displaced Man Regrets Ignorance of Eminent Domain: Washington (DC) Post, 6/4/06

By David Nakamura
Last month, the D.C. government tore down Ken Wyban's house.

Wyban was not in town to watch, but a friend sent him a picture. The five-bedroom red-brick Civil War-era home in Southeast Washington that he had purchased in 1998 — and was restoring when the city took it as part of a plan to build a new baseball stadium — has been turned into a pile of rubble.

"I was probably foolish for thinking there may have been a chance that they would use it as a historical museum as part of the new stadium," Wyban, 56, wrote in an e-mail last week from Riverview, Fla., near Tampa, where he rents an apartment near his mother's home.

As District contractors move quickly to clear a 20-acre site near South Capitol Street and the Navy Yard along the Anacostia River, the people who owned properties at the site have moved on — some having sold to the city and others forced out by eminent domain. Several cases are tied up in court to determine how much money the District must pay the property owners.

Perhaps no one put a human face on the process as much as Wyban, who was the only person who owned a house at the site and lived there full time. Before leaving Washington on Feb. 3, Wyban agreed not to take the District to court in return for being allowed to collect the $1.2 million offered by the city and to have his attorney continue negotiating with the city for more money. He said he has yet to receive the money.

These days, Wyban, who retired from the military years ago, is caring for his mother, who has lung cancer. And he is seeking to do volunteer work, he said, as he once did for the United Service Organizations at Reagan National Airport.

"I would have done many things different now that I am more educated in eminent domain," said Wyban, who plans to return to Washington in the fall to help organize the Army Ten-Miler. "I'm sure the city would have done things different with Major League Baseball now that they know the rest of the story. I guess we both lost large sums of money because of our ignorance."

Washington Post: http://www.washingtonpost.com

Peekskill BID fears eminent domain: Westchester (NY) Journal News, 6/4/06

By Brian Howard
Three weeks after approving a downtown blight study and redevelopment plan, the city has yet to sign contracts with consultants, but has begun pitching its plans to merchants.

Some of those merchants, members of the Peekskill Business Improvement District [BID], will be going over the city's proposal Tuesday, following a presentation last week.

"My mind is not changed because they're still going to use the blight study," said Jerry DiCola, owner of Peekskill Paint & Hardware on Main Street and a BID member who was at Wednesday's packed meeting. "And I cannot accept that terminology because it's the first legal step in doing eminent domain."

A blight study is an inventory of such conditions as crime, poor sanitation, overcrowding, traffic congestion, fire hazards and pollution within a given area. Such a study would let the city take property under eminent domain — or condemnation — procedures.

City officials say they want that authority, but don't plan to use it, on 20 acres bounded by Main, Brown, Broad and Bank streets targeted for redevelopment.

On May 8, the Common Council approved hiring a Long Island consultant to conduct the blight study as the basis of a redevelopment plan by Warshauer Mellusi Warshauer Architects of Hawthorne. That triggered weeks of grass-roots organizing and petition-gathering by opponents.

"I agree that it needs to be redeveloped, but I would like to see it done without the threat of eminent domain," DiCola said.

DiCola's business has been around since before the city's last major attempt at downtown revitalization. The 2000 book "Old Peekskill's Destruction" by City Historian John Curran details the urban renewal era of the 1960s and '70s, when hundreds of buildings and entire blocks were razed.

The Academy Street project, as it was known then, the city's first and biggest project, also targeted the current study area. Many downtown lots cleared during urban renewal were never redeveloped, critics note, including a lot within the study area at Park and Broad streets.

The BID, whose boundaries include the study area, has not taken a position on the issue yet, President Joseph Lippolis said. It may do so after Tuesday's session to review the city's presentation.

Mayor John Testa said the goal of any redevelopment plan that follows the blight study would be to preserve businesses and build new housing to create a customer base close by.

He disputed wording in a 1,435-signature petition opponents submitted last week that said the city would give developers the right to take private property. But he agreed with its call for public involvement, and for any project to be historically consistent and to promote sustainable economic development.

"The goal is to have a plan that will actually get built," Testa said. "We don't just want a plan and a nice drawing that ends up hanging in City Hall for 15 years."

He said the city's waterfront master plan failed for years to prompt new development there until the city conducted a blight study. Officials contend the same fate would be in store for the downtown redevelopment.

Councilwoman Drew Claxton, a member of the council's Democratic minority that opposed the blight study and redevelopment plan, disagreed.

A master plan would incorporate public input without the threat of eminent domain, she said. Instead, the city has taken a "lazy" approach and accused critics of opposing revitalization, which she said everyone favored.

"That is not in dispute," Claxton said. "The dispute is in how you get there."

Opponents have met several times since the study was authorized, and held a panel discussion aimed at Hispanic merchants.

"No one wants to stop development," said restaurateur Arnie Paglia, who owns two properties in the study area. "We just don't want to lose our rights."

Westchester Journal News: http://www.thejournalnews.com

House OKs eminent domain changes: Lansing (MI) State Journal, 6/1/06

Landowners' rights bolstered; cities' use of tool restricted
By Associated Press
The state House overwhelmingly passed legislation Wednesday aimed at strengthening Michigan landowners' rights when government wants to take their property for economic development.

Supporters said the bipartisan bills would place into state statute the allowable uses of eminent domain as established in a 2004 Michigan Supreme Court ruling.

The legislation is designed as a complement to a proposed constitutional amendment about eminent domain that will be on the November ballot in Michigan.

The main bill in the House package would bar governments from using eminent domain unless it is for "public use," prohibiting the taking of private property for economic development or more tax dollars.

It also requires that homeowners be compensated at 125 percent of their property's fair market value.

The state Senate has passed similar legislation.

Others House bills would let judges award attorney fees to low- and moderate-income people whose lawsuits contesting the condemnation of their homes are deemed reasonable but ultimately are unsuccessful.

Another bill would raise the amount in moving expenses the government pays to displaced residents.

