Eminent Domain Controversies Continue
By George Anderson
When the Supreme Court ruled by a five to four margin last year that local governments had the right to invoke eminent domain for the purpose of clearing space for retail development, there were many who thought the justices got it wrong.
Now, the city of Hercules, Cal. is considering the use of eminent domain to keep a retailer, in this case Wal-Mart, out. If the city decides to enforce eminent domain it would be using the statute to seize 17 acres of land where the retailer intends to build a store and shopping center.
Jeffra Cook, a Hercules resident since 1988, told The Associated Press why she favors the city taking steps to keep the retailer out of the community. “We want something good to take that place,” she said. “There aren’t a lot of good stories about Wal-Mart.”
City Councilor Charleen Raines said she does not remember any issue receiving such interest from the members of the community.
For its part, Wal-Mart accused the city of “playing politics” over the issue of the company building a store and a spokesperson for the retailer, Kevin Loscotoff said, “We’ve attempted to meet with the city and haven’t been given return phone calls or e-mails. In a case like this you’d certainly hope to have some sort of dialogue.”
Mr. Loscotoff said Wal-Mart intends to continue pursuing the Hercules project.
Moderator’s Comment: Do you oppose communities using eminent domain to make room for retail development? What about using the statute to prevent a retailer
from building? As a retailer, how do you deal with the issue of attempting to move into a community when a large number of residents are opposed to your building a store?
– George Anderson – Moderator
The Eminent Domain controversy has sparked an impassioned – and, not surprisingly, misinformed – controversy like few others: the Supremes ruled, on rather narrow grounds, that E.D. could be used as part of a comprehensive strategy of improving the public good; in the CT case, the issue was a large redevelopment plan to revive what was seen as a declining city; they certainly DID NOT rule, as many have claimed, that government can (simply) take/confiscate/seize your property and “give” it to a private party; on the contrary, they categorically opposed this.
Back to the case at hand, the ultimate issue is: to what extent do businesses impose (negative) externalities upon a community, and how best to deal with them ? Even the most adamant Wal-Mart fan should acknowledge traffic/noise/blight issues that cannot be resolved by “if you don’t like it, don’t shop there.” Zoning is the normal way to deal with such issues, and it would seem to be the proper way to deal with it here.
The kicker in the way George poses this question is “…if a large number of people oppose…” Many, if not most, of these cases involve a small number of vocal and/or influential people who have something to gain by the outcome. That is the inherent danger of laws that place too much power into bureaucratic hands the way “eminent domain” often does. If the majority of the people really don’t want a retailer in their area, let them voice that opinion in a referendum. That way the (voting) majority actually determines the outcome. Isn’t it ironic how the anti-Wal-Mart crowd tends to want referendums only when the governing statutes would allow the store, but vehemently oppose them when they can block the store with a statute such as eminent domain? …OK, it’s not ironic…it is totally predictable!
Eminent Domain is a valuable tool for government when used the right way. When government needs to build a school, fire house, police facility, road or general government building, Eminent Domain is there to help. It requires the government to pay a fair prica and/or the going rate for the land and building. When Eminent Domain is used for retail or commercial purposes it is simply developer payoff. The developer contributes to the people running for office and this is their payback. Forcing people to sell their land, but not for the good of the community. Cities like Stamford, CT have abused the Eminent Domain approach. Government has no business in retail. If the developer cannot put the deal together without government help, then they are not doing their job.
One of the foundations of a free society is private property rights and private commerce. Deficiency in this area is a major factor in the economic failures south of our border, that has led to 10% of their population moving here. Inserting eminent domain into private business interests on the basis that “society has an interest” is about as anti American and communistic as you could get. Time to dust off Hayek’s “The Road to Serfdom.”
This question has nothing to do with Wal-Mart. Something has gone seriously awry with this Court’s interpretation of the Constitution; it was simply and clearly wrong to allow taking of any private property for any commercial development.
Oh how we love to slam Wal-Mart. If the community as a whole does not want to shop Wal-Mart, then the store will go out of business. If Wal-Mart mistreats employees they will have difficulty hiring help. The fact is, people shop Wal-Mart because they save money. Eminent domain laws are being pushed to the extreme and at some point the Supreme Court will rule against some of the current interpretations. Who decides? Once people realize this law is manipulated to force poor people from their homes in hopes of increasing tax rates the hammer will fall on these politicians.
We elect our city officials to make those decisions. Obviously, it’s not always going to work out well for everyone.
