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Eminent Domain is Critical to Urban Revitalization

American Constitution Society for Law and Policy Blog
Monday, September 27, 2004
Jennifer Bradley

The Michigan Supreme Court ruling this summer in Wayne County v. Hathcock, which overturned the controversial Poletown decision, has been widely celebrated. Wayne County stands for the proposition that governments cannot condemn land purely for economic development purposes. Implicit in the delight over Poletown's demise is the belief that governments were going too far in their use of eminent domain. But now the opposite danger is looming: governments are tying their hands behind their back by refusing to use eminent domain even when it is constitutionally valid and appropriate.

Even before the Hathcock decision local officials were already renouncing eminent domain. Back in February, Detroit Mayor Kwame Kilpatrick had foresworn the use of eminent domain in his major far east neighborhood redevelopment project. Similarly, George Jackson, head of the Detroit Economic Growth Corporation and Matt Cullen, co-chair of the Detroit Riverfront Conservancy, said earlier this summer that they did not plan to use eminent domain for the city's sweeping riverfront renewal plan.

Given the skittishness about using eminent domain that existed even before the Hathcock ruling, the case could send a terrible message to state and local authorities: eminent domain is the third rail of municipal government-far too dangerous to touch.

But eminent domain is an important government power. The framers of our federal constitution carefully preserved the power to condemn private property upon payment of just compensation. Many state constitutions also safeguard this power. Even as it cut back on eminent domain's reach, the State Supreme Court said in Hathcock that "the state's authority to condemn private property for the commonwealth" was a "bedrock principle of our legal tradition."

Without eminent domain, Detroit's $500 million riverfront restoration project could be permanently scarred by the Cemex company's cement terminal silos smack in the middle of the proposed RiverWalk. The city has been trying to buy the Cemex company's riverfront site and relocate the silos. Two other cement companies on the river have already agreed to move. The city has offered to buy the Cemex site for its fair market value plus Cemex's relocation costs, but Cemex is demanding an additional $10 million.

This is exactly the sort of situation that eminent domain was designed for: one holdout landowner seeking a windfall profit on the sale of a crucial piece of property. But the city has so far refused to play its eminent domain trump card. Instead, if Cemex will not relocate its silos, the Detroit Economic Growth Corporation has absurdly proposed to decorate them with a mural. But why would Cemex agree to the paint job? It's already holding the city hostage. The only other option would be for the city to ante up Cemex's high price. This is what happens when city officials are too cowed to use eminent domain.

Eminent domain has been a vital ingredient in almost every important civic renewal project in the country, such as Baltimore's nationally lauded Inner Harbor redevelopment. Redevelopment projects from Louisville, Kentucky, to San Diego, California, have been able to use the condemnation power to reinvent derelict waterfronts as new public spaces. In Michigan, Poletown may have discredited eminent domain, but the power was critical to Detroit's Fox Theater project, which has sparked millions of dollars of downtown investment, and to Lansing's effort to turn a polluted, abandoned manufacturing site into the Oldsmobile Park Baseball Stadium, which attracts hundreds of thousands of visitors a year.

In theory, the Hathcock ruling should not place new restrictions on the ability of state or local governments to bring private property into public ownership through condemnation. Hathcock expressly limits only uses of eminent domain that transfer property from one private owner to another. But the opinion's language is harsh towards the practice generally and sends government officials the wrong message: that they must limit the use of the power to its absolute minimum.

Cities like Detroit have made mistakes in the past with eminent domain. But governments should learn from prior mistakes, not be paralyzed by them.


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