Demolishing Sports Welfare: Reason Online, 5/05

Two court cases could mean the end of publicly funded stadiums

By Daniel McGraw
When Dallas Cowboys owner Jerry Jones asked Arlington, Texas, voters to pay for a fancy new stadium last November, he did not call the classic plays from the sports welfare handbook. He could not say that America’s Team needed a state-of-the-art facility to compete, since Texas Stadium (in the Dallas-adjacent suburb of Irving) has more luxury suites than any other in the National Football League, and the Cowboys won three Super Bowls in the 1990s. He could not say he was financially strapped, since his franchise ranks sixth in the NFL in profits and second in revenue, according to Forbes magazine. Most important, he did not use the team owners’ favorite and most effective threat—to move to a new city—because the Cowboys have always had very strong local fan support; the Dallas–Fort Worth media market is the fifth-largest in the country, and Dallas Cowboys is a powerhouse global brand name.

But Jones had three key deadlines to beat. His lease in Irving was scheduled to run out in 2009, so a new stadium deal needed to be done quickly. Electorally speaking, there was no better time to pass a tax increase than during the high-profile presidential vote of 2004; special elections usually draw low turnouts, and the anti-tax older folks show up in droves. But perhaps the most important deadline of all loomed in 2005, when the window for public financing of sports stadiums in the United States may be slammed shut by two court decisions expected to be handed down during the year.

Kelo v. New London, which the Supreme Court is scheduled to rule on by summer, could decide once and for all when or even whether governments have the right to use eminent domain to acquire private property for the benefit of private businesses. Meanwhile, Hamilton County v. Cincinnati Bengals Inc., which is being heard in federal court in Cincinnati, is challenging football’s federal anti-trust exemption, forcing all NFL teams to open their closely guarded books, and arguing that the Bengals’ demand of build-it-or-we-can’t-compete is tantamount to fraud.

Jones’ P.R. people swear the lawsuits were not on his radar screen. But sports business specialists around the country say these two cases could bring the taxpayer-financed stadium-building boom of the last 15 years to a merciful halt. For whatever reason, the Cowboys’ flamboyant owner convinced the Arlington City Council in August 2004 to rush hikes in sales, rental car, and hotel taxes onto the November 2004 ballot. He then unleashed a mass media blitz starring old Cowboys heroes such as Roger Staubach and Troy Aikman, spending more than $5 million in all—an extremely high amount for a local election, even in the high-stakes stadium game.

The tax hikes passed 55 percent to 45 percent, and the Cowboys will move into a new retractable-roof stadium in 2009. But it could be the last deal of its kind. On the same day Jones received his gift, voters in Kansas City and St. Louis rejected similar measures to fund sports facilities. Since then, Washington, D.C., has agreed to build a new stadium for the relocated Expos baseball team (now the Nationals), but its city council insisted that it be financed with a significant amount of private money. Public sentiment may finally be turning.

From 1990 to 2003 there were 66 major construction and renovation projects for professional sports stadiums and arenas in the U.S., costing $17.3 billion, according to the League of Fans, a sports welfare watchdog group founded by Ralph Nader. Sixty percent of the funding, or an estimated $10.3 billion, came from the public purse. With the economy and stock market no longer booming, and with the public becoming more skeptical about the rosy economic claims of billionaire team owners, the era of easy money already was drawing to a close. Now the two court cases are poised to determine whether the fund-raising tactics of professional sports teams and their local boosters are even legal.

The Right to Take
Technically, the eminent domain case before the Supreme Court has nothing to do with sports. The high court is hearing a lawsuit involving a New London, Connecticut, real estate project, in which the city agreed to tear down a neighborhood so developers could build a condominium complex and office park. No claim of blight was involved. The city said the development was a “public use,” as required by the U.S. and Connecticut constitutions, because it would generate new tax revenue. Several property owners refused to sell. The Supreme Court will decide if they have to.

The Court has rarely visited the eminent domain issue. In 1954 the justices ruled that a neighborhood deemed “blighted” could be torn down and redeveloped if the local government had a better use for it. There have been several more decisions since then, but most have been very narrow in scope.

Meanwhile, the use of eminent domain has mushroomed. The Institute for Justice, the nonprofit law firm that is arguing the New London case before the Supreme Court, has documented more than 10,000 cases between 1998 and 2002 in which local governments have transferred or threatened to transfer property from one private party to another. Blight is no longer the issue; the question now is simply whether the deal helps the local economy in some way.

Sports owners have long used eminent domain as a way to acquire property cheaply. Sports economists estimate that half of the post-1990 stadium and arena construction has involved eminent domain—and even when it wasn’t invoked, it was understood that condemnation could be a last resort if the teams encountered stubborn landowners.

One of the most famous eminent domain cases involved the Cowboys’ future home of Arlington, where baseball’s Texas Rangers, at the time owned by George W. Bush, convinced local voters to approve a 1991 tax increase that helped build a new $191 million stadium. The city of Arlington used eminent domain to acquire the property from hundreds of private owners, claiming that the stadium was a “public use,” just like highways, schools, or government buildings. Several property owners were lowballed, and court decisions increased their take. (The city, not the team, was responsible for the larger payments. The compensation for one 13-acre plot was increased from $877,000 to $5 million, for example.)

The stadium clearly benefited the Rangers’ owners more than anyone else: Bush turned his initial $600,000 investment into $15 million when the team was sold in 1999. But it has produced little of the promised economic benefit to Arlington, and there has never been a real “public use” factor aside from baseball fans’ paying their money to see games.

Opponents of stadium deals argue that teams and local governments are getting around the public use issue by placing the stadium or arena in the ownership of a “public sports authority.” The property is then tax exempt, and the teams pay nominal rent that is often less than they would have owed in property taxes. The lease arrangements are often lopsided in favor of the teams; many, for instance, allow the franchises to move after a certain time if revenues do not hit projections. This threat to pull stakes and run gives teams strong leverage to renegotiate. If the sports facility were privately owned, there would be no lease to haggle over, and the team would be less willing (and able) to leave.

Without eminent domain, acquiring enough property for a stadium could become expensive. A handful of property owners could hold up an entire complicated deal. “If the court makes the ruling that this is not a valid use of eminent domain, there will be some problems,” says Scott Powe, a law professor at the University of Texas. “Huge problems. No doubt, there will be lots of litigating.”

In resolving the Connecticut case, the Supreme Court is expected to decide whether the promise of local economic benefits is enough to justify the use of eminent domain, and whether local governments have to prove such benefits are likely. If the Court requires such evidence, stadium boosters will be in serious trouble.

During the last 15 years, economists such as Stanford’s Roger Noll, Smith College’s Andrew Zimbalist, and Cleveland State University’s Mark Rosentraub repeatedly have shot down the claim that new stadiums benefit local economies. “There is no dispute in the economic community about who gets the primary benefit from the subsidy,” says Raymond J. Keating, chief economist for the Washington-based Small Business & Entrepreneurship Council and an expert on sports facility financing. “It is very clear a ruling against how eminent domain is now used will change some of the issues used by local government and teams in making their case for public financing of sports facilities.”

Rosentraub estimated Arlington would lose roughly $235 million over 30 years as a result of the new Cowboys stadium, a far cry from the city’s (and team’s) projected $7 billion gain over the same period. (The raised taxes for the stadium would actually take spending money out of the local economy.) Local businesses tend to be largely unaffected, Rosentraub has found, because teams attempt to control almost all of their fans’ entertainment spending, including shopping and dining. This leaves little room for the promised spillover growth around the stadium.

“The reason you build new facilities is to bring in that consumption,” Rosentraub says. “That’s why in the absence of a plan for an overall development of any district, the ‘Disneyfication’ aspect works against you. People drive to games, and those that don’t eat at the ballpark usually eat at their favorite restaurant—not necessarily in the city where the stadium is located—and have generally well-defined consumption patterns.”

Without a spillover effect on the neighborhood, owners and cities would have to scramble to justify using eminent domain. “They would have to prove a defined public use and benefits that go to the community,” Keating says. “Obviously the clear benefits go to the team owners and the players.”

Kelo v. New London could have a sweeping impact not just on sports but on how local governments arrange deals for shopping malls, big-box retail outlets, housing developments, and more. If the Supreme Court restricts the use of eminent domain, private developers and sports owners will have a much harder time acquiring land and negotiating sweetheart leases with quasi-public landlords. If the high court decides a flimsy promise of economic benefits is enough to justify condemnation, it may signal a new building boom. Or the whole question could be tabled until another, more definitive lawsuit comes along.


Monopoly Powers?
The Cincinnati Bengals case is simpler. Basically, the Hamilton County commissioners claim the team they built a stadium for — and the league that oversees the team — cheated them out of $600 million. One of the most controversial pieces of evidence is the Bengals’ win-loss record: The team said it needed more money to be more competitive, but the Bengals still stink.

The Bengals moved into their new publicly funded facility in 2000. Local voters had approved a half-cent county sales tax hike in 1996, and the stadium complex — one for the Bengals, one for baseball’s Reds — cost $750 million. There was a $210 million cost overrun, which the county was forced to pay.

The new address did not produce the promised improvement on the field. In the five seasons prior to moving in, the Bengals’ record was a lousy 29-51. For the first five seasons after, it was an even worse 28-52. The Hamilton County commissioners say the team told voters they would have to pay for a new stadium if they ever wanted a Super Bowl championship, an assertion the lawsuit claims violated anti-trust laws. Because the number of professional football teams is artificially limited, Hamilton County argues, the NFL and the Bengals improperly used monopoly powers by threatening to move to another city unless the stadium was built. Because the NFL has the most shared revenues of any professional sports league — and a hard salary cap that limits pay for players — every team is theoretically profitable and should be equally competitive.

The lawsuit is designed to drive the Bengals and the league back to the bargaining table. Like most stadium deals, the Bengals have a tiny annual lease payment (about $1 million), and they keep all revenues, even for nonfootball events. Because sales tax receipts have declined, the county’s bond repayment, initially scheduled to take 23 years, is now expected to take 35. According to sources close to the lawsuit, the county wants the Bengals to pay about $200 million to keep the bond payments more in line with the original plan.

“You can’t use your monopoly status purely for driving up your profits,” says Hamilton County Commissioner Todd Portune. “That was the business plan of the NFL, and they have used their monopoly status illegally, we believe. All the evidence we have since uncovered shows that false statements were made by both the team and the league. The team was financially stable. There was no real talk behind the scenes of moving the team to another city. But the Bengals and the NFL perpetuated these lies to take money from the taxpayers and…to make lots of money for a private business.”

That, Portune contends, was illegal. “Congress has laws in place that prevent the public from being taken advantage of by private businesses by using their monopoly powers,” he says. The Bengals, he concludes, should “come back to the bargaining table and remedy how disproportionate the benefits were to the team and the league, vs. the cost to the taxpayers.”

