Denver City Council finds 29 city blocks “blighted,” could lead to eminent domain

By Nick Sibilla

In September, the Denver City Council voted 12-1 to designate 29 city blocks within the Welton Corridor as blighted, paving the way for an urban redevelopment project. The vote came after a heated debate since the agency behind this proposal, the Denver Urban Renewal Authority (DURA), can use eminent domain to seize property. Covering 85 acres, the proposed urban redevelopment area includes Five Points, one of Denver’s oldest historic neighborhoods once called the “Harlem of the West.”


Many locals were upset by this designation. Paul Paul-Havrilcsak, who’s lived in the neighborhood for 17 years, was concerned that future developments by DURA could lead to a condemnation on his two houses: “I think I’ll lose my houses. I’ve put so much into my home. I’ve got history here.” One speaker even claimed blight is like “calling someone’s baby ugly.”


One threatened homeowner is Scott Davis. Scott spent over 15 years renovating a beautiful 129 year-old Victorian house, that he is now worried will be labeled “blighted”:


I feel like I’m living in history…My worst nightmare is that I get a condemnation hearing and they’ve got some big developer who wants to build [and] basically erase the history.


Under Colorado state law, the definition of blight is extremely broad. Homes and businesses can be labeled “blighted” because they are deemed an “economic or social liability”—an extremely vague criteria left wide open to subjective interpretation. A perfectly fine neighborhood can be declared blighted for trivial reasons: light rail is limiting street parking, “inadequate street layout,” or “unusual topography” (e.g. steep slopes and billboards).


Over the past thirty years, eminent domain has been authorized three times in Denver. One such case was Alameda Square. Back in 2003, DURA voted to use eminent domain to condemn two dozen small businesses, in order to build a Wal-Mart. Further rubbing salt into the wound, Wal-Mart was even offered $10 million in subsidies. One year later, after vocal opposition, the City of Denver refused to use eminent domain and Wal-Mart backed out of negotiations. But the damage was done: more than half of the businesses in Alameda Square had already left.


And it’s never fully recovered. Years later, Lowe’s opened a hardware store, but even that closed after less than two years. According to DURA, building a now empty hardware store cost $28.6 million.


To protect themselves from eminent domain on the Welton Corridor, a few property owners are mulling designating their homes as historic landmarks. Jeanne Faatz, the only council member to vote against the proposal, was worried that eminent domain could intimidate residents and property owners:


“If I were wanting to make a further investment in a home and plan on living there in the long-term and had that hanging over me for 25 years, I would not sleep easily, and for that reason, I am not going to support this proposal tonight.”


According to the Institute for Justice’s 50 State Report Card, Colorado received a C for eminent domain reform. Signed into law in June 2006, HB 1411 amended the definition of “public use” to “not include the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenue.” Unfortunately, the law still allows municipalities to seize “blighted” properties, as long as officials can prove with “clear and convincing evidence” that “the taking of the property is necessary for the eradication of blight.” Of course, as mentioned above, the state’s definition of blight is sufficiently vague to allow for considerable abuse.


Urban growth should not rely on forcing people out of their homes. In a case study for the Institute for Justice, then Mayor Curt Pringle described how the City of Anaheim fostered “Development Without Eminent Domain,” by unleashing market forces.


The public should not stand for any proposal that allows for the abuse of eminent domain, and state legislators should completely close this blight loophole so perfectly fine properties like those threatened in Denver are never put on the chopping block. Coloradoans deserve better.