National City, Calif., may have expected an easy knockout when it sought the authority to condemn a gym that houses a boxing program for at-risk kids—just so a developer can build luxury condos on that site. But city officials never expected that the Institute for Justice would step into the gym’s corner to defend its rights.
The Community Youth Athletic Center (CYAC) was founded in 1991 by Carlos Barragan and his son, Carlos Jr. The father and son were tired of seeing promising young men lost to the streets and prisons. So these construction workers hung a punching bag in their backyard and began to use boxing to teach young people discipline and self-respect.
The Barragans were soon overrun with kids shadowboxing, jumping rope and dreaming of becoming the next Rocky. Their backyard, and later a two-car garage they rented, became a safe haven from abusive homes and the destructive gang subculture. The Barragans also attracted a legion of volunteers, including law enforcement officers.
Then, in 2001, through generous private donations, the Barragans bought a modest building in National City and christened their program, now a non-profit, the Community Youth Athletic Center. Every day after school, dozens of kids participate in the gym’s all-volunteer athletic, tutoring and mentoring programs, and the CYAC has the champions and college graduates to prove that what they do works. Indeed, the CYAC has such a stellar record of reforming the toughest kids that judges regularly sentence young offenders to the gym as a condition of probation.
But now the CYAC and its kids are taking on their toughest opponent yet: City Hall.
National City intends to seize the gym through eminent domain so developer Jim Beauchamp can build high-rise, high-end condos. To make this happen, and to enable the city to transfer other private property to big business, National City is preparing to once again declare “blighted” hundreds of commercial properties within a decades-old blight zone that covers two-thirds of the entire city. National City wants to renew its blight designation because doing so perpetuates a cash bonanza for the powerful. The blight designation unleashes the power of eminent domain, enabling National City to take low-tax-yielding small businesses and give that land to developers who promise to build high-tax-yielding properties, such as condos and big-box stores.
Through a scheme called “tax increment financing,” a blight designation also allows a government redevelopment agency to siphon off county property taxes that would otherwise go to services like police and fire protection. These perverse financial incentives have given rise in California to an insatiable redevelopment machine. There are more than 750 blight zones statewide in which the abuse of eminent domain is rampant. The state’s 400 or so government redevelopment agencies consume all of the property taxes on more than $380 billion worth of land, and they are more than $60 billion in debt.
This big money has tainted National City’s redevelopment. As any visitor can attest, National City’s sprawling blight zone is remarkable for its lack of blight: the streets are lined with lovingly tended homes and thriving, though often humble, small businesses. Rather than embrace its grassroots entrepreneurs, however, National City plans to demolish them—and their dreams—in favor of retail mega-stores and upscale condos.
Like serial eminent domain abusers everywhere, National City insists that it only uses condemnation as a “last resort.” This, of course, is nonsense. Literally within days of agreeing in 2005 to let the developer build his condos on the CYAC’s property (something the CYAC knew nothing about), National City and the developer’s lawyers began a tag-team campaign of condemnation threat letters.
The National City redevelopment machine, as elsewhere in California, is out of control because it lacks an effective constitutional brake. Though both the California and U.S. constitutions permit the government to seize property only for a “public use,” which traditionally meant projects the public would own and use, such as a post office, courts these days often look the other way when eminent domain is used to “remedy” bogus blight or even when cities admit that all they are trying to do is bring in wealthy property owners who can pay more taxes.
To restore constitutional protection for property rights for all Californians, IJ and the CYAC have launched a challenge to the entire process by which National City is re-declaring vast swaths of the city “blighted” yet again. We decided to challenge the blight-declaring process itself because under California law you must challenge a blight designation when it is made, not when they come to take your property, which may not be until years later. If you wait until they come for your property, you are almost defenseless because the blight designation is presumed to be valid, and for generations courts have held that blight is a legitimate reason to take property.
Significantly, our challenge is not only about the right to keep your property if the only justifications for eminent domain are bogus blight and economic development. Our strategic litigation also challenges California’s ridiculous notice procedures (National City gave us only a few days to review key documents) and the destructive incentives of tax increment financing. We will also apply statutorily created property rights that the California Legislature enacted as part of post-Kelo reform. By attacking the redevelopment machine from all sides, we intend to create comprehensive constitutional and statutory protections for California property owners.
By fighting eminent domain abuse, the CYAC is doing what it teaches its kids every day: stand up for what is right. IJ is proud to stand with them.
Jeff Rowes is an IJ staff attorney.