9/24/2006

Other states debate eminent domain: Jackson Hole WY Star Tribune, 9/19/06

By Jeff Narnard, Associated Press

None of the owners of six blocks of downtown [Medford OR] property slated for redevelopment as Middleford Commons wants to stand in the way of the $169 million project.

But they also want a good price for their property and face the trouble of finding a new place to do business.

Enter Measure 39 on the Oregon ballot this fall, which promises to make urban renewal projects tougher for cities in a number of ways.

If passed by voters - and no organized opposition has emerged yet - it would bar public entities like the Medford Urban Renewal Agency from using eminent domain to force the sale of private property that will end up in the hands of private entities such as the developers planning the Middleford Commons project.

It also would give new bargaining power to the people who choose to sell.

"If the property is needed for development and then condemnation is not available to the agency, I would assume they would have to weigh the cost of purchasing the property as opposed to how badly they wanted to develop the property the way they had it planned," said Don Denman, an attorney representing an estate that owns part of the area slated for Middleford Commons.

Under eminent domain, a public agency can condemn property for public purposes, forcing an unwilling property owner to sell to the government at a fair price, as determined by a judge.

In the wake of a 2005 U.S. Supreme Court decision upholding the right of a city to use eminent domain to take private property for economic development, 30 state legislatures have enacted statutes or constitutional amendments to restrict eminent domain, according to the National Conference of State Legislatures. All that went to a public vote have passed by overwhelming majorities.

Five more states, including Oregon, are considering voter initiatives this fall. A sixth, Montana, had an eminent domain initiative on its ballot, but a state judge this month ordered it stricken, concluding that methods used to gather signatures were fraudulent and deceptive.

Four of the states with ballot initiatives - Arizona, California, Idaho and Nevada - combine limits on eminent domain with variations on Oregon's Measure 37, enacted in 2004, which demands governments pay property owners if land use restrictions limit their development rights. Only Oregon's Measure 39 is limited to restrictions on eminent domain.

"To the degree that state legislation measures the mood of the country, there is concern that private property rights need additional protections from government actions," said Larry Morandi, director of state policy research for the conference. "The bills being passed on eminent domain as well as the ballot measures vary significantly. There isn't a model developed that says you can't use eminent domain for economic development purposes."

Dave Hunnicutt of Oregonians in Action, the property rights group that authored both Measure 39 and Measure 37, said they just believe that a person shouldn't have their home or business condemned so it can be turned over to a developer. The measure would not apply to projects like a natural gas pipeline or a public park.

"It's a natural outgrowth of Measure 37 and another example of the threat to private property rights," he said. "For most people property means their home and their business, and it's more than just dollars. It's where their families are raised. It's where they sweated and toiled. It's where they have memories."

Linda Dupray has owned Superior Stamp and Sign in downtown Medford for 33 years, and her mother had it before her. But she is not so attached to it that she wouldn't sell to make way for Middleford Commons, which would transform her rubber stamp and sign factory, a bus station and some used car lots into a string of park blocks flanked by retail, office and residential buildings and a hotel.

"I'm just too small to fight the big boys," said Dupray, who got a taste of redevelopment when the streets were torn up, limiting access to her business. "But in the same vein there's nothing wrong with restructuring the downtown area so it's more beneficial to the public. I just wish they would pick on somebody else. I don't want to move. It's a pain. It's been very stressful."

Despite the national groundswell of support for restrictions on eminent domain since the Supreme Court ruling, it is used rarely for urban renewal projects in Oregon, and has never been used by the Medford Urban Renewal Agency, said Dan Thorndike, the agency's attorney.

"That's an expensive way to get property," said Thorndike. "We try to avoid that."

Even in Portland, Oregon's largest city, which has done several major urban renewal projects, eminent domain has only been used 19 times out of 513 property acquisitions since 1980, said Amy Miller Dowell, a development manager for the Portland Development Commission. Four of those were for a public purpose, such as a park, which would be allowed by Measure 39. The other 15 ended up in private ownership, which would be prohibited by Measure 39.

"Without the power to condemn, there's a potential that some of these projects wouldn't have happened," she said.

Salem developer Chuck Sides figures Measure 39 is just a way for Oregonians in Action to stay in business, but will still be overwhelmingly passed by voters, because it sounds like the fair thing to do. Though condemnations are rare, he fears that Measure 39 would will make projects like Keizer Station - a retail and commercial development he co-owns in the Salem suburb of Keizer that was done without any eminent domain condemnations - a thing of the past.

"Cities are not going to sit still with blight," he said. "They'll come up a formula that puts it into streets, parks or low-income housing."

In Dupray's case, Measure 39 might not even apply, because her property is ultimately slated for one of the city-owned parks running down the middle of Middleford Commons, said Thorndike. But it's not clear whether a judge would agree, because it might go through private ownership first.

There are a number of unclear areas in the ballot measure, Thorndike said. For example, he said it's not clear to him whether owners whose property is protected by Measure 39 from eminent domain would qualify for the usual grace period for paying capital gains taxes if they decided to sell the property.

"That's the magic of ballot measures," Thorndike said. "There's always a lot of, 'I don't knows.'"


Jackson Hole WY Star Tribune: http://www.jacksonholestartrib.com