Public Power, Private Gain

Foreword by Douglas W. Kmiec “Government is instituted to protect property of every sort,” wrote Madison, and for this reason, “that alone is a just government, which impartially secures to every man, what- ever is his own.” This precept of justice was embodied in the Fifth Amendment’s protection of private property, where by constitutional text, property can be taken only for public use and upon the payment of just compensation. For reasons that are more regrettable than rational, the courts have greatly relaxed the public use requirement. Inevitably, this invites the taking or eminent domain power to be misused—either by inefficient or corrupt application or both. The extent of this abuse is widespread, but until recently, largely unaddressed—in part because isolated landowners confronted with costly and cumbersome condemnation procedures seldom have the legal or political wherewithal to stand against the winds of power. The public advocacy and litigation defense of the Institute for Justice is chang- ing this by standing with landowners singled out for disfavor. Whether family, farmer, or small merchant, these owners wish only for what Madison said our Constitution guaran- tees—the protection of property. This comprehensive report, prepared by the Institute for Justice and senior attorney Dana Berliner, carefully catalogues the extent of the problem of eminent domain abuse. It illustrates how municipal good intention, often for urban redevelopment or economic promise, can be unfairly built upon the rightful ownership of others. When projects are carried out heavy-handedly and unnecessarily, not through voluntary transaction, but coercion, the protection of property is eroded and our bedrock freedom to decide upon our own course is worn away. Douglas W. Kmiec Dean & St. Thomas More Professor of Law, The Catholic University of America; senior policy fellow, Pepperdine University. Table Of Contents Executive Summary 1 Introduction 4 Alabama 10 Alaska 12 Arizona 14 Arkansas 18 California 20 Colorado 38 Connecticut 44 Delaware 51 Florida 52 Georgia 59 Hawaii 60 Idaho 63 Illinois 64 Indiana 71 Iowa 75 Kansas 78 Kentucky 81 Louisiana 86 Maine 89 Maryland 92 Massachusetts 95 Michigan 100 Minnesota 107 Mississippi 113 Missouri 117 Montana 124 Nebraska 126 Nevada 129 New Hampshire 132 New Jersey 134 New Mexico 143 New York 144 North Carolina 155 North Dakota 157 Ohio 159 Oklahoma 169 Oregon 171 Pennsylvania 173 Rhode Island 183 South Carolina 187 South Dakota 189 Tennessee 190 Texas 193 Utah 196 Vermont 199 Virginia 201 Washington 207 Washington D.C. 211 West Virginia 212 Wisconsin 215 Wyoming 217 Glossary of Terms 218 Legal Challenge Looms Over San Jose’s Strong Neighborhoods Initiative 22 California Study Exposes the Myth that the “Public” Benefits from TIF Redevelopment 26 Huntington Beach Finds that Redevelopment Is Best Achieved Without Eminent Domain 30 Local Homeowners Rally to Defeat City’s Attempt to Repeal Eminent Domain Ban 36 Recent Colorado Court Decisions Limit the Rights of Counties and Individuals to Challenge Municipal Urban Renewal Plans 40 Many Private Use Condemnations Go Unreported 50 Florida Town Votes Against Expanded Power to Condemn for Private Business 54 There Goes the Neighborhood: Entire Neighborhoods Lost to Eminent Domain Abuse 58 Government Helps Rich People Find Homes 69 Beating the Competition Is As Easy As Getting the City to Give You Their Business 70 Houses of Worship: Just Another Tax Liability 74 Demolition First, Objection Second: Iowa Sets Dangerous Legal Precedent 77 Blight Makes Right: Unjustified Blight Determinations Pave the Way for Condemnation 82 Town Learns from Past Redevelopment Mistakes that Eminent Domain Just Isn’t Worth the Trouble 91 Baltimore County Property Owners Rally to Defeat Senate Eminent Domain Bill 93 Pittsfield Residents Vote Against Eminent Domain 97 Abandoned Use: Former Property Owner Fights to Regain Land 98 Condemnations for Private Parties Destroy Black Neighborhoods 102 Minnesota Courts Strengthen Pre-Condemnation Notice Rights of Property Owners 108 Great-Grandmother Takes City Officials on a Tour of Her Home, Convinces Them Not to Take It 110 Mississippi Supreme Court Strengthens Pre-Condemnation Rights of Property Owners 114 Vacate Your Premises Now; Your Government Might Want It Someday 119 The House Always Wins: Casinos Top List of Eminent Domain Beneficiaries 130 Local Opposition Defeats Plan to Condemn Famous Music Venue for Redevelopment 137 New Jersey Township Tried to Use Condemnation to Squelch Affordable Housing Development 138 Neighbors Rally to Defeat Condemnation Plans in New Brunswick 141 New Rochelle Activism Defeats Plans to Condemn Neighborhood for IKEA 150 Former Property Owner Loses Fight to Regain Land 152 Local Activists in Several Ohio Cities Organize to Stop Their Local Governments from Abusing Eminent Domain 162 Euclid City Officials Try a Novel Approach in Dealing with Property Disputes—Simple Politeness 167 Not a Public Use After All 170 CVS, Victim and Beneficiary of Eminent Domain