Tax-Hungry Governments & Land-Hungry Developers Rejoice in Green Light from U.S. Supreme Court
In the wake of the U.S. Supreme Court’s decision in Kelo v. City of New London upholding the use of eminent domain for private development, the floodgates are opening to abuse. Already, the ruling has emboldened governments and developers seeking to take property from home and small business owners.
The following examples from newspapers across the country show that the threat of condemnation to homes, small business, churches and other property from government-forced private development projects is being realized. These incidents are the tip of the iceberg.
Thousands of properties nationwide are facing the threat of eminent domain for private development, and many more projects are in the planning stages. In its first-ever nationwide study Public Power, Private Gain, the Institute for Justice documented more than 10,000 instances of threatened or actual condemnation for private development nationwide from 1998 through 2002. The Institute for Justice will issue an updated report in late 2006.
Less than two weeks after the Kelo decision City officials initiated eminent domain proceedings against landowner Bernard Buller. The City plans to build a housing development where Bueller’s M&T Motors now stands.
The Moorpark City Council has begun the process of returning the power of eminent domain to the Moorpark Redevelopment Agency. This is the first step in a downtown redevelopment plan that will ultimately use eminent domain to replace existing privately owned properties with office space, retail stores, restaurants and entertainment venues.
Officials in National City approved the use of eminent domain in a “large chunk” of the city to make room for redevelopment. The seized land will be turned over to a private developer to build an office tower, condos and retail space. Even properties within the redevelopment area that are not blighted will be taken through eminent domain because the proposed development will be more profitable than the current occupants.
A week after the Supreme Court’s ruling in Kelo v. City of New London, Oakland city officials used eminent domain to evict John Revelli from the downtown tire shop his family has owned since 1949. Revelli and a neighboring business owner had refused to sell their property to make way for a new housing development. Said Revelli of his fight with the City, “We thought we’d win, but the Supreme Court took away my last chance.”
Officials in San Diego are using the threat of eminent domain to force the relocation of a 150-employee laundry company called Alsco to make way for condos and retail. Alsco’s owners had been able to resist negotiations with the developer for two years, but lost their bargaining power once the City and its power of eminent domain got involved. According to developer Patrick Rhamey, “The stick, the fire to create a sense of urgency for Alsco to take action is the threat of eminent domain.”
The San Pablo City Council is using eminent domain to seize two properties owned by Robert Johanson. One property contains a mobile home park and the other a Salvation Army store. The City’s redevelopment will uproot Mr. Johanson’s mobile home park business and its residents, as well as deprive those in the San Pablo community who depend on the Salvation Army store.
The city of Ridgefield is proceeding with a plan to take 154 acres of vacant land through eminent domain. The property owner plans to build apartments on the land, while the city intends to use it for corporate office space. The case is currently before a federal judge, where the property owner has asked for an injunction to halt the eminent domain proceedings. Ridgefield officials directly cite the Kelo decision in support of their actions. First Selectman Rudy Marconi says that “it is now clear that if Ridgefield is victorious in federal court, which we feel we will be, then we can proceed with an eminent domain taking of the property.”
Eminent domain is now being used to redevelop the 1940s-era Skyland Shopping Center in Southeast D.C. City officials recently asked the D.C. Superior Court to let them take private property from business owners who refuse to sell. Some property owners are fighting in court to keep their businesses, though a new shopping complex is already slated to replace Skyland. Supporters of the redevelopment project were buoyed by the recent Kelo decision.
Boynton Beach, Fla.
Under the threat of eminent domain, the 50-year-old Alex Sims Barber Shop is selling to the City of Boynton Beach to make way for new residences and storefronts. Guarn Sims called the Kelo ruling “the nail in the coffin” that ended his hope of saving the business.
Howard Goodman, "Redevelopment cuts out Boynton barbershop," Sun-Sentinel (Fort Lauderdale), June 28, 2005, at 1B.
Daytona Beach, Fla.