The legislation now goes to the Senate.

Eminent domain typically is used to clear space for highways, airports or schools.

But governments also use the power for economic development projects that attract jobs and tax dollars.

The state Supreme Court in 2004 ruled unanimously that such economic development projects do not constitute a public use under the 1963 state constitution.

Lawmakers say the constitutional amendment is needed because the makeup of the state's high court could change.

Most of the bills received unanimous approval, though Rep. Ed Clemente, D-Lincoln Park, voted against one measure.

Lansing State Journal: http://www.lsj.com

Eminent domain debated: Waterbury (CT) Republican-American, 6/3/06

By Paul Singley
A Fairfield [Connecticut] developer who has proposed building a $729 million downtown revitalization project [in Naugatuck] said this week that taking land or businesses by eminent domain would be his last resort.

Alexius C. Conroy said if he and the town reach a development agreement for the four-phase project called Renaissance Place, he will negotiate "very fairly" with businesses and residents around the downtown area to acquire their property.

He met with the Board of Mayor and Burgesses on Tuesday to tell the board his intentions.

That night, the board also heard from its attorney for the project, Mike Bothelo of Updike, Kelly & Spellacy in Hartford, who told the board it has the final say over whether the town would try to take over a business or land through eminent domain.

He said the town has the option of drawing up an ordinance to say that the borough would not use eminent domain, under any circumstances, to acquire a piece of property. But the board has not done that.

Such an ordinance could be overturned by the board, or a future Board of Mayor and Burgesses, at any time, Bothelo said.

The board has not indicated whether it would pass such an ordinance. Mayor Ronald San Angelo said Friday that an ordinance to ban the use of eminent domain would be little more than a political statement since it could be overturned if the borough found a need to use eminent domain at a later date.

"Nobody wants to use eminent domain," he said.

He said it would have to be an absolute last option. He said if the board found itself in a predicament where it had to decide whether to impose eminent domain, it would take a majority vote of the 10-member Board of Mayor and Burgesses to either approve or deny the use of that procedure.

San Angelo, or the sitting mayor at the time, would have the final say if there is a tie vote.

Through eminent domain, the town would offer business owners or residents fair market value for their property.

Renaissance Place would be mostly funded through unnamed private brokers. The plan would bring condominiums, retail buildings, office space, a parking garage and a movie theater in and around the downtown area.

Conroy and town officials are negotiating to come up with a development agreement, which the Board of Mayor and Burgesses would have to approve.

The board said Tuesday it wanted to know more about where the negotiations stand, and San Angelo said he would meet with burgesses an hour before every Board of Mayor and Burgesses meeting to discuss the plan until an agreement is reached.

Waterbury Republican-American: http://www.rep-am.com

Eminent domain case settled: St Paul (MN) pioneer Press, 6/3/06

Restaurant owner says he's 'tired of the fight,' agrees to make way for senior housing
By Nancy Ying
A tenant who challenged the eminent domain process used at a Cottage Grove shopping center agreed Friday to settle the issue, paving the way for the mall's demolition later this year and the development of the site into senior housing.

Dennis Wolfe, owner of DeMori's Restaurant and the last tenant at the Cottage Square Mall, took Cottage Grove to court over what he said were suspect reasons for authorizing eminent domain — particularly the fact that the site's redevelopment would not serve a public purpose but would help a private entity.

Others named in the lawsuit were Snyder Drug Stores, the Fraternal Order of Police and Mendota Valley Amusements Inc.

Snyder's signed a lease termination agreement last month and closed shop; the remaining two organizations could challenge the city again June 12 in court, but an attorney for the city said the groups are not expected to do so. Both were affiliated with DeMori's Cottage Square Mall location.

Wolfe appeared Friday in Washington County District Court, but after about an hour of the hearing, his attorney announced that Wolfe was willing to settle.

Wolfe will receive a compensation of about $180,000 and must close his restaurant by June 30.

"I'm just tired of the fight," Wolfe said. "It's easier to move on and try to relocate in Cottage Grove." Wolfe has another DeMori's Restaurant in Oakdale and said he already has a few new locations in mind in Cottage Grove.

Earlier this year, Cottage Grove officials launched eminent domain proceedings to allow Presbyterian Homes to buy out the last two leases at what officials call a dilapidated shopping mall.

Roseville-based Presbyterian Homes wants to raze the mall and build more than 150 units of senior housing and retail and office spaces on the 13-acre parcel.

City officials have said there is a growing need for senior housing in Cottage Grove.

Presbyterian Homes has helped mall tenants relocate, but could not reach a deal with Snyder's or DeMori's, which were tenants for decades.

As the city launched eminent domain proceedings, Snyder's representatives said they filed a lawsuit against Presbyterian Homes for breach of lease regarding the condition and appearance of the mall. Snyder's dropped the lawsuit after the lease was terminated. As of now the store will not relocate in Cottage Grove, said Dave Leonard, Snyder's vice president of real estate development.

Cottage Grove City Administrator Ryan Schroeder said officials have wanted to redevelop the Cottage Square site for years. In 2001, he said, they created a Gateway Redevelopment District, which includes the mall.

In late January, a building inspection confirmed the shopping center's deteriorated condition, which cities can use as an argument for eminent domain.

Pioneer Press: http://www.twincities.com/mld/pioneerpress

Clarke pulls bill condemning N. Liberties tracts: Philadelphia (PA) Daily News, 6/9/06

By Mark McDonald
With threats of a lawsuit in the air, City Councilman Darrell Clarke yesterday decided to pull back a condemnation bill that included 13 Northern Liberties properties that shouldn't have been included.

Clarke acted after conferring with representatives from Temple University and the Philadelphia Redevelopment Authority.

At a stormy Council rules committee hearing last week, Jared Langman and Ierachmiel Daskal said their Second Street properties had been improperly targeted for condemnation by RDA, which in turn wanted to turn them over to developer Bart Blatstein for a residential and retail development.

