Case Studies
Judge Hands Down Verdict In Favor of Hualapai Landowners
Verdict: Maricopa County Superior Court Judge Jeanne Garcia ruled that a lease the city entered into with the State Land Department is valid and enforceable.
Background: In 2005, Scottsdale needed to expand its water treatment plant on land owned by the state to avoid federal penalties for drinking water standards. The city and the State Land Department entered into a 10-year lease worth $10 million for the land to immediately start construction. The city paid rent to the state under the lease and planned to buy the property at auction. But Hualapai LLC outbid Scottsdale, paying $6.3 million for the 6.9 acres near Pima Road and Union Hills Drive. The state transferred the lease to Hualapai. After the auction, the city condemned the property from Hualapai. Condemnations require governments to pay property owners fair market value for their land, but how much the city owes Hualapai hinged on whether the lease was valid. Scottsdale challenged the validity of the lease, saying the City Council approved only bidding on the property, but not entering into the lease that former Mayor Mary Manross signed.
What’s Next: Now that the lease is valid, Hualapai LLC would like to move forward with a valuation case, where a jury would decide the property’s fair market value and determine how much money Scottsdale would owe Hualapai. Scottsdale attorneys said they are exploring the city’s legal options.
Scottsdale Settles Condemnation Case for $8,290,000
The Scottsdale City Council last week approved the settlement of a condemnation action it had filed against CGP-Aberdeen for the principal amount of $7,500,000, plus interest of approximately $790,000, for a total settlement amount of $8,290,000. The property owner was represented by Dale Zeitlin.
The City had filed a lawsuit against the property owner on January 1,2003, which under Arizona law established the date of valuation. The City, however, did not ask the court to take early possession of the property until July 2004 at which time the City paid $4,000,000 (the City’s appraised value for the property)to the property owner, a delay of eighteen months.
Mr. Zeitlin argued that the statutory date of valuation when applied to a factual situation where the government delays taking possession of the property for a lengthy period of time was unconstitutional. The trial court rejected this argument, but on appeal, the Arizona Court of Appeals agreed with Zeitlin’s argument and held that property must be valued when the government takes possession of the property and first pays its estimate of just compensation. Thus, the valuation date was not January 2003, but July 2004, a date when values were significantly higher. The settlement was reached using the July 2004 date of value.
This case also has significance to every condemnation case that is filed by Arizona Public Service or other governmental entities that do not have the right to take immediate possession of property. In all of these cases, the property owner will be able to argue for a later date of value. APS had filed amicus curiae briefs opposing using the later date of valuation throughout the appellate process. Posted on March 31, 2009 by Dale Zeitlin
The ESDC determined the area where Columbia was to expand is blighted, which gives the agency the right to use its power to condemn property. However, the lower court ruling said there was no evidence of blight until the university started buying up the property in the neighborhood.
Norman Siegel, the families’ lawyer, alleges that there was collusion between Columbia and the ESDC, and that they acted in bad faith. For example, the two used the same consultant to determine whether the area was blighted. Eventually, the ESDC hired a different firm.
Please click on the link for more information.
Hotel Conference Center May Trump Private Property in Eminent Domain Case
Would you let the government take your car and give it to someone else? How about your computer, television set, house, or business? What if the government said you would be compensated, yet gave you no other choice?
That’s the dilemma in Auburn, New York, where the city is threatening to invoke eminent domain to force the sale of private property for a commercial hotel conference center, saying the public good outweighs the private property rights of some citizens. And it’s legal.
“This is abuse, it’s one case of eminent domain abuse,” says Renee Smith-Ward, owner of a dog grooming salon, Wag’In Tail that could be plowed down for the hotel’s parking lot. “I don’t believe it’s right to take someone’s property away from them for a hotel, for a private developer,” says Smith-Ward. “These people just want to come in and steal it from you,” says property owner Michael Kazanivsky, who says he has dreams to build a family amusement center on what is now a grass and rubble filled lot. “They’re trying to take it from me,” he says bitterly, “it’s not right.”
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Smokeshop Battles Chandler Intersection Expansion
The City of Chandler authorized condemnation against Trails, a smoke shop, which is the final holdout in the City’s plans to acquire land for the expansion of an intersection at Ray Road and Alma School Road. The City’s real estate…
http://www.beyondfairmarketvalue.com
Victory for Homeowners in Long Branch, N.J. Eminent Domain Battle
Agreement Ends Eminent Domain and Begins Restoration of the MTOTSA Neighborhood
Arlington, Va.—The Long Branch, N.J., property owners are finally safe at home. After years of battling eminent domain for a developer’s private gain, Long Branch’s MTOTSA homeowners declared victory with today’s announcement that eminent domain actions filed against the homeowners have been withdrawn and that the city and the developer must take steps to restore the neighborhood damaged by eminent domain abuse.
“Today’s agreement finally ends this government-created nightmare that was imposed upon these Long Branch homeowners,” said Scott Bullock, a senior attorney at the Institute for Justice which, along with noted New Jersey eminent domain lawyers Peter H. Wegener and William Ward, represented the homeowners. “With this agreement, the neighborhood can be restored to the kind of wonderful community it was before the city and the developer targeted it. These modest, proudly-maintained homes will no longer be threatened by the bulldozers.”
