10/10/2005

Senator Seeks to Block Use of Eminent Domain for Private Gain: New York Law Journal, 9/27/05

By Terry Sheridan

U.S. Sen. Bill Nelson (D-FL), flanked by members of a family who expect a Florida city to seize their commercial property, vowed Monday that he is working to deny federal funds to any city or state project using eminent domain for private development.

The Florida Democrat, who is running for re-election next year, is co-sponsoring with Republican Sen. John Cornyn of Texas a bill that would reserve eminent domain only for public uses.

The measure introduced in late June would close an option permitted by the U.S. Supreme Court in the Kelo v. City of New London case, which allowed the city to pursue eminent domain for a private project.

"I don't want someone's home taken for an economic development project that could be a Wal-Mart," Nelson said during a news conference at the law offices of Brigham Moore in Miami. The firm specializes in eminent domain litigation.

The Protection of Homes, Small Businesses and Private Property Act would prevent the federal government from taking private property for economic development and bar the use of federal funds by local governments using eminent domain for private development.

The bill's sponsors will try to amend the Treasury Department appropriations bill next week to prevent the use of federal funds for projects that involve eminent domain for economic development.

The bill is before the Senate Judiciary Committee, which held a hearing on it last week.

A similar measure in the House was approved in July, according to a report in The Washington Post.

The House bill would apply to funds administered by the departments of Transportation, Treasury and Housing and Urban Development. According to the Post's report, House Majority Leader Tom DeLay of Texas and Majority Whip Roy Blunt of Missouri intend to push for a broader measure that would apply to all federal funds.

Nelson said he did not know how his bill compares to the House version.

The measure followed the U.S. Supreme Court's Kelo ruling, in which justices voted 5-4 in favor of the Connecticut city, saying that the power of eminent domain could be used for private economic development. But the opinion also said states could close that opening.

The ruling set off a firestorm of opposition. Lawmakers in most states, including Florida, suggested limiting eminent domain and better defining rules for property takings.

In Hollywood, Fla., city officials are close to approving the taking of the Mach family's commercial building at Harrison Street and 19th Avenue to make way for a 19-story condo tower by developer Southern Facilities and its affiliate, SFD@Hollywood LLC.

The historic 1920s-era Great Southern Hotel also will be demolished for the project.

David Mach and his mother, Katalin Mach, said Monday that they expect to be served notice of the city's eminent domain filing any day. The City Commission is expected to vote on it soon, they said.

City officials "call this beautiful downtown area blighted," David Mach said. "But they are building a condo canyon out of a pedestrian, small-business district."

Neil Fritz, executive director of Hollywood's downtown Community Redevelopment Agency, questioned why the Machs were present at Nelson's news conference.

"The Machs were present because the senator wanted to meet citizens who have experienced the abuse of eminent domain in this context," said attorney Amy Boulris of Brigham Moore, who is representing the Machs.

"It's my understanding that there are no federal funds involved in the Great Southern Hotel project," Fritz said.

Boulris said it was unclear whether the city would request federal funding.

"The fact that the proposed federal bill addresses the issue by proposing to cut off federal funding is about all that the federal government can do given that redevelopment is usually conducted by local governments," she said. "The senator is proposing that Congress do what it can to take a stand."

When asked how much federal funding typically is used in local projects, Nelson said that in large-scale developments, "sooner or later, there will be federal funding."

But attorney and Florida Atlantic University economic development professor Frank Schnidman said Nelson's bill further confuses the eminent domain issue.

"There is no definition for 'economic development,'" he said. "It could be argued that at times a road-building project is for economic development to open an area for development that will increase the tax base or be done to attract business."

Schnidman, who wrote an amicus brief in the Kelo case on behalf of the Congress for New Urbanism, which favored the losing homeowners, said the Supreme Court ruling held that public use includes economic development.

"Therefore, the proposal needs to do better than just exclude economic development," said Schnidman, the newly approved director of the North Miami community redevelopment agency. "It needs to affirmatively define 'public use' as defined by Congress for the scope of this proposal."


New York Law Journal: www.law.com