Neither the Bengals nor the NFL would comment on the case. But the suit is already having effects on teams. U.S. District Judge S. Arthur Spiegel has ordered the NFL and all its teams to show their financial books to Hamilton County’s lawyers. The NFL has long avoided opening up its books, and the possibility of having municipalities around the country be privy to the league’s real financial health would almost certainly make it harder to sell stadium deals in the future.

Still, the Hamilton County case is fraught with problems for the plaintiffs. The Bengals and the NFL can claim that since voters properly approved the bond, it is not open for renegotiation. The league also argues that teams with more revenues from luxury boxes can sign better players by having the funds for signing bonuses. And the NFL has always maintained that it is not 31 separate businesses but a single, 31-branch business — one that can’t be a monopoly because it competes for entertainment dollars in every market.

“With all these cases, it just depends on the decision,” says Jeffrey Kessler, a New York lawyer who specializes in antitrust cases. “If the decision is that the league violated laws, and the league is punished for it, it could have a huge impact. But I seriously doubt that a court ruling in a case like this would do things like open the door for unlimited franchises. However, a decision against the league and the teams might change how teams deal with cities and local government in setting up their stadium deals.”

The Turning Point?
The stadium deal for Jerry Jones and the Dallas Cowboys is weighted heavily on the side of the team. The Cowboys emphasized during the tax initiative campaign that they were putting up half the money for the stadium — $325 million — but that isn’t quite true. While the city will use the new taxes to retire its side of the debt, Jones will be able to slap his own 10 percent “tax” on tickets and a $3 tax on parking to retire his side. This will amount to about $10 million a year, or $300 million over 30 years.

But that’s hardly the limit to Jones’ new revenue streams. He’ll also get 95 percent of the corporate naming rights revenue for the new facility, which could be worth $250 million to $350 million. That’s extra money, since the team’s current home, Texas Stadium, has no corporate naming contract. Jones could also earn more than $100 million by selling personal seat licenses (priority rights for buying season tickets), and the NFL is giving the Cowboys a $100 million loan they don’t have to pay back.

So before he even sells a ticket or luxury box or hot dog or beer, Jones will be up about $800 million. Take away the $325 million, and he is still ahead $475 million. Since studies have shown NFL teams usually double their profits in new digs, Jones’ estimated annual take of $40 million could balloon into an additional $1.2 billion over the life of the 30-year deal.

The city of Arlington never asked to see the Cowboys’ books before deciding to put the issue before voters. As with the Texas Rangers stadium before it, eminent domain likely will be invoked to assemble land for the football stadium; the Arlington City Council already has threatened to use it if any property owners decide to hold out. The city has claimed the area where the stadium will be built is blighted and full of crime, neither of which is true; the local housing prices and crime rates are about average for the city.

Such spurious claims in the service of forcing small property owners to sell to larger ones have become all too common. If the Supreme Court requires the justifications to be even slightly more rigorous, and if Hamilton County succeeds merely in publicizing the NFL’s notoriously secret finances, then the balance of power will shift away from the teams. And if the judges take decisive action, 2005 could be the year the public stopped lining the pockets of billionaire owners and millionaire players by paying for the places where they earn their living.

Daniel McGraw is the author of First and Last Seasons: A Father, A Son, and Sunday Afternoon Football (Doubleday).

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Reason Online, The Reason Foundation: www.reason.com

Whose House Is It Anyway? AARP Magazine, 5/05

By Barry Yeoman
When a city's quest for renewal means the death of an old neighborhood Wilhelmina Dery has lived her entire 87 years in a blue sea captain's house near the banks of Connecticut's Thames River. From the ground floor, her family ran a grocery where the neighborhood's Italian women congregated Saturday mornings, buying freshly stuffed sausage and wedges of Parmesan cut from large wheels. Across the street, the river was thick with traffic: swordfish, tuna, and lobster fishing boats; Coast Guard ships; and, during Prohibition, the rum-running vessels that gave New London its reputation as a crossroads of the illegal liquor trade.

Wilhelmina met her husband, Charles, now 85, at a USO dance during World War II, just before he shipped out to the South Pacific with the Merchant Marine. Of their four kids, only the youngest, Matt, survives. He lives next door with his wife and teenage son in a three-story house with skylights and oak trim, converted from the brick-oven bakery where Wilhelmina's immigrant father once worked. Several times a week, Matt or a family member carries a heaping plate of homemade pasta across the driveway.

Charles likes this balance of intimacy and privacy. "He has his space and I have mine, you know?" the older man says of his son. "I love him to death, but I realize that you've got to let him breathe a little."

The Derys' neighborhood, Fort Trumbull, has never been a tidy suburb. It butts up against a train yard, and until recently reeked from a nearby wastewater treatment plant. But it was close-knit nonetheless, a place of nighttime basketball games, Easter dinners, and huge funerals where the whole small community turned out. "Nobody locked their doors," says Matt, who is 48 and works as a sales manager at New London's daily newspaper. "You just walked in and yelled. You'd get fed wherever you went." In 1976, Matt took over the family grocery, by then a sandwich shop where employees of the Naval Undersea Warfare Center came for grinders filled with chicken Parmesan and teriyaki rib eye. He eventually gave the store to his brother, who ran it until he died in a 1994 fire. (Another brother died accidentally as an adult, and a sister died in infancy.) When the Warfare Center closed in 1996, it spelled an end to the family business.
In the late 1990s, Fort Trumbull residents suddenly noticed real estate agents poking around their rutted streets. The neighbors suspected something was in the works, and in December 1999 the news hit: the city of New London planned to acquire all 90 acres of Fort Trumbull and turn the land over to private developers. Spurred by the imminent opening of Pfizer Global Research and Development's $300 million headquarters next door, the city envisioned a "waterfront urban village" of offices, luxury condominiums, and a four-star hotel with river views.

About 80 property owners, many of them elderly, voluntarily sold their homes when the city came knocking. The remaining seven, including the Derys, refused. In response, the city-chartered New London Development Corp. (NLDC) seized the remaining houses through a process called eminent domain, which allows governments to buy property from unwilling owners. The houses are currently occupied, but their future remains in legal limbo — at least until the U.S. Supreme Court rules on Fort Trumbull's fate.

The court's decision, expected by the end of June, could set a sweeping precedent concerning the rights of governments to buy people's homes for private redevelopment. To property-rights advocates, a ruling in New London's favor could mean open season on older neighborhoods — and the older Americans who frequently inhabit them. According to Chip Mellor, president of the Washington, D.C.-based Institute for Justice, a libertarian law firm representing the Fort Trumbull neighbors, the retirement plans and life savings of people 50 and older "can be shattered in an instant" when a government has the right to take their property and give it to another private party.

But some local officials have a different perspective. They say that a city has rights too — particularly the right to control its own destiny for the common good. Cities and towns have many tools to do this: zoning laws, billboard regulations, historic preservation rules, building codes. While eminent domain is a drastic tool, they say, it's sometimes necessary in places that are suffering from chronic unemployment, underfunded schools, and shrinking tax bases.

"For many communities to be sustainable, they need to redevelop," says Jeffrey Finkle, president and CEO of the Washington, D.C.-based International Economic Development Council. Converting land to denser uses beefs up the tax base, which helps pay for the police department, fire department, roads, and social programs. When houses and businesses stand in the way of these efforts, Finkle says, cities need the power to obtain the properties. "Poor land-use judgments 40 years ago should not dictate the survivability of a city in 2010," he says.

The battle over Fort Trumbull is not a tale of villains looking for personal gain. "Really what is involved is conflicting dreams," wrote the Connecticut Superior Court in a 2002 decision. Fort Trumbull's residents dream of living peacefully in their own homes, the court said, and "any threat to that dream is understandably forcefully and emotionally opposed as it should be in a free society." On the other hand, the court wrote, New London's leaders have their own dream, "to provide an economic and social uplift for their city." However the U.S. Supreme Court rules, this much is clear: only one of those dreams can come true.

Traditionally, we associate eminent domain with road building, school construction, and other tax-funded projects. If the government wants to run a highway through your neighborhood, it can seize your home without your consent; this happens all the time. In exchange, the U.S. Constitution promises "just compensation" when your property is taken for "public use."

The controversy arises when your land is to be turned over to a for-profit business. What if a city decides that it needs a sports arena, a shopping mall, a handsome new downtown? What if a major employer wants to build a factory that will provide hundreds of jobs? Do these needs constitute public use? This is what the Supreme Court has been asked to determine.

The U.S. Constitution promises "just compensation" when your property is taken for "public use."
In the past half-century, the courts have ruled that under some circumstances — clearing slums or breaking up land monopolies — a government can indeed seize property and turn it over to private interests. But the issue is far from resolved. In 1981, the Michigan Supreme Court ruled that Detroit could condemn the working-class neighborhood of Poletown for a General Motors plant, in order to preserve jobs in the beleaguered city. In 2004, while reviewing another eminent domain case, the court decided to revisit the Poletown case — and, in a surprise move, overturned the earlier decision. By then, of course, it was too late for 4,200 Poletown residents, whose homes had long since been bulldozed for a plant that produced far fewer jobs than expected.

At the same time, some of the nation's most stellar urban-revitalization projects have also relied on private redevelopment. Baltimore's Harborplace, which turned crumbling docks and warehouses into a waterfront shopping and dining mecca, required the seizure of private property. So have stadiums throughout the United States.

While individual redevelopment projects have been controversial, the eminent domain issue itself attracted little national attention—until the Institute for Justice rallied to the defense of an Atlantic City, New Jersey, widow whose home was threatened by Donald Trump's plans to build limousine parking for his casino. (The institute prevailed in 1998.) In a hefty report published in April 2003, the institute identified 3,700 properties across the United States that were condemned for private use over a five-year period. Though there's no reliable historical data, some experts believe these takings have become considerably more commonplace. Jeffrey Finkle estimates they doubled during the 1990s.

What has definitely become more commonplace is criticism by legal activists who believe that when the Founding Fathers said "public use," they weren't referring to stadiums and shopping centers. "The Constitution has a limitation. To say 'We have a great need; let's suspend the Constitution' is not a great argument," says Gideon Kanner, professor emeritus at Loyola Law School in Los Angeles. When influential land developers convince governments to use eminent domain on their behalf, he adds, "it's a form of civic corruption. This is really raw power when people are kicked out of their homes."

Even supporters of eminent domain agree that it's sometimes misused. But focusing on the abuses, they say, misses the bigger issue: elected officials have the right and responsibility to shape the way their communities grow. If they neglect that responsibility, city centers will die while farmland morphs into miles of traffic-choked highways sprouting fast-food restaurants and big-box retailers.