City Councilman Frank DiCicco, who represents the area, said RDA had not informed him of its intentions before proceeding.

But for unexplained reasons, the properties in DiCicco's district were included in a bill with three other projects requiring condemnations in Clarke's district, including 66 vacant lots Temple wanted for a new academic building.

RDA officials told Council last week that the bill could not be amended to remove the 13 properties. Rather, a new bill would have to work its way through RDA and the City Planning Commission, a process that could take many months.

But attorney Edgar Einhorn said yesterday that if the bill was voted as is, even with an RDA board-approved side letter promising not to condemn the 13 parcels, the Second Street property owners would likely sue, a process that could tie up the properties for four years.

Last week, an outraged Langman said his lots are not blighted and that he's negotiating financing for a five-story condo project, while Daskal uses his property for one of his businesses.

Clarke then met with RDA and Temple officials who said their projects could await a new bill without the 13 properties that will come to City Council in September or early fall.

Philadelphia Daily News: www.philly.com

A useful tool, too often abused: Philadelphia (PA) Inquirer, 6/6/06

Editorial
New Jersey's redevelopment law is so loose that even the governor's mansion could be declared "underutilized" and eligible for condemnation.

But an overeager Legislature could limit the definition too much and rob towns of a key tool to rescue neighborhoods from decay.

That's the challenge tossed to states by the U.S. Supreme Court last year with its controversial decision Kelo v. New London, in which the court allowed local officials in Connecticut to tear down a modest, but healthy, neighborhood to build a more economically promising development. Now it's up to each state to decide the appropriate local use of eminent domain.

Condemning private property for public use, such as bridges or roads, causes little controversy. But taking property for a housing development, office building or mall is another matter.

Since Kelo, some states, such as South Dakota, have outlawed eminent domain for private redevelopment under any circumstances. Some states may limit eminent domain to commercial or industrial property. Others, such as Ohio and New Mexico, are taking a timeout to study the problem.

In April, Pennsylvania curtailed the taking of private property for private economic development by narrowing the definition of "blight." Time will tell whether the state leaned too far in the direction of property owners, making redevelopment overly onerous.

New Jersey, with its enormous redevelopment needs, must take more care. In earlier years, it properly limited growth in the environmentally sensitive Highlands and Pine Barrens; it's running out of space to build elsewhere.

Developers can reverse decades-long decay by capitalizing on existing public and private investment, restoring housing choices, and linking transportation and jobs. But it's not easy. Instead of buying up a farmer's fields, they often have to assemble multiple parcels in cities. Sometimes, not all of the properties they need are vacant. When that happens, for the good of the larger community, towns may have to resort to eminent domain to relocate property owners.

Done well, eminent domain helps create vibrant, productive new neighborhoods. Look at the Jersey City waterfront or downtown New Brunswick. Done poorly, as it too often is in New Jersey, eminent domain raises suspicions of insider politics, spawns lawsuits, and hurts low-income families, as it is threatening to do in Camden's Cramer Hill section.

New Jersey needs to redefine eminent domain to shift power to the people, while still preserving it as a redevelopment tool of last resort. The Legislature can do that.

More than 40 years ago, New Jersey gave local governments power to condemn blighted property. Over the years, the definition of blight became so broad that now towns can declare "an area in need of redevelopment" whenever the area is "underutilized" or the plan is "consistent with smart-growth planning principles." That breadth invited all kinds of mischief.

Over the same period, the ability of property owners affected by redevelopment to participate in the process eroded. Now, by the time they figure out what is happening, they often stand to lose their homes. The process creates enemies, not needed allies to revitalize communities.

Stakeholders, including developers, municipalities, smart-growth proponents, housing-rights advocates, environmentalists and good-government champions, have worked for two years to change that process. They have solid proposals, sponsored by Sen. Ellen Karcher (D., Monmouth), and more coming from Sen. Ronald Rice (D., Essex).

Gov. Corzine has weighed in through Public Advocate Robert Chen in a May 18 report. Echoing the stakeholders, Chen urges tightening the definition of blight, increasing public participation and the ability to appeal, raising property compensation rates, and improving ethics rules.

The challenge will be moving eminent domain reform through a Legislature riddled with dual officeholders and other conflicts of interest involving developers.

New Jersey's prosperity is more reliant on redevelopment than perhaps any state in the nation, Chen concludes. The state needs to keep eminent domain - used fairly, done properly - in its toolbox.

Philadelphia Inquirer: www.philly.com

Vilsack vetoes eminent domain: Sioux City (IA) Journal, 6/2/06

By Dan Gearino and Todd Dorman
[Iowa] Gov. Tom Vilsack has decided to veto legislation intended to curb the ability to local governments to take private property for development.

The bill [HF 2351], approved by broad bipartisan majorities in the House and Senate, dealt with local governments' eminent domain powers, banning the seizure of private property for economic development. The bill included several exceptions, such as allowing cities to forcibly acquire private property in severely blighted areas.

On Thursday Vilsack expressed concerns that the bill could hurt local job-creation efforts. Vilsack announced his decision to veto the bill this afternoon.

"You have an interesting balance between job growth, which everybody supports, and restricting the power of government, which a lot of people support," he said Thursday.

The bill was inspired by a U.S. Supreme Court case that said a Connecticut city government could seize private homes for an economic development project. This led to a nationwide backlash, with attempts in states and cities to strengthen property rights.

Vilsack’s action is certain to spark protest on both the political left and right. Republicans pushed for the bill, arguing that more must be done to protect private property rights. They were joined by Democrats such as gubernatorial hopeful Ed Fallon who argue eminent domain has been misused to accommodate urban sprawl.

Fallon called for a special session to override the veto.

“Thousands of Iowans were counting on this legislation to protect their farms, homes and businesses from condemnation,” Fallon said. “It’s simply wrong to condemn one person’s property for another person’s gain.”

The governor’s decision also puts property rights and land use issues back on the election year agenda as Iowans pick a new governor and Legislature.

