Floodgates Open:
Tax-Hungry Governments & Land-Hungry Developers Rejoice in Green Light from U.S. Supreme Court
<>(June 29, 2005)
Washington, D.C.—Less
than one week after the U.S. Supreme Court’s decision in Kelo v. City
of New London upholding the use of eminent domain for private
development, the floodgates are opening to abuse.
Already, the ruling has emboldened governments and developers seeking to take property from home and small business owners.
The
following examples from newspapers across the country show that the
threat of condemnation to homes, small business, churches and other
property from government-forced private development projects is being
realized. These incidents are the tip of the iceberg. Thousands of
properties nationwide are facing the threat of eminent domain for
private development, and many more projects are in the planning
stages. In its first-ever nationwide study Public Power, Private Gain,
the Institute for Justice documented more than 10,000 instances of
threatened or actual condemnation for private development nationwide
from 1998 through 2002. The Institute for Justice will issue an
updated report later this year.
Cities' Actions Since Kelo
Links to News ArticlesHours
after the Kelo decision, officials in Freeport began legal filings to
seize some waterfront businesses (two seafood companies) to make way
for others (an $8 million private boat marina), according to the
Houston Chronicle.
Five property owners facing
condemnation for private development had asked Lake Zurich officials to
hold off until the Kelo decision. The Chicago Tribune reports that
City officials are now moving to condemn.
Two days
after the Kelo decision, Boston City Council President Michael Flaherty
called on the mayor of Boston to seize South Boston waterfront property
from unwilling sellers for a private development project. “Eminent
domain is one tool that the city can use,” Flaherty told the Boston
Globe.
“Arnold Mayor Mark Powell applauded the
decision,” reports the St. Louis Post-Dispatch. The City of Arnold
wants to raze 30 homes and 15 small businesses, including the Arnold
VFW, for a Lowe’s Home Improvement store and a strip mall—a $55 million
project for which developer THF Realty will receive $21 million in
tax-increment financing. Powell said that for “cash-strapped” cities
like Arnold, enticing commercial development is just as important as
other public improvements.
The City
of Baltimore is moving to acquire shops on the city’s west side for
private development. Ronald M. Kreitner, executive director of
Westside Renaissance, Inc., a private organization coordinating the
project with the city’s development corporation, told the Baltimore
Sun, “If there was any hesitation because of the Supreme Court case,
any question is removed, and we should expect to see things proceeding
in a timely fashion.”
Baltimore’s
redevelopment agency, the Baltimore Development Corp., is exercising
eminent domain to acquire more than 2,000 properties in East Baltimore
for a biotech park and new residences. BDC Executive Vice President
Andrew B. Frank told the Daily Record the Kelo decision “is very good
news. It means many of the projects on which we’ve been working for
the last several years can continue.”
Newark
officials want to raze 14 downtown acres in the Mulberry Street area to
build 2,000 upscale condo units and retail space. The Municipal
Council voted against the plan in 2003, but then reversed its decision
eight months later following re-election campaigns in which developers
donated thousands of dollars. Officials told the Associated Press that
the Mulberry Street project could have been killed if the U.S. Supreme
Court had sided with the homeowners in Kelo.
Save
Our Homes, a coalition of 200 residents in a Lodi trailer park targeted
by the City for private retail development and a senior-living
community, goes to court on July 18 to try to prevent a private
developer from taking their homes. Lodi Mayor Gary Paparozzi called
the Kelo ruling a “shot in the arm” for the town. He told the Bergen
County Record, “The trailer park is like a poster child for
redevelopment. That’s the best-case scenario for using eminent domain.”
Developer
Scott Wolstein has planned a $225 million residential and retail
development in the Flats district. Wolstein has most of the property
he needs, but is pleased that Kelo cleared the way for the City to
acquire land from any unwilling sellers. If eminent domain is
“necessary,” he told the Plain Dealer, “we think this makes it clear
that there won’t be any legal impediments.” Previously, city leaders
publicly supported Wolstein’s call for eminent domain.
The
South Florida Sun-Sentinel reports that Dania Beach City Manager Ivan
Pato “expressed joy” over the ruling in Kelo. Dania plans to buy a
block of properties for a private development project, and Pato said
the city will use eminent domain to oust unwilling sellers. “Unless we
expand the city’s tax base … our residents are facing rising taxes on
their property,” Pato said. “Redevelopment is the only way we will be
able to make ends meet.”
The Riverfront Development
Corp. is planning a massive, 5-mile development effort, including the
use of eminent domain to claim a four-block section from the current
owners for a mixed-use development. “[Kelo] definitely gives the city
more tools in its tool box for dealing with the legal issues
surrounding that piece of property,” RDC president Benny Lendermon told
the Commercial Appeal.
Broward
County officials yesterday cleared the way for new condo and retail
development in these three cities. Hollywood residents in the targeted
area fear their homes may now be taken for economic development
following the Kelo decision. Mayor Mara Giulianti said the City would
use eminent domain on a “case-by-case basis” to remove homeowners
unwilling to sell.
West Allis officials want to
“revitalize” the West Allis Towne Center, a shopping mall. If the
Supreme Court had ruled in favor of the homeowners in Kelo, officials
may not have been able to use eminent domain to claim the mall, West
Allis development director John Stibal told the Milwaukee Journal
Sentinel.