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Introduction

Eminent domain is becoming an abusive power that should be restrained to perpetuate a civil society founded on voluntary exchange.

Our nation’s founding fathers believed not only in limiting the taking of private property for “public use,” but also in the vigorous protection of private-property rights, which they considered sacred. John Adams said: “The moment the idea is admitted into society that property is not as sacred as the law of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”

A firm belief in the sacredness of property rights makes our society different than virtually all others. Frederick Bastiat wrote: “Life, liberty and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”

Stealing Most of us learned in kindergarten that taking something belonging to one person and giving it to another is stealing. In civil dealings, when a buyer demands something that a seller won’t give up, it’s the same thing – stealing. And just because he throws down $5 as he’s running out the door doesn’t mean that it’s not stealing.

The Supreme Court’s recent Kelo v. New London decision indicates a growing disrespect for – and lack of knowledge concerning – private-property rights, especially at the state and local levels of government.

Too many local government officials’ economic-development policies consist of plans to eliminate successful businesses to make room for other companies they hope will succeed. Not only does such a scheme bear little resemblance to any kind of reasonableness, it’s also actually the same approach used in the planned economies of the now-defunct Soviet system.

Eminent-domain abuse often occurs when government decides it wants someone else’s property without paying for it. It ends up acting as a form of real-estate agent for people who want to buy what others don’t want to sell. Actually, a more accurate description would be: When you buy something that somebody wants to sell, you go to a Realtor; when you buy something somebody doesn’t want to sell, you go to government.

The founders were so concerned about such coercion when it came to the taking of property that they placed strict limitations on the use of eminent domain in the Constitution. They said private property could only be taken for public use – and then with “just compensation.”

“Just compensation” does not consist of a local government’s cursory analysis followed by the oft-repeated conclusion: “After all we can only pay fair-market value.” Our Constitution does not state “fair-market value.” It specifies “just compensation.”

Ultimately, the debate centers on what constitutes “just compensation.” Ordinarily, this should be an easy debate to win – or at least it should be in America. Owners determine the value – and the amount of just compensation – of their properties. The market price is the intersection of what a buyer is willing to pay and the owner is willing to take. Our Constitution guarantees that government purchases must adhere to that same formula.

Saving taxpayers’ dollars … after the fact

It’s almost humorous to hear local politicians talk – usually with dripping insincerity – about how they are limited in what they can pay because they want to protect taxpayers. Puhlllleeezzzeee…

If they are genuine in their desire to protect taxpayers, they should reject most of the projects for which they want to use eminent domain in the first place! Such ventures are usually unnecessary and ultimately wasteful of taxpayers’ monies.

Talking about saving taxpayers money by paying a private-property owner less than the value of their property amounts to after-the-fact nonsense for which no possible justification exists.

It is troublesome to hear policymakers oppose attempts to broaden a local government’s use of eminent domain because “they just don’t want to tie government’s hands.” Such proclamations convey a lack of understanding of our Constitution’s intent to restrain government and protect our property rights. When the ties that bind government’s grasp are loosened, that is when taxpayers must hold on to their wallets, homes and businesses with both hands.

Too many local policymakers don’t seem to have a clue about the importance of private-property rights. Too often they applaud decisions in light of the economic benefits of development projects that are firmly promised – but rarely fulfilled.

Susette Kelo did not want to give up her home in New London, Connecticut, but her local elected officials demanded she abandon her property so they could build a parking lot adjacent to a new Pfizer research facility. If this isn’t equivalent to public theft, what does it take to commit thievery? Worse, the Supreme Court upheld such pilfering.

Of course, the silver lining around this dark cloud is the blatant outlandishness of the decision. The ruling itself has scraped back the thin veneer on government’s so-called “benevolence.” What lies underneath is anything but generous.

The threat

Few eminent-domain proceedings actually move to the final stages in Kentucky. Yet the threat of eminent domain by local bureaucrats who salivate at the prospect of using government’s iron fist – no matter the issue – presents a real danger to property owners.

Just the threat of condemnation can tie up a piece of property and reduce the incentive for its owner to invest in – and improve – it. Moreover, potential buyers evaporate when the cloud of eminent domain hangs over a property.

Traditionally, purveyors of eminent domain have limited its use to those types of projects that are clearly designed for public use – right-of-ways, interstates and bridges. But in recent years, our judicial system has opened the door for state and local governments to argue the possibility of a property yielding increased “tax revenue” as a justification for public condemn of private properties.

An addiction

The prospects of increased tax revenues seduce too many local governments. Like drug addicts, policymakers often end up willing to do almost anything to satisfy their addiction to spending other people’s money.

Local governments in Kentucky increasingly act like drug addicts who will do almost anything to satisfy their addiction to spending other peoples’ money. What started out as an occasional hit is now an addiction to using government’s iron fist at will for a nebulously defined “public use.”

In her blistering Kelo dissent, Supreme Court Justice Sandra Day O’Connor warned that: “The specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”

In Kentucky

A misconception exists here in Kentucky that private-property owners have more protection because state law limits the taking of private property to the traditional uses of eminent domain and blighted properties.

