By JODI SUMMERS
Call us at (310) 458-7737 It has been a year since the rights of American land owners were forever changed by the Supreme Court eminent domain decision in Kelo vs. city of New London. The highest court in our land ruled that local governments could seize individuals’ homes and businesses against the property owner’s will to make way for shopping malls and other private economic development.
In a 5-4 ruling, the court said government agencies could take private property for economic development, and even transfer it to another private party. The ruling upheld New London’s right to seize 15 properties from private owners and to transfer the real estate to private developers for later hotel, office and conference-center projects. None of the owners wanted to sell at any price. None of the houses were considered to be blighted or in bad repair. None of the real estate will be used or owned by the city itself.
“With the exception of the last year or so, redevelopment agencies generously used its power of eminent domain to condemn property for private developers (whose project met the basic criteria of state law requirements... ‘for pubic purposes...’ especially those developers with relationships with the local elected official,” noted Del Richardson, founder of Del Richardson and Associates relocation services.
“Over the last year or so, it seems that redevelopment agencies are hesitant to use its power of eminent domain, primarily because the local elected officials are getting a lot of ‘heat’ from their constituents, even President Bush stated that he will not allow federal dollars to be used for private development in redevelopment project areas, but will focus federal dollars for eminent domain projects that are for transportation-related purposes. Many of our clients have warned us that projects that were online maybe on hold indefinitely.”
This is the scenario around the country. In the wake of the Kelo vs. city of New London decision, hundreds of legislative proposals to counter Kelo have been introduced in more than 40 states. As many as a dozen states have enacted new limitations on government powers. Most of those new state laws prohibit the use of eminent domain powers to further economic development or increase the tax base, while others prohibit condemnation of property that isn’t deemed to be “blighted.”
In California, a Republican-supported initiative appears to be headed toward a popular vote on the November ballot. Known as Senate Constitutional Amendment 15, it would amend the state constitution to declare that private property “may be taken or damaged only for a stated public use. The measure also would require that the property be owned and occupied by the condemnor, except as specified, and used only for the stated public use.”
A Democrat-backed proposal is pending in the legislature. Assembly Bill 590 provides that while eminent domain may be exercised to acquire property only for a public use,“in the exercise of eminent domain, ‘public use’ does not include the taking or damaging of property for private use, including, but not limited to, the condemnation of non-blighted property for private business development.”
“The city of Long Beach stated that some of its projects will be canceled because of the politics of eminent domain. I believe that the city of Laguna adopted a no eminent domain policy,” Richardson said.
Legislators in several other states also have pitched bills to limit municipalities’ eminent domain authority. Alabama Gov. Bob Riley signed a state law that strengthens private property rights by prohibiting state or local governments from “condemning private property in non-blighted areas for the purpose of retail, commercial, industrial, office or residential development.”
“A property rights revolt is sweeping the nation and Alabama is leading it,” Riley said.
In New York, the state bar association has called for a commission to study proposed changes to the state’s eminent domain laws.
In a thoroughly bureaucratic move, A. Vincent Buzard, president of the state bar association, said “The law in this area is too complicated to amend piece meal. Resolving issues involving eminent domain will best be accomplished through study by a temporary state commission on eminent domain to assure that all viewpoints are represented and that all the issues involved in this area of the law receive careful consideration.”
Legislation that’s pending in Illinois and has the support of the state realtors association attempts to strike a balance. Municipalities would be forced to prove an area was blighted before they could compel owners to sell their property for private development projects. Government seizures of property for private development would require a written agreement with a developer or an established plan to eliminate blight and a written agreement or deed restriction that would ensure the property was used for the stated purpose. Government entities would be required to pay relocation costs for displaced residents consistent with federal law in all eminent domain actions. And attorney’s fees would be awarded on the basis of the net benefit gained by property owners who made a good faith settlement offer and successfully challenged the government’s last and best offer for their property.
In Wisconsin, a bill strengthening property rights is awaiting finalization in the state legislature. Wisconsin’s Assembly Bill 657 would prohibit the condemnation of property that is not blighted, if the condemnor intends to convey or lease the acquired property to a private entity.
Locally, we have our own set of rules for eminent domain. The Santa Monica Redevelopment Agency was established on Aug. 13, 1957. They state they work “in partnership with the community,” striving “to improve a neighborhood’s physical, economic and social environment through redevelopment activities.”
Their first quest was the Ocean Park Redevelopment Project in April 1958 — a plan to redevelop 33 acres in the southwest corner of the city.
In March 1972, the Santa Monica City Council decided to begin an urban renewal project to revitalize the two blocks between Broadway and Colorado Avenue and Second and Fourth streets in downtown Santa Monica. The city and the developers called it a regional shopping center. We call it Santa Monica Place.
Originally published in the Santa Monica Daily Press print edition on July 26, 2006. Read the original PDF.