For almost 40 years, the Hiatt family has owned a copy center and printing store in Muncie, Ind. In 1985, Dave and Jane Hiatt added a satellite store on the Ball State University campus—open 16 hours a day, 364 days a year—to better accommodate students. Their son, Chris, now runs Hiatt Printing and also heads Citizens of Delaware County for Good Government, a local taxpayers’ rights organization. But now Chris is getting steamrolled by Ball State.

 

On September 5, 2012, the university’s Board of Trustees authorized using eminent domain against Hiatt Printing. The largest employer in Muncie, Ball State wants to seize Chris’ print shop to build the McKinley Commons, a $25.9 million hotel, dorm, and conference center. If built, the commons would house 51 students and 112 hotel rooms. Since it’s a hybrid hotel-dorm, it would also act as a “living-learninweg laboratory” for hospitality and food management majors. The project would be funded by issuing tax-exempt revenue bonds.

 

To defend eminent domain, the university argues that since Hiatt Printing is close to the center of campus and two parking garages, it’s needed to build the commons. Ball State also claims the hotel-dorm serves a “public use,” because Muncie has a lack of hotel space, while Ball State needs more dorm rooms. In addition, McKinley Commons would create new jobs and generate income by leasing out space to restaurants.

 

In response, Chris criticized the university for using eminent domain as “a convenient vehicle” to satisfy “their own ‘capitalistic wish-lists’”:

Condemnation and the seizure of private property is, as it should be, reserved for the most serious of circumstances for which there are no reasonable alternatives and is absolutely necessary for the overall general public welfare or good. It is not a convenient vehicle for psuedo-government entities such as Ball State to use to seize private property for their own “capitalistic wish-lists” for which there are many alternatives. Therefore, we strongly disagree with Ball State’s assessment that they can successfully meet the “public use threshold” in this proposed project.

 

Hiatt was also concerned that the university already dominates the local economy:

Ball State competes with the hotel industry. They compete with the food and beverage industry. They compete with the housing market. They compete with the local economy in at least all those arenas and more. If they had their way, they would control the whole market.

 

Moved by Chris’ plight, State Senator Doug Eckerty (R-Yorktown) introduced SB 54 to reign in this sort of eminent domain power. This bill would have mandated state universities to pay business owners not only the fair market value, but also compensation for the loss of estimated future earnings. But after pressure from Ball State, the bill died in committee.

 

Back in 2006, Indiana’s legislature overwhelmingly passed HB 1010 to limit eminent domain, earning a B from the Institute for Justice. The bill redefined “public use” and explicitly states that “the term does not include the public benefit of economic development, including an increase in a tax base, tax revenues, employment, or general economic health.”

As many as 300 homes could be seized through eminent domain to build a technology park in Little Rock, Ark. Fuelled by a $22 million sales tax, the Little Rock Technology Park Authority is trying to build a $54 million new tech park as a “business incubator” near two universities. The proposed tech park would cover 30 acres with 10 multistory buildings for researchers from University of Arkansas at Little Rock, the University of Arkansas for Medical Sciences and Arkansas Children’s Hospital.

 

But its three proposed sites are all in residential neighborhoods. According to Census data, almost one-third of local residents live below the poverty line. Outraged, citizens have mobilized against this blatant land grab. Homeowners, a local church and Occupy Little Rock have come together to form the We Shall Not Be Moved Coalition to protest Little Rock using “taxpayer money and eminent domain to force citizens out of their homes.”

 

Appearing on a local news show, the coalition emphasized that they support the tech park so long as “taxpayer money will not be used to displace fellow citizens.” Thanks to lobbying by the coalition, in June, Little Rock City Directors approved an ordinance to delay construction for six months, in order to review alternate sites. However, voting on an ordinance that would have banned using sales tax revenue (i.e. the $22 million) to build the technology park was deferred.

 

In addition, a Change.org petition sponsored by the coalition has gathered 230 signatures, including Sheldon Richman, editor of The Freeman. Richman attacked the proposal as “legal plunder—exploitation by the wealthy and well-connected. It’s an outrage against justice and individual rights.” A similar (and still) active petition on SignOn.org has garnered almost 300 signatures.

 

Yet the Authority adamantly insists on using eminent domain, so that tenants could have an easier commute. Seriously. According to a report published by ANGLE Technology Group for the Little Rock Regional Chamber of Commerce: “a successful research park in Little Rock needs to be between the two universities within a five-minute drive from each of them.” (Emphasis added.)

 

Back in May, Jay Chesshir, President and CEO of the LR Chamber of Commerce and Secretary of the Technology Park Authority Board, doubled down on this defense in an interview:

“You see from the research that to be successful in this type of this endeavor, you need to be within the five minute drive time between the research institutions and even more preferable, within walking distance…the proximity to the research institutions is absolutely key.”