Because “blighted” has come to mean everything, it now means nothing to an increasing number of elected officials. Incidents of eminent-domain use in the state in recent years reinforce the fact that local policymakers are willing to overuse eminent domain – particularly to satisfy profit-seeking developers.

Perhaps that quote by Frank Zappa was more appropriate than one might initially think. The Kelo case demonstrates that local governments can be just as tyrannical as centralized ones. Communism’s founder Karl Marx insisted: “From each according to his abilities, to each according to his needs.” In the twisted logic of today’s jurisprudence, perceived general economic needs are considered justification for subjugating individual property owners’ rights.

Unless our state policymakers proactively clarify and restrict the use of the term “blighted,” teams of local politicians and developers appear coiled and ready to use – and abuse – the Kelo Supreme Court ruling for their mutual benefits.

Conclusion

In light of the Kelo decision, some questions for Kentucky policymakers seem appropriate:

• If a development project you plan holds such great promise, why shouldn’t you pay property owners their asking price?

• If paying this “market price” is too steep, shouldn’t you reconsider the economic viability of a particular project?

• Isn’t the question of misappropriating property from citizens really about your inability to decide which programs should be funded and which ones should not?

• Whose home is safe? Whose church is safe? Whose business is safe?

• Whose interests are best served by expanding the use of eminent domain?

Legislators should keep in mind that the communities most affected by eminent-domain abuse are often those least capable of successfully fighting it. It’s the poor and disenfranchised who live in areas most affected by Kelo’s new definition of “public use.”

• Is it a proper role of government to engineer today’s society just so it can extract more and more tax receipts?

If they had passed, the measures would have governed only Cupertino's 11
square miles, well less than 1 percent of Santa Clara County's entire
land area.

So why the intense interest in thwarting them? The answer lies in fear
that if the measures were approved, Cupertino would become a weighty
domino whose falling would trigger an unstoppable chain reaction of
similar growth-limiting initiatives in towns across the South Bay.

In the balance is the future of Silicon Valley. Land-use is clearly the
most important and contentious public policy question confronting the
region today. As land use goes, so will go the area's physical
appearance, the nature of life for its residents, and, some argue, even
its economic stature on an increasingly competitive global stage.

The Cupertino story contains all of the debate's narrative threads. It
illustrates the discomfort that residents are feeling as they watch the
valley come loose from its historical, agricultural moorings and float
toward an unknown future characterized most fundamentally by a far
greater local population.

It shows the increasing tension between homeowners trying to protect
their own property rights and public officials who are charged with
balancing those rights and community needs. In the case of housing,
local public officials are being further hammered by the state, which is
telling them they must build more housing, whether their residents want
it or not.

The Cupertino fight also magnifies the inherent conflict of interest
between those who have managed to become homeowners in the Bay Area and
those who wish to, but still remain outside the pale, thwarted by the
overwhelming cost. Those who already have a home want prices to continue
to rise, and a sure way to do that is to limit new supply.

The Cupertino fight also shows with great clarity that state and local
elected officials have not persuaded significant portions of the
electorate that today's generally preferred public policies, which favor
much more intense use of land compared to 20 years ago, are the best way
for the region to go.

They have not convinced the electorate that density is the only way to
safeguard the environment by reducing sprawl. That density is the only
way to produce enough new housing to keep housing prices in check lest
the costs further undermine the region's business competitiveness. That
density, by beefing up public transportation use, will prevent total
gridlock on the region's already overburdened roadways.

Land-use fights akin to Cupertino's have played out in recent years in
Palo Alto, Sunnyvale and Redwood City with mixed results. Even in the
Nov. 8 election, voters in Antioch and Pittsburg agreed to expand their
town's urban growth boundaries by thousands of acres, but Brentwood
voters narrowly defeated a like effort there. None of the expansions
were proposed to make way for highly dense new development.

At the same time, San Jose's Coyote Valley, 3,500 acres now being
planned for new development, will have 24,000 new homes and 50,000 new
jobs, at least. That's far denser development than any similar-sized
property in San Jose now. But the council, and indirectly the public,
has not approved the Coyote Valley plan yet.

Tellingly, the Cupertino measures were defeated by relatively slim
margins. That clearly surprised the town's five-member council, which
had dismissed their backers as outsiders with limited insight into their
fellow residents' sentiments. The votes' outcomes prove beyond a doubt
that the council's perception was wrong and that close to half the
voters in Cupertino prefer yesterday's development practices to today's.

Saratoga Mayor Kathleen King, who watched the town's battle with intense
interest, predicts that local officials in Cupertino will be listening
far more carefully to their residents going forward. "This was a wake-up
call," she says, not only for them but for other cities' elected leaders
as well.

Morgan Hill City Councilman Greg Sellers, who also watched the Cupertino
fight with interest, says the vote's outcome persuades him more than
ever that leaders have lots of explaining to do. Morgan Hill restricts
new housing development to about 250 units a year, much of it
single-family detached housing in the past. But Mr. Sellers is proud to
say that the community has recently approved several substantial,
high-density infill housing developments in its downtown.

"It's incumbent on all of us (elected leaders) to talk about what a
diverse housing stock means. That it's not 'if' we grow, but 'how' and
'when' we do," he says. If not, fights like Cupertino's will almost
certainly occur again and again.

