After Losing Eminent Domain Court Case National City Declares War on Small Business

John Kramer
John Kramer · June 2, 2011

Arlington, Va.—You can say this much for National City—it doesn’t do things by half measures. Faced with a major loss in court over the city’s attempt to gain eminent domain authority over many of the city’s businesses, the city has responded by coming up with an even more radical plan. It plans to destroy local businesses through its zoning and planning powers (and add eminent domain again as well in a few months). These plans will harm property owners, business tenants and employees, as well as residents seeking employment and services. And they spell fiscal suicide for the city itself.

On June 7, 2011, National City is scheduled to hold a public hearing on its proposal to make a complete overhaul of its city planning documents, including its General Plan, Downtown Specific Plan, and Land Use Code. The contents of these boring-sounding documents should be accompanied by sirens and flashing lights. Here is a sample of what the city seeks:

  • National City wants its downtown to be almost entirely multi-story buildings, so it is taking steps to eliminate most current buildings
  • National City wants to get rid of most of its current businesses, and the jobs that come with them
  • National City will make any business that does not conform to its vision “non-conforming”
  • National City will give itself the power to order the termination of any “non-conforming” business within a certain number of years, with no compensation
  • After National City eliminates most current businesses and buildings, it wants to increase its residential population by more than two-thirds, to approximately 90,000 people in 2050

According to Christina Walsh, the director of activism and coalitions at the Institute for Justice, which represents the Community Youth Athletic Center in its legal fight against National City’s eminent domain plans, “The real blockbuster in these dry-seeming documents is a little-known device for complete fiscal destruction—‘affirmative termination by amortization’ (as it’s called in the city’s proposed new Land Use Code).”

Here is how affirmative termination by amortization works: The government wants to get rid of you and your business, but it doesn’t want to pay you. So it changes the zoning to make you non-conforming and then it allows you to operate for a few more years, after which you have to shut down. Plus you can’t sell your property, because no one in their right mind would buy it. At a stroke of the pen, National City will wipe out much of the value in its commercial property.

Walsh said, “National City plans to make many, many businesses non-conforming. It is eliminating many of the uses, changing much of the zoning to residential or upscale commercial. Its proposed Downtown Specific Plan Amendment will also require buildings along National City Boulevard to be multi-story, making it much harder to use any of the buildings from which businesses currently operate. By rezoning, the city will prevent most local business from growing.”

Walsh warned, “Eventually, everyone will have to leave and then all the buildings can be torn down and replaced by multi-story buildings with retail on the bottom and housing on the top that National City’s planners envision. If anyone actually wants to build such buildings, of course. And if they don’t, from the city’s perspective it is evidently better to have abandoned lots rather than the thriving but unglamorous businesses that are there now, providing blue collar jobs and tax dollars.”

National City will no doubt say that its new plans are needed for the good of the city.

They aren’t.

When Mayor Curt Pringle of Anaheim wanted to see development in his city, he took exactly the opposite approach. Anaheim made it easier for businesses to expand and develop without demanding that the government direct all this action. Anaheim made zoning more generous, so more things could be built; the city made permitting quicker; and it created incentives for building housing without requiring any of the businesses to leave. The city saw a huge boom in development, without forcing anyone out. A copy of Pringle’s report spelling out an effective alternative to eminent domain abuse is available at:

Walsh concluded, “Perhaps National City hopes that it can pass all its changes before anyone really mobilizes against them. The city’s businesses and residents should take notice now and make their views heard before the city council meeting on June 7, 2011.”