2005 NBJ August

A division of BUSINESS LINK, LLC PUBLISHER Lyle E. Brennan • [email protected] PUBLISHER / CEO Connie Brennan • [email protected] EDITOR Kathleen Foley • [email protected] ART DIRECTOR Joe Thomasula CIRCULATION DIRECTOR Mark Keays • [email protected] RESEARCH / RANKING NEVADA [email protected] ONLINE MARKETING DIRECTOR Harry Benson • [email protected] INTERNET / WEB SITE DIRECTOR J.R. Fent CONTRIBUTING EDITORS Jennifer Rachel Baumer • Ben Brimhall Robyn Campbell-Ouchida • Kathleen Foley Kenny Guinn • Tony Illia • Mark Keays •Laif Meidell Carol Patton • R. Keith Schwer • Sharon Rorman Sheldon Georlen Spangler • Mike Sullivan ADVERTISING / SALES Connie Brennan • [email protected] Sheri Lautherboren • [email protected] Dawn Jenkins • [email protected] SALES ASSISTANT Linda McKeon • [email protected] CORPORATE OFFICE 4386 S. Eastern Ave., Ste. 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DISCLAIMER: Editorial views expressed in this magazine, as well as those appearing in area focus and industry focus supplements are not necessarily those of the publisher or its boards. 4 August 2005 COMMENTARY LYLE E. BRENNAN Publisher Eminent Domain Is Anyone’s Property Safe? “…nor shall private property be taken for public use, without just compensation.” Fifth Amendment to the U.S. Constitution “If people had a clear idea of what this ruling means and how it could affect them, they would riot.” Attorney Kermitt L. Waters he city government of New London, series of decisions that have gradually The court’s version of this follows: Conn. faced a problem shared by chipped away at our Fifth Amendment pro- “The disposition of this case therefore T many cities: residents and businesses tections without most of us realizing what turns on the question whether the City’s were fleeing to the suburbs, a nearby gov- was happening. development plan serves a ‘public pur- ernment installation had closed and the pose.’ Without exception, our cases have city’s tax base was eroding. The city’s solu- Dissenting Opinions defined that concept broadly, reflecting tion was to create a master plan for urban Timothy Sandefur, an attorney with the our longstanding policy of deference to renewal that included converting a neigh- Pacific Legal Foundation, recapped it this legislative judgments in this field.” It pro- borhood community into an office complex, way: “In a series of decisions in the ceeds to give details of the Berman case, retail shops and a waterfront park. So far, so 1930s, the Supreme Court relegated eco- which was filed by a department store good. However, several property owners in nomic freedom and property rights to sec- owner whose property was not blighted, the neighborhood, including the Kelo fami- ond-class status, giving its blessing to but was taken away because it fell within ly, didn’t want to sell, so the city used a state laws that took property from hardworking the boundaries of an area slated for urban law entitling it to claim “eminent domain” Americans to run constantly expanding renewal. The court continues, “In Hawaii and take over their homes anyway. The res- welfare programs. Housing Authority v. Midkiff (1984), the idents being displaced argued that the city “Not long after that, it decided in the in- Court considered a Hawaii statute where- didn’t have the right to take their land ex- famous case of Berman v. Parker that gov- by fee title was taken from lessors and cept for projects with a clear public use, ernment could clear slum areas by con- transferred to lessees (for just compensa- such as roads or schools, or to revitalize demning property and reselling it to private tion) in order to reduce the concentration blighted areas, and their neighborhood developers. The Court’s rationale was that of land ownership. We concluded that the could in no way be called blighted. anything that benefits the public in any way State’s purpose of eliminating the ‘social The case eventually made its way to the qualifies as a ‘public use.’ In the years that and economic evils of a land oligopoly’ U.S. Supreme Court, which decided in followed Berman, poor inner city neighbor- qualified as a valid public use.” favor of the city. Its controversial, 5-to-4 hoods were demolished under the eu- In the Kelo case, the opinion continues, ruling in Kelo v. New London caused an out- phemism of ‘urban renewal.’ In 1981, De- “The City has carefully formulated an eco- cry all across the country – and justifiably troit, Mich. seized an entire working-class nomic development plan that it believes will so. A complete transcript of the decision, in- neighborhood and gave it to General Mo- provide appreciable benefits to the commu- cluding dissenting arguments, can be found tors to build an auto factory. nity, including – but by no means limited to on supremecourtus.gov/opinions/opin- “Between 1998 and 2003, there were – new jobs and increased tax revenue. Be- ions.html. It makes for very interesting 10,000 reported cases nationwide of emi- cause that plan unquestionably serves a reading, especially as it reviews the history nent domain being used, or threatened, for public purpose, the takings challenged here of the court’s decisions in eminent domain the benefit of private developers. All in the satisfy the public use requirement of the cases. The Kelo case is only the latest in a name of ‘public use.’” Fifth Amendment.” August 2005 5 In the dissenting opinion, written by What’s Ahead for Nevada? velopment project. Waters, an attorney Sandra Day O’Connor, the four justices The Supreme Court’s decision will have whose firm defended the Pappas family, is who disagreed with the ruling warned, far-reaching impact on Nevada. First of all, leading a movement to put a “property own- “Under the banner of economic develop- it should make us re-examine our state ers bill of rights” on the ballot for the gen- ment, all private property is now vulner- laws concerning eminent domain. The eral election in 2006, declaring, “We have able to being taken and transferred to an- 2005 Legislature passed two bills restrict- to put this monster back in its cage.” other private owner, so long as it might ing use of eminent domain. Assembly Bill Another thing to consider is the impor- be upgraded – i.e., given to an owner 143 added new requirements that local tance of supporting judicial nominees who who will use it in a way that the legisla- governments must satisfy before con- will uphold property rights. As changes take ture deems more beneficial to the public demning private property for redevelop- place on the Supreme Court, other factors – in the process. The Court today signif- ment: two-thirds of a redevelopment area should be considered besides a candidate’s icantly expands the meaning of public slated for seizure must be declared “blight- position on Roe v. Wade or other political use. It holds that the sovereign may take ed” and the government must also show litmus tests. This case should underline the private property currently put to ordinary that four out of 15 possible factors exist to importance of appointing judges who will private use, and give it over for new, ordi- prove the area is blighted. However, more support property rights. nary private use, so long as the new use could be done to shore up our rights. This is only the latest decision in a con- is predicted to generate some secondary The issue may actually come up before sistent trend by activist judges to erode the benefit for the public – such as increased the 2007 legislative session, if Kermitt Wa- rights of U.S. citizens established by the tax revenue, more jobs, maybe even aes- ters has his way. Southern Nevadans may Constitution. Make no mistake – even if thetic pleasure. remember the long court battle that took you don’t own property, the ramifications of “For who among us can say she already place between the Pappas family and the this decision will resonate throughout our makes the most productive or attractive pos- Fremont Street Experience, which con- society and strip yet another layer of the sible use of her property? The specter of demned the family’s downtown property in freedom guaranteed by our forefathers.

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