Lost in this rhetoric is the human struggle that has repeated itself across the United States. One side fails to acknowledge the suffering of families like the Derys, who have lived in their neighborhoods for decades and can't bear the thought of relocating. The other side dismisses civic leaders, like New London's, who grapple daily with shrinking tax bases and underfunded schools, and who can't envision any solution that doesn't uproot people from their homes.

At its peak as a 19th-century whaling port, New London was a curious mixture of aristocratic mansions and rough-and-tumble establishments catering to sailors on shore leave. These days, New London has a split personality of a different kind. On the south end of town, elegant shingled homes sit on private beaches with 180-degree views of Long Island Sound. Downtown, though, antique shops alternate with empty storefronts. Since 1960, the city has lost almost one quarter of its population, shrinking from 34,000 to 26,000.

"We have terrible economic woes," says Ed O'Connell, an attorney who represents the New London Development Corp. Unemployment is high. Tax revenues have been stagnant, forcing the city to cut back the police and fire departments and lay off literacy tutors.

Hemmed in by water and more affluent municipalities, New London has no place to grow. To expand its tax base, it must make better use of the six square miles that make up the city. Otherwise, says O'Connell, the city will continue its downward spiral and plunge deeper into poverty.

That's why, when Pfizer announced it would locate a global research facility on a trash-strewn peninsula next to Fort Trumbull — the largest in-state business expansion in Connecticut's history — the plan was viewed as a singular triumph. The new complex, where scientists would design and manage clinical drug trials, would employ more than 1,500 people. Pfizer spokesperson Liz Power insists that the drug firm's only preconditions for moving to New London were a cleanup of a waterfront park, odor reduction at the wastewater treatment plant, and citywide infrastructure improvements. Internal Pfizer documents, however, suggest the company's "expectation" for Fort Trumbull included upscale housing and a hotel and conference center.

Whatever the extent of Pfizer's demands, New London's leaders envisioned turning Fort Trumbull into an urban showpiece. Along with the townhomes and hotel, there would be office buildings, marinas, a river walk, and possibly even a Coast Guard museum. As many as 1,400 jobs could be created, the city predicted, along with $1.2 million in annual property tax revenues. "This was a chance the city of New London would have once in its history," says O'Connell.

There was, however, the matter of evicting the neighborhood's existing residents.

If New London's dire straits lent its leaders a certain moral high ground, the city's actual tactics squandered any chance of winning Fort Trumbull's goodwill. From the start, the neighbors felt bullied into selling their homes. They claim that NLDC's agents phoned at night and visited during Sunday dinners, contracts in hand. "They started calling my parents at all hours of the day, saying, 'Listen, you need to sell this property. If you don't take what we're offering, we're going to take it [for less money] by eminent domain,' " says Mike Cristofaro, whose family had had another home seized in the 1970s to make room for a seawall that was never built. "To me, that's harassment." O'Connell, NLDC's attorney, says it's normal for real estate agents to conduct business at night and on weekends.

The Supreme Court could limit the government's power to buy private homes without their owners' consent.

NLDC began seizing title to holdout properties starting in 2000. Around the same time, demolition crews came into Fort Trumbull with excavators that looked like dinosaurs, leveling the houses the owners had sold to the city voluntarily. Amid the dusty cacophony, Byron Athenian, a retired body shop owner who helps care for his severely disabled granddaughter, found his house cut off from the street by barricades and a ditch. Now Athenian and the wheelchair-bound girl must enter the building through a side door at the end of a pothole-ridden path. "It's like living in a bunker," he says.

One clear day in November 2000, a brick wall from a house being demolished next door crashed into Matt Dery's yard, destroying the garage and all its contents. "It was like an airplane had struck my house," recalls Matt's wife, Suzanne. "The whole house shook." When Matt tried to rebuild the structure, the city denied him a permit.

The neighborhood grew tenser. Two months after the garage incident, police were summoned to a brick apartment building, where NLDC padlocked some of landlord William Von Winkle's tenants into their homes and ordered others into the street. O'Connell calls the evictions legitimate, explaining that Von Winkle had defied a city order to keep the apartments vacant. (NLDC later agreed to permit Fort Trumbull's landlords to rent on a month-to-month basis.)

Meanwhile, a lawsuit filed by the Institute for Justice wended its way through the courts. In March 2004, Connecticut's Supreme Court ruled in the city's favor, noting that the rebuilding of Fort Trumbull would create hundreds of jobs. While NLDC was still temporarily barred from bulldozing the houses, it did the next-best thing: it sent the Institute for Justice a notice that the institute's clients owed back rent for living in their own homes. Von Winkle owed $301,756 for his house and rental units. The Derys owed $229,900. "If we stay here much longer, we'll have to give them a dog and maybe some furniture," Matt Dery says sardonically.

Ed O'Connell, the attorney, says the city and NLDC were just trying to safeguard the public purse. Since New London owns the houses, he argues, its officials have a responsibility to earn money from the buildings. "It's not like we charged them rent as a way of grinding salt into their wounds," he says. "There's taxpayer dollars involved."

In reality, there's been plenty of salt grinding, intentional or otherwise. Twice, The Hartford Courant quoted former NLDC president Claire Gaudiani as saying, "Anything that's working in our great nation is working because somebody left skin on the sidewalk." ("It's fine to say when it's not your skin," Matt Dery grumbles.) Gaudiani's husband, a Pfizer executive, made matters worse when he publicly declared, "Pfizer wants a nice place to operate. We don't want to be surrounded by tenements."

With the Supreme Court about to rule in the New London case, cities across the United States are wondering whether their own redevelopment projects will be allowed to move forward — and homeowners in the path of those projects are wondering whether they'll be allowed to stay put. "There are dark clouds on the horizon for cities," warned Utah's Salt Lake Tribune last December, hinting that if the Derys win, the city of Ogden might find it harder to condemn 34 homes for a planned Wal-Mart superstore. Other places awaiting the high court's decision include Bowling Green, Kentucky; Camden, New Jersey; New Brighton, Minnesota; and Liberty, Missouri.

However the court rules, though, it'll be too late to save Fort Trumbull. These days, where neighborhood kids once romped, there are mostly rubble-strewn lots pocked with the occasional holdout house. One salmon-colored cottage, dating to 1893, is adorned with birdhouses and folk art and a sign that says "not for sale."

If you walk around Fort Trumbull, it's hard not to think of war zones. But the remaining residents don't think of their neighborhood that way. They want to stay. It's their home. At night it's quiet enough to feel like the countryside, dark enough to see the stars. Besides, they say, there's the principle. "If this all goes through, any house, anywhere, can be taken for higher tax dollars," says Von Winkle. "No house is safe."

The residents say they're willing to coexist with the new development. O'Connell says that's out of the question. The older houses wouldn't be in keeping with the planned development's character. "You can put up a hotel," he says, "but you're not going to get a guest to pay $150 to look out at isolated buildings."
Besides, O'Connell adds, Fort Trumbull's residents romanticize their neighborhood. "This is not a garden spot," he says. "It was not some old Italian neighborhood. They were not passing cannolis across the fence to one another. It was one of the nondescript areas you see along the side of railroad tracks."

Matt Dery begs to differ. Friends still come by unexpectedly, then stay for a beer and a bowl of his wife's seafood-tomato soup. And the cross-driveway pasta shuttle continues. Says Matt: "As long as there's one 16-year-old kid ferrying a big tray of ravioli over to his grandparents and telling his grandmother that he loves her and getting a hug and a kiss, this is still an Italian neighborhood."

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AARP Magazine: www.aarpmagazine.org

Court eyes eminent-domain rules: (Harrisburg PA) Patriot-News, 5/8/05

Decision could have impact on HIA case

By Joel Berg
Under current law, Harrisburg International Airport likely would prevail in its legal battle to take private land from a nearby business, observers said. But, a U.S. Supreme Court decision expected in June could shift the balance of power against the airport.

The right of eminent domain — a government's ability to take privately owned land for a public purpose — is part of the Fifth Amendment to the U.S. Constitution. The issue before the court centers on the grounds for exercising that right.

Few people question government's authority to seize private land to build a road, a bridge or even a new airport runway. That power provokes greater controversy when it drives out businesses or homeowners to clear a path for economic development, as in the case at HIA.

In March, airport officials said they wanted to take over Cramer's Airport Parking, a neighboring business, and develop the land for privately run, airport-related operations, such as a cargo base or maintenance facility. The Susquehanna Area Regional Airport Authority, which owns HIA, has offered to pay about $1.57 million for the property.

The Cramer family objects to the move. It has cited, among other issues, antitrust allegations that the airport wants to knock out a competitor to its new parking garage.

"We're in business. We intend to stay in business. We want to remain in business," said Solomon Cramer, son of owner Stanford Cramer and a manager at the company. "This isn't a matter of not being happy with their offer or anything else. We don't want to sell."

Fred Testa, HIA's aviation director, has said the airport's intent isn't to shut out a rival. "Anything that the Cramers are claiming in the lawsuit will be answered in the lawsuit," he said.

The Cramers face an uphill struggle, given the courts' traditional attitude toward the use of eminent domain, attorneys said.

Ever since a Supreme Court case in 1954, judges have not interfered when governments and public authorities say a particular seizing of land serves a public purpose, said Joel Burcat, an attorney in the Harrisburg office of law firm Saul Ewing. Typically, courts decide only how much money a landowner is due in return for losing property.

Burcat believes courts should be more skeptical.

"There have been many instances over the years where condemning bodies have taken properties, they've said that there is a public purpose and, in reality, it was a very shady public purpose," Burcat said. "The public purpose was putting in a hotel. The public purpose was keeping a football team. The public purpose was replacing an old department store with a new department store."

Depending on its outcome, the case before the Supreme Court could give judges a bigger say in whether a public purpose is being served, Burcat said. He questioned whether the airport's move to take Cramer's serves a true public purpose.

The Supreme Court case involves a homeowner named Susette Kelo who is fighting an economic development plan in New London, Conn. Public officials condemned a residential neighborhood, which includes Kelo's home, and plan to turn the property over to a private developer. The developer is expected to bring in new businesses, create jobs and provide more tax revenue for the city.

If the court rules in favor of Kelo, the Cramers and other landowners might have more leeway in resisting eminent domain, Burcat said. He filed a brief in the case on behalf of a client in York County, the Kohr family, whose farmland is being sought by county officials for a park.

"After 50 years, for the courts to even agree to hear a case on this subject says that they must be seriously reconsidering their decision," Burcat said. "Otherwise, why would they take it?"

John Echeverria expected the court to stick with tradition. He is an attorney with the Georgetown Environmental Law and Policy Institute in Washington, D.C., and filed a brief in the Kelo case in favor of New London.

