Eminent Domain Watch: 08/29/04

9/04/2004

Seven Property Owners Still Holding Out

The Kentucky Post

By Jeanne Houck

One hundred sixteen down, seven to go.

That's how Newport officials see the progress of their quest to negotiate a sale price with all 123 Cote Brilliante property owners whose houses, churches and businesses are to be razed for a retail-office-residential development.

But for a few details, four of the last 11 holdouts have agreed upon a sale price for their homes, City Manager Phil Ciafardini confirmed Friday, leaving just seven left.

Three of the property owners settling were among about a dozen who sued earlier this year in Campbell Circuit Court, claiming the city had unlawfully declared their neighborhood blighted and therefore subject to a forced buy-out under state law.

But Campbell Circuit Judge Leonard Kopowski ruled in June that the city was entitled to use eminent domain, which allows governments to take property for a public purpose, at a fair price to the property owner.

Said Ciafardini: "Our goal always was to reach a fair and equitable settlement with all property owners, and we remain true to that end result," he said. "We're down to a few and we're still trying to reach out to their legal counsel, trying to come up with a similar settlement."

Don't hold your breath, warns Cold Spring attorney Bob Blau, who represents three home owners who have not given up their court battle.

Their appeal of Kopowski's decision is pending before the Kentucky Court of Appeals.

"They're not anxious to have anyone tear down their family homes," Blau said.

The Newport City Commission voted in August to sign a development agreement with Bear Creek Capital of Montgomery, Ohio, to develop the property, which is 55 acres between Memorial Parkway and Carothers Road, just west of Interstate 471. It formerly included 96 homes, two churches and one business.

The city commission also voted to authorize the issuance of $92 million in industrial building revenue bonds for the project.

The Kentucky Post: http://www.kypost.com

The Akron Beacon-Journal

Associated Press

Owners of private property can proceed with their lawsuits that say a suburb is inappropriately preparing to condemn and take property for a developer's commercial project, a court ruled Friday.

The four property owners may sue the city now rather than wait until the city of Norwood begins court proceedings to take their property so a developer can build a retail, condominium and office project, the 1st Ohio District Court of Appeals ruled.

The property owners say the city has wrongly declared the neighborhood blighted and is misusing its power of eminent domain - the authority to buy and take private property for public projects such as highways - to clear the way for private developers to obtain the land.

The decision sends the case back to Judge Robert Ruehlman of Hamilton County Common Pleas Court, who had dismissed the property owners' complaint last year.

Norwood's lawyer, Timothy Burke, said he was unhappy with the appeals court's ruling. Burke said, however, he was pleased with another part of the ruling, which will allow the city to go ahead this fall with court hearings to set the market value to be paid for other private properties.

A message seeking comment was left Friday with Jeffrey Anderson, developer of the proposed Rookwood Exchange project.

The Institute for Justice, a public-interest law firm representing the property owners in this case, has litigated similar eminent domain issues in Pittsburgh, Baltimore, Atlantic City, N.J., Canton, Miss., and Mesa, Ariz.

The Washington, D.C.-based law firm represented private property owners last year in the Cleveland suburb of Lakewood. In November, Lakewood voters rejected a referendum to support the city's plan to use eminent domain to acquire land a developer wanted for a proposed $151 million condo, entertainment and shopping complex. Anderson also was involved in plans for the Lakewood development.

Akron Beacon-Journal: http://www.ohio.com/mld/beaconjournal

Summary of Appeals Court Judgement

CAPTION: GAMBLE V. NORWOOD, 09-03-04

APPEAL NO.(S): C-040019; TRIAL NO.(S): A-0307160

CATEGORY: REAL PROPERTY - APPELLATE REVIEW/CIVIL

SUMMARY: The trial court erred in dismissing for lack of jurisdiction the declaratory-judgment actions of certain property owners seeking to challenge a municipal ordinance designating their neighborhood as a blighted, deteriorated, or deteriorating area, a necessary step for the municipality to seize their property through eminent domain: Although declaratory-judgment actions cannot be used to bypass adjudicatory hearings in special statutory proceedings, where no appropriation actions had begun, the property owners were entitled to seek declaratory relief challenging the city’s designation given its injurious effect on not only the marketability of their property but also their good-housekeeping incentive; but where appropriation proceedings had already begun against other owners, affording them the opportunity they sought to challenge the designation, it could not be said that the trial court erred in dismissing their claims as an attempt to bypass the appropriation actions against them, and those pending appropriation actions effectively mooted their appeals from the denial of declaratory relief.

JUDGMENT: REVERSED AND CAUSE REMANDED IN PART; APPEALS DISMISSED IN PART

JUDGES: OPINION by GORMAN, P.J.; DOAN and SUNDERMANN, JJ., CONCUR.