 

But the Authority has declined to consider other options. In an August cover story, the Arkansas Times elaborates on 10 of these proposals—none would require removing residents, while nine sites are within a 10 minute drive of both universities. What’s even more galling is that the We Shall Not Be Moved Coalition has instead identified not one, not two, but twenty-two alternate locations in non-residential areas. While some of the locales are in commercial areas (and could be susceptible to eminent domain), many of the coalition’s suggestions are in unused buildings or on vacant lots. Plus, four of the coalition’s alternate sites are within a 10-minute commute. The Authority would rather violate property rights and force poor people out of their homes, instead of having tenants endure a slightly longer commute.

 

In addition, there are concerns that the intent here of using eminent domain may be to help private businesses. According to its founding legislation, the Authority is a “public corporation” that serves a “public purpose and use” through

“the growth of Arkansas-based businesses whose focus on research and development of products and services will serve to diverse Arkansas’s economy; and a strategic alliance between business and higher education that has the potential to substantially improve Arkansas’s economy.”

 

In other words, helping private enterprise grow is “public use.” While many of the tech park tenants are expected to conduct publicly funded research, the park will also have commercial enterprises. In the ANGLE report, the Authority is expected to attract start-ups in biomedicine, IT, and nanotechnology. As the study elaborates, “the Authority, Chamber of Commerce, and others leading the outreach marketing for the park will aggressively seek large technology companies, government agencies and others” for leases. According to the Little Rock Chamber of Commerce, this tech park will “commercialize the wealth of intellectual property” created in the area. No wonder renters are expected to pay between half a million to a million dollars each year.

 

After the infamous Kelo decision, where the Supreme Court ruled in favor of using eminent domain to develop land for Pfizer, 44 states reformed their eminent domain laws to provide greater protection for property owners. Sadly, state legislators have failed to protect natural rights in the Natural State: Arkansas received an “F” for eminent domain reform, having passed nothing.

 

For more information on eminent domain, check out the Institute for Justice’s many policy papers, including our “50 State Report Card on Eminent Domain Reform,” and how Anaheim fostered billions in economic development, while prohibiting eminent domain. Be sure to get a copy of IJ’s “Eminent Domain Abuse Survival Guide” to fight land grabs in your neighborhood.

By David Morse

The nightmare is still not over for homeowners of the Gardens neighborhood in Mount Holly Township, NJ. Having endured nearly a decade of bullying by local politicians while they fight to save their homes, embattled homeowners now await a decision by the U.S. Supreme Court about whether or not they will hold arguments over a petition filed by the township.

The Mount Holly township council has been using the threat of eminent domain since 2003 to force residents into selling their homes, all so that politicians can transfer the land to Keating – a private development firm that wants to build high-end townhomes and retail outlets atop the demolished community. The destruction thus far is so extensive that even the township’s own lawyers admit that it looks like “a bomb has gone off” in the neighborhood.[1]

Vivian Brooks, a widowed great-grandmother and Gardens homeowner, testified at a 2008 public forum about the unsafe and heavy-handed tactics used by the township to force her and dozens of other homeowners to leave their homes. “The people that the township hired hit my house with their bulldozer, [which] shifted my roof, cracked my walls, and loosened the beams,” Ms. Brooks testified,[2] “The day the bulldozer hit the house, my great-granddaughter was living with me and she was sitting on the bed. The bulldozer hit the side of the house she was sitting [on] and she could actually put her hand where the wall crashed and pushed in. She had sheet rock all in her hair when the ceiling fell.”

Ms. Brooks is one of many seniors living in the community who have been offered paltry sums for their properties, and whose age may disqualify them from a new mortgage. As of June 2012, the median price for a home in Mount Holly is $136,800; at least $52,000 more than the $42,000 to $84,000 offered by the township.[3]^,[4]

Homeowners scored a bittersweet victory on April 9, 2012 when township manager Kathleen Hoffman issued a “cease and desist” order to halt the project and all ongoing litigation. Saddled with $18 million in construction and legal debt, and after having destroyed at least 260 homes, Ms. Hoffman simply sighed: “We don’t have the money.”[5]

The township’s Supreme Court appeal comes after a September 2011 decision in the Third U.S. Circuit Court of Appeals that Gardens homeowners had been improperly denied their ability to argue in District Court that their rights under the Fair Housing Act had been violated. “Frankly, we’re sorry the township wants to continue this aggressive litigation mode after they had said they maybe wanted to negotiate some type of settlement,” said Olga Pomar of South Jersey Legal Services, a firm representing some residents.

