Public power, private gain : a five-year, state-by-state report examining the abuse of eminent domain

228 Pages·2004·3.74 MB·English

by  Dana Berliner

Foreword
by Douglas W. Kmiec
(cid:147)Government is instituted to protect property of every sort,(cid:148) wrote Madison, and for this
reason, (cid:147)that alone is a just government, which impartially secures to every man, what-
ever is his own.(cid:148) This precept of justice was embodied in the Fifth Amendment(cid:146)s pro-
tection of private property, where by constitutional text, property can be taken only for
public use and upon the payment of just compensation. For reasons that are more
regrettable than rational, the courts have greatly relaxed the public use requirement.
Inevitably, this invites the taking or eminent domain power to be misused(cid:151)either by
inefficient or corrupt application or both.
The extent of this abuse is widespread, but until recently, largely unaddressed(cid:151)in part
because isolated landowners confronted with costly and cumbersome condemnation
procedures seldom have the legal or political wherewithal to stand against the winds of
power. The public advocacy and litigation defense of the Institute for Justice is chang-
ing this by standing with landowners singled out for disfavor. Whether family, farmer, or
small merchant, these owners wish only for what Madison said our Constitution guaran-
tees(cid:151)the protection of property.
This comprehensive report, prepared by the Institute for Justice and senior attorney
Dana Berliner, carefully catalogues the extent of the problem of eminent domain abuse.
It illustrates how municipal good intention, often for urban redevelopment or economic
promise, can be unfairly built upon the rightful ownership of others. When projects are
carried out heavy-handedly and unnecessarily, not through voluntary transaction, but
coercion, the protection of property is eroded and our bedrock freedom to decide upon
our own course is worn away.
Douglas WW. KKmiec
Dean & St. Thomas More Professor of Law,
The Catholic University of America; senior policy fellow,
Pepperdine University.
Table Of Contents
Executive Summary 1
Introduction 4
Alabama 10
Alaska 12
Arizona 14
Arkansas 18
California 20
Colorado 38
Connecticut 44
Delaware 51
Florida 52
Georgia 59
Hawaii 60
Idaho 63
Illinois 64
Indiana 71
Iowa 75
Kansas 78
Kentucky 81
Louisiana 86
Maine 89
Maryland 92
Massachusetts 95
Michigan 100
Minnesota 107
Mississippi 113
Missouri 117
Montana 124
Nebraska 126
Nevada 129
New Hampshire 132
New Jersey 134
New Mexico 143
New York 144
North Carolina 155
North Dakota 157
Ohio 159
Oklahoma 169
Oregon 171
Pennsylvania 173
Rhode Island 183
South Carolina 187
South Dakota 189
Tennessee 190
Texas 193
Utah 196
Vermont 199
Virginia 201
Washington 207
Washington D.C. 211
West Virginia 212
Wisconsin 215
Wyoming 217
Glossary of Terms 218
Legal Challenge Looms Over San Jose(cid:146)s Strong Neighborhoods Initiative 22
California Study Exposes the Myth that the (cid:147)Public(cid:148) Benefits from TIF
Redevelopment 26
Huntington Beach Finds that Redevelopment Is Best Achieved Without
Eminent Domain 30
Local Homeowners Rally to Defeat City(cid:146)s Attempt to Repeal Eminent
Domain Ban 36
Recent Colorado Court Decisions Limit the Rights of Counties and
Individuals to Challenge Municipal Urban Renewal Plans 40
Many Private Use Condemnations Go Unreported 50
Florida Town Votes Against Expanded Power to Condemn for Private
Business 54
There Goes the Neighborhood: Entire Neighborhoods Lost to Eminent
Domain Abuse 58
Government Helps Rich People Find Homes 69
Beating the Competition Is As Easy As Getting the City to Give You Their
Business 70
Houses of Worship: Just Another Tax Liability 74
Demolition First, Objection Second: Iowa Sets Dangerous Legal Precedent 77
Blight Makes Right: Unjustified Blight Determinations Pave the Way for
Condemnation 82
Town Learns from Past Redevelopment Mistakes that Eminent Domain
Just Isn(cid:146)t Worth the Trouble 91
Baltimore County Property Owners Rally to Defeat Senate Eminent
Domain Bill 93
Pittsfield Residents Vote Against Eminent Domain 97
Abandoned Use: Former Property Owner Fights to Regain Land 98
Condemnations for Private Parties Destroy Black Neighborhoods 102
Minnesota Courts Strengthen Pre-Condemnation Notice Rights of Property
Owners 108
Great-Grandmother Takes City Officials on a Tour of Her Home, Convinces
Them Not to Take It 110
Mississippi Supreme Court Strengthens Pre-Condemnation Rights of
Property Owners 114
Vacate Your Premises Now; Your Government Might Want It Someday 119
The House Always Wins: Casinos Top List of Eminent Domain Beneficiaries 130
Local Opposition Defeats Plan to Condemn Famous Music Venue for
Redevelopment 137