Angst about the future of land use is evident in every Bay Area
community in which his company does business, says Chek Tang, a
principal with Oakland architect and land-use consultant McLarand
Vasquez Emsiek & Partners. McLarand is overseeing South San Jose's
Hitachi redevelopment and was the architect for the two-building complex
in Cupertino that was the genesis of much of that city's subsequent
community fight.

As recently as 15 years ago, his firm was still designing low-density,
single-family and townhouse developments in the Bay Area, he says. So
change has come fast.

But, he argues, there is no going back to that kind of development, not
in Northern California and ultimately not in many other parts of the
country as well.

Still, implementing new high-density urban-planning principals will
likely be a fight for some time. Americans still cherish the past of
wide open spaces and the big sky, available to all. American companies
(think truckmakers) regularly reinforce that national mythology of
individual rights and power to sell their wares.

"Urbanism is not natural to the United States," concludes Mr. Tang.

http://sanjose.bizjournals.com/sanjose/stories/2005/11/21/focus1.html

By WILLIAM YARDLEY

NEW LONDON, Conn. - They have still not moved out. Not Susette Kelo. Not the Derys. Not Byron Athenian or Bill Von Winkle or the others.

Five months after the United States Supreme Court set off a national debate by ruling that the City of New London could seize their property through eminent domain to make way for new private development, no one has been forced to leave.

No bulldozers have arrived to level the last houses still standing, and none are expected soon.

Even though the holdouts lost their case, and the development that would displace them finally seems free to go forward, construction has not begun, and some elements of the project have been effectively paralyzed since the court ruling prompted a political outcry.

Ms. Kelo, also among the handful of holdouts, said, "We still have hope that we'll get to keep our homes."

It is not that Ms. Kelo and the others have chained themselves to their property in a final dramatic defiance of the law.

Instead, wary of public disapproval and challenges from groups like the Institute for Justice, the law firm that represented the holdouts in court, the state and the city have halted plans to evict the remaining residents. Investors are concerned about building on land that some people consider a symbol of property rights. At the same time, contract disputes and financial uncertainty have delayed construction even in areas that have been cleared.

With so many complications, some people are unsure whether the city's initial vision for the property - a mix of housing, hotel and office space intended to transform part of its riverfront and bolster a declining tax base - is even realistic anymore.

"Winning took so long," said Mayor Jane L. Glover, "that the plan may not be as viable in 2005 or 2006 or 2007."

New London, founded in the 17th century as a port city in southeastern Connecticut, has a high unemployment rate and fewer residents today than it had in 1920. Its court battle over eminent domain started five years ago, when it claimed the property of six Fort Trumbull homeowners, a two-block area within 90 acres set for development. Homeowners challenged the move, and the matter eventually made its way to the Supreme Court, which ruled 5 to 4 in June that the city had the right to take the land to improve its financial health, even though doing so would eventually transfer the property to a private developer.

But in a dissent that echoed what property rights activists were saying, Justice Sandra Day O'Connor wrote: "The specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall or any farm with a factory."

Congress and state legislatures across the country have reacted by revisiting eminent domain laws. Over the summer, the United States House of Representatives passed a resolution condemning the court decision. This month, the House voted overwhelmingly to deny federal economic development money for two years to local governments that seize private property for private development.

In September, Gov. M. Jodi Rell of Connecticut demanded that the New London Development Corporation, the city's development agency, rescind eviction orders delivered to tenants in rental units that belong to homeowners who have refused to give up their property.

The Connecticut General Assembly has asked cities to delay using eminent domain while it considers revising state law. Some city and state officials cite the difficulty in finding a balance between using eminent domain to rebuild blighted areas and preventing the potential for abuse that concerned Justice O'Connor.

"We're not writing a law to solve the New London problem," said State Representative Michael P. Lawlor, a Democrat who is co-chairman of the Judiciary Committee. "We're writing a law to fix the Sandra Day O'Connor problem."

Amid all the debate, the Fort Trumbull project has stalled.

"This lawsuit put a chill on the development of the whole 90 acres, no doubt in my mind," said Thomas J. Londregan, the city's director of law. "Any developer knew that whatever they did would most likely be appealed to the courts."

Contentiousness led to stalemate and stumbles. At one point the city severed ties with the New London Development Corporation, only to reverse itself days later under pressure from the state. A key corporation executive was forced out.

Pressure to go forward is considerable, even if momentum is not. The state has already invested $73 million on environmental cleanup and sewer and road improvements. Elegant street lamps, intended to illuminate a gentrified new riverfront, instead shine over empty lots where buildings have been leveled but not replaced.

In recent weeks the city, the state and the developer, Boston-based Corcoran Jennison, have begun discussing ways to jump-start construction in empty areas. Details are not firm.

"We are currently working our way toward what I believe will be something fruitful," said Michael Joplin, president of the New London Development Corporation.

One point of contention: Corcoran Jennison is resisting pressure from the city to build a waterfront hotel first, as was initially planned, out of concern that there is no market for one.

