FloridaTrend.com, the Website for Florida Business

New Orlando Arena Pushes Limits of Eminent Domain Law

Rendering: Orlando Magic arena
Rendering: Orlando Magic arena

Eminent domain law, traditionally somewhat sedate, generated an earthquake in 2005 with the U.S. Supreme Court’s decision in the Kelo v. City of New London case. The court ruled that the city of New London could use eminent domain to take private land because the land was to be used for a “public use.” The Connecticut city’s “public use” involved forcing property owners to sell so that the city could turn the land over to a private developer planning new homes, a hotel, shops and office space.

The New Eminent Domain

The updated eminent domain law that then-Gov. Jeb Bush signed in May 2006 hasn’t affected a majority of the state’s eminent domain cases. As before, governments can use eminent domain for public uses, such as condemning land to build roads or government facilities, which amount to “90%” of the cases, says Richard Milian, a partner at Broad and Cassel who specializes in eminent domain. “What this prohibits,” he says, “is a government condemning land and then selling it to a Wal-Mart or a private marina.” Mary Solik, a partner at Foley & Lardner in Orlando, who also works in eminent domain, says the new statute has also taken away the ability of community redevelopment agencies to condemn blighted areas tabbed for redevelopment.

In the wake of the court’s ruling, scores of states, including Florida, approved legislation essentially reversing the decision. In Florida, the new eminent domain statute prohibits governments from taking private property from a person or entity and then leasing it or selling it to another.

The new statute came just in time for one family —and nearly derailed a major development project in downtown Orlando.

Looking for a site for a $480-million arena for the Orlando Magic, the city of Orlando purchased 10 acres in Parramore for $35.5 million. Smack in the middle of the site, however, were two adjoining lots owned by the Salter family that were situated on about a quarter of what was supposed to become the proposed arena’s basketball court. The family, which had owned the parcels for 60 years, didn’t want to sell — and didn’t think the city could force it to sell.

The family refused the city’s initial offer of $1.5-million. At one point, an offer also would have included free Magic tickets. There was even talk of a street being named after the family, but the Salters still wouldn’t budge.

The dispute began shaping up as the first major test of the state’s new eminent domain statute, says Richard Milian, a partner at Orlando’s Broad and Cassel who represented the family. As the eminent domain process moved along, both parties argued their side to a judge, who scheduled a December 2007 hearing to decide whether the city had a right to continue with eminent domain.

Milian expected the family to win, since the updated statute prohibits condemning land and then leasing it to private user, which in this case would have been the Orlando Magic.

Like its disputed property, the family found itself squeezed in the middle of a very public debate. “On one hand, they live in this community and they like the Orlando Magic and they didn’t want to be disruptive,” Milian says. “They liked Buddy Dyer, the mayor, and they didn’t want to be disruptive to him. There was also pressure because the city promised to hire minority contractors, and the project would have created jobs within their community. On the other side, there were people who were against the project and felt it was wrong for the city to try to force them to sell. They felt pressure from a lot of different angles.”

Shortly before the December hearing, the Salters finally decided to sell. The deal didn’t come with free basketball tickets or a Salter Boulevard, but it did include $8.4 million for the family’s third-of-an-acre property. “They always just wanted to be treated fairly,” Milian says. “When the compensation reached what they thought they could have made from developing the property themselves, that’s when they agreed to sell.”