New Jersey Township Tried to Use Condemnation to Squelch Affordable
Housing Development 138
Neighbors Rally to Defeat Condemnation Plans in New Brunswick 141
New Rochelle Activism Defeats Plans to Condemn Neighborhood for IKEA 150
Former Property Owner Loses Fight to Regain Land 152
Local Activists in Several Ohio Cities Organize to Stop Their Local
Governments from Abusing Eminent Domain 162
Euclid City Officials Try a Novel Approach in Dealing with Property
Disputes(cid:151)Simple Politeness 167
Not a Public Use After All 170
CVS, Victim and Beneficiary of Eminent Domain for Private Use 174
Pittsburgh Mayor(cid:146)s Plan to Take Properties for Redevelopment at Fifth &
Forbes Is Derailed 176
Home Depot Decides to Include Local Pittsburgh Pizzeria in Its Plans
Rather than Try to Have It Condemned 179
Out With the Old: Elderly Residents are Prime Targets for Eminent Domain
Abuse 185
Two States Fight over Public Use: South Carolina and Georgia Face Off
over Seaport 188
Arlington City Council Votes to Limit Its Own Condemnation Powers 194
No Good Deed Goes Unpunished: Plano Family Threatened with Taking
After Years of Giving 195
Washington Supreme Court Says No to Condemnations for Private Use 208
Costco Leads Big-Box Beneficiaries of Eminent Domain 210
(cid:147)(cid:133)nor shall private property be taken for public use without just compensation.(cid:148)
(cid:151)U.S. Constitution, Amendment V.
Public Power,
Private Gain
by Dana Berliner
The Despotic Power
As early as 1795, the U.S. Supreme Court described the power of eminent domain(cid:151)where the government takes
someone(cid:146)s property for a (cid:147)public use(cid:148)(cid:151)as (cid:147)the despotic power.(cid:148) Eminent domain has the potential to destroy
lives and livelihoods by uprooting people from their homes and businesspeople from their shops. With eminent
domain, the government can force a couple in their 80s to move from their home of 50 years. Eminent domain
is the power to evict a small family business, even if that means the business will never reopen.
The danger of such an extreme power led the authors of the U.S. Constitution and state constitutions to limit the
power of eminent domain in two ways. First, the government had to pay (cid:147)just compensation.(cid:148) And second, even
with just compensation, the government could take property only for (cid:147)public use.(cid:148) To most people, the meaning
of (cid:147)public use(cid:148) is fairly obvious(cid:151)things like highways, bridges, prisons, and courts.
No one(cid:151)at least no one besides lawyers and bureaucrats(cid:151)would think (cid:147)public use(cid:148) means a casino, condominiums
or a private office building. Yet these days, that(cid:146)s exactly how state and local governments use eminent domain(cid:151)as
part of corporate welfare incentive packages and deals for more politically favored businesses. This is the first report
ever to document and quantify the uses and threats of eminent domain for private parties. We have compiled this
information from published accounts and court papers covering the five-year period from January 1, 1998 through
December 31, 2002. The results are chilling.
Eminent Domain for Private
Benefit, Nationwide
(cid:149) 110,282+ filed or threatened condemnations for private parties
(cid:149) 33,722+ properties with condemnations filed for the benefit of private parties
(cid:149) 66,560+ properties threatened with condemnation for private parties
(cid:149) 4,032+ properties currently living under threat of private use condemnation
(cid:149) 441 states with reports of actual or threatened condemnations for private parties
(cid:149) 99 states with no reports of either actual or threatened private use condemnations
The Tip of the Iceberg
The information in this report represents only a fraction of the number of cases where private property has been con-
demned for another private party. There is no official database of condemnation for private parties. Many, if not most, pri-
vate condemnations go entirely unreported in public sources and thus could not be identified for this report. To give some
sense of how few private condemnations are reported, the Connecticut courts recorded 543 redevelopment condemnations
from 1998 through 2002. That(cid:146)s 17.5 times more than the 31 we found reported in newspapers. Connecticut is the only
state that records those numbers, and it may not be representative, but there are obviously many more condemnations for
private use than even this report contains. This report contains every instance of actual or threatened condemnation for pri-
vate parties between 1998 through 2002 that we know about(cid:151)over 10,000 in total. But even that number represents only
the tip of the iceberg.
