A split U.S. Supreme Court issued a 5-4 ruling Thursday that could put more wind in the sails of the Freeport marina project plan backed by city officials and developers.
In Kelo et al v. city of New London, the court upheld a March 2004 Connecticut state court ruling and ordered that a local government's power of eminent domain can trump individual property rights to seize land for economic development.
Eminent domain is a government entity's power to take or condemn property it
deems is necessary for "public use." Thursday's ruling is significant because it includes economic development in the definition of public use.
The decision comes at the end of a five-year legal journey. Susette Kelo and other homeowners filed suit against the city of New London, Conn., in 2000 to prevent it from taking their property to build a hotel and conference center complex.
New London city officials cited higher tax revenues and economic improvement as the project's goal.
In his majority opinion, Justice John Paul Stevens wrote local officials should decide whether development projects benefit communities. States can pass additional laws restricting condemnations if necessary, he wrote.
"It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular project area," Stevens wrote.
Justice Sandra Day O'Connor argued in the dissenting opinion that the ruling gives large corporations and developers a dangerous amount of influence in the political process.
"As for the victims, the government now has a license to transfer property from those with fewer resources to those with more," O'Connor wrote.
While the case is based in Connecticut, the ripple effect will be felt nationwide and in Freeport, where the city's marina project has been stalled by legal action.
Western Seafood Co. is battling the city of Freeport and the Freeport Economic development Corp. over 330 feet of the company's property along the Old Brazos River that the city wants for a marina.
Wright Gore III, son of the company's president, has said the land is crucial to his family business since shrimp boats offload their catch there.
The city and developers say the $7 million project - paid for by $6 million committed by the city and $1 million by private developer Walker Royall - will net eight times the $50,000 in revenue the city gains from the 1,800-foot strip of land.
Between 100 and 150 jobs will be produced by the first of the two-phased construction, said Lee Cameron, executive director for the Freeport Economic Development Corp.
O'Connor's dissent is on target in theory, but accountability of elected officials keeps the political process free of undue influence, Cameron said.
"If they were to exercise (eminent domain) to the extreme, then they wouldn't be in office for very long," Cameron said.
Gore filed suit to block Freeport in 2003. U.S. Southern District Judge Samuel Kent ruled in favor of the city in August, and the case has been stalled in the U.S. 5th Circuit Court awaiting the outcome of the Kelo case.
John Hightower, a Houston attorney who represents Freeport and its economic development group, said his office will notify the U.S. 5th Circuit Court of Appeals in New Orleans of the decision to get the case moving again.
The Kelo ruling gives his clients a little more weight going into the process, Hightower said. "The courts continued to hold that governmental entities have wide
discretion in how to use their condemnation powers," Hightower said.
Gore maintains the purpose of Western Seafood's suit is not meant to impede progress.
"We are for anything that could possibly bring prosperity to the city of Freeport, but not at the expense of losing our jobs and our businesses of over 50 years," Gore said.
The second phase of the project would double the size of the facility and future plans include a possible condominium complex nearby, Cameron said.
No condemnations are planned for the placement of the condos, he said. "We wouldn't have done these if we weren't forced to," Cameron said.
Freeport City Manager Ron Bottoms said the city is ready to move forward and hopes the ruling will encourage Western Seafood to negotiate.
"We would still rather settle this thing out of court but we've never gotten close before," Bottoms said. "Now, hopefully there's a little more motivation for them to sit down with us."
Gore said negotiation always has been an option, but Royall and the city haven't budged during previous talks.
While a disappointing setback, Gore said Western Seafood plans to continue the fight.
The city has other condemnation suits pending against the company, and Gore said the legal standoff is far from over. "The most important part at this juncture is the court of public opinion," he said.
Gore said O'Connor's dissenting opinion accurately captures what is happening in Freeport and leaves homes, businesses and churches vulnerable to the city's grab.
"In this case, it's purely for the benefit of a private developer who would be given title to our property," he said. "In that case, no one is safe."
The voting breakdown of the Supreme Court's 5-4 ruling in favor of allowing local governments to seize property through eminent domain for economic development projects.
IN FAVOR: Stevens, Souter, Ginsburg, Breyer, Kennedy
OPPOSED: O'Connor, Rehnquist, Scalia, Thomas
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