April 24, 2014

Eminent Domain

An Odd Twist

Backlash to the Kelo case may come too late for some property owners in Charlotte County.

Pat Dunnigan | 10/1/2005
DREAM DEFERRED: Scott Huss says he was assured his property, located in a redevelopment district, was safe.
This summer's Supreme Court decision upholding a Connecticut law that allows local governments to seize private property for economic development has generated lots of "could it happen here?" discussions throughout the state. But for Scott Huss and a group of Charlotte County property owners, those discussions come too late.

Three years ago, Huss fulfilled a longtime dream, building a three-bedroom home on a three-acre wooded lot in Port Charlotte that he'd bought years earlier. The location was perfect. His mother's home was next door. Despite its rural surroundings, the property is within a short drive of schools, shopping and everything he needs for his three young children.

"It's ideal," says Huss, 47.

He'd had reservations about building because his property was within a redevelopment district where county officials were trying to assemble 1,100 acres for an upscale mixed-used development to be built by Lennar Corp. But a county commissioner assured him that his home was safe.

Last year, those assurances fell apart. The county began acquiring homes and vacant lots where Huss lives -- known as the Port Charlotte Murdock Village Community Redevelopment District.

Unlike Connecticut, Florida has no law allowing the government to seize property strictly for economic development purposes, but Florida does have laws that allow the government to take land it deems "blighted."

"Kelo (ruling) rubbed a lot of people the wrong way, but Florida law is not the same."
-- Charlotte County attorney Janette KnowltonInitially, the county offered Huss $370,000 for his home and property. It later raised its offer to $530,000, which Huss says still isn't enough to rebuild on a similarly sized lot. But Huss doesn't see much point in a drawn-out legal battle. "I've lost the property," Huss says. "It's gone."

So far, the courts have thrown no obstacles in the county's way. A trial court judge has ruled for the county in every challenge so far, according to Huss' attorney. One group of homeowners has joined in an appeal that is pending in the 2nd District Court of Appeal.

Lawyers for the Charlotte County property owners say the government's determination that their land is "blighted" is little more than a pretense for the county's economic ambitions. Among other conditions of blight, the lawyers say, county officials cited poorly maintained roads -- even though the county is responsible for allowing the roads to deteriorate, even as it has collected assessments from property owners to maintain them.

"The private developer is really calling the eminent domain shots," a lawyer for the property owners argues in an appellate pleading.

Charlotte County attorney Janette Knowlton says that comparisons between the Supreme Court case (Kelo v. New London) and the Murdock Village case are off point.

"Kelo rubbed a lot of people the wrong way, but Florida law is not the same," she says. Knowlton says the 2,679 Murdock plots, 97% of which were vacant, had been abandoned for decades. Water, sewer and roads had badly deteriorated, and there was no practical way for a developer to acquire the parcels one at a time. "It would take them forever," she says. "The way the land values are increasing every day it would not be economically feasible." The project, she says, is a perfect example of why government needs eminent domain powers.

The county's real estate services director, Paul Payette, says the vast majority of owners sold their property willingly. Beginning in 2003, the county began paying about $2,500 a lot to acquire the land. As property values rose, the price paid rose to around $30,000 in some cases, he says. The prices paid represent up to 20% over market value, Payette says.

Too late, but...
While the debate over property rights spurred by the Kelo ruling may be too late for the Charlotte County property owners, private rights advocates say the ruling has brought welcome attention to the issue of government abuse of eminent domain powers.

Valerie Fernandez, Coral Gables managing attorney for the Pacific Legal Foundation, a non-profit group that litigates private property issues across the country, says the Kelo decision, ironically, could turn out to be "one of the best things that has happened" to the property rights movement.

Within days of the opinion's release, Florida House Speaker Allan Bense announced the formation of a legislative committee to study the issue. When eminent domain is "used in a situation involving private companies, with an inherent profit motive, people should be extremely skeptical," Bense wrote in a press release.

Another Florida legislator has introduced a bill to amend the state constitution to protect private property rights. Tampa attorney Cary Gaylord, whose law firm, Gaylord, Merlin, Ludovici, Diaz and Bain, represents property owners in eminent domain cases, says it won't be easy to roll back the eminent domain powers contained in the state's community redevelopment act over the objections of the big homebuilders. Private developers working in specially created redevelopment districts reap the benefits of both cheaply acquired land and tax money for infrastructure improvements.

"I think the people who make a lot of money off this are going to fight very hard to keep the Legislature from reining this in," says Gaylord.

State Rep. Marco Rubio, R-Miami, who chairs the Speaker's committee, is careful not to promise too much. The committee's role, he says, will be to produce an "intellectually and legally based report" on the status of Florida property rights law and not to propose any sweeping legislation.

"We don't want to have a knee-jerk reaction to this," he says.

But, says Gaylord, without some kind of relief, Florida property owners will be left fairly defenseless.

A proliferation of community redevelopment districts throughout the state -- there are about 200 by one count -- the increasingly broad definition of "blighted," and the Supreme Court's endorsement of takings for economic development leave Florida property owners with "absolutely no safety or constitutional protection," Gaylord says.

Meanwhile, Ellen Neil, a Boca Grande lawyer who represents Huss and a group of property owners who are challenging the county's finding of "blight," says many of her clients are out-of-state residents who had planned to build on their lots after retirement. "Now their plans are just being ruined," she says.

Tags: Politics & Law, Southwest, Government/Politics & Law

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