New Jersey government officials have become infamous for their habitual abuse of eminent domain—and their refusal to reform state laws to protect property owners. Having evidently tired of constant constituent criticism, they are turning to a new—but equally controversial—method that allows them to wrestle control of homes and businesses out from the hands of their rightful owners, and into the hands of government.

Property rights attorney Bill Potter calls their new tactic “eminent domain abuse lite.” Read more here.

By Andrew Koehlinger

Eminent domain recently received a welcome setback in Hoboken. The city council, at the behest of Mayor Dawn Zimmer, recently voted to rescind an amendment designating the southwest zoning district as “in need of redevelopment,” and asked the planning board to consider declaring the area “in need of rehabilitation.” Mayor Zimmer’s change of heart is commendable, but ultimately, the rights of property owners to control the use of their properties may still not be safe if she continues to pursue a rehabilitation designation.

The southwest zoning district is located in a prime location at the entrance to Hoboken and covers 17 acres and 35 properties, including Frayed Knot, which was recently featured on HGTV’s Home by Navogratz. The city council indicated that they want to redevelop the area, but their actual plans and the process remain unclear.

Dennis Shah is a business owner in the targeted area. He owns Studio Printworks, a company that hand prints beautiful and unique wallpaper designs. Dennis’ father began the company almost thirty years ago and today it employs dozens of employees, many of whom are artisans and whose parents also worked for the company. Studio Printworks is considered one of the most prominent companies in the world in its industry, having designed and crafted wallpaper for the White House and high-end clientele. Their creations have been featured in museums and art galleries, and garnered awards from most major design magazines.

Over the years, Dennis maintained the company’s location in the city of Hoboken and has plans to expand his property and business. To do so, Dennis vetted and recruited numerous architects before choosing a world renowned architectural firm. Together they envisioned a place complete with residential high rises, an art space, retail shops, and outdoor common areas. But the city seems to have other plans.

In early 2006, the city charged the planning board with undertaking a study to determine whether or not the Southwest Area was “an area in need of redevelopment.” After reviewing their findings later that year, the city decided to zone the area as a redevelopment area.

Under New Jersey’s Constitution, such a determination allows the city government to then seize private property through eminent domain for “redevelopment”, which in New Jersey has always meant private development. Article 8, section 3 of the New Jersey Constitution stipulates that redeveloping “blighted” areas constitutes a “public use”—a serious deviation from the Founder’s intention that eminent domain be used for real public uses, like roads and schools..

New Jersey’s legislature further defined “blighted” in the Local Redevelopment and Housing Law (LRHL), outlining seven criteria for determining if an area is blighted (only one of which must be met). Cities can declare property “in need of redevelopment” because it is dilapidated, obsolescent, vacant land “not likely to be developed through the instrumentality of private capital,” or there is a growing or total lack of property utilization of the area.

As Dennis knows far too well, these standards and designations are often subjective and arbitrary, creating uncertainty. He notes that, “we do not know what [the city government] is going to do — we can only guess at what they are going to do.”

The recent decision by the Hoboken City Council gives hope to Dennis and other business owners in the area, but they now face a rehabilitation designation. Rehabilitation is similar to redevelopment, except that it does not authorize the use of eminent domain. On its face, rehabilitation appears to be harmless, but the experience of another business in town tells a different story.

Neumann Leathers is a 17-building complex owned by a group of private owners who recently wanted to develop it into what some envisioned would be the “crown jewel of Hoboken.” But at that time, the complex housed artists who opposed the redevelopment.

In April 2011, Mayor Dawn Zimmer directed the city council and planning board to consider designating Neumann Leathers as “in need of rehabilitation” because of the dilapidated state of the sewer and water infrastructure beneath the complex—over which the property owners have no control. But her public statements indicate she never wanted to condemn the building, but instead wanted to prevent the owners from selling or redeveloping the building, thereby protecting the tenants and their low rates.

One can reasonably assume that that if the city council used “rehabilitation” for such subjective and arbitrary ends with Neumann Leathers, it can do the same with other businesses in Hoboken, including Dennis’ Studio Printworks. Hoboken officials would be wise to take a better approach to developing the Southwest Area.

All Dennis wants is to be able to stop spending money fighting the city to protect the property he rightfully owns, and instead focus on growing his company, which remarkably he has been able to do despite the city’s threatening actions.

Especially in these still-difficult times, Hoboken should welcome and encourage entrepreneurs like Dennis, instead of trying to take or control his business.

The city government has taken a good first step by stopping redevelopment efforts. Moving forward, they should assure property owners that their investments are safe, and work with them to make Hoboken a better place for all.