Thursday, April 01, 2004

Pushing the limits of 'public use': Owners see their land taken -- and handed over to developers

USA Today
by Dennis Cauchon

Rene Corie installs drapes in Florida mansions. Her husband, David, builds the mansions' gates.

Eight years ago, the working-class couple finally found some waterfront real estate they could afford: a two-bedroom house for $70,000 in Riviera Beach, a poor town near the wealthy enclaves of Palm Beach and Jupiter.

But Riviera Beach now wants to bulldoze the Cories' home and 2,200 others to make way for one of the nation's grandest redevelopment plans: a collection of high-rise condos, bigger homes and upscale shops. The city plans to use eminent domain -- its power to confiscate private property for projects that benefit the public -- to take the homes of 5,100 people if the residents do not agree to move."

It's un-American to take my property and give it to a private developer," says Rene Corie, 55."I couldn't afford a water view anywhere else."

The use of eminent domain is meeting growing resistance in courts, legislatures and neighborhoods from Connecticut to Ohio and Colorado. The criticism targets local governments' efforts to spur economic growth by transferring land from homeowners and shopkeepers to developers or corporations.

Local governments are using eminent domain to acquire land for Wal-Mart, Target and other retailers that need big sites for stores. Land also is being taken for manufacturing plants, hotels, condominiums and parking lots.

Riviera Beach Mayor Michael Brown says his predominantly black community is trying to take advantage of its greatest resource: the waterfront. "For their own selfish reasons, some people want to live near the water and pay little or no taxes," he says. "Who wouldn't? But city government has to look out for all residents."

Larry Morandi, environmental program director for the National Conference of State Legislatures, says cities are using eminent domain to address financial problems. "They are taking property they don't believe is generating enough tax revenue and turning it over to a developer who will generate more taxes," he says.

To accomplish this, cities are pushing the legal limits of eminent domain. California City, Calif., declared vacant property in the Mojave Desert as "urbanized and blighted" so it could acquire land for a Hyundai auto testing facility.

Legislatures in 10 states this year are considering limits on the use of eminent domain that benefits private corporations, but the measures aren't likely to pass immediately. "It's a tough concept for legislators to understand," Morandi says. "It often takes several years for these types of laws to pass." The Arizona Legislature last year enacted similar limits."

The use of eminent domain has expanded for years, but the pendulum is swinging the other way now," says Scott Bullock, attorney at the Institute for Justice, a non-profit legal group in Washington, D.C., that is trying to establish precedents for limiting the practice.

Government at all levels has long used eminent domain to acquire land to build roads, schools, parks, hospitals and other projects of public benefit. The Constitution says private property can be taken for "public use" if the owner receives "just compensation." Courts have traditionally defined "public use" broadly. "Just compensation" usually means fair market value as determined by an appraiser.

Whether economic development justifies the use of eminent domain is at the heart of many disputes.

In a landmark case, Detroit cleared the ethnic Poletown neighborhood in 1981 for a General Motors luxury car plant. The city took 1,300 homes, 140 businesses, six churches and a hospital. The Michigan Supreme Court is considering whether to overturn the precedent in a current case that involves taking 1,300 acres near the Detroit airport for a business complex.

City planners say eminent domain is a crucial tool for restoring the economic health of cities and older suburbs. Older communities often need higher tax revenue and new attractions to remain vibrant."

Sometimes you have to acquire an old gas station or massage parlor to make way for a better use," says Jeffrey Finkle, president of the International Economic Development Council, an association of professionals involved in community development. "The community is often 100% behind these projects, and the problem may be one landowner who wants $1 million for a $400,000 project."

New York City used eminent domain to acquire land for a Pathmark supermarket on 125th Street in Harlem."Without eminent domain, that supermarket never would have happened," says Orlando Artze, program vice president of the Local Initiatives Support Coalition, a national non-profit corporation that helps revitalize urban neighborhoods.

Harlem's Pathmark store has brought the neighborhood 100 jobs, lower food prices and the convenience of not having to travel 40 blocks to shop, Artze says. But he and other urban planners fears that aggressive use of eminent domain could backfire. "If it's overused, we run the risk of legislatures and courts becoming skeptical -- and that would be bad news for people who care about inner cities," he says.

In Florida, Riviera Beach, a city of about 30,000 people, wants to redevelop 800 acres along its waterfront and U.S. Highway 1 with luxury housing, yachts and upscale shops.

The mayor says the project will increase the assessed value of the property from less than $80 million to as much as $2 billion. The added tax revenue will finance better roads, new schools and safe streets, Brown says. "We will eliminate poverty in Riviera Beach."

But Herman McCray, a restaurant owner and former city councilman, says razing whole neighborhoods is too great a price to pay. "Things should be done in moderation," he says.

Rene Corie's waterfront view may soon be gone. Across the street, a lot has been cleared for high-rise condos. The developer plans to build an 8-foot-high wall around the complex. "They are taking what I love," she says.

The mayor sees it differently: "The people who live on the water are cheating the poorest members of our community."

Eminent domain rulings in courts
Recent court cases that have limited government power to confiscate private property:

* The Colorado Supreme Court on March 1 rejected a Denver suburb's attempt to take a private lake for a new Wal-Mart.

* The Arizona Court of Appeals ruled in October that the city of Mesa couldn't take a brake-repair shop so an Ace hardware store could expand.

* The Illinois Supreme Court ruled in 2002 that a local government could not take a privately owned auto scrap yard and give it to an auto racetrack for a parking lot.

But property rights advocates aren't winning every case. The Connecticut Supreme Court ruled on March 3 that a private, non-profit corporation, which had been given eminent domain authority by the city, could take 15 riverfront homes in New London and turn the land over to a developer. Opponents plan to appeal the case to the U.S. Supreme Court, which has not ruled on whether economic development is a legitimate reason for government to take property.

© Copyright 2004 USA TODAY, a division of Gannett Co. Inc.

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