On August 19th, Florida Circuit Judge John W. Watson III gave the City of Daytona Beach permission to seize three Boardwalk properties to make way for a $120 million retail complex. Justification for the condemnation came in part from a 1981 study declaring the area "blighted"—even though the area has seen many changes and new development since that 24-year-old blight designation. City attorney Scott Cichon pointed out that the Supreme Court's decision in Kelo had an effect on the case, affirming the city's plan to take private properties for other private parties.
Private property under attack, Chattanooga Times Free Press, August 26, 2005
Broward County officials on June 28 approved plans for new condo and retail development in these three cities. Hollywood residents in the targeted area fear their homes may now be taken for economic development following the Kelo decision. Mayor Mara Giulianti said the City would use eminent domain on a “case-by-case basis” to remove homeowners unwilling to sell.
For the second time in a month, Hollywood officials have used eminent domain to take private property and give it to a developer for private gain. Empowered by the recent Kelo ruling, City commissioners took a bank parking lot to make way for an exclusive condo tower. When asked what the public purpose of the taking was, City Attorney Dan Abbott didn’t hesitate before answering, “Economic development, which is a legitimate public purpose according to the United States Supreme Court.”
Shannon O'Boye, "Hollywood uses eminent domain, again; second condo development to benefit," Sun-Sentinel (Fort Lauderdale), July 13, 2005, at 5B.
Lake Zurich, Ill.
Liam Ford, Ruling on property rights makes owners vulnerable, Chicago Tribune, June 24, 2005. (link not available)
Five property owners facing condemnation for private development had asked Lake Zurich officials to hold off until the Kelo decision. The Chicago Tribune reports that City officials are now moving to condemn.
Baltimore, Md. (East Side) (subscription required)
Baltimore’s redevelopment agency, the Baltimore Development Corp., is exercising eminent domain to acquire more than 2,000 properties in East Baltimore for a biotech park and new residences. BDC Executive Vice President Andrew B. Frank told the Daily Record the Kelo decision “is very good news. It means many of the projects on which we’ve been working for the last several years can continue.”
Baltimore, Md. (West Side)
Lorraine Mirabella, High court upholds eminent domain; Acquisitions fueled a rebirth; city reaction, Baltimore Sun, June 24, 2005.
The City of Baltimore is moving to acquire shops on the city’s west side for private development. Ronald M. Kreitner, executive director of Westside Renaissance, Inc., a private organization coordinating the project with the city’s development corporation, told the Baltimore Sun, “If there was any hesitation because of the Supreme Court case, any question is removed, and we should expect to see things proceeding in a timely fashion.”
Two days after the Kelo decision, Boston City Council President Michael Flaherty called on the mayor of Boston to seize South Boston waterfront property from unwilling sellers for a private development project. “Eminent domain is one tool that the city can use,” Flaherty told the Boston Globe.
“Arnold Mayor Mark Powell applauded the decision,” reports the St. Louis Post-Dispatch. The City of Arnold wants to raze 30 homes and 15 small businesses, including the Arnold VFW, for a Lowe’s Home Improvement store and a strip mall—a $55 million project for which developer THF Realty will receive $21 million in tax-increment financing. Powell said that for “cash-strapped” cities like Arnold, enticing commercial development is just as important as other public improvements.
Jake Wagman, High court rebuffs homeowners, St. Louis Post-Dispatch, June 23, 2005
Richmond Heights, Mo.
City officials are taking bids to demolish 200 homes in the Hadley Township Neighborhood, just to turn the land over to a private developer who will build more homes. The City has said it is open to using public funds and eminent domain to accomplish the redevelopment.
Saint Louis, Mo.
Just one month after the landmark Kelo decision, St. Louis Circuit Court Judge Timothy J. Wilson reluctantly issued a condemnation order requiring two St. Louis homeowners, located in an upscale neighborhood called Boulevard Heights, to give up their home to make way for a shopping center. Basing his decision on Missouri law and the Kelo decision, the judge lamented: “The United States Supreme Court has denied the Alamo reinforcements…Perhaps the people will clip the wings of eminent domain in Missouri, but today in Missouri it soars and devours.”
Sunset Hills, Mo.