How the States Compare
In terms of sheer numbers of condemnations for private parties, California, Kansas, Michigan, Maryland and Ohio lead
the pack for most private use condemnations filed. Pennsylvania, Florida and New Jersey also have high numbers of
threatened condemnations for the benefit of private parties. Detroit takes first place as the worst city in terms of con-
demning property for private parties, while Riviera Beach, Florida, San Jose, California, and Philadelphia have placed the
greatest number of private owners under threat of condemnation for private parties. With the assistance of a state
agency, New York City has become the site of some of the most egregious condemnations for private use. Some states
stand out. From a legal standpoint, New York, Missouri and Kansas are the worst states to live in for owners who hope to
avoid condemnation for private parties, while Idaho, Montana, New Mexico, South Dakota and Wyoming appear to be the
best. Those states, as well as Alaska, Delaware, Georgia, New Hampshire and Washington, D.C. have no reported uses of
eminent domain for private parties. Certain other states, like Arkansas, Illinois, Kentucky, South Carolina and Washington
also appear to have a legal climate disfavoring private condemnations, but enforcement is either spotty or unknown.
2
A Few Examples of the Abuse of
Eminent Domain for Private Parties
In tthe ppast ffive yyears, ggovernments hhave:
(cid:149)Evicted four elderly siblings in Bristol, Connecticut, from their home of the last 60 years for an industrial park;
(cid:149)Destroyed a black middle-class neighborhood in Atlantic City (including the home of a woman who lived on a street
named after her father) in order to build a tunnel to a casino;
(cid:149)Removed a woman in her 80s from her home of 55 years for the claimed purpose of expanding a sewer plant, but
Bremerton, Washington actually gave her former home to an auto dealership;
(cid:149)Condemned 10 homes for a shopping center and parking lot in Hurst, Texas and forced them to move while the spouses
in two of the homes were dying of cancer;
(cid:149)Condemned a family(cid:146)s home in Florida so that the manager of a planned new golf course could live in it;
(cid:149)Designated a neighborhood of colonial homes in Lakewood, Ohio blighted because their yards were too small and they lacked
two-car attached garages. The City(cid:146)s redevelopment plans call for upscale condominiums and retail;
(cid:149)Condemned small businesses for The New York Times and the New York Stock Exchange;
(cid:149)Threatened to condemn a Walgreens in Cincinnati to build a Nordstrom; condemned a CVS to relocate the Walgreens; and
condemned several small businesses to relocate the CVS. The Nordstrom was never built and became a parking lot;
(cid:149)Begun condemning a bus company in Edison Township, New Jersey, for a Walgreens. The Township(cid:146)s consultant said the
bus company was (cid:147)unproductive and stagnant,(cid:148) but actually it transports the local schoolchildren;
(cid:149)Planned to force the relocation of 500 low-income seniors in Aurora, Colorado, over the next 10 years;
(cid:149)Condemned property in Boston to help the owner get rid of its tenants and condemned property in Knoxville, Tennessee
to help the tenants get rid of their landlord;
(cid:149)Labeled as blighted one-tenth of the geographical area of San Jose, occupied by one-third of its citizens, making all
homes and businesses within the area susceptible to condemnation.
The Tide is Turning
Eminent domain for private use happens all over the country, and local governments and developers regularly force residents
and businesses out by threatening eminent domain. But the news isn(cid:146)t all bad. Courts, ordinary citizens, and even, occasional-
ly, politicians are starting to say (cid:147)enough is enough(cid:148) and to prevent the use of eminent domain for private parties.
Most private use condemnations never make it to court. For many years, courts simply rubber-stamped any use of eminent
domain. In recent years, however, courts have ruled against the government in a sizable minority of the cases where owners
do challenge the condemnation. Courts rejected condemnations for private use or overturned blight designations (which
authorize condemnations) permitting such condemnations a total of 37 out of 91 times (40 percent) between 1998 and 2002.1
Grassroots activism has defeated a number of projects, each of which would have forced the relocation of many homes
and/or businesses. Voters rejected eminent domain projects three times at the polls and in at least 18 other instances,
demonstrations and public pressure caused either the government or the developer to reject the use of eminent domain.
State politicians proposed 17 bills to increase protections for people threatened by eminent domain. Although they managed
to pass only six, the number proposed bodes well for the future. Local politicians even voted to limit their own eminent
domain power eight times.
This report documents the widespread abuse of eminent domain, not for anything resembling a (cid:147)public use,(cid:148) but for private
benefit and private profit. Eminent domain takes a terrible toll on its victims. It should be used only in the direst of public
necessities and never for private ends.
1 This number includes all judicial rejections of takings for private use, including those on statutory grounds. The trend toward greater judi-
cial scrutiny of private takings means that courts are applying statutes more strictly than before. The total number includes only the most
recent result of any given case, not separate numbers for the trial and appellate decisions. Decisions with mixed results were not included.
3