St. Paul Port Authority Attempts End-Run Around Minnesota’s Popular Eminent Domain Reform

J. Justin Wilson
J. Justin Wilson · October 15, 2008

St. Paul, Minn.—Most cities’ development agencies would be touting a 48-year-old, high-wage, high-benefit, woman-owned, taxpaying business as an example of why others should consider moving in—but not the city of St. Paul.  The city’s Port Authority wants to defy Minnesota’s popular 2006 eminent domain reforms and drive that exact company out of the city so it can try to lure a yet-to-be-identified private developer with promises of $10 million in public subsidies.

Property owner Karen Haug and the Institute for Justice—the nation’s leader in the fight against eminent domain abuse—have joined with Haug’s employees, unions, customers and others to challenge the Port Authority’s abuse of Minnesota’s new legal protections of property rights.

Tonight [October 15, 2008] at 5:30 p.m. at City Hall in St. Paul, Haug and her supporters will demand that the St. Paul City Council stop the Port Authority’s reckless and illegal condemnation of her business property not only because it will be detrimental to her company and employees, but because it will violate Minnesota’s two-year old eminent domain reforms that protect homeowners, farmers and small businesses from this type of abuse.

“The Port Authority’s scheme amounts to nothing less than land speculation with more than $10 million in public subsidies,” said Karen Haug, CEO and principal owner of the three companies that make up Advance, a long-time family-owned company in the Arlington-Jackson section of St. Paul.  “For nearly 20 years, the Port Authority has coveted my family’s property and sought to hand it over to someone else for private economic development.  After years of our paying taxes and living by the rules, it is insulting that the Port Authority is kicking out my family’s business and offering a sweetheart deal for some private developer by offering massive subsidies of taxpayers’ money—including probably some taxes paid by my family.”

Since its founding in 1960 by Haug’s father, Advance has played an instrumental role in leasing cranes, scaffolding and concrete forming equipment used in the construction and restoration of landmarks in the Twin Cities including the Xcel Energy Center, the Cathedral of St. Paul and, currently, Regions Hospital.  “You cannot look at St. Paul’s skyline without seeing the contribution that our family business has made,” Haug added.

The Port Authority claims that it is taking Haug’s land to remediate contaminants that have long-been below the property’s surface.  Lead and other metals left there by the land’s previous owner are safely encapsulated under several feet of clean fill.  Methane, which occurs naturally from a peat bog on which the property sits—and from the debris buried by the former owner decades ago—can be easily addressed as necessary.

“The key thing to keep in mind when it comes to the Port Authority’s trumped-up environmental claims is that Karen Haug’s’ property complies with all Minnesota Pollution Control Agency directives,”  said Lee McGrath, executive director of the Institute for Justice Minnesota Chapter.  “If her property is left alone, any minor environmental concern that may exist can be easily and cost-effectively taken care of with private funds, which Karen is ready to invest, rather than with millions of dollars of taxpayer money, which is what the Port Authority seeks.  The Port Authority’s environmental red herring is just an excuse to use eminent domain take Karen’s land for the Port Authority’s real goal, namely, creating yet another generic ‘business center’ redevelopment project.”

 “My father, brother and I have been good stewards of our land and the Port Authority is abusing its power to kick us off our property,” said Haug.  “This fight is not about money for us.  It is about staying where we are in St. Paul where our managers and employees have built a successful business by cost-effectively and timely meeting the demands of our customers.  It’s also about standing up against eminent domain abuse so that other homeowners and business owners are protected from bogus environmental claims.”

“Minnesotans overwhelmingly support eminent domain reform.  They oppose eminent domain for private gain,” said Jason Adkins, staff attorney for the Institute for Justice.  “If the Port Authority can take Karen Haug’s land for this private development project, it will gut the very eminent domain reforms that now protect the homes, small business and farms of all Minnesotans.”

“Elected officials across the nation are taking property rights more seriously since the infamous Kelo ruling in 2005,” McGrath concluded, referring to the case in which the U.S. Supreme Court allowed the City of New London, Conn. to take private homes for the promise of a hotel and office complex that has yet to be built.  “The St. Paul City Council should do likewise to protect the rightful property of their residents.  The City Council should not rubberstamp this eminent domain taking and give the Port Authority private property for someone else’s private development.  It shouldn’t rob from Peter so it can give to St. Paul.”

Headquartered in Arlington, Va, the Institute for Justice litigates eminent domain cases nationwide in courts and in the court of public opinion, successfully preserving the rights and properties of the politically and financially disenfranchised.  Opened in 2005, the Institute for Justice Minnesota Chapter is one of the Institute’s four state chapters that litigate to promote free speech, property rights, economic liberty and educational choice.