November 23, 2014

Eminent Domain

A State of Discontent

A Supreme Court ruling on property rights stirs demands for tighter rules in Florida.

Neil Skene | 12/1/2005

"It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled... There is nothing in the Fifth Amendment that stands in the way."
-- Justice William O. Douglas, Berman v. Parker, 1954

Ah, the super-liberal William O. Douglas, patron saint of economic redevelopment.

For half a century, local governments and unelected redevelopment authorities have been using eminent domain, or the threat of it, to muscle residents out of their homes and businesses in the name of redevelopment and higher property values. The old structures typically are razed, lots are assembled for larger-scale development and the new uses produce more property-tax revenue and economic activity. It used to be called urban renewal, until the federal government got tired of urban money pits and cut off the grants. It is now "community redevelopment."

While newcomers benefit from all the subsidy and encouragement, old residents re-establish their lives elsewhere. So do the small businesses whose customers are now dispersed and whose reputations and cash flow must be rebuilt. For this the government offers no compensation. The Constitution may require "full compensation" when property is taken, but courts say that means merely property value, not necessarily business value or inconvenience.

It took a U.S. Supreme Court case from Connecticut last June to stir dissatisfaction with this state of affairs in Florida. The case, Kelo v. Town of New London, started with seven holdout owners of 15 parcels out of 115 targeted for redevelopment near the Long Island Sound waterfront. One owner had been born in her house in 1918, and her son still lived next door. Another owner, Susette Kelo, had moved in recently, done extensive fix-ups and liked her lower-cost waterfront. These weren't blighted places, just inconvenient ones. New London wanted to replace them with a familiar waterfront: A museum, more parking, an "urban village" of shops and restaurants, a marina, a boardwalk.

By a 5-4 vote, the Supreme Court said the Fifth Amendment of the U.S. Constitution, which prohibits taking property "for public use without just compensation," does not bar a local government from condemning land for "economic development" and turning it over to private developers.

The Kelo decision was greeted with a rumble of discontent -- from conservatives and landowners who object to a wide range of environmental and land-use constraints on "property rights," and from liberals and urbanites who support neighborhood preservation and oppose forced evictions. For them, as for Justice Sandra Day O'Connor in her dissent, it's one thing to take property for a public use like a road or a school or even a private utility, but quite another to take it for a shopping center or offices.

In Florida, Attorney General Charlie Crist initially said Kelo didn't really affect Florida because eminent domain can be used for redevelopment only in cases of "slum or blight."

That was technically true, but it wasn't the whole picture. Florida's definition of "blight" is so diluted that it amounts to virtually no standard at all -- largely because of changes passed by the Legislature in 2002 and signed by Gov. Jeb Bush.

"Kelo didn't create any problems for Florida at all," says Frank Schnidman, senior fellow at Florida Atlantic University's Center for Urban and Environmental Solutions. "It is the actions of the Florida Legislature that created the current problems." Schnidman filed an amicus brief in Kelo seeking a higher constitutional standard for use of eminent domain.

"We've seen... 15 years of rubber band stretching," says Andrew Brigham, whose Brigham Moore law firm represents property owners in eminent-domain proceedings. Wade L. Hopping, one of the state's pre-eminent lawyer-lobbyists in development and growth management, says Florida is now functionally equivalent to Connecticut. The two are among a number of lawyers who have urged House and Senate committees to draft tighter laws as well as a state constitutional amendment to protect property owners.

It's worth noting, cynically, that a constitutional amendment would give legislators, who created the Swiss-cheese standards in 2002 and could readily fix them, a chance to champion "property rights" during their 2006 campaigns.

The Legislature is now clearly moving toward restrictions. House Speaker Allan Bense created a special House committee chaired by his designated successor, Republican Rep. Marco Rubio of Miami. The Senate Judiciary Committee also took up the issue.

As for Bush, he "feels eminent domain should be reserved for projects of vital public importance such as roadways or environmental restoration," says spokesman Russell Schweiss. "He does not feel that it is appropriate to take people's homes solely for redevelopment purposes."

Crist, running for governor, also has enlisted in the forces of change. Among several proposals, he would prohibit eminent domain in redevelopment except for "dilapidated and deteriorated"
properties.

The other side
There is, of course, another side to all this -- the side of the cities and counties that thrive on redevelopment projects.

"We hope the Legislature will take a very measured approach to it," says John Thomas, head of legislative and public affairs at the Florida League of Cities. "We don't believe they have to make wholesale changes." Cities have to "maintain quality of life for their citizens, including getting rid of slum and blight" through redevelopment. Assembling all the parcels is difficult. As for reselling to private developers, "why is that such a bad thing?" Thomas wonders.

Douglas J. Sale of the Panama City redevelopment agency told legislators that cities need eminent domain to deal with "one or two holdouts" who could block a redevelopment project. But perhaps, he said, eminent domain might be used only for parcels "critical" to a project.

In particular, critics of the Kelo decision have vilified a $1.25-billion redevelopment project in Riviera Beach in Palm Beach County. The use of eminent domain there could displace more than 5,000. But Floyd Johnson, head of the city's redevelopment agency, said Riviera Beach "should be the poster child for being proactive." The city is providing additional compensation above legal standards, including relocation services and various "intangibles," Johnson says. It is also providing assistance for renters and giving as many residents and businesses as possible a chance to move back into the redeveloped area.

Compensation hasn't gotten much attention in the legislative debate, even though Republicans logically might favor it since it relies on market forces such as higher prices and better terms instead of eminent domain to induce sellers into "voluntary" agreements.

And then there is the position of Justice Clarence Thomas that a taking should be allowed only for actual "public use" of the property. Taking people's property is not just another economic decision, like subsidizing a new business, Thomas said, but is an intrusion on individual citizens who are being required to sacrifice for the public good.

The Legislature is unlikely to go there, but Thomas' dissent does illustrate the peculiar place of Kelo in the public debate over "judicial activism." The Kelo majority was deferential to a political decision. The dissenters, who were the more conservative members of the court, were the judicial activists pressing for constitutional restraints. So we not only have William O. Douglas as the patron saint of economic revival, but also Clarence Thomas as a judicial activist.

That's a good measure of the political, legal and social complexity of this issue.

Tags: Politics & Law, Around Florida, Government/Politics & Law

Digital Access

DIRECT DIGITAL ACCESS
Add digital to your current subscription, purchase a single ditgital issue, or start a new subscription to Florida Trend.

TABLE OF CONTENTS
An overview of the features and articles in this month's issue of Florida Trend.

ACCESS THIS ISSUE »

Florida Business News

Florida Trend Video Pick

What It Will Feel Like To Ride The World's Tallest Roller Coaster
What It Will Feel Like To Ride The World's Tallest Roller Coaster

Developers David and Joshua Wallack are set to build a 570-foot vertical coaster, which will be the tallest in the world, in Orlando.


Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

Did President Obama overstep his executive authority by enacting immigration reform?

  • Yes. He should have gone through Congress.
  • Unsure
  • No, other presidents have taken similar action, and something had to be done.

See Results

Ballot Box
Subscribe