READER'S DIGEST - AUGUST 2003

Home Wreckers

Greedy developers can seize your property - and do it legally

- Tucker Carlson

William Minnich's father founded his furniture making business, Minic Custom Woodwork, in 1927. For nearly a quarter-century, the company operated out of a building he owned on 117th Street in New York City. Until 1998, Minnich imagined the family business would remain there indefinitely.

Then, one Sunday morning that year, Minnich read a story in The New York Times about new construction in his East Harlem neighborhood. A developer was planning to convert an old wire factory into a shopping center, complete with a Home Depot and other large retail outlets.

The projects was going to be massive, and would require more land than the developer presently owned. In the 15th paragraph, the story explained how the developer was going to get that land. "State officials," it said, "plan to use the state's power to condemn property to acquire adjacent lots for the project."

Yet, when in cahoots with cash-hungry public officials, companies like Costco have the power to take other people's homes and businesses. Let's call it what it is: legal theft.

William Minnich read the line again. He realized that one of the "adjacent lots" was his family's company. It was the first he'd heard of the state's intention to seize his land and uproot his business.

Minnich fought to keep his property, but his chances were never good. The Constitution gives the government the right to seize private property for "public use" as long as just compensation is paid to the owner.The concept is known as eminent domain, and traditionally it has been used by government to take land for schools, highways, military bases, and other projects with obvious and universal public benefit. In 1984, however, a Supreme Court decision radically expanded the understanding of eminent domain. According to the Court, states were then allowed to define "public use" as anything "rationally related to a conceivable public purpose."

State soon did just that. The city of Merriam, Kansas, seized land owned for three decades by 74-year-old William Gross, in order to allow a BMW retailer to expand his dealership. In New York, the city of New Rochelle proposed taking land away from some 200 residents and dozens of businesses to bring in a furniture superstore.

Around the country, privately owned homes and businesses were condemned by local governments to make way for shopping centers, high-end housing and ballparks. (The Texas Rangers baseball team, once partly owned by George W. Bush, was one such beneficiary of eminent domain). In each case, public officials were able to justify the land grabs by arguing that higher tax revenues qualified as a "public purpose."

The city of Lakewood, Ohio, for instance, recently proposed bulldozing 18 private homes and businesses and handing the land to private developers to build condominiums. The buildings slated to be destroyed are solidly middle class. Yet the city has designated them as "blighted" because more expensive condos will bring more money to the local treasury. And this is not an aberration. A study by the Institute of Justice, a public interest legal foundation in Washington, found that over the past five years more than 10,000 homes have been seized or threatened with seizure, virtually all on similar grounds.

In such an environment, a small-business owner like William Minnich never had a chance. He decided to challenge the decision, but the law was weighted against him. Earlier this year, facing hundreds of thousands of dollars in legal costs, Minnich gave up his fight to save his business. He retired and left the city. As compensation, Minnich was offered a little more than half what he says the building would have fetched on the open market.

Though necessary in rare cases, eminent domain has become the weapon of first resort for cash-hungry government, a tool of greedy bureaucrats serving the interests of greedy developers. Consider the case of Cottonwood Christian Center, a nondenominational church outside Los Angeles. In less than 20 years, Cottonwood's congregation grew from 50 people to about 5,000. By last year, the church had reached maximum capacity. Cottonwood decided to expand, purchasing 18 acres in the city of Cypress near Disneyland. The church planned to build a new sanctuary on the property.

City officials had other ideas. New churches are fine in theory, but they generate no tax revenues. New shopping malls do. In May of 2002, the Cypress City Council voted unanimously to seize Cottonwood's land, amid negotiations to sell it to Costco, a bulk retailer. That summer, the city's decision was put on hold by a judge who declared that the land grab amounted to a form of religious discrimination. Other landowners haven't been as fortunate in their battles against Costco. In 2001, a Costco official admitted that the company had used eminent domain ("or the threat of it") "probably dozens" of times to seize property from owners unwilling to sell voluntarily.

Keep in mind that Costco is not an arm of the federal government, a charity or a public utility. It is a private-sector warehouse store. It has no greater moral right to a piece of property than any other American, and perhaps less than many. Yet, when in cahoots with cash-hungry public officials, companies like Costco have the power to take other people's homes and businesses. Let's call it what it is: legal theft.