Corcoran Jennison says that Pfizer, which built a major research center next to the site in the late 1990's and pushed for the Fort Trumbull development, backed away from a commitment to help pay for the hotel as the lawsuit dragged on. And the prospects for a Coast Guard museum, which under one plan could be built on the holdouts' land, are also unclear.

Still, Ron Angelo, deputy commissioner of the state's Department of Economic and Community Development, insists that the project, at least in some form, will get under way soon. "I think for the first time in a number of months, if not years, we have come close to beginning with the project," he said.

If any construction begins soon, it will happen away from the area where the holdouts remain, said Marty Jones, president of Corcoran Jennison, which has been under contract on the project since 1999.

"We need to have some positive things happening so that every lender and investor I go to doesn't say, 'I want to be 100 miles away from here,' " Ms. Jones said. "Eminent domain in Fort Trumbull has been on the front page of every newspaper in the country, and it has not put New London in the most positive light."

Despite losing in court, the holdouts have gained political leverage, largely through the public relations effort led by the Institute for Justice, Mr. Joplin said.

Scott G. Bullock, a lawyer for the Institute for Justice who argued for the resistant property owners before the Supreme Court, said, "We might have lost the battle, but the overall war is really going in our favor."

"What developer is going to want to build on land that was received through probably the most universally despised Supreme Court decision in decades?" Mr. Bullock asked.

Governor Rell has hired a mediator to meet with the holdouts. The goal is to see what, if any, financial terms, beyond the outdated appraised value they have been offered, might persuade them to leave.

"I'm on the road to search for the proverbial win-win," said the mediator, Robert R. Albright. "It's an extraordinarily complex situation. It's not a two-party situation by any means. I'm not sure I can honestly give you an option set or even fully describe the obstacles."

The property owners have their critics in New London. They have been accused of delaying the city's resurgence, and even of taking payoffs from property rights advocates in order to keep up the fight. But at least a few, after seeing most of their neighborhood leveled, say they will consider coming to terms with Mr. Albright if the money is right. Others, however, have not ruled out new lawsuits.

Meanwhile, some renters are moving in, not out. Michelle Cerrato arrived from Pennsylvania in September and found her two-bedroom apartment on Walbach Street through a newspaper ad. Unaware of the fuss over eminent domain, Ms. Cerrato, a 30-year-old casino hostess with three children, soon figured out why neighbors have signs in their windows that say, "Not for Sale."

Confused and concerned that she would be evicted, she called her landlord, Sue Dery, one of the holdouts.

"She said it's not going to happen," Ms. Cerrato said. "It's been going on for eight years."

Did this blight really ever exist? If so, has redevelopment ended any of it? And, if so, why does continue to grow, now covering over 1 million acres, or 25% of all urbanized land in California? These are the questions we face today.

There are 4 issues with “blight” that must be addressed:

1) The definition of blight is so broad as to render it meaningless.

2) Once defined, the blight designation becomes virtually permanent.

3) The designation of blight justifies billions in tax diversions away from the public interest and into private interests.

4) A designation of blight justifies eminent domain for private gain.

California redevelopment law’s definition of blight is so broad as to be meaningless. Some of our richest cities have been declared blighted. Indian Wells, for example, with a median household income of $250,000 has two redevelopment areas.

Residents fear a blight designation will depress property values, but voter approval is never asked. Citizens can force a vote by gathering 10% of the signatures within 30 days of the blight designation. Where this has occurred, redevelopment typically loses by wide margins. It was rejected in Montebello by 83%, La Puente by 67%, Ventura by 57%, and Half Moon Bay by 76%, for example.

Counties and school districts fear the loss of property tax revenues. Legal challenges, however, are difficult , and long-established, debt-ridden agencies are virtually impossible to shut down

State law must more narrowly define exactly what blight is.

A blight designation lasts for the life of the project area. Redevelopment areas are supposed to sunset in 40 years, but they are easily and routinely extended. There is no monitoring as to whether the blight has been removed.

To justify their continued existence, state law must require that redevelopment agencies periodically prove—at least every 5 years—that blight still exists, and then explain why they have been unable to cure it.

Once blight is established, property tax revenues may be used to subsidize purely private development. By law, all of these projects must have the sole purpose of eliminating blight. In reality, most are corporate welfare schemes enriching big box retailers, auto dealers, corporate chains, NFL owners and even casino operators.

Statewide, over $100 million in cash, land and tax rebates have been given to Walmart. In Orange County alone, Costco has received over $30 million in public handouts. Irwindale gave Raiders owner Al Davis $7 million just to talk. Here in San Diego is the infamous $6 million annual seat guarantee to the Chargers. The Los Angeles CRA gave $98 million for the now-failing Hollywood/Highland Mall, just as Costa Mesa’s Triangle Square—built using eminent domain and lavish subsidies—now stands virtually empty.

Redevelopment agencies currently divert about $3 billion annually. $3 billion. Think of all the teachers that could hire, all the library books that could buy and all the streets that could repair. $3 billion. That’s 10% of all the property tax revenues in the state. What has any of this money done to cure blight? And if it has, let the agencies declare victory, shut down and return this $3 billion annual revenue to the counties, school districts from which it was taken.