"The long-standing Supreme Court precedent has provided strong support for the use of eminent domain by government to achieve public purposes, including when private property is transferred to other private parties," Echeverria said.

An airport serves a public purpose, he said. If the airport needs land for related operations, taking the land is a sensible choice, even if the land goes from one private user to another.

The Supreme Court is unlikely to reverse precedent, agreed David Lehman, an attorney with McNees Wallace & Nurick in Harrisburg. But, he said, "These are strange times politically. Who knows what can happen."

No government or public authority exercises the right lightly, said David Black, president and chief executive officer of the Harrisburg Regional Chamber and the Capital Region Economic Development Corp.

But, he said, "I think it's something that probably has to be done to look out for the long-term interests of the airport, keeping it competitive and helping it become the economic engine that it can and should be for our region."

How land is used before and after it is taken helps to determine whether a public purpose is being served, said Neal West, general counsel for Harristown Development Corp. In the 1970s, the organization had used eminent domain to redevelop downtown Harrisburg.

"At some point, you do cross the line," West said.

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Patriot-News: www.pennlive.com/business/patriotnews

A steamroller at Flowerfields: Newsday (Long Island NY), 5/8/05

By Charles V. Zehren
It's fitting that the state [of New York] wants to build a virtual reality center on private property it seized from a company that once manufactured pilotless drones.

For there's an absurd quality to the situation the business community finds itself in after a unanimous decision by four justices of a New York appellate court on April 25 that paves the way for Stony Book University to annex through eminent domain 246 acres of a 314-acre parcel belonging to Gyrodyne Co. of America of St. James.

Critics say if you need more evidence of the abridgment of private property rights, here it is. Developers, landlords and small businesses think they "own" their real estate and the "market" sets the price. But that's an economic illusion in a community where dozens of local governments, state lawmakers, university trustees and the courts exert ultimate control over the value of property through restrictive zoning, confiscatory taxation, open space acquisitions and outright seizure.

Originally acquired back in the 1950s as a flight-test facility, the tract stands as the sole asset of Gyrodyne, a thinly traded corporation held by investors speculating that the ultimate sale of the property will yield a tidy windfall on their shares. South of Route 25A and adjacent the Stony Brook campus, the scenic "Flowerfields" has been described by its owners as among the most valuable real estate east of Manhattan.

Not all Gyrodyne shareholders have been happy, filing complaints with the Securities and Exchange Commission, accusing company executives with dragging their feet on potential land sales while pulling down large salaries for managing what amounts to a passive investment. The executives deny such claims, saying over the years they've been stymied trying to develop a $220 million golf course community, which would require a change in zoning.

The stock bumped up last year when the university expressed interest, but talks fell apart, the university accused Gyrodyne of bad faith, invoked its condemnation power, went to court, and won the right to seize the property at "fair market value," ostensibly to build Republican Gov. George Pataki's Center for Excellence in Wireless and Information Technology.

The university says it wants to use 73 acres to build nine buildings totaling 830,000 square feet housing high-tech research and some private businesses by 2017. It also intends to provide payments in lieu of property taxes for those portions of the buildings occupied by private businesses.

But the university could still be in the business of taking land off the tax rolls for de facto environmental preservation as plans now call for setting aside 172.5 acres for perimeter buffers, land preservation and and a "field study area." Let's hope SUNY doesn't hire the same post-modern-Stalinist architects this time around.

"The balance of power has tilted so far in favor of the condemning authorities that property owners have extremely limited rights," said Peter Pitsiokos, Gyrodnyne's chief operating officer. "It's been 40 years since the state university system has condemned this volume of property."

Even though it's called "fair market value," the courts and the board of trustees - not market forces - are now effectively charged with setting the price of the very property the university covets. That's all the more startling given that the state has moved to take the property even though there is no rock-solid guarantee that it has the money to pay for it, even if Pataki holds a groundbreaking ceremony. The university has set aside $18 million to buy Flowerfields - $86 million less than the $100 million Gyrodyne wants.

"At the appropriate time, when the value is set, the university will be there with a check," promises state Sen. Ken LaValle (R-Port Jefferson), who is playing a central role in shepherding the deal. Gyrodyne says university president Shirley Strum Kenny may tap the Stony Brook Foundation, a tax-deductible nonprofit dedicated to financing "mission-essential initiatives." A university spokesman declined to comment on that possibility.

A large part of the university's success is attributable to the lawyer it hired to argue its case against Gyrodyne, M. Allan Hyman of Sands Point, partner in Certilman Balin's Real Estate Tax Certiorari and Condemnation practice group. The law contains myriad mechanisms to protect individual property rights and gives holders the courts as a forum to defend their interests, he told me. After Gyrodyne rebuffed the university's "fair and reasonable" offers, the school was well within its federal and state constitutional rights to seize the property through eminent domain, Hyman explained, adding that the $100 million price tag is "unrealistically optimistic."

The decision will be hung up in court for quite a while. The judge now seated in the Court of Claims, where the price will be set, is none other than James Lack, the former Republican state senator from East Northport. Sen. Chuck Schumer evidently senses there's PR hay to be made. An internal fax between the Democrat's aides sent apparently by accident to our office last week noted that the Gyrodyne flap "is a great issue, we should think of some federal involvement."

A compromise could involve striking a public-private partnership between the university and Gyrodyne that would allow the company to retain some of the property, build and then lease space to tenants as part of a corporate center. Such a plan would serve the university, Gyrodyne and local residents by generating additional property tax revenue instead of taking it away.

But no matter how much land the state seizes to create "centers of excellence," little will happen to bolster local business until companies are able to attract high-quality employees who can afford to own a home and pay taxes on Long Island. As long as that's not the case, businesses - even those coming out of virtual reality incubators - will elect to forge their futures elsewhere.

Players in the Gyrodyne case

• The lawyers
  
  • Peter Pitsiokis, Gyrodyne chief operating officer and a Republican who worked as a Suffolk County prosecutor and ran unsuccessfully for state Assembly in 1992
    
  • M. Allan Hyman, Republican and partner with Certilman Balin, an East Meadow firm with strong ties to the Nassau GOP.
  
  
• Appeals Court judges ruling in favor of SUNY
  
  • Republicans: Robert Lifson, former Huntington GOP chairman
    
  • Robert Schmidt, former Nassau County and Town of Oyster Bay attorney
    
  • Robert A. Spolzino, former counsel to state Sen. Nicholas Spano (R-Westchester)
    
  • Democrat: Fred T. Santucci, who was appointed by then-Gov. Mario Cuomo
  
  
• Judge likely to set the price
  
  • Judge of the Court of Claims James Lack, former Republican state senator from East Northport

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Newsday: www.newsday.com

Eminent domain - used carefully - can mold destiny: Syracuse (NY) Post-Standard, 5/7/05

By Dick Case
The water in Ley Creek runs muddy through the Seventh North Street district these days.

In March, Bob Congel and his helpers at Pyramid Cos. unpacked their newest sheaf of renderings of a Destiny USA research and development park that would straddle Seventh North where the Thruway and I-81 intersect, a place we like to call the "Crossroads of New York State."

The cost: billions.

This newest entry to the Pyramid wish list would turn a 325-acre marsh into the cross patch of New York state; the 29 business owners on the half of the site south of Seventh North aren't happy with the notion Pyramid will ask OCIDA (the Onondaga County Industrial Development Agency) - a public benefit corporation controlled by the county Legislature - to use its power of eminent domain to condemn their property and turn it over to the Congel partners.

This is going down hard, as we heard at a meeting of the agency this week, when some of the owners spoke. Later, they said they'd fight the idea of a public authority taking private land and giving it a private developer.

They weren't thrilled to hear Robert Baldwin, the OCIDA chairman, say out loud that board members "didn't have to be here." He cautioned against early panic for a project that has many approvals to clear.

The owners aren't napping. They've founded a "Stop OCIDA" coalition, with posters, signs, buttons and a Web site (stopocida.com).

Meanwhile, on the north side of the road, where two county agencies have trash and sewage operations, Pyramid faces other challenges on what used to be a landfill. The developer looks to this land to hold Phases I and II of the project; number three's the small industrial park to the south.

The Onondaga County Resource Recovery Agency - our trash busters - has a transfer station on the land I'm told it's not anxious to move. Rather, director Tom Rhoads told me in March, the agency hopes its nine-acre operation could become part of a research park.

At the same time, the county Water Environmental Protection Department, the engineers who look after our sanitary needs, has a pumping station on the lot that can't be relocated.

Aside from the concerns about the development agency and Pyramid wanting the businesses to lie down and play dead, the owners tell me they're not comforted by what they heard from County Executive Nick Pirro.

I paraphrase: I'm not going to turn Onondaga into another Erie County, a reference to the financial woes of the Buffalo area. They don't think Nick's using his critical powers to evaluate a Pyramid proposal that looks, right now, like all of the other Pyramid proposals: lovely gift-wrapping with no gift inside.

There's another issue here, and it's bigger than Seventh North: defining eminent domain as a tool for the public's "health, safety and welfare." As we speak, the concept is being tested before the U.S. Supreme Court in a Connecticut case that also involves a public agency condemning private property for a private developer.

Just now, we don't have a choice except to trust that members of that industrial agency board - all appointed by the Legislature - will do what's best for all of us, not just Congel Inc. Public benefit corporations such as this one were created by the state in 1970 to assist established businesses and help new ones relocate to places like Onondaga County.

"Assist established businesses" means both The Pyramid Cos. and the 29 entrepreneurs south of Seventh North.

One thing is clear this week: The project is not the done deal Pyramid suggested in March. Educated guesses suggest OCIDA will end up telling the developer it will withhold the eminent domain favor until the board sees Phases I and II rising. Maybe even the Other Destiny: the entertainment and retail complex promised for old Oil City.

That's the kind of "irresistible power" of true destiny.

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Syracuse Post-Standard: www.syracuse.com

Fighting The Power To Take Your Home: Washington (DC) Post, 5/7/05

More Owners Are Challenging Government Plans to Seize Land

By Kirstin Downey
Prince George's County [MD] Executive Jack B. Johnson set off a furor in March by warning during a radio broadcast that the county might tear down some crime-riddled apartment complexes if the owners didn't do more to step up security.

Within days, dozens of renters who lived in the apartments had staged rallies in defense of their homes, demonstrating at a government building and one of the apartment buildings. Johnson quickly backed off, but one thing was clear: Even an off-hand mention of the mighty government power to seize people's property set off powerful emotions.

