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For the public good

By Eric Miller
web posted August 6, 2001

The power of eminent domain remains the vehicle that makes the city able continually not to remake, but to destroy, itself, in order to reach political rather than market, cultural or artistic goals. In many instances, using eminent domain disrupts businesses and scatters people in the name of getting rid of blight.

Once confined to making private land available for transportation projects, parks or civic buildings, today the powers are often misused to remove a local business and replace it with a national chain.

Limiting the powers of eminent domain may be the only thing that can stop rarely successful developments like the never ending string of "Renaissance" and redevelopment schemes in Pittsburgh and other cities. Without these tyrannical powers, cities wanting to redevelop would have to work with small business owners, homeowners, tenants and others who are now too easy to sweep out of the way of "progress."

The legal principle of eminent domain has been used at least since colonial days to allow the government to obtain private land for public use. But increasingly, the private sector has become involved. The now failed Fifth-Forbes project in Pittsburgh, as well as another project there involving an expansion of a Heinz processing plant, used eminent domain to take private property not for public use, but for private use for public "benefit."

In fact, the Institute for Justice in Washington, D.C. sees the use of eminent domain in Pittsburgh as so out of hand it called the action to take property for Heinz a "misuse of government power," and said private property was being used as bargaining chips in corporate deals.

While this is nothing new--private land had been taken for public use by railroads throughout the nineteenth century--today no specific project with clear goals and a defined outcome is apparent when the powers of eminent domain are used. Since a 1954 Supreme Court decision, private property may be taken to remove "blight."

But just what is blight? Can a business district will almost full retail occupancy be considered blighted? Can a discount store be labeled as blighted so that an upscale chain can move in? Can a golf course constitute blight? Can a working factory be labeled as blighted so that another factory can raze the plant to build a new facility? Increasingly, the answer to these questions is yes.

In Las Vegas, some legislators and community activists recently opposed a new "development," not on the grounds of saving historic buildings, but on the grounds that the local government may have larger goals than removing blight. The group demanded that potential beneficiaries in "blight removal" schemes be named.

Nevada Assembly woman Chris Giunchigliani introduced legislation that would redirect five percent of redevelopment money away from commercial projects to be used for sidewalk repairs, street lights and other improvements, but according to the Las Vegas Sun, officials "came out in force" to object to redevelopment money being used for neighborhood blight.

The bill would also have required city councils to say why it is necessary to condemn someone's property and list what private parties may benefit if the city seizes private property through eminent domain.

After seeing a string of failed projects in downtown Las Vegas--the Minami Tower, the people mover and Bob Snow's Main Street Station--downtown merchants were presented with another proposal, an $84 million entertainment and retail complex. The developer, Atlanta-based World Entertainment Centers, acquired most of the property it needed for the project. But there was one property owner who refused to sell.

"Naturally, City Hall is considering using its power of eminent domain," the Las Vegas Review-Journal editorialized. "The city continues to cavalierly use the tactic to transfer property from one private owner to a more favored one." Continuing the criticism, the paper concluded that no matter how dazzling a project, "using eminent domain to serve the developer at the expense of other property owners would be an abuse of this awesome power."

Las Vegas seems rife with such battles. In another case, the Stratosphere Resort got the Las Vegas Redevelopment Agency to condemn a parking lot next to an inn so it could redevelop the site. But the inn had just spent $700,000 remodeling and knew the loss of the parking lot would destroy their business.

The inn took the city to court and won. It was unconstitutional, Judge Don Chairez ruled, to take one casino's land and give it to another casino. But the decision didn't save the inn or give the Stratosphere what it wanted. Instead, an undisclosed sum of money, "considerably more" than the original amount offered for the lot, was awarded to the inn.

According to local accounts, Deputy Attorney General Chuck Gardner, who represented the inn, concluded that eminent domain wasn't necessary to build the casino. "Redevelopment to me is just one more aspect of using public money, power and influence to help the big guys," Gardner told the Las Vegas Sun.

Another recent case in Pittsburgh put a local ministry up against a developer and K-Mart against Wal-Mart.

Petra Ministries had purchased the abandoned East Hills Shopping Center and planned to develop the site bringing in a K-Mart, a supermarket, housing recreational attractions as well as light industry. But Allegheny County and the Urban Redevelopment Authority had other ideas and filed to take the property through eminent domain and give it to the J.J. Gumberg Company, who wanted to bring in a Wal-Mart.

"It could only be arrogance and ill will that would prompt the county to move to condemn this property, take it from Operation Nehemiah for the purpose of giving it to J.J. Gumberg," Constance Calthorp of Nehemiah, an affiliate of Petra Ministries told the Pittsburgh Tribune-Review. Or in other words, rob from K-Mart to give to Wal-Mart.

Located near a large public housing complex, Petra Ministries' plans for the East Gate Mall were similar to those presented by the developer. Both would provide a retail store and both have the potential to create jobs for nearby residents. The differences being the grocery store, the housing, recreation and social service programs, the "local" aspect which would serve the nearby residents.

If the "market," which is in this case the ministries, can bring new life to the old shopping mall, why should the city, county or urban redevelopment authority use tax money to acquire the property and give it to a developer? With the mall contained on one lot, there isn't even a need to assemble parcels to make a site "attractive" to developers. It was ready for development, only not by a developer in favor with local officials.

A county spokesman answered the ministry's criticisms saying it felt the site should be developed "successfully." But how good is the track record of public-sponsored redevelopment? Some parcels taken by government agencies in mid-western cities have remained vacant for more than a decade after the owners were kicked out and the buildings razed. The power of eminent domain in this case and many others allows government organizations to over-step their bounds, bend to political influence and "take and give" property at little more than whim.

Should tax dollars be used to purchase the mall and issue a tax exemption to developer to bring in a Wal-Mart when a K-Mart would have been developed anyway without providing the large property with a tax exemption in a tax-starved area?

Without clear guidelines as to exactly what constitutes "blight," a clear outline of who stands to benefit, and to what degree, from development projects that require the use of eminent domain, it is sure to breed corruption.

The powers have allowed some companies, mostly large corporations, often to do business tax-free, and even be subsidized in heavily-taxed urban areas, while local businesses, organizations and developers have no recourse if their business is confiscated, relocated and taxed out of existence. ESR

Eric Miller is editor of www.newcolonist.com.

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