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Thursday, August 11, 2005

Ind. Law - Reports of yesterday's hearing on eminent domain

The legislaive Interim Study Committee on Eminent Domain met yesterday for the first time.

Lesley Stedman Weidenbener reports in the Louisville Courier Journal. Some quotes:

Mishawaka Mayor Jeff Rea said his community was able to purchase 60 properties to build a plant to make the Hummer H2, creating 2,000 jobs, without resorting to eminent domain.

"Not one single property went to court," he said.

But after questions from lawmakers, Rea acknowledged that without the authority to use eminent domain to take the land, the sales might not have come so easily.

"It's an economic-development tool," he said.

That's essentially the crux of the eminent domain controversy.

Local governments say they need to be able to obtain property from people who won't voluntarily sell to eliminate blight and create new jobs. But both "blight" and "economic development" have traditionally been ill-defined and broadly interpreted. * * *

Steven Anderson, coordinator of the Institute for Justice's Castle Coalition, a national group seeking restrictions on eminent domain, said local officials in Indiana are becoming increasingly aggressive in their efforts to forcibly transfer property from one owner to another.

"The power of eminent domain is awesome," Anderson told lawmakers. "This power must be used sparingly."

The Indiana Constitution -- unlike the federal and most other state constitutions -- doesn't restrict eminent domain only to projects that constitute a "public use," although state courts have added that requirement, Anderson said.

And the Indiana law that defines what kind of property can be taken is relatively vague, he said.

The Supreme Court ruling means that "every home, every church, every small business is now up for grabs to the private bidder," Anderson said.

He urged lawmakers to amend state law to allow eminent domain only when a property is truly unfit for living or other use. He said the transfer of land from one private owner to another should be prohibited.

And he said the law should require a local government to show a court that its project should be considered a "public use" worthy of employing eminent domain.

But Sen. Tim Lanane, D-Anderson, said lawmakers should consider instead crafting legislation that requires eminent domain only to be a last resort. He said he could see situations -- especially involving large economic-development projects -- that might require taking private land.

Matt Greller, the executive director of the Association of Cities and Towns, said mayors already view eminent domain as a last resort. The association is fighting to keep the power, which it calls a "critical tool" for economic development.

The committee plans to meet again in September to discuss possible changes in state law. Wolkins said the committee could vote on recommendations at a meeting in October.

Niki Kelly of the Fort Wayne Journal Gazette reports:
Indiana’s legislative study committee was established even before the high court’s ruling. Rep. David Wolkins, R-Winona Lake, filed a bill in 2004 and 2005 to prohibit using eminent domain to obtain land for use by a private entity or developer. * * *

Mike Sylvester, of Fort Wayne, testified that the city misused eminent domain in the Grand Wayne Center expansion project by spending $1 million to seize the Belmont Liquors property at Harrison Street and Jefferson Boulevard to be used for a new hotel.

Now the city isn’t even sure they want that land anymore, he said, and is looking at using the site of a popular downtown diner instead.

“If that isn’t abuse of power I don’t know what is,” said Sylvester, also chairman of the Libertarian Party of Allen County.

The Indiana Association of Cities and Towns defended the practice, saying eminent domain is a tool they need to effectively bring economic development to their jurisdictions.

Several people testified that cities use eminent domain as a threat to get owners to agree to a lower price. But when Mishawaka Mayor Jeff Rea objected to the characterization – instead saying officials merely explain the powers of eminent domain – most members of the panel and the audience laughed heartily. * * *

Committee members seemed torn between protecting private property rights and encouraging economic development that could create jobs. They seemed less supportive of using eminent domain for smaller retail and housing projects that simply increases the tax base.

A complete prohibition of eminent domain seems unlikely, but many of the lawmakers gravitated toward changing Indiana’s definition of blight – or areas in need of redevelopment – that must be found by city officials in order to use eminent domain.

State law outlines eight criteria to be classified as blighted, but a property must meet only one of the criteria, compared with other states that require four or five factors to be met. The criteria themselves are also somewhat vague, such as age and cessation of growth.

Shyl Karshner of the Munster (NW Indiana) Times reports here:
Hammond officials are paying close attention to eminent domain law.

Cabela's Inc., a giant retailer of outdoor sporting goods, has been interested for months in the Woodmar Country Club property and has steadily upped its offers for the land from $7.5 million late last year to a pending offer of $14 million.

Mayor Thomas McDermott Jr. has avoided saying he intends to condemn the property under eminent domain law if the club members refuse to sell. However, his administration has hired a consultant at $25,000 to draft an "integrated economic development plan" for the property -- a plan specifically mentioned by the high court as necessary.

Michele McNeil of the Indianapolis Star writes:
In Indianapolis, eminent domain was used to transform a crime-plagued area into Fall Creek Place, the highly successful neighborhood revitalization project on the Near Northside.

Eminent domain also may be used to make way for a new stadium for the Indianapolis Colts.

John Klipsch, the stadium building authority's executive director, said eminent domain is a possibility for three of the last six properties the authority does not own on the site. City officials negotiated a price for two and the authority is working with the U.S. Postal Service on another one.

Negotiations continue with the private owners of the last three properties, and the authority has sent letters to start the eminent domain process, which can take 60 to 90 days, Klipsch said.

Rick Hurst, and his company that sells dry beans to grocery stores, is one of the last three holdouts in the path of the new stadium. His situation illustrates the problem facing Hoosier lawmakers -- how to make sure governments adequately compensate residents who lose their property.

Hurst told the committee the cost of relocating his business far exceeds the appraised value of his company, N.K. Hurst Co. There's the cost -- and difficulty -- of finding another facility that can handle cleaning and packaging millions of beans. And there's the cost of moving his employees or finding new workers.

There's an emotional cost as well. In the 1970s, when businesses and residents were fleeing downtown for the suburbs, he said: "We stayed."

Note: After watching the Bureau of Motor Vehicles hearing Tuesday via the General Assembly's website, I was very sorry the same couldn't be done for the eminent domain hearing. The availability of these hearings online would be an incredible service to the citizens of the state, most of whom cannot take off time from work to travel to Indianapolis. Hopefully, the BMV hearing will be archived and available for on-demand viewing online. And if the Eminent Domain hearing was recorded, and I assume it was, perhaps it could be made available as a podcast? Plus the handouts - how hard would it be to post the handouts from these two meetings online, at the legislative committee's sites?

Posted by Marcia Oddi on August 11, 2005 07:43 AM
Posted to Indiana Law