Sioux City Journal: http://www.siouxcityjournal.com

Senate Republican Leader Mary Lundby (R-Marion) released the following statement in response to the governor’s veto of HF 2351, the eminent domain bill. The bill was approved by a vote of 43-6 in the Senate and 89-5 in the House.

“I’m extremely disappointed by the governor’s action. The bill was the result of countless hours of work by legislators and it was approved with overwhelming bipartisan support in both chambers. I believe a veto-override by the Legislature is needed. I will be talking with my caucus about our options over the weekend. We will have a decision on Monday.”

Waterfront developer withdraws offer in Riviera Beach eminent-domain case: (S Florida) Sun-Sentinel, 6/2/06

By Associated Press
The developer of Riviera Beach's $2.4 billion waterfront project that could displace hundreds of residents has withdrawn 20 offers to purchase private property, a day after Gov. Jeb Bush expressed concern over the legality of the deal.

Bob Healey, chairman of Viking Inlet Harbor Properties, said the company is willing to continue negotiations with property owners on a voluntary basis.

``We're not going to pay a fortune for people's property,'' Healey said Thursday.

A day before Gov. Bush signed a restrictive eminent domain bill into law last month, Mayor Michael Brown called a special meeting so the city and Viking could sign a contract to develop the project that called for some residents to be removed from their properties if they refused to sell.

As part of the deal, the city agreed to use eminent domain to make way for the project. But the new law makes seizures of personal property for private use illegal.

Brown contends that since the contract was signed before the bill became law, the city is within its right to proceed.

Bush, however, claims the hastily called city meeting may have violated state Sunshine laws which call for advance public notice, making Viking's contract invalid.

Healey said his company is being blamed for removing residents from their homes.

``I don't want people to think we're the bad guys,'' he said, adding that the project will move forward and residents will be paid fair market value for their properties.

Bush has asked the state Attorney General's Office to investigate the contract. House Speaker Allan Bense said he has asked his general counsel's office to do the same.

``Hopefully between the (attorney general's) office and the governor's office and our legal counsel, maybe there's a way we can keep them from taking their people's property,'' Bense said.

Sun-Sentinel: http://www.sun-sentinel.com

Power of Eminent Domain - When? The Post-Chronicle, 6/1/06

Opinion
By Jim Clark
There's a place for government action that sometimes impinges upon the rights of citizens, one such being the exercising of the "power of eminent domain", or the taking of property with appropriate remuneration to the owner for the purpose of establishing facilities for the common welfare thereon or therewith. Such facilities could include such things as roads, buildings, and parks. This action is perfectly legal, subject to an offended party's access to the courts, and not infrequently exercised.

The "Kelo Case" in Connecticut last year brought the subject front and center, however, when a municipality exercised its eminent-domain power to take property — not for public use, but for use by private concerns — in the interest of profitability for the entrepreneurs and tax-enhancements for the government. The matter made its way to the Supreme Court, which amazingly ruled in favor of the city of New London, thus requiring the owner involved to give up the personal property. Without question, the interests of the businesspeople involved, as well as those of the government, will be more than well-served — they will be grandly enhanced. However, where does that leave the property owner? There are other such cases in the works now, one of them outlined in a recent Fox-News Hannity-Colmes program.

An unusually interesting eminent-domain case has been an on-and-off-and-on matter in Lexington, Ky. since 2003. Notwithstanding that probably 95% of all municipalities in the nation own (either built or bought) and operate their water companies, this city (280,000 population) did not build its own water-supply company years ago and has never owned it. It's owned by the Kentucky-American Water Company, which was purchased a few years ago by RWE, a German outfit that operates water companies in many places.

Suddenly, there was panic in some quarters — especially among some of the city's best-heeled citizens — engendered, at least allegedly, by the fact that a German company had immediately become enabled to somehow cut off the city's water supply on a whim - or as an act of... whatever ...and that something had to be done. These folks set up an organization for the purpose of seeing that the city become the owner of the water company — even through the power-of-eminent-domain route, if necessary. A handful of them "loaned" something like $750,000 to the city to cover the costs of instigating action, and a property-appraisal firm was employed. The water company made it clear that its facility was not for sale, and in subsequent negotiations even offered some prime land (a beautiful park leased by the city at a dollar a year) to the city.

The kicker in all this has to do with the electricity required to operate the water company. Its supplier, Kentucky Utilities, was sold a while back to Louisville Gas and Electric, the company furnishing power to Louisville, Ky., which in turn was sold to a company in Great Britain. In 2000, LG&E was acquired by Powergen plc of the U.K. Then in 2002, Powergen plc was acquired by E.ON, headquartered in Düsseldorf, Germany.

So, not only the water supply in Lexington is controlled by a German company, but so is the power supply. Yet, the folks agitating for water-company ownership offer no exception at all to the German-ownership of the power supply, even though not a gallon could be pumped from the Kentucky River or purified without the use of electricity.

The Post Chronicle: http://www.postchronicle.com

Court sides with Charlotte in use of eminent domain powers: Sarasota (FL) Herald Tribune, 6/1/06

By Devona Walker
What is very likely the final round in a three-year eminent domain battle between Charlotte County and Murdock Village property owners has been won by the government.

In an opinion filed by the 2nd District Court of Appeal on Wednesday, judges determined that Charlotte County was justified in taking possession of a host of residential properties in the Murdock Village redevelopment area.

The ruling likely clears the remaining hurdles for the county's plans to redevelop Murdock Village.

"It was a major victory for us. The court said there was substantial evidence supporting the findings of blight," said Charlotte County Attorney Janette Knowlton. "This may not have been so much of an obstacle in redeveloping Murdock Village, but this decision erases many unknowns in terms of the timing of all this."

The county has settled with about 2,500 Murdock Village homeowners, leaving about 450 to be compensated. Last week, the county allocated another $11 million for wrapping up final settlements, said Paul Payette, the county's real estate services director.