Let’s face it, if the shoe was on the other foot, Wal-Mart would use every means possible. In this case, the community is using every means possible to maintain their community in a way they see fit. One might criticize that – meaning that a community has not a right to choose when business is involved. However, I think communities have many more rights than they exercise. Why? Most are blinded by revenue rather than the consequences of major development.
So, it’s fair to use eminent domain to take land for business, but not to preserve land for the community?
I have seen in my own community what is now calculated as a 250% increase in crime rates due to the import of multiple mass merchants. In this case, to Bernice’s point, a referendum was held (well actually it was forced). The result was 50.1 to 49.9 in favor. It ended up having no binding effect, due to the support of the community board being nearly unanimous. As it turns out everything predicted by those that opposed it has turned out to be absolutely correct. Not that I would say “I told you so.”
To the broader issue, the court has made a very precarious decision that has left a lot of room to maneuver the use of this powerful weapon in many directions. Even though it’s thought that the Supremes are the last stop in the adjudication of the matter, it may in time become a legislative issue once again yet to be resolved. That was a long way of saying it’s still in play.
Some towns have tried to stop the advance of box stores through zoning limitations of retail larger than 100,000 square feet. In that case, the supercenters become a little less super and build at 99,000 square feet. Others have been successful in blocking them all together. The problem there is the cost to the city or community of the long term battle when the retailer simply remains patient and wins through attrition.
One might ask why a retailer would come into a community that was so opposed to them in the first place. The answer in the case of many (including Wal-Mart) is why not? While I have accused Wal-Mart of trying to conquer the world, it could be said that they at least are very successful at conquering the communities they enter – with or without a battle. In the end, they win via price and dominance to the extent that many have little choice. The idea is, if I can diminish enough of the competitors in a community, you have to shop there whether you like them or not. They simply will eliminate choice.
In my own community, we’re certainly not better off for the growth. We’ve simply shifted issues existing in other surrounding communities to our own without the means to deal with them. But that’s not the big box responsibility.
In the end, will communities be allowed to choose their own destiny? Will communities be forced to accept business domination without out controls or consideration? This issue is one that is very multifaceted and will continue to evolve over time. It will remain unresolved. It does certainly make for good discussion and may be one where the opportunity still remains to have one’s mind influenced and changed in time.
I agree with C Sundstrom that zoning is often a reasonable tool for a community to govern its land use. Eminent domain or zoning or almost any legal tool can be used “for good or for evil.” In America, every dollar put into a cash register is a vote for that retailer. There’s no doubt that many retailers would like to prevent competition, so restrictive zoning and eminent domain could (and have) been used for that purpose. Some towns use legal restrictions to effectively ban fast food chains, for example. On the other hand, shouldn’t local residents get to decide what kind of businesses they’d like to live near? One great solution: elect decent trustworthy folks.
I am totally opposed to eminent domain being used for commercial purposes. If the city wants to turn it around in this way, I would say fair is fair but also hope that it can be used to show how wrong and inequitable it is at all. Neither side should be allowed to take land just to build more retail outlets.
As for the other part of the question, retailers forcing their way into communities where at least some part of the population doesn’t want them (and I strongly object to unsubstantiated knee-jerk generalisaions that brand them all “a vocal and selfish minority”) are wrong to rely on the argument that if people really don’t want them they will refrain from shopping there. There are many instances where the retailer hasn’t been sufficiently supported so has pulled out after doing damage to the businesses that were there previously and leaving carnage (empty boxes and unemployed people) in their wake.
Referenda would be a wonderful idea if we lived in a perfect world where these could be conducted at the drop of a hat but as I understand democracy, most of the time elected officials are relied upon to represent their constituents’ interests and they do not call referenda unless there is an extremely good reason and a great deal of cash to cover the costs. In too many cases, those same elected officials have their own agendas and reasons for supporting one or other side of an argument, therefore resisting even more strenuously any suggestion of “asking the people.”
This question is a loaded political question. Eminent domain, the way I was taught in high school, was the right of the community to take private land for the betterment of the public. Eminent domain was used when the town or county needed land to build or expand a road. Eminent domain was used when a city, town or county wanted to build public parks. Yet a century ago eminent domain was also used when a town needed land for the railroad tracks or station. Since the Supreme Court has ruled that eminent domain also includes land for commercial development, then why not use it to either build a mall or shopping center or to maintain zoning rules? Yes, this case smacks of singling out against Wal-Mart, but doesn’t a community have that right? Once you have expanded eminent domain to commercial development, it can be used either for or against that development. This is a question that far smarter people than me need to solve and solve it with the right answer.