Far from economic development or ending blight, these are a net drain on California’s economy and public treasure. The most comprehensive study of redevelopment in California was conducted by the Public Policy Institute in 1998, with veteran researcher Michael Dardia studying 114 project areas. Their report “Subsidizing Redevelopment in California” showed no net benefits compared to comparable areas without redevelopment. A similar LA Times report of January 30, 2000 reached the same conclusion.

State law must require that redevelopment funds be spent only on public projects, not private development. Current law requires 20% be spent on housing. Additionally, we could require that 20% be spent on transportation, 20% on school construction, 20% on storm water clean-up and 20% spent on libraries.

Lastly, a blight designation makes all properties within a redevelopment area subject to eminent domain for the benefit of other private interests. Your home may be given to a developer. Your business may be seized and given to a competitor. Your church may be grabbed and given to a big box chain. Your open land may be taken and handed over to a foreign auto maker.

The designation of blight has a depressive effect on local property owners. Vibrant neighborhoods are now stigmatized. Eclectic business districts with a rich mixture of locally-owned businesses are now under the shadow of eminent domain. The blight designation thus steals from our communities the diverse and unique mixtures of people, housing types and businesses that made them so special.

Do all Californians have the equal right to own and enjoy their homes and businesses? Or shall they be sacrificed at the demands of the wealthy and powerful? Is eminent domain to be used in California to serve the public? Or for private profit?

The abuses of eminent domain are as widespread as they are tragic. Cottonwood Church’s property in Cypress was condemned for a Costco. Norm Neilson’s open desert land in California City was condemned for a Hyundai test facility. Phil Gold’s 99 Cent Only store in Lancaster was condemned for a Costco. Bill Vega’s family-owned repair shop in Brea was seized for a brew-pub.

My own Orange County Health Care Agency’s facility was condemned for a Santa Ana BMW dealership expansion. Under current law, the Santa Ana redevelopment agency could declare selling expensive German cars to be a greater public good than a health facility housing over 200 county restaurant inspectors.

The CRA claims that eminent domain is a necessary tool for economic development. In fact, just the opposite is true. The most successful projects are those where cities work with local business owners, not dispossess them. Successful projects are those that enhance local neighborhoods, not destroy them.

In fact, it is the fear of eminent domain that mobilizes citizens and small property owners against revitalization efforts. Lifting that fear will usher in a new era of trust between city hall and neighborhood groups.

Look at cities in my own Fourth District of Orange County. Fullerton's historic and vibrant downtown was rehabilitated without a single use of eminent domain. Anaheim's new Platinum Triangle is a dynamic high-density mixed-use area of multiple ownerships, where Mayor Curt Pringle has told developers eminent domain will not be used for their projects.

City council members do not want to use eminent domain against their own citizens, but often feel pressured by short-sighted developers, big box retailers and auto dealers who pit city-against-city for more land and subsidies. By limiting eminent domain, the legislature will create a level playing field for all cities when dealing with developers.

In its narrow 5-4 Kelo vs. New London decision, the Supreme Court lifted all federal limits on eminent domain, but it did challenge the states to put their own limits on this awesome power. The public demands this. Polls from Orange County to San Francisco show by a 9-1 margin that voters favor protections for small property owners.

There must be clear standards to define blight and to monitor how it has been cured. If redevelopment is to succeed, it must precisely define its objectives and the means to achieve them. It must fund only public, not private, projects. It must respect the right of all Californians to own their own property.

Redevelopment agencies are state agencies that are wholly within the power of the legislature to control. Now is the time, and you are the people to do it

Union Township, N.J. -- Carol Segal has a problem: He wants to build townhouses on the six acres of land he owns in New Jersey's Union Township and has contracted with a developer to build 100 townhouses there.

But the township government wants to develop the property themselves, and - incredibly - they have voted to take his land through the eminent domain process and let a local developer with political connections do the job.

"They want to steal my land," Segal told the Newark Star-Ledger. "What right do they have when I intend to do the exact same thing they want to do with my property?"

At that point, on May 24, the five-member township committee voted unanimously to authorize the municipality to seize Segal's land through eminent domain and name its own developer, AMJM Development, paving the way for the developer to build 90 or so townhouses on Segal's land, according to the Star Ledger.

After that vote, Segal sued the township, and on Sept. 7 a Superior Court judge in Union County issued a temporary restraining order prohibiting the township from hiring its own developer. Six days later, the township committee unanimously voted to start negotiating - but not sign a contract - with AMJM Development.

In the meantime, Segal signed a contract last week to sell his property to Centex Homes for about $13 million, contingent upon local approval. The Star-Ledger described Centex as a nationally known developer with projects in New Jersey's Middlesex, Morris and Monmouth counties. Centex plans to build 100 townhouses on Segal's property, and expects to earn some $15 million to $20 million, Segal told the newspaper.

Township Mayor Joseph Florio and Deputy Mayor Peter Capodice, both members of the township committee, told the Star Ledger they were unaware of Segal's involvement with Centex when they voted Sept. 13 to negotiate with the Mauti family, who own AMJM Development. But a proposal Centex submitted to the township committee on Sept. 1 said the company "has been in negotiations with (Segal) for quite some time."