Defending the Neighborhood

Are there rumors that your neighborhood is slated for major change? Are you worried you could lose your home to eminent domain? Here are some tips from the Castle Coalition, a libertarian advocacy group opposing what it calls "eminent domain abuse." Do your research. Go to the local planning department and ask for information about any redevelopment plans in your area, including proposed highway improvements. Call elected officials who represent your area to find out what they know. (Ideally, you should have done this before you purchased the property.) Get copies of all planning documents relevant to your property. Take notes, with dates, including the names, titles and telephone numbers of every official who gives you information. Attend scheduled public hearings on planning issues related to the possible project. Share information with neighbors and others who will be affected by the plans. Consider organizing a group to monitor events and schedule protests if necessary. If you find that your home or business is in danger of condemnation, consult a lawyer who specializes in eminent domain. The Owners' Counsel of America maintains a list of attorneys who focus on property rights issues. Some require hourly payment but others will accept a contingency fee based on the difference in the price you were initially offered and the final price. (Such a payment system would require that you eventually relinquish the property.) Ask questions. What is the timeline for this project? What are the deadlines for challenging eminent domain decisions? When might a condemnation action be filed? How is compensation handled? How much are relocation expenses?

The words Johnson used were "eminent domain," the condemnation process by which government agencies are allowed to take land from property owners. Under the Fifth Amendment to the U.S. Constitution, governmental entities can take private property for public use, as long as the owner is given a fair price, or what the amendment calls "just compensation."

Eminent domain is a phrase that is increasingly cropping up when people talk about land use in the Washington area. In the District, for example, the government has sent letters to 33 property owners telling them it intends to buy their properties to build a baseball stadium in Anacostia. The District is also pushing ahead with its plan to buy 16 properties to redevelop the Skyland Shopping Center in Southeast Washington, with a Target store as the proposed centerpiece. In both cases, the D.C. government has said it will use eminent domain to compel the property owners to sell if they do not do so voluntarily.

In Maryland, 30 to 50 homes would be affected if the long-proposed Intercounty Connector, a highway linking Montgomery and Prince George's counties, were to be constructed. The project has been mired in controversy for 40 years, but may have additional traction now because Maryland Gov. Robert L. Ehrlich Jr. (R) has made it a priority.

And in Virginia, public hearings will be held next week on the proposed Tri-County Parkway, a new 10.5-mile highway that would cross Fairfax, Loudoun and Prince William counties. It is not funded, but if it were to go forward, 13 to 22 houses would be taken.

So how should homeowners react if they find themselves in such a situation?

Most people accept the practice of eminent domain, even if they consider it unpleasant and distasteful, particularly when the government takes the land for something that is clearly a public use, such as a school, a highway overpass or a bridge. They realize millions of people benefit from the land transfer, from children sailing boats at New York's Central Park, to Washington commuters riding Metro to work, to tourists strolling at Baltimore's Inner Harbor, to motorists driving from soccer practice to shopping centers.

But another kind of eminent domain is receiving critical scrutiny. Many municipalities use eminent domain to assemble land for redevelopment, either to revitalize downtowns or to boost tax revenues. A case pending before the Supreme Court, Kelo v. New London , concerns a redevelopment plan in Connecticut; it questions the use of eminent domain when governments take the land from some property owners to make it available to other property owners, alleging that the private use makes the land transfer unconstitutional and illegal. The case's success in reaching the Supreme Court has re-opened a policy debate that started in 1954, when a landmark case involving the redevelopment of Southwest Washington allowed governments to use eminent domain for urban renewal and slum removal projects.

In an interview this week, Washington Mayor Anthony Williams (D) said the outcome of the Kelo case could affect the Skyland Shopping Center project. "It would have severe long-term effects on many government projects," said Williams, who also serves as president of the National League of Cities. "It would jettison" the long-sought shopping center redevelopment, he said.

About 90 percent of condemnations, however, involve properties acquired for purely public purposes, and they make up most eminent domain actions, said James L. Thompson, a Rockville real estate lawyer whose firm has handled more than 200 eminent domain actions over 25 years.

Many property owners who find themselves in the middle of such a land transfer do not object to leaving, but for many others, the process is fraught with emotion. Connecticut nurse Susette Kelo, for example, the lead plaintiff in the case pending before the Supreme Court, has staged rallies and protests, testified and fought a seven-year legal battle to protest the condemnation of her Victorian house to make way for a luxury waterfront hotel and office park. Similarly, homeowners at the site of the proposed Washington baseball stadium and the commercial tenants at the Skyland Shopping Center have denounced plans to relocate them to permit the land to be used in other ways.

Sometimes the wrangling lasts a lifetime. Elizabeth Beall Banks, who died in January at age 93, had spent much of her adult life fighting off efforts to redevelop her 138-acre farm on Route 28 in Rockville, once waving a shotgun at Montgomery County park and planning officials who used the eminent-domain process to claim part of her property for road expansion. As traffic congestion grew over the years, government officials used eminent domain there to widen the Muddy Branch Road and Great Seneca Highway, Merle Steiner, a longtime friend of Banks, said recently.

Nobody knows exactly how many properties change hands each year through government action, partially because so many government agencies — city and county governments, state transportation departments, the federal government, even public utilities — have the power of eminent domain. The transfers often involve small pieces of land, such as a 10-foot strip to permit a wider turning lane for cars pulling onto a highway, and they attract little or no controversy.

The libertarian group that is funding the Kelo lawsuit, the Institute for Justice, which focuses on eminent domain used on behalf of for-profit operations, has studied news reports and court filings nationwide and calculated that from January 1998 to December 2002, 3,722 condemnation procedures were filed by government agencies on behalf of private entities, including big-box retailers such as Target and Costco or for casino parking lots.

The cases typically pit individual rights against public rights, or at least the public rights as some perceive them.

"I wouldn't want eminent domain either, if it were my house," said Lora Lucero, a lawyer with the American Planning Association. "When you're the target of eminent domain, you aren't going to like it. . . . But without eminent domain, we'd hamstring the general public's interest at the expense of one individual."

Many people learn they are at risk of eminent domain when they hear about plans for future development near their homes. Houses near major roads often are included in master plans for highway expansion, but the owners may never know it because the master plans are never funded. They hear the news as a rumor in the neighborhood or in an vaguely-worded article in a local newspaper recounting a recent planning meeting. For homeowners, even the existence of such a plan is worth noting — and for many, worth protesting at forums such as planning meetings.

The eminent domain process varies from state to state and county to county, making it difficult to generalize, but typically the chain of events that results in property loss begins with a letter in the mail. A government employee, sometimes called a "right-of-way agent," contacts the property owner to say his property is needed for a particular purpose, such as a road, and that the agency, the Virginia Department of Transportation, for example, will be sending an appraiser to look at the site and try to establish its value. The property is inspected. Soon after, the property owner is contacted for a meeting.

Most homeowners are incredulous at this point, Thompson said. About 20 percent became "very emotional."

"The first thing they say is, 'Jim, I want you to stop this,' " he said. "They are passionate. . . . Business people look at it in a more objective way. They say, 'Can they do this?' And I say, 'Yes, the law permits them. The question is mitigating the damage and paying compensation.' "

And while some people, like Banks, may be able to hold on to much of their land, for many others fighting eminent domain means fighting to get the most money possible out of the government.

The government entity tells the property-owner how much it is willing to pay. Often that figure appears surprisingly low, Thompson said. But it can be just the opening round of negotiations.

"Many, many times the appraiser for the state appraises many properties for the state," Thompson said. "They get to be favorites because they appraise at low numbers. They come back again and again with low appraisals."

Dana Berliner, senior attorney at the Institute for Justice, said that many property owners are lulled by seemingly sympathetic government officials into believing they will be treated generously.

"Often the city will say, 'Don't worry, we'll take care of you,' and that isn't true," Berliner said. "If you think the local government will take care of you through the goodness of its heart, that's not a good idea."

Not everyone has such a negative experience. Brandt Mensh, managing partner of Let's Connect Wireless, a business in Rockville, was distressed when he learned the townhouse where his firm operated was being taken by the city for the Town Center redevelopment project. But the townhouses were "old and falling apart," and the city paid compensation and relocation costs. He declined to say how much he was paid.

Property owners can boost the purchase price they receive by producing evidence of comparable sales, providing information on valuable home improvements, and hiring an appraiser to give expert testimony about valuation. A lawyer who is experienced in eminent domain questions and has valuable local political connections can help to ensure a better price as well.

"When you get into the process, it can be expensive," said real estate lawyer Steven VanGrack, chairman of the Maryland Real Estate Commission. "Part of the problem is the government has government lawyers, city attorneys, state or county attorneys to pursue this process. The landowner has to pay to hire an attorney. The cost to the government doesn't include legal counsel but the cost to the individual homeowner can be enormous."

One way to keep legal costs down is to find other people in the same situation and agree to share the costs. One-tenth of a legal bill is cheaper than 100 percent of a legal bill.

Another big uncertainty property owners face is how long the process will take. The condemnation timeline varies dramatically from situation to situation, depending on local law, and the power wielded by the individual agency. It can happen within months, or take years to be completed.

The process is often quicker in Maryland, Virginia and the District than in some other states, Thompson said, because "quick take" laws in the three jurisdictions allow the process to happen more quickly than in places where property owners have more time to appeal.

The Maryland State Highway Administration, for example, can take raw land via quick-take within about 90 days after initiation of negotiations. When a case involves a home, the quick-take process takes about three months to a year. Without the right to quick-take, or when the government decides not to use it, the process can take a year or more.

If the price appears about right, however, and the seller is agreeable, the deal can be struck quickly. If the owner says no, there is a public hearing where people can testify. In Maryland, for example, the government agency adopts what is called a "resolution of necessity," which sets forth the reason for the condemnation.

Then the government agency sues in state court. It is also required to post the purchase money it has set aside at the price it intends to pay. Both the property owner and the government present testimony. A jury hears the suit. Two separate issues are in question: whether the property is indeed suitable for the purpose the government has said, and what the price should be. If the property owners lose, they can appeal.

An increasing number, such as Kelo and her eight co-plaintiffs in New London, are fighting longer.

"People are challenging eminent domain now," Berliner said. "As they realize they can and do win, you will see more legal challenges."

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The Washington Post: www.washingtonpost.com

Eminent domain challengers ask court: What is "public" use? Asbury Park (NJ)Press, 5/5/05

Opinion

By Martin L Haines
New London, Conn., adopted a redevelopment plan in 2000 to permit the construction of a hotel, conference center, office space and costly living accommodations on properties currently owned by private parties, including homeowners. The properties are not in a blighted area. The municipality intends to condemn the properties and lease them to a private development company that will arrange for the construction of the proposed facilities.

Those new facilities will generate much more tax revenue than the properties now do. The project will provide jobs and will accommodate employees of a recently constructed Pfizer pharmaceutical plant located nearby, the arrival of which promoted the condemnation plan.