The property owners who sued the county argued that the state's eminent domain law was vague, subjective and that the term "blighted structure" should apply only to physical buildings and not infrastructure such as roads, pipes and sewers.

"It is the government's policy not to maintain roads where people are not living, and then they say, 'Gotcha. I took your money for 30 years and now I'm going to take your property because the roads are deteriorated,'" said Ellen Neil, the attorney for property owners Donald and Lela Replogle.

"The danger of this decision is obvious. If local officials decide there is a developer they want to do business with, they can manipulate things and manufacture blight," she added.

But a law passed this month prohibits government from taking property by way of eminent domain because, in the view of local officials, it constitutes a slum or blight.

"Things have changed since this happened. If they had changed earlier, this could not have happened," Neil said.

The ruling in favor of Charlotte County thus really sets no precedent because it is superceded by the Legislature's action, said Steven Anderson, an attorney with the Institute for Justice, a nonprofit public sector law firm specializing in eminent domain issues.

"Eminent domain can now only be used for truly public purposes. I mean like a utility, or for roads or a school," Anderson said. "The Florida Legislature realized there were so many abuses going on that they had to spell it out.

"Blight in Florida has meant whatever the government has wanted it to mean."

The appeal court's decision said that some criteria were vaguely written, but that ultimately "blighted structures" was inclusive of infrastructure.

That provided the legal footing to take possession of about 70 or so vacant lots in the Murdock Village redevelopment area based on the fact that they were surrounded by substandard roads.

The ruling is seen as a final blow for about 20 property owners looking to receive more compensation from the county.

Charlotte County already has spent $97 million over three years in its effort to build a downtown at Murdock Village. County officials hope the project, to include a downtown with a crescent-shaped amphitheater, will create new homes and businesses in an area abandoned by General Development Corp. years ago.

Stock Development has been tapped to build the 1,200-acre project and has committed to pay the county $93 million for the land.

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

Eminent Domain Case Hits Facility: Inside Self Storage, 6/06

By Jim Chiswell
Saying I told you so doesn’t make me feel any better. Four months ago, I wrote about potential problems for the storage industry with the Supreme Court’s decision on eminent domain. I concluded by saying, “I’ll climb down off my soapbox now, but I can’t remain silent in the face of such a looming crisis for real estate owners.”

There is no way I could have known that one month later, the city of Arcadia, Calif., would take its first step to seize Arcadia Self Storage, an established four-story, self-storage business on Huntington Drive, for the expansion of the local Mercedes Benz dealership.

The dealership’s owners had threatened the community with a not-too-subtle message: “If we can’t expand, we will be forced to move.” The city council voted unanimously to move on the first of five properties, the self-storage business. The city’s underlying financial motivation is clear: Mercedes Benz customers pay sales tax, while California self-storage customers do not. The dealership already accounts for 10 percent or more of the city’s total sales tax revenue, according to its manager.

California law requires the owners of eminent-domain condemned properties be paid a fair market value for their land and relocation expenses. Most eminent domain cases across the country typically produce a negotiated settlement. However, the potential for a major court case does seem possible.

At this point, storage building owners Gary and Dan Braun seem to be taking a wait-and-see attitude. In a local newspaper story, their attorney explained it could be “easier for his clients to negotiate with the city after a so-called resolution of necessity is adopted.”

The California legislature is already considering both legislation and constitutional amendments to limit the power to seize property. One unique feature being proposed is property would have to be sold back to its prior owners if the land isn’t used for the reason it was acquired. State Sen. Tom McClintock, one of the sponsors, stated in a local newspaper, “There are 6,000 public agencies in California that now have the power to seize your home, pay you pennies on the dollar for it, and then give it to somebody else for their own personal gain and profit.”

McClintock’s district includes the northwest corner of Los Angeles County, including the cities of Stevenson Ranch and Santa Clarita. The Ventura County portion of the 19th Senate District encompasses the cities of Thousand Oaks, Simi Valley, Moorpark, Camarillo, Ventura and Ojai. Santa Barbara County was recently added too.

I urge all California self-storage store owners and their employees to let Sen. McClintock and other elected representatives know they want legislation passed to protect private landowners from potential abuses by local units of government who will use the Supreme Court’s misguided decision to run rough-shod over private property rights.

The Institute for Justice, a civil liberties law firm started in 1991, has launched a website dedicated to fighting the eminent domain issue. If you should find yourself or your company facing a possible challenge, visit for information on obtaining assistance at www.castlecoalition.org.

The city of Arcadia is just one example. Don’t sit back and just hope you won’t be impacted. Get on the Internet and send a message to your state and federal legislators demanding they take action to protect us all.

Inside Self Storage: http://www.insideselfstorage.com

6/12/2006

Man battles Metro over eminent domain: Nashville (TN) City Paper, 5/31/06

By Bill Harless
A Nashville man whose used car lot Metro took through eminent domain in 2001 to replace with a condominium development is continuing a legal battle against the city to regain his property, on which the condos now sit.

Oral arguments at the Tennessee Court of Appeals are scheduled for June 27.

Kenneth Eaton owned the Eaton Auto Village on Eighth Avenue North along with his wife Toni for more than 20 years.

The lot, according to a court brief filed by Metro in February, was a “junk car lot in a blighted area,” although Eaton maintains he intended to redevelop the property but that Metro refused to give him the chance.

“They violated that law by not allowing me to redevelop my own property — therefore they took my property illegally, and we’re asking the Appeals Court to reverse the decision,” Eaton said in an interview Tuesday.

After acquiring the property, the Metropolitan Development and Housing Agency (MHDA), in partnership with the nonprofit Affordable Housing Resources, built the Row 8.9n condominium development on the site.

The project has been hailed as a major success of the affordable housing movement, intended to provide modern, affordable housing within the central city.

The project sits just north of the Nashville Farmers’ Market, on the other side of Eighth Avenue.