When the item came up at the Sept. 13 meeting, the committee did not allow Segal's attorney to speak before the vote was taken.

Florio and Capodice told the newspaper they preferred AMJM because it is a local company. "I've never heard of Centex," Capodice said. "They're not Union County people."

This is where it gets sticky. Segal charges that last May 21, Albert G. Mauti Jr. and his cousin Joseph hosted a fundraiser for Assemblyman Joseph Cryan at the Westmount Country Club in Passaic County. The two developers and family members picked up the $10,400 dinner tab, donated another $8,000 and raised more than $70,000 that night for Cryan, a powerful Union County Democrat, according to state election records. Three days later, the township officials -- all Democrats -- introduced their eminent domain land grab.

According to the Star-Ledger, Cryan, 44, is "a rising star in state Democratic politics." While he holds no official position in Union Township government, he has been chairman of the local Democratic Party since 1995. He told the newspaper there was no connection between the fundraiser and the committee's vote and described the Mautis simply as "good friends," insisting moreover that he had nothing to do with shaping the township's redevelopment plan.

"My involvement is zero," Cryan told the Star-Ledger. He said he met with Segal no more than five times, and it was always at his legislative office. All discussions, he said, were initiated by Segal, and insisted that at no time did he recommend developers.

He added that his message to Segal was, "I can't help you. I don't make those decisions; the governing body does." His claim was disputed by Union County GOP Chairman Philip Morin, who told the Star-Ledger "Joe Cryan is intimately involved in even the most mundane decisions in Union Township."

Moreover, both Florio and Capodice admitted to the Star-Ledger that they have discussed the development project with Cryan, but neither could recall whether he expressed an opinion on the matter. Cryan said his discussions with committee members about the property are best characterized as him asking about the project's status.

Cryan's name also surfaced in connection with a change of language in the first draft of the development proposal for Segal's property, submitted in January, which directed officials "to work with any property owner within the redevelopment area."

The Star-Ledger reports that this language was removed from the final plan introduced May 24, which authorizes the township to choose its own developer. Florio and Capodice said they don't know why the language was changed; but both versions were written by an outside engineering firm hired by the township, T&M Associates of Middletown, which contributed $1,000 to Cryan at the May fundraiser.

Stanley Slachetka, the T&M employee who wrote the plans, declined comment to the Star-Ledger. Segal told the newspaper the township first expressed interest in his property in 2000, when committee member Anthony Terrezza called to set up a meeting - the first of many over the years. Segal said that at times he met with Terrezza and Cryan together, other times separately.

During the meetings, Segal said, the two politicians would recommend people to either buy the land or develop it in partnership.

"They made it clear I needed them to get it done," Segal told the newspaper, adding that he didn't like the deals they offered, and said he told them he wanted to develop the land himself. Around April, Segal said, the meetings stopped.

"At first, I thought we were working together," Segal said. "Now I realize they were trying to steal my land the whole time."

Terrezza did not return the Star-Ledger's calls for comment - nor did Committee members Brenda Restivo and Clifton People Jr.

Albert Mauti, a Staten Island resident, also denied any connection between the country club fundraiser and the committee vote; he claims he was simply supporting a local politician he likes and admires. His development plan, he said, "has nothing to do with Joe Cryan" he told the Star Ledger. But Mauti originally had told the newspaper that he never spoke to Cryan about the development.

When pressed, however, he said he may have but doesn't recall. But Cryan said he did speak to Mauti about the project, but it was just him inquiring how Mauti was progressing.

Despite the ordinance taking the property from Segal, Cryan did admit that he disagreed with the township's attempt to use eminent domain in this case: "It would be hugely unfair if they go in and use eminent domain to take his property," he said.

AB 1290 describes conditions of blight. "Areas lacking proper utilization to such an extent that it constitutes a serious physical AND economic burden on the community which cannot reasonably be expected to be reversed or alleviated by private enterprise or governmental action, or both, without redevelopment." Case in point. The renovation and expansion of the Mission Viejo Mall by Simon Property Group, the largest mall owners in America, whose pockets are much deeper than the city of Mission Viejo. Our city council, functioning as the RDA, authorized up to $85 million of Bonded indebtedness on their behalf. Simon stated that they needed our corporate welfare to satisfy a specific return on investment for their REIT eight months AFTER the renovation was underway. Where was the RDA project oversight? I visited Sacramento to challenge the legality of this project. In reviewing the facts Deputy Attorney General Marsha Bedwell stated that "while the timing and progress of the project may cast some doubt on the findings of blight, the statute makes judicial review of their adequacy extremely difficult."
As to public participation. As we did not have the right to vote on this debt we took League of Cities lobbyist Ken Emannuel's challenge and in three election cycles removed that council including a sitting mayor and mayor pro tem.

In his book entitled "Subsidizing Redevelopment in CA" Michael Dardia stated that Blight conditions need to be aligned with the goal(s) of redevelopment and should be more precise. With the financial incentive of tax increment revenues, blight conditions cannot remain in the eye of the beholder if redevelopment efforts are meant to target the most serious cases of blight. This means they must be more like the quantitative criteria used to determine eligibility for enterprise zones in some states. Criteria such as poverty rate of at least 20% of the population, 20% population loss in recent years, x percentage of the buildings or assessed value abandoned, y percentage of property taxes in arrears, or the crime rate z times the state average. If the redevelopment subsidies are to be targeted, blight must be judged more on an absolute than a relative basis.