Not everyone is happy with the proposal. Several dwellings are affected, some occupied by families who have lived in them for many years. They oppose the condemnation of their homes; they want to stay where they are. Their opposition has generated a lawsuit to prevent the city from proceeding with its redevelopment plan. The suit, Kelo vs. New London, was argued before the U.S. Supreme Court on Feb. 22. A decision is expected in June.

Under state and federal law, including New Jersey law, private property may be taken for "public" use provided "just compensation" is paid to the property owner. This is the power of eminent domain. New London is prepared to pay that compensation. The private property owners are not interested. They don't want money. They want to continue living in their long-time homes.

They argue that the city's proposed condemnation, since it is designed only to obtain economic benefits, is not a "public" use. They have sued to stop the project.

The Connecticut Supreme Court's decision was against them. It held that the New London taking was permissible, that it represented a public use of the property. It said:

"We conclude that economic development projects . . . that have the public economic benefits of creating new jobs, increasing tax and other revenues, and contributing to urban revitalization satisfy the public use clauses of the state and federal constitutions."

Takings for purely economic reasons are not unusual. According to the Institute for Justice, which represents the New London property owners, its research has discovered more than 10,000 such takings nationwide.

The issue has never been decided by the U.S. Supreme Court. The Michigan Supreme Court addressed it more than 20 years ago. It held that Detroit's taking of property, and its sale to General Motors (at a discount) for the construction of a new plant, was a public taking.

The power to condemn private property purely for economic reasons was challenged in Michigan two decades later. This time, its Supreme Court held that a proposed taking by Wayne County was unconstitutional. The court said that its earlier decision was a "radical departure from fundamental constitutional principles." This 2004 ruling may help the New London homeowners in their case before the U.S. Supreme Court.

Obviously, takings for solely economic reasons, like the one in New London, pit the rich against the poor. Such takings are attractive to developers, construction companies and business enterprises of all kinds. Large profits from the supposed improvement of the properties involved are realistic expectations.

This conflict of public vs. private interests is not easily decided. One's sympathies are with the homeowners, but the public interest is considerable.

If the court honors that interest, the homeowners will be heavily penalized. They will suffer permanent and unwelcome changes. They may have a long wait to receive their compensation. Condemnation proceedings, often subject to problems of compensation and other issues, can take time. The money the homeowners receive for their homes may be taxable, at least in part. They will have difficulty, especially in today's real estate market, in finding comparable replacement housing. Worst of all, they will lose their long-cherished homes, their familiar neighborhoods and their familiar friends.

New London's insistence that the taking is for a public use raises its own questions. Redevelopment success is a guess, not a certainty. The project may fail. How is that concern to be considered? How is a municipality's judgment to be weighed?

Reasonableness is a test we use in other areas of the law. It would be appropriate to use it here.

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Asbury Park Press: www.app.com

Martin L. Haines, of Moorestown NJ, is a retired Superior Court judge.

Judge voids Cramer Hill vote: Camden (NJ) Courier-Post, 5/4/05

Council has 90 days to reapprove project

By Luis Puga
A Superior Court judge on Tuesday ruled city residents were not properly informed of a public hearing on the $1.3 billion Cramer Hill redevelopment project last February and ordered the City Council to try - for a third time - to adopt the plan.

Judge Francis Orlando gave the city 90 days to approve the ordinance.

Orlando also upheld a restraining order barring the city from engaging in eminent domain - its right to take private property for a public purpose - but said people could still sell their property to the city voluntarily.

Richard Ochab, a spokesman for Cherokee Camden, the developer of the project, said the delay was unfortunate.

"But following the appropriate procedures and process is very important to this redevelopment project," he said, noting the company is committed to continuing the project.

Orlando's decision came during a hearing on pretrial motions in a lawsuit involving several Cramer Hill property owners opposed to the project.

The project has been the subject of at least two other procedural missteps by the City Council in the past - first in June 2004 when two council members who lived in the neighborhood voted on the project, and then in February, when the council did not give proper public notice to residents about the public hearing.

"What are we doing here if there is no plan," argued Fred Levin, an attorney representing Cramer Hill-based Riverfront Recycling, slated for acquisition. He asked Orlando to void the entire plan.

"The city was not trying to act in secrecy," Orlando noted. "They made a misstep."

Elesha Johnson, a staff member at the city clerk's office, told Orlando she faxed notice of the public hearing in February to reporters for the Courier-Post and the Philadelphia Inquirer 47 hours before the meeting. Orlando ruled that state law strictly requires 48-hour notice.

Orlando declined to rule on three alleged conflicts of interests that have been raised by plaintiffs. They include allegations that council President Angel Fuentes owns property in the neighborhood and Councilman Israel Nieves rents property in the neighborhood. Both could receive relocation assistance from the city under the plan.

Also, Councilwoman Dana Redd is chairwoman of Camden's Housing Authority, which operates Ablett Village, a complex that would be razed under the plan.

All three voted for the plan's first adoption in June 2004. Fuentes and Nieves did leave the room when the council readopted the plan in February.

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The Courier-Post: www.courierpostonline.com

Parkway proposal is slap at Slab: Rocky Mountain News (Denver CO), 5/5/05

Plains residents target developer

By Kevin Flynn
What's good for the goose is good for the gander, or in this case the developer.

Two plains residents whose homes are in the Super Slab toll road corridor have filed papers for a toll road of their own.

No surprise, their Castle Rock Alternative Parkway, or CRAP, plows right through Super Slab developer Ray Wells' living room off the third fairway of the Plum Creek Golf and Country Club.

"My car-pool buddy and I came up with it on the ride in to work," said David Reed, of Elizabeth.

He figures the name of his road will allow him to post signs near Wells' house saying, "Watch out for CRAP coming!"

Folks along the 210-mile corridor between Pueblo and Fort Collins that Wells has staked out for his high-speed toll road and railway corridor have been hopping mad over the private plans that could result in condemning their properties.

Under Colorado law, a private company that plans to build a toll road can have the power to condemn after laying claim to a corridor. Wells did that 20 years ago and has been working on his plans since then.

"It's such a joke, this law," Reed said. "It cost me only $50 to get condemnation power."

Wells' need for legislation this year to aid his project led to an explosion of awareness among plains communities that had never heard of Super Slab.

"Ray Wells has created a lot of informed citizens in eastern Colorado," Reed said. "We don't want to be caught by surprise anymore."

Reed, a software programmer in the Denver Tech Center, runs a Web site called NoSuperSlab.org opposing Wells' plan.

He and car-pool buddy John Lamprech, of Kiowa, filed a corporation with the Colorado secretary of state last month staking their claim to a 600-foot-wide pathway from Interstate 25's mile marker 180 southeast to Colorado 83's mile marker 34.

Wells' house, his neighbors and a good portion of the fairways of the Plum Creek golf course fall within it.

"I'm ready to sell," an unflappable Wells said when told his house was in the path of CRAP. "All I need is an offer."

On Wednesday, state Sen. Tom Wiens and another Super Slab opponent, Marsha Looper, filed a proposed amendment with the legislative council that would eliminate private toll road companies' power of condemnation.

Wiens has a bill pending in the Senate to do that, but Gov. Bill Owens said he would consider vetoing it if it passes.

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Rocky Mountain News: www.rockymountainnews.com

Queach Road property battle sparks special RTM meeting: Branford (CT) Review-News, 5/4/05

By John Rook
The battle over the controversial Queach Road property has spilled into the political arena as town Democratic officials have called for a special meeting of the [Branford CT] Representative Town Meeting [RTM] to discuss the issue.

Democratic Town Chairman Michael Milici last week called on RTM moderator Raymond Dunbar to include an item on the meeting's next agenda to establish a special meeting where all RTM members would have a chance to voice their opinions on the possible acquisition of the property.

"We need to act on this right away," said Milici. "We need a special meeting devoted to this one issue to examine all possibilities and alternatives to place this property in the control of the Town of Branford."

At issue is 160 acres off Queach Road currently owned by developer Alex Vigliotti. The town is interested in purchasing the parcel for open space, but has run into problems revolving around the asking price of the property.

According to town officials, the property has been assessed, for tax purposes, at approximately $900,000 and the town has offered $1 million to purchase the land. That, according to officials, is an adequate offer for the parcel.

Vigliotti, however, has evidently refused that original offer. According to officials, depending on whether all of the property were sold for open space, or only a portion of it, Vigliotti has been asking for anywhere between $4 million and $20 million for the property. Any property not sold for open space would be subject to extensive development, officials stated.

Those asking prices have forced the town to examine possibly acquiring the property via eminent domain for public purposes.

But town Democrats have criticized the handling of the property purchase by First Selectman John Opie and his administration, suggesting that Opie has "dragged (his) feet" on the issue.

"The town should have negotiated with (the former owner) in title, then the town would have gotten Vigliotti's price for the land of $1 million," said Cheryl Morris, a candidate for the Democratic nomination for First Selectman. "Instead, we are forced into the current position of paying a more exorbitant amount of money or facing potential litigation for exercising the right of eminent domain. Town Hall was asleep at the switch on this issue."

Milici and other Democratic officials are hopeful that a full meeting of the RTM could open the door for other options in securing the property.

Opie on Tuesday responded to the allegations that he, and his administration, had dragged its feet on the issue, stating that there was, in his mind, no time in which the town could have purchased the land.

According to Opie, he contacted the former owners of the land, Queach Corp., to see about possibly purchasing the land late last year and was told, at that time, that a tentative agreement with Vigliotti had already been reached. Before that time, according to Opie, no one was sure as to the exact value of the property.

Queach Corp. sold their portion of the land to Vigliotti in December of last year.
Opie stated that he immediately began discussing the issue with Vigliotti but came to the conclusion over the last few weeks that a negotiated price would be hard to come by.

"We have been going back and forth for a few months now," said Opie. As far as a possible agreement in the future, Opie stated that, while he remained optimistic something could be negotiated, there was no evidence that would happen.

"The important factor is that the property is open for sale for some price," said Opie. "Obviously the Board of Finance is aware that the property is worth $1 million so if you walked in and said that you wanted to pay $4 million for it, they would probably balk at that notion. However, could something be worked out, would the BOF be willing to pay a little more if it avoided going down the road of eminent domain? That is a possibility."

Eminent domain, described by Opie as the town's last resort, would allow the town to take the land for the price it felt was reasonable. The act would most certainly prompt legal action on the part of Vigliotti.

Because of that Opie stated that he wanted to give Vigliotti every chance to negotiate a deal.

"If things keep going as they are, I could see us filing our paper work (for eminent domain) by July 1," said Opie. "I would like to give Mr. Vigliotti at least a couple of weeks to come in and chat before that happened, however."

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Branford Review-News: www.zwire.com

Funding Eminent Domain: (Yolo County CA) Daily Democrat, 5/4/05

County gambling with tribal money

By Jim Nielsen
How would you like the money you lost gambling to be gambled by elected officials in a manner that might short-change schools, roads, police and fire protection and even hit you in the pocketbook again through taxes or fees?

