Court’s Eminent Domain Ruling Settles Nothing
Editorial By George Anderson
With all due respect to the majority of justices on the Supreme Court of the United States, who recently ruled that local governments could take private property using eminent
domain laws to facilitate commercial development – they got it wrong.
What was happening before the ruling, as the Atlanta Business Chronicle points out, was that local “cash-starved governments” were using eminent domain “to turn so-called
blighted areas into virtual cash registers.”
With the Supreme Court ruling, many expect the pace of eminent domain condemnations to increase. This will bring more controversy for retailers, especially those operating big
boxes, because in many instances properties have been condemned to make way for retail projects.
As the Atlanta Business Chronicle reports, “As recently as June, for example, Kmart Holdings Corp. was forced to sell one of its properties in North Bergen, N.J., to make
way for a Home Depot. And in 2003, a homemade furniture store in Harlem, N.Y. was forced to sell to make way for a Home Depot parking lot.”
Home Depot spokesperson Jerry Shields said retailers are not the guys wearing the black hats in these cases.
“When cities or states identify areas for redevelopment and present them to The Home Depot for consideration, the company has an obligation to its customers, shareholders and
associates to make a careful review of the potential investment, its return to the shareholders and the community,” he wrote. “If a city moves forward with plans to use eminent
domain, The Home Depot is often one of the most desired tenants to participate in this type of redevelopment.”
A RetailWire poll from last December asked, “Are retailers justified in pushing for government to invoke eminent domain laws so that their businesses can develop land
for their corporate commercial use?” Eighty-two percent of respondents answered no.
Moderator’s Comment: Are retailers blameless in eminent domain cases as Home Depot’s response to the Atlanta Business Chronicle suggests? Do the
pros outweigh the cons of developing stores for retailers in the cases where eminent domain is invoked? –
George Anderson – Moderator