Floodgates Open

Matt Powers
Matt Powers · June 29, 2005

Washington, D.C.—Less than one week after the U.S. Supreme Court’s decision in Kelo v. City of New London upholding the use of eminent domain for private development, the floodgates are opening to abuse.

Already, the ruling has emboldened governments and developers seeking to take property from home and small business owners.

The following examples from newspapers across the country show that the threat of condemnation to homes, small business, churches and other property from government-forced private development projects is being realized.  These incidents are the tip of the iceberg.  Thousands of properties nationwide are facing the threat of eminent domain for private development, and many more projects are in the planning stages.  In its first-ever nationwide study Public Power, Private Gain, the Institute for Justice documented more than 10,000 instances of threatened or actual condemnation for private development nationwide from 1998 through 2002.  The Institute for Justice will issue an updated report later this year.

Freeport, Texas

Hours after the Kelo decision, officials in Freeport began legal filings to seize some waterfront businesses (two seafood companies) to make way for others (an $8 million private boat marina), according to the Houston Chronicle.

 Lake Zurich, Ill.

Five property owners facing condemnation for private development had asked Lake Zurich officials to hold off until the Kelo decision.  The Chicago Tribune reports that City officials are now moving to condemn.

Boston, Mass.

Two days after the Kelo decision, Boston City Council President Michael Flaherty called on the mayor of Boston to seize South Boston waterfront property from unwilling sellers for a private development project.  “Eminent domain is one tool that the city can use,” Flaherty told the Boston Globe.

Arnold, Mo.

“Arnold Mayor Mark Powell applauded the decision,” reports the St. Louis Post-Dispatch.  The City of Arnold wants to raze 30 homes and 15 small businesses, including the Arnold VFW, for a Lowe’s Home Improvement store and a strip mall—a $55 million project for which developer THF Realty will receive $21 million in tax-increment financing.  Powell said that for “cash-strapped” cities like Arnold, enticing commercial development is just as important as other public improvements.

Baltimore, Md. (West Side)

The City of Baltimore is moving to acquire shops on the city’s west side for private development.  Ronald M. Kreitner, executive director of Westside Renaissance, Inc., a private organization coordinating the project with the city’s development corporation, told the Baltimore Sun, “If there was any hesitation because of the Supreme Court case, any question is removed, and we should expect to see things proceeding in a timely fashion.”

Baltimore, Md. (East Side) (subscription required)

Baltimore’s redevelopment agency, the Baltimore Development Corp., is exercising eminent domain to acquire more than 2,000 properties in East Baltimore for a biotech park and new residences.  BDC Executive Vice President Andrew B. Frank told the Daily Record the Kelo decision “is very good news.  It means many of the projects on which we’ve been working for the last several years can continue.”

Newark, N.J.

Newark officials want to raze 14 downtown acres in the Mulberry Street area to build 2,000 upscale condo units and retail space.  The Municipal Council voted against the plan in 2003, but then reversed its decision eight months later following re-election campaigns in which developers donated thousands of dollars.  Officials told the Associated Press that the Mulberry Street project could have been killed if the U.S. Supreme Court had sided with the homeowners in Kelo.

Lodi, N.J.

Save Our Homes, a coalition of 200 residents in a Lodi trailer park targeted by the City for private retail development and a senior-living community, goes to court on July 18 to try to prevent a private developer from taking their homes.  Lodi Mayor Gary Paparozzi called the Kelo ruling a “shot in the arm” for the town.  He told the Bergen County Record, “The trailer park is like a poster child for redevelopment.  That’s the best-case scenario for using eminent domain.”

Cleveland, Ohio

Developer Scott Wolstein has planned a $225 million residential and retail development in the Flats district.  Wolstein has most of the property he needs, but is pleased that Kelo cleared the way for the City to acquire land from any unwilling sellers.  If eminent domain is “necessary,” he told the Plain Dealer, “we think this makes it clear that there won’t be any legal impediments.” Previously, city leaders publicly supported Wolstein’s call for eminent domain.

Dania, Fla.

The South Florida Sun-Sentinel reports that Dania Beach City Manager Ivan Pato “expressed joy” over the ruling in Kelo.  Dania plans to buy a block of properties for a private development project, and Pato said the city will use eminent domain to oust unwilling sellers.  “Unless we expand the city’s tax base … our residents are facing rising taxes on their property,” Pato said.  “Redevelopment is the only way we will be able to make ends meet.”

Memphis, Tenn.

The Riverfront Development Corp. is planning a massive, 5-mile development effort, including the use of eminent domain to claim a four-block section from the current owners for a mixed-use development.  “[Kelo] definitely gives the city more tools in its tool box for dealing with the legal issues surrounding that piece of property,” RDC president Benny Lendermon told the Commercial Appeal.

Hollywood, Fort Lauderdale and Miramar, Fla.

Broward County officials yesterday cleared the way for new condo and retail development in these three cities. Hollywood residents in the targeted area fear their homes may now be taken for economic development following the Kelo decision.  Mayor Mara Giulianti said the City would use eminent domain on a “case-by-case basis” to remove homeowners unwilling to sell.

West Allis, Wisc.

West Allis officials want to “revitalize” the West Allis Towne Center, a shopping mall.  If the Supreme Court had ruled in favor of the homeowners in Kelo, officials may not have been able to use eminent domain to claim the mall, West Allis development director John Stibal told the Milwaukee Journal Sentinel.

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[NOTE:           To arrange interviews on this subject, journalists may call John Kramer, the Institute for Justice’s vice president for communications, at (202) 955-1300 or in the evening/weekend at (703) 527-8730.  For an on-line media kit on this issue, visit www.ij.org or www.castlecoaltion.org.]