Eaton cries cronyism
Eaton, however, says the land grab stinks of cronyism because Steve Neighbors, president of the homebuilding branch of Affordable Housing Resources — called The Home Company — is a former campaign treasurer for Mayor Bill Purcell.

Neighbors on Tuesday, however, flatly denied any patronage, noting the nonprofit has built several other projects in the area.

In his legal argument, Eaton claims that section 13-20-105 of the Tennessee Code prohibits Metro from condemning a property for the purpose of reselling it if the property owner himself intends to redevelop the land. Eaton also claims that MDHA has tried to strip him of his means of appeal.

In a Court of Appeals brief filed by his attorneys in December last year, Eaton claims that MDHA crafted an amendment to the plan for the Phillips-Jackson Street Redevelop-ment District — the legal district giving Metro the power to use eminent domain in the area — for the purpose of circumventing his appeal and to rewrite the plan to bypass 13-20-105 regulations.

In its counter brief, however, MDHA maintains 13-20-105 applies only to what are called “urban renewal plans” — not to “redevelopment districts” — which are defined in separate sections of the Tennessee Code.

MDHA: Amendment is irrelevant
Further, MDHA claims the 2001 amendment is “irrelevant” to the Eaton case given that the Davidson County Circuit Court ruled on June 25, 2001 — before the amendment was crafted in the fall — that Eaton had no grounds for appeal.

Eaton has said that when Metro took his land he was in talks with two fast food companies to redevelop the property. MDHA, however, maintains it gave Eaton ample time to redevelop the land in conformance with the redevelopment district guidelines, beginning in 1993, and says Eaton gave no indication he would do so.

Eaton, meanwhile, is not letting the case restrain his other ambitions.

He said Tuesday he intends to run for mayor in 2007 to rid Metro Government of waste.

Nashville City Paper: http://www.nashvillecitypaper.com

Draper residents fight city's use of eminent domain: The Salt Lake (City UT)Tribune, 5/31/06

By Rebecca Walsh
[A currently] dusty, barren strip of land is more construction site than trail.

A year from now, the gravel and dirt will be paved over and landscaped, turning the mess into another link in Draper's popular 60-mile network of equestrian, biking and hiking trails.

But for the neighbors whose homes border the pathway-in-the-making, the construction is a bitter reminder of the power of government to take private property for the "public good." Their court fight with city leaders was one of the catalysts for changes in state law limiting local governments' power to condemn.

Despite that change in state law, the dispute is not over. Five of the neighbors still are suing the city. And the city is negotiating with three additional property owners to take sections of their yards.

"I don't know where they're getting the idea that they can use eminent domain to get a trail," says Eric Stern, one of the homeowners who sued Draper.

Trail started as a water project. Managers of the Metropolitan Water District of Salt Lake City planned to replace the old canal with a massive pipeline. Following the path of the canal, the pipe would crisscross Draper's southeastern edge, ending at a new water treatment plant at the Point of the Mountain. When the pipe is opened next summer, 77 million gallons of water from the Provo River will churn into Salt Lake Valley homes.

With the pipeline under construction, Draper leaders saw an opportunity to add to the city's system of trails. Last year, the city served a handful of homeowners with notices that they would have to sacrifice some of their property for the trail. Draper attorneys claim the city owns the old canal easement and doesn't have to pay the homeowners for their land.

Stern could lose a swath 16 feet deep and 300 feet wide in front of his home - about an eighth of an acre. And he would have to tear down a building the city authorized him to build a year earlier.

"They're taking my property and not giving me anything for it," Stern says.

The neighbors tried unsuccessfully to persuade the city and water company to put the pipeline under nearby Relation Street or next to Utah Transit Authority's light rail right of way. They argue the trail is redundant; it will run parallel and connect to the already existing Porter Rockwell Trail. At some points, the two trails are just 300 feet apart.

They pleaded with the city to leave old-growth cottonwood and elm trees along the canal in place. When the neighbors failed to persuade a judge to issue a preliminary injunction last year, crews ripped the trees out. The homeowners were given $80 gift certificates to "revegetate" along the trail.

Residents even question the city's motivations for building the trail. They note that fiber-optic cables are being installed along with the water pipeline.

"This is just a cheap way to get a utility corridor," says Loraine Sundquist.

The neighbors sued. But they also appealed to state lawmakers. During the 2006 Legislature, Kamas Republican Rep. David Ure amended legislation that actually expanded the public uses - including roads, streets or alleys - of eminent domain. Ure's amendment limits the definitions of roads, stripping out recreational trails and paths.

"I think [Draper leaders] were skirting both the letter and the spirit of the law," Ure says. "In Utah, we have never allowed eminent domain for recreation purposes."

Trails advocates unsuccessfully lobbied Gov. Jon Huntsman Jr. to veto the bill.

Sarah Alley, director of Friends of Emigration Canyon Trails and Open Space, says cities rarely use eminent domain to create trails. But in some cases, when they bump up against intractable property owners, local government leaders have to turn to condemnation as a "last resort."

"We're now in this painful process of having to go back into areas and create green space," Alley says.

As Salt Lake County's last patches of open space are developed, she adds, local governments could avoid the "ugly, difficult process" by planning trails in the first place.

As far as Draper and Metropolitan Water leaders are concerned, the Pipeline Trail is grandfathered, or exempt from the restrictions of the new state law. A week ago, three new property owners received letters from the city informing them that their land was needed for the trail.

"We're still proceeding in negotiations," says Scott Cardwell, Metropolitan Water's Point of the Mountain Aquaduct consultant working at Draper City.

While the legislation apparently has not resolved the dispute in Draper, Alley and other trail advocates say it will hamper other cities' efforts to build trails in already-developed neighborhoods.

"It could cause some problems," says Brad Jensen, a Draper engineer who oversees the city's parks and trails. "It takes away the negotiation tool for the city. If one person doesn't have any interest in doing it, we can't."

That's just what the Draper neighbors hoped would happen. The law might not have passed in time to cut off the trail bypassing their homes, but it could stop future condemnations.