Thank you for listening.

Larry Gilbert, O.C. Co-chairman Californians United for Redevelopment Education (CURE)
28302 San Marcos, Mission Viejo, CA 92692
email lgpwr@aol.com

As far as the Smart Growthers who infest City Council and their developer allies are concerned, those lyrics are bunk. They believe that your land is their land whenever they choose to take it, and land's highest and best use is to make a profit.

October 19, 2005 - Sacramento Bee

Reacting to a Supreme Court ruling, the Senate on Wednesday moved to bar some federal funds from projects where people's homes are seized for private development.An amendment to the transportation, treasury and housing spending bill would prevent any money in the bill from being spent on projects that seek to use the power of eminent domain to build shopping malls or other commercial developments.

"People should not be forced out their homes at the will of any private development," said Sen. Kit Bond, R-Mo., who offered the amendment. The bill is expected to pass the Senate this week.

Since then, Congress has considered several measures to withhold federal funds from federal, state or local projects that take private property in the name of economic development. The House has approved legislation to bar federal transportation funds from being used in such projects.

Separately, Sen. John Cornyn, R-Texas, is pushing a bill that would ban the use of any federal funds in construction projects that rely on the Supreme Court decision to seize property.

Eminent domain is typically used for public works projects that benefit entire communities, such as highways, airports or mass transit projects. The measure approved Wednesday would continue to allow federal funds to be used when property is confiscated for public use.

Bond's amendment, adopted on a voice vote, also requires the Government Accountability Office to study the use of eminent domain.

More than two dozen states are considering changes to eminent domain laws to prevent the taking of land for private development. In its ruling, the high court said states are free to ban that practice.

http://www.sacbee.com/24hour/politics/story/2820587p-11464238c.html

Saturday, October 22, 2005
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The Mayors' group, a private organization funded in part by memberships paid by taxpayers from cities including Long Beach, has issued a memo via its Executive Director urging Mayors of member cities "not to support legislation restricting state and local use of eminent domain in promoting economic development" and to lobby Congressmembers accordingly.

http://www.lbreport.com/news/sep05/emdomay.htm

Washington -- Rep. Maxine Waters, a Los Angeles Democrat, warned Tuesday against using government's power of eminent domain to redevelop New Orleans after Hurricane Katrina concentrated its devastation on largely poor African American neighborhoods.

Waters' comments came after the Senate Judiciary Committee held its first hearing on legislation to cut off federal funding for cities that use eminent domain to condemn private property for economic redevelopment, including such private uses as shopping malls, hotels and condominiums.

Congress is searching for ways to blunt the Supreme Court's 5-4 decision in June in Kelo vs. New London, Conn., which held that governments can condemn private property if the project serves a "public purpose."

The decision created a public uproar and a rare alliance of conservative and liberal lawmakers, many of them minorities, concerned about government incursions on private property.

They want to roll back what they consider a misreading of the Constitution's Fifth Amendment, which prohibits the taking of "private property for public use without just compensation."

Traditionally, public use has meant condemning land for public schools or highways, but in recent decades has expanded to include clearing "blighted" neighborhoods or redeveloping commercial areas.

Two downtown Oakland property owners, John Revelli, who owned a tire shop
that had been in business since his father opened it in 1949, and his neighbor Tony Fung, owner of Autohouse, were forced by the city of Oakland to vacate their properties July 1, days after the June 23 Kelo decision, to make way for a city-subsidized apartment complex.

"We had one week to move all our equipment and vacate our property," which is prime commercial real estate a block from the 19th Street BART Station, Revelli said. "It was a horrible day. I wouldn't want anyone else to go through this."

Since the 1950s, African American communities have been targeted for "urban renewal" projects so many times that the redevelopment efforts came to be known as "black removal," said Hilary O. Shelton, director of the Washington office of the National Association for the Advancement of Colored People.

Minority and poor communities are affected more often by eminent domain and have less ability to fight back politically or legally, Shelton said. The recent Supreme Court decision "to allow the government or its designee to take property simply by asserting that it can put the property to a higher use will systematically sanction transfers from those with less resources to those with more," Shelton said.

Jose Mendoza, owner of San Jose Men's Wear in the Tropicana Shopping Center in East San Jose that is made up of Latino and Asian businesses, said he won an eminent domain case in 2003 against the city's redevelopment agency, which wanted to build a new shopping center on the site. Mendoza said he had already lost two properties, one in Salinas and one in downtown San Jose, through condemnation.

"When they came here, I was very, very, very upset," Mendoza, 68, said. "I said not the third time. And we fought until we beat them."

The Judiciary Committee heard testimony on a bill by conservative Texas Republican Sen. John Cornyn, co-sponsored by liberal California Democratic Sen. Barbara Boxer, that would limit the power of eminent domain "for public use," and ban its use for private economic development.

The bill would apply to the federal government, but also discourage cities and states by blocking federal funds for any private economic redevelopment that uses eminent domain. Many such projects use federal money.