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9/03/2004

Ashland Plans New Downtown Development

Business space, housing in works

By Matt McDonald

In what would be its first attempt at revitalizing downtown, the Ashland Redevelopment Authority has reached an agreement to purchase vacant land on Front Street in hopes of constructing apartments and commercial space.

Pending approval from Town Meeting in the fall, the authority plans to buy a little more than an acre and a half at 125 Front St. from the Massachusetts Bay Transportation Authority for $171,000. Since 1991 the town has leased the property, which sits across the street from the library, for parking.

The authority's preliminary plans call for a three-story building, with retail space on the first floor, and an undetermined number of below-market-rate apartments on the second and third floors. The project is estimated to cost about $2.7 million, which board members expect to fund with help from the Massachusetts Housing Financing Agency.

Supporters of the Front Street project hope it will give some energy to the downtown, which lacks the foot traffic and hustle and bustle of some nearby town centers, such as that of Wellesley.

"There's no reason to go there now," said the authority board's vice chairwoman, Pat Abbott, who noted that the busiest event of the year is a chili bakeoff sponsored by the Fire Department.

Town Meeting approved creation of the Redevelopment Authority in May 2003. This proposal could be its first test.

The idea behind the authority's creation was that it could help spur commercial development and decrease the town's dependence on its residential tax base. The body also has the power to cobble together parcels of land for major commercial developments, because it can finance projects by issuing bonds and take land by eminent domain.

Authority board member Steven H. Greenberg noted that key elements of Ashland's downtown area already are getting makeovers. A major renovation of Town Hall and an expansion and renovation of the town's library are underway.

"It's going to help downtown Ashland reinvent itself," Greenberg said of the Front Street project. "The downtown needs housing and it needs more retail, and we're providing both."

Ashland's interim town manager, Dale Morris, who is also the redevelopment authority's acting executive director, said it's important for the town to acquire the Front Street site.

"It's been almost like a hidden asset to the town, because it's been sitting dormant for many years," Morris said. "By doing this, we're controlling our own growth versus having it controlled by someone else."

Some business owners in the area reacted enthusiastically to the plan.

Brenda Rivera, a beautician at Salon Illusions on Front Street, said apartments are needed in the area. She said she is a little worried about losing parking but generally supports a project that would provide a boost to downtown.

"There's really not a lot here," she said, "so that would be a nice addition, I think."

Andy Talvy, who owns Talvy Florist on Front Street, also said he thinks the proposal is a good idea. "We need business as much as we can get here. Everybody goes out of town to do shopping," he said.

At the time the redevelopment authority was first proposed, Selectman Adam Shuster questioned why creating it was the best course of action for the town. But he called the concept of a mixed-use development on Front Street "a good idea" and said he is pleasantly surprised that the authority's first project would include below-market-rate housing.

"It would be good to get people downtown," Shuster said. "I'm tantalized by the idea, and would like to see it go forward."

Selectman John Ellsworth, one of the early supporters of creating a redevelopment authority, said he likes the idea of building commercial space downtown. But he sounded a cautionary note about building apartments at 125 Front St., noting that the site abuts railroad tracks. Residents who live in a nearby housing complex for the elderly have complained for several years about train whistles that go off at all hours of the day and night when trains approach the downtown crossing.

"I'm not sure that we ought to be building housing of any kind backing up to the railroad, since they started blowing their whistles," Ellsworth said.

The Redevelopment Authority is asking the town's Community Preservation Act Committee to recommend that Town Meeting, which is to begin Oct. 20, appropriate $245,000 for the project; that figure includes the purchase price plus $74,000 for studies, design, and other preconstruction costs.

The Preservation Act, which Ashland voters have adopted, allows communities to combine a local property tax surcharge with state matching funds to promote open space, historic preservation, and below-market-rate housing. Proposals to spend from the account must be recommended by the Community Preservation Act Committee and then approved at Town Meeting.

The Boston Globe www.boston.com/news/globe

Rowan Files Suit Over Wal-Mart Site

By Denise Jewell

Rowan University plans to take developers involved in a project to build a Wal-Mart in Harrison Township back to court in an effort to take 115 acres slated for the shopping center by eminent domain.

In a lawsuit filed in Superior Court last week, Rowan University claims it has offered $8.38 million for two rural properties near the interchange of routes 55 and 322 where the developers have proposed building the shopping plaza.

The documents seek to condemn the property and to allow the state university to acquire the land through eminent domain.

Rowan's suit is the latest development in a legal battle between the Wal-Mart developers and Rowan University over the farmland that has drawn on for more than two years.

