9/02/2006

Target, state road agency tussle over eminent domain: Palm Beach FL Post, 8/26/06

By Pat Beall

Retail giant Target Corp. and the state's road-building agency are headed for court. Again.

Justices with the 4th District Court of Appeals in West Palm Beach this month ruled that the Florida Department of Transportation and Target will have to face off in a second trial.

At issue is how much Tallahassee owes the retailer in business damages now that it has used eminent domain to force the sale of three Target-owned parcels at State Road 7 and Southern Boulevard in Royal Palm Beach.

It's an unusual case.

First, most of the state road-building agency's eminent domain actions never make it to court, much less appellate court.

Second, it turns the tables on Target. Along with such businesses as Wal-Mart Stores Inc. and CVS Corp. pharmacies, Target has benefited when cities or counties hungry for new business seize land through eminent domain and then make it available to the retailers.

"Target is not the first big-box store that, after having taken advantage of eminent domain, finds itself on the receiving end," said Dana Berliner, senior attorney for the Institute for Justice. The Washington think tank supports curbs on eminent domain.

The retailer's strategy has backfired occasionally. U.S. District Judge Charles A. Shaw rebuked Target in 2003 for strong-arm tactics involved in trying to get St. Louis to condemn a store site.

Target did not return repeated calls for comment.

According to court documents, the tussle between Target and the Florida Department of Transportation has its roots in the 1970s. That's when Tallahassee first started thinking up road plans for Southern Boulevard. For years, nothing happened. Target bought its corner property, built a store and made plans to expand, just as the department finalized its blueprints.

In 2002, the department filed to take the retailer's properties through eminent domain. At trial, both sides could claim half a victory. The department successfully argued that a fair price for the real estate was not $9.4 million, as Target claimed, but $2.4 million.

Target successfully argued that it was owed an additional $2.5 million for business losses, based on its plans to expand, as well as plans to sell some of its property to other retailers.

The department appealed, arguing that Target did not have adequate evidence that its plans to expand business operations, specifically a garden center, were actually under way. This month, the appellate court decided the department had a point. The case was sent back for a new trial addressing how much in business damages, if any, should be awarded.

Jeffrey H. Savlov, a former Department of Transportation attorney who represents landowners, said the key to business damages is that some — but not all — of the business has to be taken as part of a road project. The business also has to have been open at the location for at least five years.

Pursuing a claim also means the business will have to open financial data to public scrutiny. Target, for instance, revealed that after a Wal-Mart Supercenter opened for business less than a mile from its SR 7 site, sales went flat for a year.

That's more transparency than some can stomach. Savlov cites the case of a Florida Sears store that balked at making its finances public, even if that meant not pursuing a substantial claim.

Others think it's worth the disclosure. Adult entertainment mogul Joe Redner was incensed when the department offered him $3.4 million for his trio of Tampa businesses: a bar, a restaurant and a topless nightclub. He pushed the case to trial. A jury last year awarded him $7 million.

No date has been set for a retrial on Target's claimed business losses.

But big awards may not last forever. Florida's Office of Program Policy Analysis and Government Accountability this year reported the Department of Transportation spent just shy of half a billion dollars in 2004-05 to acquire land. Their suggestion for paring costs: Cut out all business damages payments.


Palm Beach FL Post: http://www.palmbeachpost.com