Even as most states move to reform their eminent domain laws, local governments continue to rely heavily on broad interpretations of blight statutes to justify seizing private property for private economic benefit.
In the city of Clayton, Mo., a wealthy suburb of St. Louis, the town board found five upscale commercial buildings in the downtown area “economically underutilized” and, therefore, “blighted” in order for a nearby development corporation to construct another so-called “mixed-use” project.[1]
After losing in the trial court, three of the property owners won a victory in the Missouri Court of Appeals, which sent the case to the state’s supreme court after determining that there was no substantial evidence that the condemned properties were a social liability, a necessary requirement for an area to be “blighted,” according the Missouri’s eminent domain reform laws passed in 2006.[2]
The city had transferred condemnation powers to Centene Corporation, a managed health care corporation that has plans to build a new corporate headquarters up the street from the block of buildings. The land is not needed for the office buildings, but Centene thought it would take advantage of the city’s early 2005 request for proposals to “encourage the highest and best use of commercial properties in the central business district.”[3]
What is currently there—two real estate offices, a spa and an office building—apparently were not good enough for the city’s mayor and aldermen, who unanimously voted to allow the use of eminent domain to seize the properties in December 2005 in the hope that the new development would bring more tax revenue.
In response, the property owners gathered five times the number of signatures required for a petition to hold a public vote on the matter–a vote local officials subsequently tried to thwart.[4]
Clayton residents were finally allowed to vote in August 2006, when 71 percent of voters favored restricting eminent domain when used “in conjunction with any economic development or redevelopment project.” [5] Although the aldermen said they would be “guided” by the vote, they noted it was only an advisory measure as they moved forward with condemnations.
Three of the property owners took the city to court. A circuit court judge ruled in January 2007 that the city did not act improperly when it approved the ordinances giving Centene eminent domain powers.[6]
After a circuit court ruled in favor of the city, one of the property owners, David Danforth explained why he would continue his battle in court: “I’d love for them to build it if they buy the property. For me, it’s more of a philosophical battle. I think eminent domain is a terrible thing.”[7]
In continuing the battle in the courts, Danforth and his fellow property owners benefited from the state’s recently passed eminent domain reform laws, which increase the burden proof for condemnation and create a policy that grant eminent domain cases a higher priority in the state’s appellate courts.
In its ruling, the Court of the Appeals found that the city had acted improperly in its blight designation because it tried to equate the properties’ economic liability, the fact that it could conceivably produce a higher tax revenue, with a social liability, whose definition “focuses upon the health, safety, and welfare of the public.” Missouri’s eminent domain laws require a property to be both, and the Court found “there was no evidence regarding any public health concerns resulting from the condition of the area.”[8]
The Court of Appeals also sent the case straight to the Missouri Supreme Court—a move that stopped the project temporarily but did not reverse the condemnation process.
After the decision, property owner Dan Sheehan was confident about his case. “Clayton is taking private property and giving it to a developer for his gain, and that’s not the American way.”[9]
In June, the condemnation process was halted. The Missouri Supreme Court affirmed the appellate court’s decision, ruling Clayton had not provided enough evidence for the supposed blight—largely because the blight report failed to provide any evidence that the threatened properties constituted a social liability.
The court also criticized Clayton for trying to use the imagined benefit of the redevelopment project as evidence of current blight: “The city’s ultimate goals for the area cannot serve as probative evidence of social liability in light of the lack of evidence concerning the public health, safety, and welfare in the record.”[10]
Clayton’s ultimately unsuccessful attempt at seizing property for the Centene Corporation demonstrates the lengths to which a city will go to abuse its eminent domain power, whether that means stretching the definition of “blight” or trying to thwart a referendum, to increase its tax revenue at the expense of its own citizens’ livelihoods. Luckily for the citizens of Clayton, there are vigilant property owners ready to fight back—and win.
[1] Timothy B. Lee and Shaida Dezfuli, “Eminent Domain Victim of the Month,” Show Me Institute, June 2006.
[3] Lee and Dezfuli.
[4] Margaret Gillerman, “Petitions oppose eminent domain in Clayton,” St. Louis Post-Dispatch, December 29, 2005.
[5] Ryan Heinz, “Clayton voters send message on eminent domain, Citizen Journal, August 16, 2006.
[6] William C. Lhotka, “Centene is cleared to used condemnation, judge rules Company needs three parcels or its planned world headquarters at Hanley Road and Forsyth Boulevard,” St. Louis Post-Dispatch, January 20, 2007.
[7] Quoted in Margaret Gillerman, “Clayton plaza project is moving forward,” St. Louis Post-Dispatch, April 5, 2007.
[8] Centene Plaza Redevelopment Corporation v. Mint Properties
[9] Quoted in William C. Lhotka and Tim O’Neil, “Eminent domain flashpoint Appellate court slows $210 million Clayton project, sends case to state’s top court,” St. Louis Post-Dispatch, April 25, 2007.