for Private Use 174 Pittsburgh Mayor’s Plan to Take Properties for Redevelopment at Fifth & Forbes Is Derailed 176 Home Depot Decides to Include Local Pittsburgh Pizzeria in Its Plans Rather than Try to Have It Condemned 179 Out With the Old: Elderly Residents are Prime Targets for Eminent Domain Abuse 185 Two States Fight over Public Use: South Carolina and Georgia Face Off over Seaport 188 Arlington City Council Votes to Limit Its Own Condemnation Powers 194 No Good Deed Goes Unpunished: Plano Family Threatened with Taking After Years of Giving 195 Washington Supreme Court Says No to Condemnations for Private Use 208 Costco Leads Big-Box Beneficiaries of Eminent Domain 210 “…nor shall private property be taken for public use without just compensation.” —U.S. Constitution, Amendment V. Public Power, Private Gain by Dana Berliner The Despotic Power As early as 1795, the U.S. Supreme Court described the power of eminent domain—where the government takes someone’s property for a “public use”—as “the despotic power.” Eminent domain has the potential to destroy lives and livelihoods by uprooting people from their homes and businesspeople from their shops. With eminent domain, the government can force a couple in their 80s to move from their home of 50 years. Eminent domain is the power to evict a small family business, even if that means the business will never reopen. The danger of such an extreme power led the authors of the U.S. Constitution and state constitutions to limit the power of eminent domain in two ways. First, the government had to pay “just compensation.” And second, even with just compensation, the government could take property only for “public use.” To most people, the meaning of “public use” is fairly obvious—things like highways, bridges, prisons, and courts. No one—at least no one besides lawyers and bureaucrats—would think “public use” means a casino, condominiums or a private office building. Yet these days, that’s exactly how state and local governments use eminent domain—as part of corporate welfare incentive packages and deals for more politically favored businesses. This is the first report ever to document and quantify the uses and threats of eminent domain for private parties. We have compiled this information from published accounts and court papers covering the five-year period from January 1, 1998 through December 31, 2002. The results are chilling. Eminent Domain for Private Benefit, Nationwide • 10,282+ filed or threatened condemnations for private parties • 3,722+ properties with condemnations filed for the benefit of private parties • 6,560+ properties threatened with condemnation for private parties • 4,032+ properties currently living under threat of private use condemnation • 41 states with reports of actual or threatened condemnations for private parties • 9 states with no reports of either actual or threatened private use condemnations The Tip of the Iceberg The information in this report represents only a fraction of the number of cases where private property has been condemned for another private party. There is no official database of condemnation for private parties. Many, if not most, private condemnations go entirely unreported in public sources and thus could not be identified for this report. To give some sense of how few private condemnations are reported, the Connecticut courts recorded 543 redevelopment condemnations from 1998 through 2002. That’s 17.5 times more than the 31 we found reported in newspapers. Connecticut is the only state that records those numbers, and it may not be representative, but there are obviously many more condemnations for private use than even this report contains. This report contains every instance of actual or threatened condemnation for private parties between 1998 through 2002 that we know about—over 10,000 in total. But even that number represents only the tip of the iceberg. How the States Compare In terms of sheer numbers of condemnations for private parties, California, Kansas, Michigan, Maryland and Ohio lead the pack for most private use condemnations filed. Pennsylvania, Florida and New Jersey also have high numbers of threatened condemnations for the benefit of private parties. Detroit takes first place as the worst city in terms of con- demning property for private parties, while Riviera Beach, Florida, San Jose, California, and Philadelphia have placed the greatest number of private owners under threat of condemnation for private parties. With the assistance of a state agency, New York City has become the site of some of the most egregious condemnations for private use. Some states stand out. From a legal standpoint, New York, Missouri and Kansas are the worst states to live in for owners who hope to avoid condemnation for private parties, while Idaho, Montana, New Mexico, South Dakota and Wyoming appear to be the best. Those states, as well as Alaska, Delaware, Georgia, New Hampshire and Washington, D.C. have no reported uses of eminent domain for private parties.

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