In a decision likely to force Baltimore to rethink its economic development strategy, Maryland's highest court ruled yesterday that the city cannot continue using eminent domain to "run roughshod over the owners of private property."
The state Court of Appeals, in a blunt opinion that harshly criticized the city's favored property seizure technique, found Baltimore had no good reason to take a Charles North bar called The Magnet last year with a sped-up version of eminent domain called "quick take."
The decision is sure to have implications for the Baltimore Development Corp. - and could affect similar agencies around the country using quick take, a tactic hardly tested in the legal system. It also runs counter to the Supreme Court's 2005 decision giving governments broad powers to take properties for private development.
Quick take, the state court pointed out, requires an agency to prove that it needs property urgently and for the public good. In this case, wrote Judge Dale R. Cathell, the BDC demonstrated neither.
"Agents of the City literally refused to answer any questions directed at the immediate need for this specific property, but appeared to have adopted the attitude that the City did not have to have a specific immediate need for the property, so long as sometime in the near or distant future they had such a need," Cathell wrote. "This extraordinary power conferred upon the City ... was not for the purpose of allowing such entities to use it `whenever they wanted to.'"
John C. Murphy, the attorney for Magnet owner George Valsamaki, said the high court clearly sent a strong message to those who would stretch the limits of eminent domain and harm property owners in the process.
"The court is saying that what the city is doing now does not meet the standards," he said. "That's a big change for a city which basically has used quick take for all of its acquisitions."
Institute for Justice senior attorney Dana Berliner predicted that the decision would have national reverberations - particularly for quick take.
"Other states are going to look at this and say there has to be a justification for using quick take," she said. "This decision says this is inappropriate, using this profound government power to take someone's property without saying why. Hopefully, this will place a check on that."
The ruling affirms state Circuit Judge John Philip Miller's decision in May that the BDC failed to show sufficient grounds to warrant taking the bar and package goods shop at 1924 N. Charles St. - the first time the courts blocked a Baltimore quick take.
It also puts Maryland among a handful of states whose judiciaries have restrained the property seizure powers that the Supreme Court granted government in the 2005 landmark Kelo v. New London. The high court ruled that government can take homes or businesses for private economic development projects.
By condemning the bar and about 20 other Charles North properties, Baltimore officials aimed to assemble a sizable tract that would entice developers. The goal was revitalizing the depressed area between Mount Vernon and Charles Village along the busy Charles Street corridor.
The city filed a quick take petition on The Magnet in March, gaining immediate possession of the property without a hearing.
Valsamaki learned of the seizure in a terse affidavit that stated: "The property ... must be in possession of the Mayor and City Council of Baltimore at the earliest time in order to assist in a business expansion of the area."
He had 10 days to challenge the seizure, which he did, calling the city's stated reason for taking his property "patently insufficient."
Baltimore City Solicitor George Nilson agreed that with this verdict, the city will, to some degree, have to change its ways.
"I think they're saying you have to have more specific things in hand when you exercise quick take power and that the government bears the burden of proving that the taking is justified," Nilson said. "And, because you bear that greater burden, you're going to have to have fairly particular plans."
As BDC officials argued in court, Nilson called quick take "critically important" to Baltimore's neighborhood revitalization projects. It would be all but impossible, city officials have said, to interest developers in a site with ownership questions hovering over it.
Typically, the Baltimore Development Corp. seizes property and then leaves it up to developers vying for the land to decide whether they want to build houses, shops, offices or something else.
"When you have a pretty decent idea of what you think needs to be done to that area, are you far enough along in the specifics of your planning to support the condemnation?" Nilson asked. "How do you strike the balance that is now going to require us to have to show that the taking is important and in the public benefit?"