Property rights ruling not open and shut

Published 12:00 am Sunday, June 26, 2005

Cities have always used eminent domain to acquire private property for roads, schools and other public uses.

But the line that defines &uot;public use&uot; blurred somewhat on Thursday when the Supreme Court issued a 5-4 ruling that allows local governments to seize people’s homes and businesses for private economic development that will benefit the community.

The ruling represented a defeat for some New London, Conn., residents whose homes are slated for destruction to make room for an office complex. They argued that cities have no right to take their land except for projects with a clear public use or to revitalize blighted areas.

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Justice John Paul Stevens, who wrote for the majority, said the city should be able to take property to make way for projects, such as shopping malls and hotels, so long as they will &uot;provide appreciable…economic development…benefits to the community, including – but by no means limited to – new jobs and increased tax revenue.&uot;

Lower courts had been divided on the issue, with many allowing a taking only if it eliminates blight.

Justice Sandra Day O’Connor, who has been a key swing vote on many cases before the court, issued a stinging dissent. She argued that cities should not have unlimited authority to uproot families, even if they are provided compensation, simply to accommodate wealthy developers.

&uot;Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random,&uot; O’Connor wrote. &uot;The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.&uot;

Last week’s decision was fraught with huge implications for a country with many areas, particularly the rapidly growing urban and suburban areas, facing countervailing pressures of development and property ownership rights.

Suffolk – the state’s fastest growing city – has flexed its eminent domain muscle several times in recent years, most recently in its quest to acquire property for its $10 million Fairgrounds urban revitalization project.

Working through the Suffolk Redevelopment and Housing Authority, the city is still in the process of buying up parcels in the blighted East Washington Street area for its massive project. Although most property owners are willing sellers, the city has used eminent domain on several occasions for the project.

The court’s ruling will mean little change in Suffolk, where eminent domain has never been used solely for economic development purposes, said City Attorney C. Edward Roettger.

Nonetheless, its potential implication is raising red flags for some local attorneys and city and state leaders.

Joseph Waldo, a Norfolk attorney whose firm specializes in condemnation cases, said he has received calls from across Virginia since the ruling was handed down.

&uot;This could have far-reaching implications for localities in Virginia,&uot; Waldo said. &uot;This gives cities the legal green light they need to easily favor one business over another.

&uot;…This is the shot heard around the world for property owners,&uot; said Waldo. &uot;It

has galvanized support for property rights…that so many people just take for granted.&uot;

Homeowners and small business owners are the most vulnerable under the court’s ruling, he added.

The state, anticipating the court’s decision, has established the Virginia Housing Commission to study the ruling’s impact on eminent domain issues in the state, Waldo said. He anticipates the General Assembly

will hand down legislation to help protect property owners.

That is likely to happen, said state Del. S. Chris Jones, R-Suffolk.

&uot;This is cause for concern in my mind,&uot; he said. &uot;…I think local government should only use eminent domain…when there is a clear, convincing reason for taking property for public use.

&uot;Anytime you have a ruling of this magnitude, it takes several weeks to determine the impact it will have on state laws,&uot;

he said.

&uot;The commission will have legal scholars look at the ruling and tell us (state lawmakers) if there is any action we need to take to ensure that private property rights are not further eroded in Virginia.&uot;

That comes as good news to realtor and Councilwoman Linda T. Johnson.

&uot;I think eminent domain is something that needs to be used very cautiously,&uot; she said.

&uot;I have grave concerns about the court’s decision.

&uot;Private property rights are one of the biggest things this country has stood for. I have grave concerns that this decision leaves too much control in too few hands.&uot;

Despite the federal court’s ruling, downtown developer Mickey Garcia doesn’t believe the public will let localities get away with abusing their eminent domain powers.

&uot;I think if it starts looking that way to the public, some politicians will lose their jobs,&uot; he said. &uot;I don’t think the public will stand for it.

&uot;I personally think eminent domain is like a silver bullet,&uot; said Garcia. &uot;It should not be used unless it’s absolutely necessary.&uot;