Last year, Superior Court Assignment Judge George H. Stanger Jr. denied a similar request by Rowan to condemn the property --then owned by a local farmer who had contracted to sell the land to the Turnersville-based American Continental Properties. Stanger ruled that the state university had failed to adequately negotiate for the land.

Since then, the latest suit contends, Rowan has made offers to Wal-Mart Real Estate Business Trust and ACP Harrison Developers LLC, the two entities that now own the tracts, but has failed to purchase the property.

"It just came to an impasse," said Joe Cardona, a Rowan University spokesman. "There came a point where there was no movement."

Rowan claims Wal-Mart, which owns 25 acres of the land Rowan wants, met with the university's appraiser to discuss the property, but did not make a counter-offer to the university's $2.85 million proposed price.

Mia Masten, a community affairs manager for Wal-Mart, disputed Rowan's claim that it had properly negotiated for the property.

"We don't have any formal negotiations," Masten said. "We're unaware of any that may have taken place."

The corporate chain expects to move forward with its plan to build a 149,500-square-foot shopping center on the site, Masten said.

Any appraisal by Rowan for the site would have to consider that it is now zoned for commercial use and includes the township's approval to build the chain store, Masten said.

"They had the opportunity years ago to buy this land," Masten said. "I'm sure at a much-reduced cost to the taxpayers."

Rowan's suit contends that the university came to a stalemate with ACP Harrison Developers after the university's $5.53 million offer fell short of the $15.25 million asking price ACP wanted for its 90-acre site.

Jim Speake, executive vice president of American Continental Properties Inc., which sold the 25-acre site to Wal-Mart last year, said he had not seen the condemnation suit as of Thursday afternoon.

Cardona said university representatives had taken "extra efforts" during the last year to patiently negotiate with the developers.

"We wanted to be as fair as possible," Cardona said. "We believe that we went far beyond what we needed to do."

The Arkansas-based chain received final approval from Harrison Township in February 2003 to build a green-and-beige superstore designed to blend with Mullica Hill's antique motif.

Harrison Township officials have estimated that the store would bring more than $1 million in tax revenue to the town, which has been struggling to boost commercial growth as the number of residential homes have increased.

"Right now, we have every intention of moving forward," said Masten, noting that store construction could begin as early as next year.

However, the university is planning to build new residence halls, academic buildings, athletic fields and a technology research facility in the area.

"There is a tremendous need in South Jersey for this university to be able to expand, and we're locked right now in 200 acres," Cardona said.

Cardona estimated that the university owns or has an option to buy about 450 acres out of about 600 acres the school projects that it will need near the Route 55 interchange. Many of the homeowners along Route 322 have already sold their properties to the university.

In January, Stanger allowed the university to move forward with proceedings to take a nearby 8-acre property through eminent domain.

Gloucester County Times www.sjnewsco.com
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Rite Aid Shut Out of Island's Bridgeside Shopping Center

Judge orders drug store out of 30-year home as renovation starts
By Susan McDonough

Rite Aid apparently will be left out of a revitalized Bridgeside Shopping Center, despite its efforts to become part of the vibrancy developers are promising for the aging center.

Superior Court Judge James Richman denied the drug store company's motion to restrain the city from using eminent domain to immediately seize the property Rite Aid has leased 30 years.

The city reportedly offered Rite Aid $484,200 to take over the lease.

The drug store has remained as one of the few viable businesses at the Blanding Avenue plaza, which has slipped into disrepair in recent years.

The center's owner, Regency Realty Group, plans to demolish the Rite Aid building and rebuild the shopping center into a glowing neighborhood plaza anchored by Nob Hill Foods and its in-house pharmacy.

Rite Aid objected to the plan, claiming, among other things, that developers failed to provide the store with its legal right to reestablish itself in the revitalized center.

Under redevelopment law, displaced businesses must be given reasonable preference for relocation in a redeveloped project, said Lee Rosenthal, an attorney at Goldfarb & Lipman, which represents Rite Aid.

The city and project developers say Rite Aid was given plenty of opportunity to remain in the retail center, but the parties couldn't agree on terms.

The city bought Bridgeside from its former owner in July 2003 for $6.25 million and later sold it to Regency Realty, one of the country's largest owners of shopping centers anchored by grocery stores.

Doug Wiele of Foothill Partners is developing the shopping center for Regency. He plans to spend almost $20 million to rebuild the center, add new retail and office space and re-landscape the property to emphasize its waterfront location on the Oakland Estuary.

The judge's decision authorizes the city to take immediate possession of the Rite Aid lease.

Sources say the store could close as early as Oct. 1.

Had the judge granted Rite Aid a stay, construction on the Bridgeside project could have been delayed until at least next spring, said Assistant City Attorney Teresa Highsmith.

