Amazing, isn't it? In the land of Barry Goldwater, a municipal government can take your land and give it to another private citizen, or to a corporation. Of course, the government must pay you "fair market value," but that's no consolation if you didn't want your property to be on the market in the first place.
The Arizona Constitution says that "Private property shall not be taken for private use," and lists some very specific exceptions. Those exceptions do not include hardware stores or strip malls. Furthermore, the constitution provides that the courts-not municipal legislative bodies-have the authority to decide whether a proposed use is public or private. So how is it that municipal governments are able to rob Peter to allow for Paul's vision of "redevelopment"?
In 1997, the state Legislature adopted the redevelopment statutes, which have gutted the constitutional restriction on takings for private use. Under the statutes, a municipal legislative body can put property in a redevelopment district and condemn it if that municipality deems that the property is "deteriorating," or has "no diversity of ownership," or even if the streets are "inadequately laid out." The statute even allows an area to be redeveloped if it "impairs or arrests the sound growth of a municipality."
Thanks to that highly open-ended language, the Valley has seen the advent of several eminent domain "horror stories."
In 1998, at Mesa's Site 17, two dozen homes were condemned under the redevelopment statutes. Now the land sits empty because the redeveloper has not yet been able to get financing for the project. That same year, Phoenix condemned a grocery store and other small businesses at the southwest corner of 24th Street and Broadway because the elected officials believed this area was overrun with crime. As of now, the city has not received a viable proposal for redevelopment, and the property sits vacant.
In Scottsdale, many downtown properties that were designated for redevelopment in 1998 have languished in a kind of real estate limbo. Waiting for their properties to be condemned, the owners can't sell and are discouraged from making improvements. In 2001, the city of Mesa attempted to take Randy Bailey's brake shop in order to make room for a hardware store. With the help of the Institute for Justice, Bailey is fighting the condemnation in court.
Ironically, abuse of eminent domain is unnecessary to achieve redevelopment. Before 1997, developers in Arizona had to negotiate creatively with the owners of "hold out" parcels. Indeed, private owners have made land deals for hundreds of years without the need for government intervention.
How can property owners defend themselves? First, they can fight condemnations through political opposition, as the owner of the Coach House did when the Scottsdale City Council targeted it for redevelopment. If that doesn't work, owners can fight the taking in court, as Randy Bailey is doing in Mesa.
While those tactics may keep some owners from losing their land, the real solution is legislative reform. We must change the law to make it easier for landowners to defend their rights.
First, the Legislature should revoke the 1997 redevelopment statutes in their entirety. Municipalities would still have the power to condemn property for truly public purposes like roadways, sewers, and sanitation. The free market will allow for redevelopment of older areas without any government intervention.
The Legislature should also adopt a statute requiring municipalities to hold at least two public hearings prior to any condemnation. As it is now, condemnations are generally not discussed in public meetings. The community needs to be aware of these takings.
In English and American legal tradition, an old maxim held that "a man's house is his castle." A small business is just as important as a house. Thanks to eminent domain abuse, our castles are being invaded and knocked down by municipal governments. If ours is to remain a free society, we cannot allow such abuses to continue.
--Jordan R. Rose is a land use and zoning attorney with the law firm of Jorden, Bischoff, McGuire & Rose PLC. She is the author of a new Goldwater Institute study, "Eminent Domain Abuse: The Growing Threat to Private Property."