"We don't want this to happen to anyone else," says Sundquist.

Salt Lake tribune: http://www.sltrib.com

New group takes aim at eminent domain: Triangle Business Journal (Raleigh NC), 5/31/06

By Daniel Johnson
Kieran Shanahan, a Raleigh attorney and former member of the Raleigh City Council, has launched a new statewide organization that will advocate for limits on the use of eminent domain to seize property in North Carolina.

The organization, called the North Carolina Property Rights Coalition, is a nonprofit coalition of individuals including Raleigh City Council member Philip Isley and Durham City Council member Thomas Stith, among others.

Shanahan says the organization's first project will be to push for an amendment to the North Carolina Constitution that would limit the government's ability to seize private property for economic development purposes.

Last year's decision by the U.S. Supreme Court in Kelo v. New London left much of the power to administer eminent domain to local governments.

"The organization will serve as a clearinghouse for groups on the short end of the eminent domain stick," he says.

Shanahan says he became involved in the cause after representing Frank Lee, also on the organization's board, who had a marina on Topsail Island seized by the local government.

The organization next hopes to branch out across the state, educating people about eminent domain and providing resources for people threatened by government action.

Triangle Business Journal: http://triangle.bizjournals.com

Veto city-strangling eminent-domain bill: Des Moines (IA) Register, 5/30/06

Law would stall economic development
By Register Editorial Board
Gov. Tom Vilsack has made the economic transformation of Iowa a centerpiece of his eight years in office. That transformation would be halted, however, if he signs a bill passed by the Legislature this session prohibiting the use of eminent domain for economic development.

Vilsack should veto the bill if he wishes to preserve the gains he has made as governor and to give all Iowa communities a fighting chance for revival, or survival.

If this legislation becomes law, cities and towns in every part of Iowa would lose an important tool to attract new development and salvage declining neighborhoods and commercial districts. It would stop progress in cities such as Des Moines, which is witnessing a renaissance downtown, or Dubuque, where riverfront attractions have become a national destination. It would stymie progress in many communities where growth literally means survival.

Legislators who voted for the bill were obviously aware of those consequences, because they extended the effective date to give Clinton time to complete condemnation of land needed for an ADM corn-processing plant to make plastics. Burlington officials, however, are worried that the extension may not save a major residential and commercial redevelopment project that's been in the works for 20 years. The legislation without doubt would prevent such projects in other cities in the future.

That means Dyersville would lose a proposed ethanol plant and its $1.3 million investment in an industrial park for want of a 50-foot-wide sliver of land needed for a railroad spur and a water main. The owner rejected the city's generous financial package, far above market value. Condemnation is the last option, but without it, the project is dead.

And, it means that Pella could be blocked by a neighboring county in acquiring land needed to relocate its landlocked municipal airport. That has officials of window manufacturer Pella Corp. nervous about the company's future in Iowa as it looks to potential growth: The company relies heavily on corporate aircraft to manage operations in other states. Does Iowa want to keep and grow companies like Pella Corp. or repeat the Maytag experience?

Eminent domain is never the first option, but there are cases when private property must be taken in the interests of the entire community. Not a single credible example has been cited of this power being abused in Iowa, and that is because existing Iowa law has long contained elaborate procedures to protect the rights of property owners.

The changes made by the Legislature to that law are not only unnecessary but potentially devastating to Iowa's future. The governor should not sign them into law.

Des Moines Register: http://desmoinesregister.com

Reasons to limit eminent domain: Philadelphia (PA) Inquirer, 5/30/06

Opinion
By Ronald K. Chen
Eminent domain is one of the most awesome powers Americans have entrusted to government.

It is therefore crucial that the laws governing its use ensure a just and transparent process that fully protects the rights of tenants and property owners.

This is particularly important when eminent domain is used for private redevelopment because, in these cases, the opportunities for misuse, abuse and injustice are often even greater.

Unfortunately, current laws:

Allow for the use of eminent domain in areas that do not meet the constitutional requirement of a "blighted area."
Require little meaningful notice to affected tenants and property owners.
Offer few opportunities for real public participation.
Provide little meaningful opportunity to appeal the designation of blight to an impartial third party.
Permit compensation for taken property that is so low it does not allow homeowners to ever own a home in their town again.

The system for using eminent domain for private redevelopment in New Jersey needs to be reformed.

Statutory criteria must provide real limitations on the ability to use eminent domain for private redevelopment, as the Constitution requires.

For example, under current law an area can be deemed blighted if it is found to be "not fully productive," which could apply to virtually any property.

Such broad criteria must be removed.

Revised criteria for designating an area as blighted should be based on an assessment of the current state of an area, not its potential future use.

All tenants and property owners in a proposed redevelopment area should receive notice via certified or regular mail, at least 60 days prior to the public hearing, indicating that their municipality is considering designating their property as part of a "blighted area."

Such notice should make explicitly clear that a consequence of this designation is that their property can be taken using eminent domain.

The hearing to determine the blight designation should be recorded, testimony should be provided under oath, and affected citizens should have the opportunity to bring witnesses.

If the matter ends up in court, the municipality should be required to present "clear and convincing evidence" the area has been properly designated blighted, thus putting the burden of proof on the municipality.

All meetings about the development of the plan should be public, with recorded meeting minutes. The plan itself should be required to provide more detail, including more specific time frames, a detailed relocation plan, an assessment of the impact on affordable housing, and specific justification as to why it is absolutely necessary to acquire each property.

Property owners should be offered the chance to rehabilitate or redevelop their own properties in accordance with the goals of the redevelopment plan, where feasible. Low-income displaced tenants should also receive up to five years of rental assistance if comparable and affordable replacement apartments are not available in the municipality.

Replacement value should be defined as enough to buy a home of similar size and quality within the municipality under comparable conditions.

Enact pay-to-play reforms that apply to all local redevelopment projects and contractors, including consultants hired as part of the project. Redevelopment contracts should be competitively procured.