Sen. Dianne Feinstein, D-Calif., a former mayor of San Francisco, has expressed reservations about the Kelo decision but has not signed on to any bill. There are several other efforts in the Senate and House -- where Waters has teamed with conservative Republican Rep. Richard Pombo of Tracy -- to limit eminent domain.

"This issue is very dear to my heart," said Waters, who has fought condemnations for years in Los Angeles neighborhoods. "The taking of private property for private use is in my estimation unconstitutional, unAmerican and is not to be tolerated."

Susette Kelo, the nurse who was the lead plaintiff in the now famous case, testified that she bought a waterfront Victorian cottage in 1997 in New London, Conn. It was "a beautiful little place I could afford on my salary. I spent every spare moment fixing it up and creating the kind of home I always dreamed of."

She said she received an eviction notice from the city five years ago "to make way for a luxury hotel, upscale condos and other private developments," which the city said would bring in more tax revenue and jobs. Connecticut's governor recently suspended the evictions of Kelo and her neighbors while the state Legislature considers changing its rules.

"I'm not going anywhere," Kelo said after the hearing. Asked about the notoriety her case has created, she replied, "I'm really a very simple person. I wanted to keep my home."

Eddie Perez, mayor of Hartford, Conn., speaking on behalf of the National League of Cities, said the issue has been distorted by "frenzied rhetoric and misinformation." If used properly, he said, eminent domain "helps cities create jobs, grow business and strengthen neighborhoods."

Perez said restricting the use of eminent domain "is going to make it harder for those communities to put these plans together." Citing New York's Lincoln Center and Baltimore's Inner Harbor developments, Perez said "New Orleans and Louisiana will not be able to develop" if eminent domain powers are restricted.

When the U.S. Supreme Court ruled this summer that governments could seize homes and other property to facilitate private development projects, it touched off a political firestorm throughout the nation - including California - and fueled demands for new barriers to misuse of governmental "eminent domain" powers.
California's version of the debate centered on the aggressive use of eminent domain - or the threat to use it - by city redevelopment agencies to assemble land for hotels, auto malls, big box retailers and other projects.

The resistance to aggressive misuse of eminent domain is one of those rare issues that cross usually stark ideological lines. Conservative property rights advocates and liberal activists for the poor are equally concerned about seizing homes and small businesses and bulldozing them on behalf of politically favored developers.

It's a little known fact, for example, that Delores Huerta, a much-venerated leader of the United Farm Workers union, originally became involved in social and political causes by resisting a redevelopment project that destroyed an entire neighborhood of working-class homes and businesses on the edge of downtown Stockton.

Tom McClintock, a Republican state senator from Thousand Oaks and a leading conservative political figure, took up the eminent domain crusade in the Legislature after the Supreme Court's ruling, saying that it "breaks the social compact that gives government its legitimacy and opened a new era when the rich and powerful can use government to seize property of ordinary citizens for private gain." He and others introduced bills, including constitutional amendments, to restrict such seizures to purely public projects.

Predictably, local government and redevelopment officials reacted with alarm that eminent domain could be severely restricted. The California Redevelopment Association and other advocates geared up to kill the measures and in the closing days of the legislative session, Democratic leaders ginned up a strategy to cool off the anti-eminent domain fervor. They unveiled legislation that would place a two-year moratorium on the seizure of private homes (but not commercial property), and authorize a study of the practice, thus giving their members a chance, or so it seemed, to side with the anti-eminent domain sentiment without doing any real damage to redevelopment agencies.

Quietly, however, the moratorium bills were themselves put on the shelf as the session ended - with Democrats blaming Republicans. "With every vote, they tried to derail this prudent response," said Sen. Christine Kehoe, D-San Diego, who carried one of the moratorium bills.

Kehoe's finger-pointing, however, was more than a little disingenuous since the stalled bills required only simple majority votes and thus needed no Republicans to go along. Clearly, this was a Democratic action, not a Republican one, perhaps just a feint to pretend to do something about eminent domain without actually doing anything to upset the apple cart.

Ironically, the only eminent domain-related bill to reach Gov. Arnold Schwarzenegger's desk was a measure that allows the Rumsey Band of Wintun Indians, which operates the Cache Creek Casino in Yolo County, to join a joint powers consortium with local governments and the University of California to manage the 17,300-acre Conaway Ranch. While the county would purchase the land - or acquire it through eminent domain - the Rumsey Band has agreed to help finance the transaction.

Whether the tribe's interest in the Conaway Ranch is just an _expression of civic involvement, or it has some other, more commercial interest is yet to be discovered. But allowing a casino-owning tribe to even indirectly participate in an eminent domain action sets a potentially worrisome precedent.

I have felt all along that to be successful redevelopment expansion would require broad community support. We have had significant community participation in the discussion about redevelopment and a lively debate but no consensus about moving forward. I therefore have concluded that the current proposal does not have the kind of support that it would need to be successful. I have requested City Staff to withdraw their proposal for expansion of the redevelopment area.

Thank you to everyone who participated in community meetings and enlivened this discussion.

Very Truly Yours,

Jane Brunner
Vice Mayor
Councilmember, District 1