High court takes eminent domain case

Taking of private property for redevelopment is issue

Outcome could affect Md.

September 29, 2004|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

The Supreme Court agreed yesterday to decide whether local governments can seize people's homes and businesses to make way for private redevelopment, a tool used by Baltimore and other Maryland subdivisions to spur rejuvenation and build their tax bases.

In agreeing to hear a Connecticut case early next year, the justices will revisit an issue they last dealt with 20 years ago. The court unanimously ruled then that Hawaii could take land from large property owners and resell it to others, determining that decisions about takings were best left to elected leaders.

In the latest case, Susette Kelo and several other homeowners in a working-class neighborhood in New London, Conn., filed a lawsuit after city officials announced plans to bulldoze their homes to clear the way for a riverfront hotel, health club and offices. The residents refused to budge, arguing that it was an unjustified taking of their property.

At issue is the scope of the Fifth Amendment, which allows governments to take private property through eminent domain for "public use," such as roads or schools, if the owner gets "just compensation."

New London, with a population of less than 26,000 and losing residents and jobs, contended that development plans serving a public purpose - such as boosting economic growth - are valid "public use" projects that outweigh homeowners' property rights. The Connecticut Supreme Court agreed with New London in March, basing the justification on the promise of additional tax revenue.

Government officials in Baltimore and other Maryland subdivisions have made similar arguments in pursuing redevelopment projects including biotechnology parks, waterfront hotels and theaters.

Baltimore County officials pulled back from a plan for Middle River that was similar to New London's when residents marshaled their opposition.

More recently, the use of condemnation has caused a controversy on the city's west side and in the area around the Johns Hopkins medical campus that is being turned into a biotech park.

"This [Supreme Court] case could certainly have a significant impact as to how Maryland and local governments in Maryland exercise the right of eminent domain; it could circumscribe them," said Paul T. Glasgow, a Rockville-based partner with Venable LLC, a law firm that specializes in state and local government cases and commercial litigation.

Maryland is one of seven states that allow the use of eminent domain for economic development purposes, along with Connecticut, Kansas, Michigan, Minnesota, New York and North Dakota, according to the Institute for Justice, a Washington public interest law firm representing the New London homeowners.

"Home and business owners have been waiting for this for 50 years," Dana Berliner, a senior attorney at the Institute for Justice, said of the court's decision to hear the case.

"Maryland is one of the states that actually has said [increasing] tax revenue is a justification for taking someone's home or business away from them, and that is precisely the issue the Supreme Court is going to decide," Berliner said. "So Maryland will certainly be affected by this decision."

Maryland has traditionally had a broad definition of "public use" when it comes to property condemnations, said Glasgow, the Venable attorney.

State economic development officials were unavailable yesterday to comment on the significance of using eminent domain to promote economic development in Maryland. Baltimore County development officials said they were not familiar enough with the Supreme Court case to comment on how its outcome might affect development there.

In Baltimore, the practice has been used in high-profile developments such as the redevelopment of the west side, anchored by the revitalized Hippodrome theater, which opened in February, and Bank of America's Centerpoint retail and residential project.

City officials made offers to property owners and condemned properties that stood in the way of redevelopment.

"The city's use of condemnation authority on the west side is very much in keeping with traditional urban renewal implementation, largely directed at the elimination of blight," said Ronald M. Kreitner, executive director of WestSide Renaissance Inc., the nonprofit group coordinating public and private efforts in the redevelopment.

In an area dotted with vacant or largely vacant buildings and properties fallen into disrepair, "the effort is to rebuild the area, to fill it back in and to restore properties and to bring as much activity to this major part of downtown as possible," he said.

Lou Boulmetis, a property owner forced to move his nearly 75-year-old Hippodrome Hatters to make way for redevelopment, said the experience left him understanding the points of view of property owners afraid of losing their livelihood and of government officials trying to improve an area.

"I don't want to stop what's necessary, and I don't want to get ripped off, either," he said.

His shop's move, from across North Eutaw Street from the Hippodrome to West Baltimore Street, ended up benefiting his business.

"It worked out well," he said. "It was painful ... but I benefited from the move. I imagine there are some people out there who are very bitter."

Sun staff writer Paul Adams and the Associated Press contributed to this article.

Who's affected

Seven states allow condemnations for private business development alone: Connecticut, Kansas, Maryland, Michigan, Minnesota, New York and North Dakota.

Eight states forbid the use of eminent domain when the economic purpose is not to eliminate blight: Arkansas, Florida, Illinois, Kentucky, Maine, Montana, South Carolina and Washington.

Three states have indicated they probably will find condemnations for economic development alone unconstitutional: Delaware, New Hampshire and Massachusetts.

The remaining states have not addressed or spoken clearly to the question.

Source: Institute for Justice.

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