On July 12, two-and-a-half weeks after the Kelo ruling, Sunset Hills officials voted to allow the condemnation of 85 homes and small businesses. This was the first step in allowing the private Novus Development Corp. to use eminent domain against the property owners who stand in the way of a planned $165 million shopping center and office complex. On August 18th Novus’ $28 million bank loan fell through, placing the development project in limbo.
Save Our Homes, a coalition of 200 residents in a Lodi trailer park targeted by the City for private retail development and a senior-living community, goes to court on July 18 to try to prevent a private developer from taking their homes. Lodi Mayor Gary Paparozzi called the Kelo ruling a “shot in the arm” for the town. He told the Bergen County Record, “The trailer park is like a poster child for redevelopment. That’s the best-case scenario for using eminent domain.”
City officials in Long Branch voted unanimously in July to use eminent domain to take modest oceanfront homes to make way for new luxury condos. Activists have rallied in protest and several grassroots homeowners organizations have been established to lead a coordinated resistance. Two bills are currently pending in the State legislature that would restrict eminent domain abuse and U.S. Congressman Frank Pallone, who represents Long Branch, told residents he will draft similar federal legislation in September.
Less than a week after the Kelo decision, Spring Valley officials asked the New York Supreme Court to authorize the condemnation of fifteen downtown properties in an area where a private developer plans to construct residential and retail buildings. On August 12th the Court granted the village permission to condemn more than thirty properties, over twice as many as the village sought to acquire.
Mayor Tim Kreischer wants to demolish 126 buildings – mom-and-pop shops, $200,000 homes, and apartments – to erect luxury condos, high-end specialty stores, and a parking garage. Kreischer has already won one lawsuit and is in the middle of another, and the Supreme Court’s Kelo ruling only bolsters his confidence. “People don't like to hear it,” Kreischer said, “but bringing people with more money into the area will hopefully bring more money to store owners and reduce everyone’s taxes.”
Developer Scott Wolstein has planned a $225 million residential and retail development in the Flats district. Wolstein has most of the property he needs, but is pleased that Kelo cleared the way for the City to acquire land from any unwilling sellers. If eminent domain is “necessary,” he told the Plain Dealer, “we think this makes it clear that there won’t be any legal impediments.” Previously, city leaders publicly supported Wolstein’s call for eminent domain.
Herman Blankenship, whose auto-body shop was one of 99 properties taken to make way for the expansion of a Jeep plant, had his recent appeal to the Supreme Court denied when the Court decided not to hear his case. Blankenship’s shop was seized and destroyed in 2004, but he had held out hope that the Kelo ruling would bring him justice.
Warwick, R.I. (registration required)
In 2000, the developer hired by the City to redevelop the Station District was unable to acquire the land he needed through negotiations with property owners. Now, after the Supreme Court’s Kelo ruling, Warwick Station Redevelopment Agency chairman Michael Grande says, “The only obstacle to private development of hotels, condos, office space, and retail is the price of the dirt.” According to Grande, the Court’s ruling “just shores it all up.”
The Riverfront Development Corp. is planning a massive, 5-mile development effort, including the use of eminent domain to claim a four-block section from the current owners for a mixed-use development. “[Kelo] definitely gives the city more tools in its tool box for dealing with the legal issues surrounding that piece of property,” RDC president Benny Lendermon told the Commercial Appeal.
Hours after the Kelo decision, officials in Freeport began legal filings to seize some waterfront businesses (two seafood companies) to make way for others (an $8 million private boat marina), according to the Houston Chronicle.
Menomonee Falls, Wisc.
Property owners in downtown Menomonee Falls have been notified that their land could be seized for a redevelopment project. Even though a concrete plan for the redevelopment doesn’t exist yet, 80 parcels of land are at risk of eminent domain. The Milwaukee Journal Sentinel notes that the City’s ability to condemn property for economic gain was made easier by the Supreme Court’s Kelo ruling.
West Allis officials want to “revitalize” the West Allis Towne Center, a shopping mall. If the Supreme Court had ruled in favor of the homeowners in Kelo, officials may not have been able to use eminent domain to claim the mall, West Allis development director John Stibal told the Milwaukee Journal Sentinel.