Public records disclose that Yolo County supervisors are considering using tribal gaming mitigation money to pay for the eminent domain acquisition of the Conaway Ranch. It appears other financing options such as bank loans and Proposition 50 funds have not panned out and self-imposed deadlines to have financing in place are not attainable. The county appears desperate to find money for land speculation.

Documents titled "Project Financing and Financial Issues" contain entries for the Pomona Fund and the Tribal Fund as sources of financing for the Conaway Ranch. The Pomona Fund accrues around $1 million a year and the Tribal Fund accrues around $1.2 million a year, increasing to $2 million in four years.

These funds are negotiated between local governments and sovereign tribes for the purpose of helping with the financial and other impacts of locating casinos in counties and cities. Tribal funds are used to pay for public needs such as schools, roads, public protection and environmental impacts.

Under the Yolo County agreement with the Rumsey Band of Wintun Indians the county received $3.5 million of tribal mitigation funds in 2004-05. Forty percent of the funds are directed into the general fund and 60 percent to specific programs or projects.

A tribal advisory committee makes recommendations to the county as to the distribution of the general fund allocation. Funds are recommended for things like a sheriff's patrol in the Capay Valley, community enhancement projects, and for non-county entities and county departments to pay for the impact of having a casino located here. I would be surprised if the advisory committee found that county land speculation on the Conaway Ranch is a worthy expenditure.

A total of $2.2 million annually (increasing to $4.2 million by the fourth year) is proposed as a source of Conaway financing. Public documents report a total of "ongoing annual payments" of tribal funds of up to $1.6 million to the general fund by 2005-06 and up to $2.4 million to specific projects or programs. So much for the county promise that no general funds would be used for the Conaway Ranch. If these funds are spent to buy the Conaway Ranch they won't go to any public projects or programs.

It is no stretch to conclude the county may attempt a re-negotiation with the Rumsey Tribe to provide that these annual distributions are paid lump sum, up front giving the county cash for the cost of the Conaway. It is also interesting that more recent documents indicate a Conaway Ranch purchase price of $80 million - up considerably from an earlier projection.

It is alarming that the county would have the temerity to consider such a significant general fund diversion while projecting annual budget shortfalls that range from $10.8 million to $15 million from 2003-2004 through 2007-2008. Last week the board voted to oppose a state special election. Board Chairwoman Helen Thomson bemoaned the $300,000 cost to the county for a special election observing, "$300,000 is nothing to sniff at." Guess not, but then why has the county expended considerably more than that on consultants and attorneys attempting to take the Conaway Ranch off the tax rolls while exposing the county to an $80 million liability and legal risks?

One budget document discusses strategies to deal with the county's budget shortfall. Savings are suggested from salaries and benefits, services and supplies, contracted services, fixed assets and capital improvements. County employees have already endured a furlough. The counties feeble rationale for acquiring the Conaway Ranch cannot justify ignoring more critical needs for tribal funds.

The proposed tribal fund raid was disclosed only through a pubic records request ­ not in open meetings. For more than a year probably the most significant financial obligation in the history of the county has been veiled in secrecy. There has been little opportunity for the public to be a part of Board meetings and the only other venue, the Joint Powers Authority meetings, were discontinued when the public started showing up.

Based on conversations with many people over time I question whether even the supervisors have been availed all information about this Conaway takeover. This is not the way this county has historically been run and it is not in the best interests of the people.

Eighty million dollars is a lot of money to obligate for speculation. It is increasingly clear that there are real risks, direct threats to services the county provides, a trifling with money not intended for land purchases all at a time the county is in fiscal trouble.

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Daily Democrat: www.dailydemocrat.com

Council Had Deaf Ears Over Eminent Domain: (New London CT) Day, 5/3/05

Letter to the Editor

By Heather Grigsby, Uncasville
I read with amazement and confusion the comment by New London City Councilor Beth Sabilia in the article titled “NL, Norwich grappling with budget problems,” published April 30.

Ms. Sabilia said, “Nobody anticipated we would be where we are in terms of Fort Trumbull.” What did the city think would happen when the Institute for Justice took the case of seven homeowners in 2000 and pledged it would fight eminent domain all the way to the U.S. Supreme Court?

Did no one from the city even look into the Institute for Justice and see this was not some fly-by-night threat and that it meant business?

The City Council heard from many people at each council meeting about ways to compromise and get on with the project. These pleas fell on deaf ears except for Lloyd Beachy, who advised that “these people” will not go away.

So, tell me, after all these years, would it have been so bad to save the houses, give some a facelift and build everything the Municipal Development Plan required? After all, there was plenty of room to have it all.

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The Day: www.theday.com

Council to authorize eminent domain: Downingtown (PA) Ledger, 4/29/05

By Bryan G. Robinson
By a vote of 4-0, Downingtown Borough Council passed a motion last week to advertise the intent to adopt an ordinance that would allow the borough to condemn 9.8 acres on the Alcoa property at 520 Lincoln Ave., if need be.

Voting for the ordinance were council president Brenda Brinton, and councilors Heather Bruno, Anthony "Chip" Gazzerro and David Proctor.

Absent from the meeting were council vice president Jamie Bruton, who was out of town, and Tom Roderer, who was ill.

The ordinance reads that the acquisition "is necessary for the reduction in the perils caused by flooding, because the borough may, after acquisition, construct thereon a stormwater detention basin for the accumulation and dissipation of stormwater." In other words, the borough wants to build a basin to catch stormwater from Parke Run before it gets farther downstream, thus flooding properties in the borough, specifically along Green Street and Jefferson Avenue.

Downingtown Borough Manager Steve Sullins said that especially when one considers the health, safety and welfare of borough residents, the borough is well within its rights to enact such an ordinance, if necessary.

"We have to do something," said Gazzerro after the meeting. "It's been going on for years and years. We're trying to handle everybody's water coming in."

In 2001, the borough had an appraisal done with Alcoa for 9.8 acres, for $480,000, but no agreement had been reached.

Since then, according to Sullins, the borough has not been able to reach anyone with the company with the authority to authorize a transaction. He said he has had numerous talks with Alcoa officials at the local level and did talk with a representative from the real estate office several months ago. However, since 2001, there have been some changes in upper management at the company and the borough has had no formal offer, he said — up until last week.

At last Wednesday night's meeting, borough council president Brenda Brinton announced that she had received a formal offer from Alcoa, which after the meeting, she called "preposterous."

She said the offer came to borough hall on Monday and she was only able to receive the offer on Tuesday. She said that since council did not have an executive session before its meeting last Wednesday night, she only felt right to inform them of the offer at the meeting.

After she made her announcement, the meeting was recessed into executive session. "I didn't know of an official offer," said Gazzerro. "That's why we recessed into the executive session."

Brinton said now negotiations can run concurrently with the ordinance.

(Interestingly, the ordinance as it reads now has a blank line for a "drop-dead" date if negotiations for the acquisition fail to result in an agreement. Sullins said the borough wanted the option to continue negotiations, at this point.)

Sullins said Brinton had been attempting to make contact with Alcoa representatives for several months. "She knows some people in Alcoa," he said. "All of council knew she had been working on it."

As for the offer being "preposterous," he said that the offer was "much more than anticipated." However, he said he thought that with the eminent domain ordinance now on the table, it would give the borough better leverage in negotiations with Alcoa. He said that it would now be up to council whether or not it would adopt the ordinance. His own opinion, though, is that it will happen, he said.

Council, he said, has to advertise no less than seven days from the time that it would adopt the ordinance and that the advertisement for the intent to adopt would be in the newspaper shortly.

The next meeting for borough council is Wednesday, May 18.

On Monday, he said that since the formal offer, borough officials have not been in contact with Alcoa representatives. "We're still reviewing the offer," he said.

Roderer's comment

In a telephone conversation with Roderer last week, he said that personally he would have voted against the motion. "It's not a solution to our problems and sets a bad precedent for taking property," he said. "It's a Band-Aid on a bullet wound."
He said he thinks a basin will do little good. "It will make a little bit of a difference," he said.

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Downingtown Ledger: www.zwire.com

City sets eminent domain in motion: Atlanticville (Long Branch NJ), 4/29/05

Council approves retaining attys. for next phase of redevelopment

By Christine Varno
The Long Branch City Council took the first steps toward condemnation of properties in the Beachfront North Phase II redevelopment zone at Tuesday’s meeting.

The council approved two resolutions authorizing the city to retain two law firms to “perform services of redevelopment counsel for the Beachfront North Phase II project of the city of Long Branch.”

“[The resolutions] are obviously for acquisition of the property,” city Financial Director Ronald Mehlhorn Sr. said in an interview prior to Tuesday’s meeting.

One resident of the redevelopment zone said she is ready for this step.

“The city is taking private property and handing it over to a private developer,” Denise Hoagland, Ocean Terrace, said before the meeting Tuesday.

“It is wrong and it does not get any clearer than that.

“This is the beginning of them raping us of our due process and our properties.”

The resolutions award a $25,000 contract to Ansell, Zaro, Grimm and Aaron, Ocean Township, City Attorney James Aaron’s law firm, and $75,000 to Greenbaum, Rowe, Smith & Davis, Woodbridge.

Aaron said at the meeting his law firm is being retained to handle negotiations “if, in fact, the MTOTSA property owners want to negotiate.”

“If the homeowners cannot reach a compromise with the city, and as a last resort the city must use eminent domain,” he said, Greenbaum, Rowe, Smith & Davis would handle those proceedings.

If there are no negotiations, or if the city does not have to resort to eminent domain, the fees would be returned to the developers, he added.

According to Mehlhorn, the fees are provided by the designated developers of the zone, Applied Cos., Hoboken, co-developer with Matzel and Mumford Corp., a division of K. Hovnanian, Middletown, which have been given the right to redevelop the 36 properties in the three-street neighborhood, known as MTOTSA – Marine and Ocean Terraces and Seaview Avenue.

The area is slated for eminent domain and plans call for the properties to be razed and replaced with upscale townhomes and condominiums.

“My understanding is that most of the appraisals have been done and some offers have already been made to the property owners [in MTOTSA]” Mehlhorn said.

“If there is not a forthcoming agreement [between the city and the property owners], then condemnation will be used to acquire the properties.”

Before eminent domain is enacted by a governing body, several procedures must be followed by the city, explained Michael S. Kasanoff, Red Bank attorney. Kasanoff is representing a resident of the first phase of the Beachfront North redevelopment zone whose home already has been taken through eminent domain proceedings.

“Prior to eminent domain, there has to be good faith negotiations [between the city and] property owners,” he said.