“At long last, we can get our homes, lives and neighborhood back,” said Lori Vendetti, who owns one of the homes across the street from the house her parents bought more than 40 years ago—a home where her mother still resides. “I am so glad my father and the other seniors in the neighborhood were able to live out their days in their homes, but I wish they could have been here to see this wonderful conclusion.” Lori’s father, Carmen Vendetti, passed away in June of this year while still battling to protect the home the former truck driver built for his family.
Under the terms of the agreement announced today, the city must dismiss the eminent domain actions filed against the MTOTSA homeowners in 2005. (MTOTSA is an acronym for the streets Marine Terrace, Ocean Terrace and Seaview Avenue, the neighborhood targeted for eminent domain for private gain.) Just as important, the order also provides that the city is barred from taking the homes in the future under the current or any subsequent redevelopment plan. The agreement further provides that the homeowners can take advantage of tax abatements, just as the city-designated developer was permitted to do, for reinvesting in their properties. The city is also paying a portion of the attorneys’ fees for the homeowners.
Importantly, the agreement imposes obligations on the city and the developer to improve conditions in a neighborhood that was neglected because the city and its hand-picked developer originally wanted it entirely demolished to build upscale condominiums. The city must now repave and repair all the streets in the neighborhood and repair long-neglected neighborhood street lights.
The developer must also clean up the damage it caused to the neighborhood. The developer-owned homes in MTOTSA were abandoned and boarded-up, causing decline and posing safety and crime problems. Under the agreement, the developer must start work on demolition of the abandoned homes immediately, with all the developer-owned homes being demolished by April 2, 2010. The developer plans on eventually building new homes in the area. The court will maintain jurisdiction over the agreement to ensure that its terms are enforced.
“I know my mom is looking down on us today and smiling,” said Maryann Allegro, one of the daughters of Anna DeFaria, who also lived in the MTOTSA neighborhood for more than 40 years and who passed away in 2008. Mrs. DeFaria fought tenaciously to keep her house, a battle that her family continued after her death. “Her little home meant the world to her and we were determined to make sure that it stayed in our family,” Allegro added. Many of the homes in the neighborhood have been owned by families for generations.
“This agreement is a wonderful victory for the MTOTSA homeowners but the larger battle against eminent domain abuse in New Jersey must continue,” noted Institute for Justice Staff Attorney Jeff Rowes. “No homeowner in this state should have to go through what the folks in Long Branch did, but unless the New Jersey legislature acts, eminent domain abuse in the Garden State will continue.” Although 43 states have reformed their eminent domain laws in the wake of the U.S. Supreme Court’s infamous decision in Kelo v. City of New London, the New Jersey Legislature has done nothing to better protect property owners against eminent domain for private gain.
Although New Jersey politicians have failed to act, the New Jersey courts have started to rein in eminent domain abuse. In August 2008, a three-judge panel of the New Jersey Appellate Division unanimously reversed the 2006 decision of Superior Court Judge Lawrence Lawson, which had allowed Long Branch to condemn MTOTSA for a luxury condominium development. After the case was sent back to the trial court and the city announced that it was willing to drop the eminent domain actions, the parties began discussing how to resolve the remaining issues in the case, leading to the agreement announced today.
The actions of the New Jersey courts follow a broader trend in state courts since the Kelo decision. While many state supreme courts follow the lead of the U.S. Supreme Court, the exact opposite has happened with regard to the use of eminent domain for private development. Since Kelo, four state supreme courts have so far rejected the decision while not one has adopted it.
City of Tempe v. McGregor (Tempe Marketplace)
In an attempt to condemn Desert Composites, an aerospace machine shop, the City of Tempe hoped to further their land grab in the creation of Tempe Marketplace. The machine shop is located just south of Tempe Marketplace on Rio Salado McClintock Dr. The City of Tempe filed several condemnation cases against local business and land owners in the area, eventually hoping to secure the land for a private developer. The U.S. and Arizona Constitutions are very clear that eminent domain can only be used to further the greater good. The defendants hired private council and began a co-defense with the Institute for Justice and were ultimately successful in winning the case. The Arizona Appeals court denied a hearing for the City and developer who had hoped to overturn the Bailey’s Brake Shop decision that stiffened the public use definition of eminent domain. Although Tempe Marketplace was successfully completed, the developer was unable to seize Desert Composites’ shop which is still in operation today. Please click on a link for more information.
http://phoenix.bizjournals.com
Justices Affirm Property Seizures
5-4 Ruling Backs Forced Sales for Private Development
By Charles Lane
Washington Post Staff Writer
Friday, June 24, 2005
The Supreme Court ruled yesterday that local governments may force property owners to sell out and make way for private economic development when officials decide it would benefit the public, even if the property is not blighted and the new project’s success is not guaranteed.
The 5 to 4 ruling provided the strong affirmation that state and local governments had sought for their increasing use of eminent domain for urban revitalization, especially in the Northeast, where many city centers have decayed and the suburban land supply is dwindling.
Opponents, including property-rights activists and advocates for elderly and low-income urban residents, argued that forcibly shifting land from one private owner to another, even with fair compensation, violates the Fifth Amendment to the Constitution, which prohibits the taking of property by government except for “public use.”