Construction is set to begin this fall, after the city approves the project's design, Wiele said.

In the meantime, negotiations with Rite Aid over the value of its lease will continue, Highsmith said.

Rite Aid argued the amount offered by the city to buy out its lease undervalues the drug store and the goodwill generated during the 30 years it has done business in the Blanding Avenue neighborhood.

The Oakland Tribune www.oaklandtribune.com
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9/02/2004

Court Decisions May Stall Development

Letter to the Editor

Avern Cohn U.S. District Judge, Detroit

Your concern that two recent decisions of the Michigan Supreme Court "clamps one more major restriction on the rights that the public once had to defend the public trust from assault" ("Lawsuit Limits: Two rulings signal trouble for environment law," Aug. 17) rings hollow in light of your wholehearted endorsement of the court's decision as reining in government condemnation powers and putting a stop to the Pinnacle Aeropark near Metro Airport ("Property Rights: State Supreme Court reins in power of condemnation for private development," Aug. 8).

The environmental decisions and the Pinnacle Aeropark decision reflect an ideological commitment to private property rights over community rights. This view of the Pinnacle Aeropark decision is reinforced by the manner in which the Supreme Court arrived at the conclusion that a public benefit is not a public purpose under the Michigan Constitution's eminent domain provision, forgoing any analysis under the Fifth Amendment to the U.S. Constitution's eminent domain jurisprudence.

The state Supreme Court also failed to take note of the March 2004 decision of the Connecticut Supreme Court holding constitutional the use of eminent domain to acquire land by the City of New London for a development adjacent to a major drug research facility, and failed to mention the October 2003 decision of the Ohio Court of Appeals for Lucas County upholding the right of the City of Toledo to acquire land for the development of a new Jeep plant by Daimler-Chrysler.

Your business page description of the Toledo case ("DCX expansion forces small repair shop to give up land," Aug. 17) grossly distorted what was involved and was in error when it stated that the Poletown decision was "heavily quoted" in it. The briefs to the Ohio Supreme Court that denied review do not cite the Poletown decision.

Both the Connecticut and Ohio decisions are before the U.S. Supreme Court on applications for review. It is unlikely that the high court, in light of its previous decisions on the power of eminent domain, will accept review. Lastly, it is fair to say that in the future, Michigan will be at a competitive disadvantage in attracting large-scale developments benefiting the public where the use of eminent domain is a factor.

Judge to Decide CURA’s Eminent Domain Rights

By Mandy Rorrer

Plans to build a new grocery store on the city’s East End will be delayed so a judge can decide if the Charleston Urban Renewal Authority has the right to take property for the store.

In a Wednesday morning hearing, Kanawha Circuit Judge Jennifer Bailey Walker was expected to grant CURA access to a lot in the 1300 block of Washington Street East.

Instead, Nick Barth and Bill Smith, two lawyers for the property’s owners, argued CURA does not have the right to buy the property.

For CURA to use eminent domain, the property must be taken for a public use, Barth said Wednesday afternoon.

He does not believe a grocery store is a public use.

Walker scheduled another hearing for Oct. 8.

Before that, both sides will file briefs with the court, Smith said.

CURA wants to buy the lot to complete a piece of property large enough to build a fairly large grocery store for the East End.

Earlier this year, CURA had the property appraised, and offered owner Frank Fisher a check for $299,000.

In April, Fisher refused the offer, saying the 19,000-square-foot lot is worth almost twice that amount.

So, CURA started eminent domain proceedings to take the lot in August.

They wrote a check for $299,000, which is being held by the court for Fisher to accept.

Eminent domain power gives government the ability to force the sale of a piece property at its appraised value.

For CURA to use eminent domain, the property must be in a designated urban renewal area, which it is, and City Council also must approve the use of eminent domain on the individual piece of property CURA wants to buy, said CURA Executive Director Pat Brown.

Urban renewal areas are established to prevent an area from becoming slum-ridden or blighted, Brown said.

He said he was frustrated by the new hearing. CURA wanted to start advertising for grocery store developers, but can’t until they have been granted access to Fisher’s property, Brown said.

Brown said CURA would probably appeal to the state Supreme Court if it lost in Kanawha Circuit Court.

He doubted CURA would pay more than the appraised value for the property.

“We’re talking about taxpayers’ money, and we have an independent opinion on what it’s worth,” Brown said.

“We don’t want to spend more than it’s worth.”

Last fall, CURA bought a 44,000-square-foot Burger King lot, and had that building torn down and property cleared earlier this summer.

The East End has been without a grocery store since 2001, when the Smith Street Kroger closed.

City officials have discussed bringing a new grocery store to the neighborhood for several years.