“Appraisers must appraise the properties. The city then decides if the figure is appropriate before making an offer to the property owners.

“After the property owners receive an offer, they can get counsel and negotiate or say ‘no, under no circumstances.’ ”

If the property owners refuse, Kasanoff continued, “there essentially is a stalemate [between the city and property owners] and a compromise is unable to be reached. That is when the city can file eminent domain proceedings.”

According to MTOTSA members, which represents 26 of the neighborhood’s 36 property owners, they are not willing to sell their properties.

MTOTSA has hired Peter H. Wegener, an expert in defending eminent domain cases with the law firm of Bathgate, Wegener and Wolf in Lakewood, to represent them.

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Atlanticville: http://atlanticville.gmnews.com

Senate Panel's Eminent Domain Move Kills 'Super Slab': CBS-TV4 (Denver CO), 4/27/05

With 275 people from the eastern plains looking on, a [Colorado state] Senate panel Tuesday backed a bill that would effectively prevent the building of private toll roads such as the 210-mile long "Super Slab" project.

The crowd that had packed into the Old Supreme Court chamber applauded after the vote, hoping the measure would prevent the road's developers from forcing them to sell their land. Others who couldn't fit into the room listened to the meeting in a room upstairs.

The measure from Sen. Tom Wiens, R-Sedalia, would strip eminent domain power from developers of private toll roads, including the highway proposed for the plains between Pueblo and Fort Collins. Without that power, developers wouldn't be able to force people to sell their land for the project.

Ray Wells, who wants to build the Front Range Toll Road to the east of Interstate 25, has said Senate Bill 230 would effectively kill his project.

Because lawmakers are in a rush to get bills heard in both the Senate and the House before the session ends May 11, Sen. Stephanie Takis, D-Aurora, decided not to allow any public testimony. Instead she asked those in favor of the bill to stand and the sergeants at arms counted 275 people. Only one person a representative of the state transportation department stood when she asked who opposed the measure.

Front Range Toll Road Co. lobbyist Kathy Oatis declined comment. The company issued a written statement saying that it would only use eminent domain power as a last resort and supported adding regulations to protect property owners and the environment.

Republican Sen. Ron May, who represents El Paso County where much of the opposition to the road is based, tried to change the bill to still allow eminent domain but require private companies to follow the same rules as the state in paying fair cost for land. That angered toll road opponents but Takis ruled it out of order, saying it didn't fit under the bill's description.

Takis said the amendment had been offered by May on behalf of the transportation department.

Sen. Nancy Spence, R-Centennial, was the only senator to vote against the proposal. She said lawmakers should have heard from transportation officials about their problems with the measure rather than just making a decision based on emotions.

"I cannot support letting 275 people set highway policy for the state of Colorado," Spence said.

Wiens said the 19th century laws, which allowed private toll roads to be built, needs to be changed because it was never intended to allow highways carrying trucks and cars. He said the law makes it so easy to gain the power of eminent domain over people's property that he was able to fill out the registration paper work to build a toll road between Boulder to Pueblo during his lunch hour.

Irene Lobaido of Peyton said residents should never have been forced to defend their property against Wells.

"What right does he have over me just because he's a rich man?" she said.

Residents have come a long way since learning about Wells' plans after a bill he backed easily passed the House earlier this session. They mobilized quickly, holding large meetings and starting Web sites. About 500 of them showed up last month to watch the same Senate committee kill the pro toll road bill.

Road opponents have now hired a Denver lawyer to help them fight the proposal and they're working with lobbyists for environmental groups as well as one working for cable magnate John Malone, who owns land in the path of the proposed toll road in Elbert County.

Chuck Shaw of the Eastern Plains Citizen Coalition said members helped write Wiens' bill as well as another one introduced Wednesday by state Rep. Jack Pommer, D-Boulder. He said they'll be following those bills and could put more pressure on Gov. Bill Owens to support their effort. One option is holding a tailgating party at the governor's mansion, he said.

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CBS-TV4: http://news4colorado.com

Eminent domain debate plays role in Republican primary campaigns: York (PA) Dispatch, 4/26/05

By Melissa Weiler
As debate over the use of eminent domain continues throughout York County, a smaller contest is taking shape in Lower Windsor Township, the epicenter of the argument.

Supervisor William Buser, whose term expires at the end of this year, is again running for the Republican nomination, this time facing Russell Blew and Mary Caldwell.

The winner of the May 17 primary will likely become the next supervisor, unless someone else wins the Democratic nomination through write-in votes.

All three candidates say preserving the township's largely rural nature is a high priority, but have mixed views on a plan by York County Commissioners to use 915 acres of township land to build a park.

The commissioners want to acquire 80 acres through eminent domain, a move protested by the owner, Columbia builder Peter Alecxih. The county is currently in negotiations for another 800 acres of farmland overlooking the river, owned by the Kohr family, but has said it will consider eminent domain if it is not successful.

Blew said that he is in favor of landowners' individual liberties, and opposes the county's plan.

Wouldn't support taking: "I would never support the taking of private property by government, for purposes other than obvious public good," said Blew. "A highway, or a life-saving facility, perhaps but never for a public park."

Blew said he believes landowners in the township are the ones who are best able to plan for the future.

"The planning that goes on at kitchen tables in Lower Windsor Township is probably better than some of the professional planning being done," he said. "None of those groups are in it for the long haul — when you change those plans, you may be screwing up a family's plan that has been going for generations."

Blew said some of the township's recent accomplishments — such as its comprehensive plan — need to be more closely examined.

"Things in the township have changed, and some of those changes I'm not so fond of," said Blew, adding that he feels the board needs to do a more effective job of communicating with residents.

No 'stiff-neck position': Buser, who has farmed in the township since 1956, said he hasn't yet spoken either for or against the county's plans for a park.

"I didn't really take a stiff-neck position either way," he said, adding that he would like to see the issue resolved in the near future.

In the past few years, the township has undergone a sometimes contentious process to create a comprehensive plan, official map and zoning ordinance, designed to control growth.

"We had some pretty nasty meetings for a while there," said Buser. "There's still a little more to be done it's all being done for the betterment of the township."

Buser said the township also has a good farmland preservation program, especially important because the township is zoned to be about 85 percent agricultural.

"There are some issues on the table yet I would like to see be addressed," said Buser, who said he feels that his experience makes him the most qualified candidate.

Dismayed at $2 million: Caldwell said that as a member of the township's planning commission and a staunch supporter of farmland preservation, she was dismayed to see the board give $2 million to the York County Commissioners recently — money which may be used to support the proposed park. The money is to be used for a public park — but not for any land taken through the eminent domain process.

Although Caldwell says the issue of eminent domain is out of the control of township supervisors — it's now between the county and the landowner — supervisors can still control the financial effects of the county's decision.

Caldwell said that the $2 million should have instead been used toward the township's own efforts to preserve open space, instead of being given to a government body that can raise its own money through taxation. "We've lost our ability to follow through on our plan — a plan approved by supervisors," she said. "It was a direction we were going in, to provide services to our residents.

"Having this money leave our community is putting a hardship on us," she said.

Caldwell said the township's comprehensive plan calls for a park on the other side of the township, as well as carefully planned development.

"We need proper stewardship of Lower Windsor Township funds," she said. "I would like to make sure that we have short- and long-range planing practices in place for financial responsibility."

Future plans: On another issue, Buser said that, if re-elected, he will work to ensure that funding for the three fire departments serving the township remains steady, or is increased.

Currently, the board gives $47,000 annually to each of the departments East Prospect Fire Co., Yorkana Fire Co. and Craley Fire Co.

"I am going to see that we donate to those fire companies what they need to keep going," said Buser. "If we have to go to paid service, it will probably cost us much more, and we would have less protection."

Blew said he thinks he can effectively serve the township by providing an engineer's viewpoint and helping to better manage the township's assets.

"There aren't many people in the township that know me," he said. "My main job has always been serving my family and my church, and earning a living.

"Residents might find it useful to have a registered engineer working for them voluntarily on a township supervisor level."

Caldwell calls preservation of farmland and open space a priority. If elected, she said, she wants to make sure the board uses the tools it has available to guide development and recreation in areas that the township has already designated. In addition, Caldwell said that she would like to see the township reinstate the agricultural land preservation program, which uses funding to purchase permanent agricultural easements.

"It's an important program for the entire county," she said. "By preserving farmland, we can maintain a small-town rural community atmosphere here in Lower Windsor Township."

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York Dispatch: www.yorkdispatch.com

Nevada eminent domain bill wins state Senate approval: KRNV-TV4 (Reno NV), 4/26/05

A developer-backed bill that would limit use of eminent domain powers by government entities to preserve open space won approval on a 16-to-four vote in the state Senate.

There was no discussion as the bill by Senator Terry Care moved to the state Assembly for final legislative action.

The bill would help a developer tied up in a lawsuit over plans to build upscale homes on the old Ballardini ranch just south of Reno, but Care says he doesn't want to interfere with that litigation.

Senator Dina Titus, D-Las Vegas, one of the four senators who opposed the bill, said after the vote that she had received about two dozen calls and e-mails from open-space advocates and conservation groups opposed to the measure.

Minnesota-based Evans Creek LLC paid 8.5 million dollars for the Ballardini ranch in 1998, and wants to build nearly 200 upscale homes on part of the scenic property.

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KRNV-TV4: www.krnv.com

Are Private Benefit Condemnations a Thing of the Past? American Bar Assn Symposium, 4/29/05

Implications of Kelo v. City of New London
What will the Supreme Court decide in Kelo v. City of New London? The Supreme Court is expected to render a decision by the end of June, 2005 as to whether condemnations based on purely economic benefit will be allowed to continue, but you can hear the argument again in a program being presented at the American Bar Association, Section of Real Property Probate and Trust Law Spring Symposia in Washington, D.C.

Michael Rikon, chair of the Condemnation Committee will moderate a program entitled, “Are Private Benefit Condemnations a Thing of the Past? Implications of Kelo v. City of New London.” The speakers are Professor Steven Eagle of George Mason University Law School; Alan Ackerman, Esq. of Troy, Michigan who was successful in convincing the Michigan Supreme Court to reverse the Poletown decision in County of Wayne v. Hathcock; Dana Berliner, Esq. of the Institute of Justice and plaintiff counsel in Kelo; Daniel Krisch, Esq. of Horton, Shield & Knox, attorneys for the City of New London; James Burling, Esq. of the Pacific Legal Foundation; and Charles S. Webb, III, Esq. of Berger & Webb, attorneys to Forest City Ratner and other developers.

The program is scheduled for April 29, 2005 from 4:00 p.m. to 5:30 p.m. at the Fairmont Hotel, Washington, D.C.

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Michael Rikon: 212-422-4000, e-mail c/o LGeller@ggrgpc.com