Eminent Domain

By Paul R. Green, Jr.

Recent legal decisions to traditional eminent domain make homeowners, businesses and churches more at risk to lose their properties than before.

I am a supporter of the eminent domain concept that allowed the taking of the real property of an individual owner for public use by the government (U.S. Constitution, Amendment V). For example: public use projects such as dams and roads or, as was done during the country's westward expansion, railroads - which today might equate to airports.

These uses resulted in a direct benefit to the entire public regardless of the need to charge fees because the entity that received the transferred property was the government itself and it leased it to the primary service or other provider. Furthermore, the government most often regulated the fees that were allowed to be charged by the provider.

Two things have happened to skew this, however, and cause me to not be in favor of eminent domain as it now is defined.

First, the definition of public use identified above has over the years been changed both in practice and in the courts to be synonymous with public benefit. This has had the effect of empowering local legislative bodies to summarily decide what is in the public benefit without regard for its public use.

An example is the taking of a small business owner's property in a minority or low socioeconomic community over the owner's objection and turning it over to large commercial business (no longer government owned or overseen) to build a shopping mall.

The assumption that the resulting public benefit of increased taxes to the city is the same as providing public use is not the same. At most, any such benefit, if any, will only be secondary and minimal in terms of a particular individuals government services.

And even if the goods and services provided by the new business can be taken advantage of and are made more available, only that segment of the public that may need the services provided and chooses to use that particular name brand store will benefit.

Often times this action changes the "style" or "flavor" of the community, and most often provides a financial advantage to the new store over the other small businesses that remain in proximity to that location.

The second problem with eminent domain as it is used today is the use of blight as a primary justification of government in considering whether or not to use its eminent domain power.

Blight is a disease associated with plants that leads to their dying that has come to be used to define areas of a community that are run down and that otherwise theoretically bring down overall area property values and eventually cause it to "die" as people leave and others choose not to move in.

On its face, this seems to work for the benefit of the real property owners in proximity of the "blighted" location because an upgrade may increase their property values and prolong the life of the area.

However, this is not so in many instances for three reasons:

1. Blight is in the eye of the beholder (many times the local legislative leaders or those who covet the property location for their own use and benefit).
2. A single property labeled as blighted labels the entire "area" as blighted. Note: the definition of and limitation upon the word, "area," when used in association with eminent domain, is arbitrary and summary).
3. Once defined as a blighted area always defined as a blighted area since there are no provisions of which I am aware to have such a designation taken "off the books."

The impact again falls more so on minority and low socioeconomic communities where small business owners, especially those that not only are working hard to stay in business and make a profit, but at the same time are taking steps to improve their surroundings, find that out of the blue they are included in a "blighted" area definition as a prerequisite to a government take over of their property in the name of eminent domain.

And the most appalling thing about this to the business owner is that he or she was moving forward by working hard to pull himself and his family, his business and his community up from where it was and that all that effort is counted as meaningless and to no avail when he or she refuses to sell the property to the government..

Often, this refusal to sell is not about "just compensation." The supposed fair market value proposal made to property owner of an eminent domain takeover may not be fair in the eyes of the property owner because it typically includes only location, land and improvement values.

What most likely is not included in the offer is payment for the so called "sweat equity that now will have been for naught, the existing relationships, the history that may be generational and the general ties that have been built and maintained. In an accident or wrongful death court case, this might be labeled as compensation for "pain and suffering."

And on top of all this is that the calculation typically does not take into account what is referred to as the "assemblage value" of the area homes or businesses. As an example, lets us assume that there are 10 parcels each valued at $100,000. Total value is $1 million.

But if the 10 were combined into one and fair market value then computed, the value based upon the potential expanded use ("the whole is greater than sum of its parts" concept) the value may be as much as double or $2 million. This too is lost to the owner though under eminent domain.

Regardless, the real issue remains whether or not a refusal to sell should be overridden using the new guidelines for the government taking the personal property of a private citizen.

If the courts continue to uphold the changed definitions and provide legal cover for the local legislative bodies that use the new definition of eminent domain, then the public is stuck without direct action at the ballot box.

If that fails, one simple solution is to make the aggrieved property owner a for-life prorated (to that property only) perpetual shareholder of the private company that was given "ownership" over the property.

Another attempt to provide property owners a purchase offer more near to the real worth of the property might be to base the offer on a statistically validated assemblage value.

If the new business and its shareholders should benefit immediately and continually for the life of the business, then so too should the original real property owner and his or her heirs.

Paul R. Green Jr. Candidate, State Senate District 6

3709 Bainbridge Drive, North Highlands, CA 95660 Phone: (916) 332-6180, Cell: (916) 698-9700, FAX: (810) 222-1778, E-Mail: prgreenjr1@juno.com, Website: paulrgreenjr.com