FEATURE ARTICLE, JUNE 2006

THE FINE LINE OF EMINENT DOMAIN
When it comes to balancing interests in redevelopment projects, confusion is eminent.
James S. Ettelson

One year after the Kelo vs. City of New London case, politicians and the populace continue to struggle with eminent domain as decision-making power is falling to the state and local level.

Since the U.S. Supreme Court promulgated on the issue of eminent domain in the Kelo vs. New London case and we are still no closer to a clear right or wrong regarding most eminent domain issues. In this well-publicized case, the high court found in favor of the City of New London versus a group of seven land-owners. With a 5-4 decision, the high court provided “strong affirmation” that state and local governments had the right to compel private land owners to sell their property if public officials believed it would benefit the public good.

The decision has had far reaching effects across the country, and especially in the northeastern United States, where urban renewal projects, brownfield redevelopment and historic property debates are particularly prevalent. Quite simply, Kelo vs. New London has influenced the majority of the eminent domain cases and debates throughout the country. Eminent domain has since turned into a virtual four-letter word in real estate development, urban planning, and state and municipal governments. One year later, we are no closer to clearly defining the boundaries of this issue or how to balance properly private property rights versus the greater good of our communities.    

No Clear Answers

The boundaries that define eminent domain remain fuzzy. Congress, local legislators, citizens, local interest groups and local business authorities all want economic redevelopment and growth. However, the problem is reaching an agreement that pleases all parties involved. Part of the problem is the nebulous nature of the definitions that help determine eminent domain cases. “Blight” is a prime example of a word whose meaning is relative to the situation and difficult to define. Leaving terms like “blight” not clearly defined is almost, by design, giving discretion to decision makers on a state and local level.

Pennsylvania sought to remedy this issue with the approval of PA Senate Bill 881 by the Pennsylvania State Legislature on December 7, 2005. While the legislation ultimately did not pass, it illustrates how action is being taken on eminent domain at the state and local level. The definitions and restrictions set forth in PA Senate Bill 881 would have provided for such specific and restrictive definitions of blight, so that even a boarded up tenement in a row of abandoned homes could be protected, as long as the owners could show it was occupied and rented.

The legislation in Pennsylvania is characteristic of a trend taking shape across the country in more than 13 states since Kelo was decided. In 2006, Alabama, Delaware, Ohio, Texas and Michigan have either passed legislation limiting the government’s use of eminent domain, or, in Michigan’s case, gone as far as passing a state constitutional amendment limiting its use.  In Delaware, the enacted legislation “restricts the use of eminent domain by the state or a political subdivision to a recognized public use.” Again, the intention here is honorable, but how is “public use” to be defined?  Who makes that determination, and is it in the best interest of the community at large?

More and more often, we are seeing debates taking place at the state and local government level, but not at the federal level. Why? Quite simply, each case is so unique that only those familiar with the challenges and needs of a particular area are suited to make the decisions. The blight of the inner city is quite different from the blight of an affluent suburb, but depending on the location, both are potential targets for redevelopment. Currently, the rush to define and legislate such terms is slowing at the state and local level as bills that start out with bipartisan support are finding it difficult to navigate the bureaucracy surrounding this issue.  

Less Right or Left, More Right or Wrong

The interesting part of the eminent domain debate is that it has crossed party lines, but has no clear support from either party. Proponents on the left side of the debate point to the evils of corporate greed, and those that favor the right side note the evils of big government’s intrusion on property rights. The reality is that the government needs to utilize the right of eminent domain to push economic and urban redevelopment efforts that benefit the community as a whole. Unfortunately, some private land owners may have to pay the price.  Economic development and urban revitalization projects extend far beyond better roads and bridges. The government needs to have several options to make the right choices for its communities. Certain projects, such as the one in the New London case, bring economic growth to a community; thus, the rights of a few landowners have to be weighed against the future economic vitality of cities, towns and municipalities.

What’s the Solution?

Appealing directly to those affected is the best way to make the right choices. Redevelopment and economic revitalization cannot simply be halted because a long-used tool of the government has become a political hot potato. As definitions and legislation remain in holding patterns, the public needs to be convinced, on a situation-by-situation basis, that each project has an element of public good to it and will serve the interests of the community as a whole.  On the other hand, the rights of private landowners need to be considered and protected as well. Fair and just compensation must be ensured, and alternatives should be considered. 

James Ettelson is a partner with law firm Thorp Reed & Armstrong.

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