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Eminent domain and private gain

A report claims that 10,000 properties have been seized by cities for private developers.

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In the early 1950s, a landmark case changed that. Washington, D.C., wanted to redevelop a rundown part of town. So it declared eminent domain and condemned the property by arguing that it constituted a public use by getting rid of the "blighted" area. The Supreme Court upheld the notion that it's a public good to get rid of blight, but made no determination one way or the other on the appropriateness of handing the property to private developers.

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"The Supreme Court gave 'public use' definition by saying it had to be of public purpose," says Veronique Pluviose-Fenton, an attorney with National League of Cities. "Redeveloping brown fields can be seen as having a public use because it gets rid of an environmental hazard."

It wasn't until the booming 1990s - when real estate prices soared - that the practice of condemning property for private development really took off.

According to the Institute for Justice report, local governments went from condemning blighted areas to applying the practice to rundown neighborhoods. Then it began to be condemn properties in areas that looked just fine.

In Lakewood, Ohio, for instance, a whole neighborhood of colonial homes was recently deemed "blighted" because the backyards were too small and the homes didn't have two-car garages. The city is turning the property over to private developers to build upscale condominiums and retail space.

"Things have gotten worse as the word spread among businesses that they can acquire land without having to go through a bidding process," says Gideon Kanner, a professor emeritus at Loyola Law School in Los Angeles and expert on the issue of eminent domain. "They can overcome opposition and force their way into communities that don't want them."

The National League of Cities' Ms. Pluviose-Fenton wouldn't comment on any individual case. But she admits there have been abuses. But in general, she insists the power of eminent domain is used responsibly and that the courts are there to act as a check and balance.

"I think local governments are keenly aware that that kind of abuse gets the attention of people in Washington who are, at a moments notice, ready to pass legislation that would restrict local authority."

Lawmakers in New York State are considering a bill that would at least require cities and towns to notify people like Mr. Brody that they're taking their land so that they can at least mount a legal fight.

Brody had wanted to challenge the city's designation of the street as "blighted." Just a few years earlier, it had spent a million dollars putting in new roads, underground wires, and quaint 19th street lamps. It had assessed him almost $60,000 for the upgrade. The street had a thriving, eclectic mix of antique shops, Latin restaurants and commercial space when it was condemned.

Several property owners, in addition to Brody, are challenging the city. But so far have had little luck with the local courts. "I've never, never seen anything like this," says Mike Rikon, an eminent domain attorney with 33 years experience who is representing several Port Chester landowners. "Since the beginning you could open the book and go down chapter by chapter and point out the violations of the law."

Anthony Cerreto, village attorney, wouldn't comment because the matter is in litigation.

Bill Brody has taken the case to federal court. A hearing is scheduled on June 2nd.

"We have to get the legislative and judicial branches to revisit this takings issue so it's a little more friendly to the people," he says. "Because that's what the laws are supposed to be there for - the people not the government."