Victory Highlights Strength of Minnesota’s Eminent Domain Reforms

August 11, 2009

In the first test of the 2006 eminent domain reforms that Minnesota enacted after the infamous Kelo decision, the Institute for Justice Minnesota Chapter and its client, Advance Shoring Company, beat back efforts by the St. Paul Port Authority to condemn Advance’s property for private economic development.

After extensive advocacy in the court of public opinion by IJ-MN defending Advance’s property rights, the Port Authority—a municipal development agency whose mandate has grown well beyond regulating ports—announced on June 8 that it would not condemn 10 acres owned by Advance, a family-owned leasing company that has operated in St. Paul for nearly 50 years. The cranes, scaffolding and concrete-forming equipment that Advance leases have helped construct or restore such landmarks as the Cathedral of St. Paul. As IJ Staff Attorney and St. Paul resident Jason Adkins observed, “You cannot look at St. Paul’s skyline without seeing the contribution that this family business has made.”

The Port Authority’s decision not to condemn Advance’s property signals that the state’s 2006 reforms to its eminent domain laws have the strength to stop takings for economic development.

The U.S. Supreme Court’s 2005 Kelo decision upheld governmental power to take non-blighted property from owners and sell it to a private developer for so-called “economic development” under the federal Constitution. In the majority opinion, however, Justice John Paul Stevens emphasized “nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power.”

Responding to public outrage at the Kelo decision and lobbying by IJ and a broad coalition seeking reform, Minnesota accepted Justice Stevens’ invitation. Less than one year after the Court’s ruling, Gov. Tim Pawlenty signed reforms that included prohibiting takings for “economic development.”

In September 2008, seeking to test the limits of the new law, the Port Authority advised Advance that it planned to take Advance’s property so that the agency could redevelop it for an unspecified use. The Port Authority claimed that it was taking the land under one of the new permissible public uses—remediation of environmental contamination—but these environmental claims were clearly a pretext for prohibited economic development; Advance has long met all of the Minnesota Pollution Control Agency’s environmental directives.

Worse yet for the Port Authority, the evidence of pretext was made clear by the fact that Advance’s property has been part of a Port Authority redevelopment district for almost 20 years. The Port Authority’s own public statements stressed the project’s potential to create jobs and increase the city’s tax base. Its “jobs” mantra revealed the illegality of the taking.

Facing condemnation, Advance’s owners, employees and union representatives fought back. Working with the Institute for Justice, Advance fought the taking in the court of public opinion and before the city council, emphasizing, among other points, that the state’s reforms made the taking illegal. The positive media coverage and testimony contributed significantly to the Port Authority abandoning its condemnation plans.

IJ’s post-Kelo victory on behalf of Advance makes clear to every government entity and agency across the state, including the Port Authority, that the days when the government could threaten or actually use eminent domain for “economic development” are over. Property rights are no longer a small and threatened island in the Land of 10,000 Lakes; now they are terra firma for every property owner in the state.

Lee McGrath is the executive director of IJ’s Minnesota Chapter.

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