May 14, 2008
EMINENT DOMAIN
ISSUE BRIEF


ISSUE: 
   Legislation is pending in the Delaware General Assembly that will restrict the use of Eminent Domain. DAR believes that there are instances where eminent domain for redevelopment of blighted areas, no matter how distasteful, is necessary in some circumstances. However, the use of eminent domain must be an action of last resort, after comprehensive planning, and if done must provide just compensation. DAR has a legislative proposal which addresses fairness and consistency and increased substantive and procedural protections for property owners.

BACKGROUND:    In Kelo et al v. City of New London, the United States Supreme Court upheld the use of eminent domain power by the City of New London, Connecticut for the purpose of implanting an economic development plan for approximately 90 acres. In its decision, the Court invited state legislatures to pass statutes that restrict the use of eminent domain to a greater extent than the federal government. Delaware took up the issue in the 143rd Legislature which tightened up eminent domain actions covering state activities. The City of Wilmington is engaged in an urban renewal project and may use the power of eminent domain to take property to complete a development project. Representative Williams introduced HB 289 which is pending in the House Transportation and Infrastructure Committee and Senator Venables introduced SB 194 which passed the Senate and has been referred to the House. Both pieces of legislation attempt to eliminate the use of eminent domain for anything but "public use" projects. Both pieces of legislation are vague and may not accomplish what the author intends.

IMPACT:    It is in all of our communities interest to have a fair and consistent policy addressing the taking of private property. Property owners must know that their property cannot be taken for redevelopment purposes without a thorough and comprehensive planning process and demonstrated need, substantive procedural protections and fair and just compensation.

DAR PROPOSAL:    DAR's legislation amends Delaware's Slum Clearance and Redevelopment Law (Chapter 45, Title 31) and Section 107 of Title 22 (Use of eminent domain powers for federal community development programs) in order to increase fairness and consistency under this law and to provide additional procedural and substantive protections for property owners when property is to be condemned for redevelopment projects.

The DAR bill provides for just compensation including: providing compensation (in all cases) for reasonable litigation expenses of a property owner who challenges a condemnation action; a reasonable percentage of the increase in the value of the property resulting from its inclusion in the proposed redevelopment area; and any anticipated lost business revenue resulting from relocation.

The DAR bill clarifies and tightens the definition of "blight" by: removing the term "slum" to eliminate redundancy with the definition of "blight"; eliminating factors that are irrelevant to the health, safety, or welfare of a community; and requiring that a minimum of two (2) health, safety or welfare factors must be present in order to declare a property "blighted." These changes ensure that only property that poses a real risk to public health, safety or welfare can be declared "blighted."

The bill requires that all communities follow the same procedures prior to condemning property for redevelopment.

The bill increases substantive and procedural protections for property owners by requiring an in-depth planning prior to condemnation. It adds several additional requirements to the current four-step redevelopment plan process that government must undertake prior to condemning property for redevelopment purposes. These additional requirements are: requiring that the general plan for the community demonstrate a specific public need for the redevelopment project; requiring that the redevelopment plan: (a) include a definition of an "adequate unit of development," (b) include an analysis of alternatives to the proposed condemnation, (c) identify the public benefits of the condemnation beyond employment and tax revenues, (d) include a relocation plan, and (e) incorporate existing property owners in the plan to the greatest extent feasible; requiring that the local planning board and the governing body hold public hearings on the redevelopment plan, that each approve the plan by a super-majority (2/3), and that the governing body make specific findings when approving the plan and by requiring that the local governing body make parcel-by-parcel "blight" findings after notice and public hearing.

It also places greater responsibility on government to demonstrate the need for condemnation as a tool of last resort. Each of the additional requirements forces the government to demonstrate the need for a proposed condemnation and helps ensure that eminent domain is, in fact, a tool of last resort.

The proposed legislation provides meaningful opportunities to challenge a proposed condemnation. It provides two (2) types of opportunities to challenge a proposed condemnation. The first is at the pre-redevelopment plan approval stage which is accomplished by providing public hearings prior to parcel-by-parcel "blight" determinations, requiring public hearings on the redevelopment plan, providing notice to property owners of public hearings and the redevelopment process, and requiring that the government engage in "reasonable attempts to negotiate" with property owners prior to initiating a condemnation action. The second is a judicial review of key decision points challenge which is accomplished by allowing for an appeal of any governmental action taken during the redevelopment plan approval process, eliminating judicial deference to local legislative body findings, requiring that all governmental decisions are supported by substantial evidence, and placing the burden of proof on the government.

STATUS:    Representative Williams introduced HB 289 which is pending in the House Transportation and Infrastructure Committee and Senator Venables introduced SB 194 which passed the Senate and has been referred to the same House Committee. Senator Venables, Representative Williams and 30 other members of the General Assembly introduced SB 245 which was voted out of the Senate Small Business Committee on May 7th.

ACTION:    Ask your Senator and Representative to support a comprehensive approach to eminent domain that preserves the ability of municipalities to redevelop blighted areas while ensuring a thorough planning and approval process and just compensation.