Philadelphia Inquirer: www.philly.com

Ronald K. Chen is the New Jersey public advocate. This article is adapted from the summary of his report May 18 proposing curbs on the use of eminent domain, or condemnation, by local governments to acquire property for redevelopment.

Eminent Domain Rules Slanted: (Wheeling WV) Intelligencer, 5/29/06

Ohioans who worry about the expansion of local governments’ authority to take property through eminent domain proceedings now have a poster child illustrating one concern. He is Scott Wolstein, a developer with big plans for Cleveland.

Wolstein wants to develop an area of the “Flats” neighborhood in Cleveland — but he doesn’t want to pay what some owners of existing properties are asking for their land and buildings. So, he is getting help from the Cleveland-Cuyahoga County Port Authority, which has filed eminent domain lawsuits against owners of two properties.

After the U.S. Supreme Court last year ruled that local governments can use eminent domain power to obtain property needed by private developers, Ohio’s General Assembly responded to public concern by enacting new limits on such proceedings. But, as has been the case in several states, Ohio lawmakers left the door open for abuse. A local government still can use eminent domain to help a developer, merely by declaring an area to be “blighted.” That’s the tactic being used in Cleveland.

But more than simply obtaining the two properties involved in eminent domain proceedings now may be at stake.

In an interview with The Plain Dealer of Cleveland, Wolstein made it clear that the two property owners in effect are being used as a warning to others: Play ball, or wind up in court on the wrong end of an eminent domain lawsuit.

Wolstein told The Plain Dealer that he was “happy we’ve taken the step of filing, and I would expect more to come.” In a thinly veiled threat, he added, “Until you show that you’re serious enough to (use eminent domain lawsuits), there won’t be serious negotiations.” Owners of other properties being sought by Wolstein are expected to read that as an ultimatum.

Eminent domain proceedings, then, can be used as a lever to pressure property owners to be more flexible in their negotiations with private developers. That gives developers a major edge — and puts property owners at a serious disadvantage.

We don’t think that is what the nation’s founders had in mind when they provided that local governments could take private property for public purposes. Ohio legislators should take another look at the eminent domain law. Clearly, the playing field has been tilted toward developers — and that should be corrected.

The Intelligencer: http://www.news-register.net

Misuse of eminent domain in Hercules: Contra Costa (CA) Times, 5/28/06

Editorial
If Hercules does not want a huge retail outlet such as Wal-Mart at the future Bayside Marketplace, it need not have one. City officials can easily deny a permit for a store larger than 64,000 square feet. That size limit was part of the development agreement with the Lewis Group, which owned the 17.5-acre site before Wal-Mart.

But Hercules has made a major mistake in preparing to use the power of eminent domain to oust Wal-Mart. Instead, the city should work with the giant retailer to see if an agreement can be made on a smaller store.

Wal-Mart already has cut back on its request for a 142,000-square-foot store and is seeking a 99,000-square-foot retail outlet that would include grocery sales.

If that is too large for Hercules' plans, then Wal-Mart could make an offer to build a smaller store or decide not to build at all.

Ultimately, the size of stores at Bayside Marketplace should be up to the people of Hercules. The use of eminent domain, however, is ill-advised and unnecessary.

It also could prove costly if Wal-Mart chooses to challenge Hercules in court. Not only would the city be forced to spend money on extensive litigation, but it likely would lose in the end.

While it is true that the U.S. Supreme Court has broadened the use of eminent domain, there are limitations on its use in California. This state confines the use of eminent domain to blighted areas.

In 1993, the Legislature passed AB 1290 by former Assemblyman Phil Isenberg, D-Sacramento. The measure was designed to more clearly define blight and constrain redevelopment agencies from designating just about any area as blighted.

The law said that to name an area blighted, both physical and economic conditions must be met.

Physical blight must include one of the following: unsafe or unhealthy buildings, or factors that hinder economically viable use of buildings or land, or incompatible lots, or odd subdivision of lots.

Economic blight must include: stagnant or falling property values, or high rates of business vacancies, or lack of commercial facilities, or residential crowding of adult stores, or high crime rates.

Clearly, none of the above applies to Bayside Marketplace, which is an area designated for retail development. That is what Wal-Mart intends to do.

The area is hardly blighted, and Wal-Mart would bring considerable value to the area by providing low-cost products for consumers and tax revenue for Hercules.

Unfortunately, many people have been misinformed by unfair and inaccurate criticisms of Wal-Mart, not the least of which is that its pay scales are inordinately low.

The fact is that retail salaries and benefits are modest throughout the industry. Wal-Mart's pay and benefits are at least average among large retailers.

The argument that Wal-Mart is costly to local governments because its employees do not have adequate health benefits and thus use county health services is disingenuous.

Employees of retail stores in general are in the same economic situation as Wal-Mart workers and place similar burdens on government social services.

While it is true that smaller retailers with similar products often lose out to Wal-Mart, it is not true that Wal-Mart stifles commercial development.

Stores that do not directly compete with Wal-Mart often benefit from proximity to the huge retail outlet, which attracts large numbers of people to the area.

In recent years, Wal-Mart has come under considerable fire in large part from union activists who are upset that the retailers' employees are non-union.

Union interests also dislike Wal-Mart's expansion into the grocery business. They fear that Wal-Mart will harm supermarkets, which often have unionized workers. That is what much, if not most, of the controversy concerning Wal-Mart is about.

We believe that Hercules, Antioch or any other city where Wal-Mart wants to build or expand, should seek considerable public input.

Perhaps a survey or even a nonbinding referendum could be used before a city takes final action.

If after careful consideration, Hercules does not want Wal-Mart or any other big-box retail store at Bayside Marketplace, so be it.

The final decision should be based on the will of the people, not scare tactics or inappropriate legal action.

It is dishonest for the city to play upon misinformed criticisms of Wal-Mart and even worse to use the power of eminent domain against the retailer.

Contra Costa Times: http://www.contracostatimes.com