10/26/2004

The eminent domain 'free fall' — The Roanoke (VA) Times, 10/25/04

By Reginald Shareef, columnist


I’ve watched with interest this fall as the U.S. Supreme Court has agreed to hear the case of Kelo v. City of New London. The legal question here is whether a municipality, using the power of eminent domain, can take private property for economic purposes. The case is interesting because it will determine whether cities can seize a person’s property and transfer it to private developers to boost an ailing economy. At the same time, the case is redundant because economic development has been the catalyst behind urban renewal “takings” for the past 50 years.

As the French like to say, “the more things change, the more they remain the same.”

What is different about the Kelo case is the “fig leaf” covering the economic development component of government takings is stripped away as New London openly condemned property that will be used in a private development plan. Heretofore, governments have used their eminent domain powers to condemn property in “blighted” areas, ostensibly to improve them. What a hoax! What really has happened is that these properties were turned over to private developers for economic development.

In Roanoke, we can look at the controversial Kimball and Gainsboro urban renewal policies to see that these were clearance, not revitalization, projects. Where neighborhoods once stood, businesses and other commercial ventures now exist. As I wrote in a 1991 U.S. Department of Housing and Urban Renewal grant that studied the effects of urban renewal on these communities, economic development is at the heart of these initiatives and creates a win/win for private developers (who don’t have to buy the property and thus, develop it cheaply and then sell for a huge profit) and the municipality (which enhances its tax base). The only people who lose are displaced residents who often are not adequately compensated for their property as required by law.

In New London, Susette Kelo and several other homeowners in a working class neighborhood filed a lawsuit after city officials announced plans to raze their homes to clear the way for a waterfront hotel, health club, offices and 80 homes. The homeowners argue that the takings would only be legal if it serves to revitalize slums or blighted areas dangerous to the public.

However, New London administrators contend the condemnations are proper because the development plans serve the “public purpose” of boosting economic growth and thus are valid public use projects that outweigh the property rights of homeowners. The Connecticut Supreme Court agreed and ruled that New London had a valid “public use” to justify eminent domain based on the thousand of jobs and significant revenue that would be generated by the redevelopment of the 90-acre parcel.

The redevelopment plan coincides with a decision by the pharmaceutical giant Pfizer to build a nearby research facility. The property takings are an amenity for Pfizer’s new facility. The plan develops a “24 hour” urban village where Pfizer employees can work, walk, shop, drive and dine.

The model urban neighborhood in the country is located in Legacy Town Center in Plano, Texas, headquarters of the giant information processing company EDS. The town center features pedestrian-friendly streets, upscale boutiques, galleries, restaurants, theaters, a hotel and 640 apartments within a five-minute walk to EDS. The center is within a mile of other large employers such as Frito-Lay, Dr. Pepper and Comcast.

Urban neighborhoods attract the young creative professionals who drive the knowledge economy. These communities have sprouted up in Rockville, Md., San Jose, Calif., and Atlanta. Developers know that “if you build it, they will come.”

The major difference in those urban neighborhoods and the one planned in New London is that private developers purchased the land themselves to build these live-work centers. For instance, Legacy’s developer was EDS Real Estate Asset. Conversely, Pfizer is using the City of New London as a proxy to seize private property. That’s both illegal and unethical.

Pfizer could make Kelo and other homeowners offers for their property at prevailing market rates. That’s what EDS Real Estate Asset did in Plano. However, using the government to take the homeowners’ property under the “just compensation” clause of the 5th Amendment will likely result in final settlements below what the owners could have gotten in the free market.

Talk about a slippery slope &151 government used to pretend it was involved in neighborhood revitalization when the strategic goal was always displacement and economic development. Now, the economic development cover is blown. If the Supreme Court accepts the Connecticut high court’s reasoning, any home or small business could be condemned and replaced by a project that produces more tax revenue.

If that occurs, we are beyond a slippery slope and in a free-fall concerning the 5th Amendment’s power of eminent domain “takings” and just compensation. Government should not serve as the middle man for property takings simply so that businesses can cheaply secure property it desire. Poor people have suffered under this constitutional violation for years. Maybe now, the high court will stop the 5th Amendment from being turned on its head.


The Roanoke Times: www.roanoke.com