No Need for Question 1 on Eminent Domain

By Peter Galuszka

It hasn’t gotten a lot of attention during this campaign, but Virginia will decide Tuesday whether to go with an amendment resulting in the toughest law in the country regarding eminent domain.

Virginia has a law already that requires fair market compensation for private property taken for “Public Good” such as building a highway or knocking down blighted buildings for public ones or even a for-profit project that is being handled through the auspices of the government.

Question 1 regarding a constitutional amendment on Tuesday’s ballot would go even farther. It would not just provide for fair market value for eminent domain but would make the state also compensate for the loss of “profit” or access — the cost to be determined.

The issue is whether the extra level of compensation is necessary or wise. Conservatives, although not all, tend to like the proposition, such as Atty. Gen. Kenneth Cuccinelli and Corey A. Stewart, the head of the Prince William County Board of Supervisors. So does the Virginia Farm Bureau.

Opposing it are equally formidable groups including the Virginia Municipal League and the Virginia Association of Counties and Spotsylvania County which is heavy with historic parks.

A Washington Post editorial states that the idea must be voted down because it would “cost state and local governments and taxpayers tens of millions of dollars annually in giveaways to private landowners and businesses.” It would be a “staggering act of corporate welfare,” the Post believes.

Experts point out that the state’s eminent domain law was already beefed up several years ago to make taking private land harder. This follows the U.S. Supreme Court’s decision in 2005  that upheld the idea of taking land for the “public good” in the case of a woman named Kelo who sued the City of New London which took her house as part of a government-sponsored retail project.

Personally, I tend to favor the private land holder versus that of government in such cases, but the key question for Question 1 is whether the extra belt of protection is really needed.

It is a complex issue, as seen in this  Virginian-Pilot report. Tidewater has long been a hotbed for urban renewal. It started in the 1950s when Norfolk decided to tear down acres of slums occupied by low income African-Americans and owned usually by absentee landlords. Urban removal became fashionable in planning circles, but what happened is that the poor residents had to go somewhere — in this case to cheap public housing left over from barracks-style buildings used by shipyard workers during World War II in adjacent cities like Portsmouth.

The port city is hemmed in and its major facilities such as the Norfolk Naval Shipyard and Naval Hospital are government owned and don’t pay taxes. Blight became a decades-old issue. Retail centers such as the Mid City Shopping Center fell apart and were put back together thanks to the threat of eminent domain. The surrounding area is no longer the haven for drugs and crime it once was.

Norfolk did something similar with East Ocean View where eminent domain was deployed in the 1990s to tear down 1,600 gritty buildings and relocate hundreds of low income people.

According to the Pilot, one of the East Ocean View landlords was a  eminent domain lawyer Joe Waldo, who says his properties were not high priced but were clean. He felt cheated when he went through the eminent domain process and now represents others fighting in similar situations.

The issue is not that eminent domain can be abusive, it is whether Question 1 goes too far and gives too much protection to property owners. They may not always be modest homeowners. They could be big and deep-pocketed companies. If Virginia’s law already has brakes available on abuse, why the need for the extra law?

My view is that advocates haven’t made their case other than paying homage to the conservative dogma of protecting personal property rights. A more troubling and unanswered  aspect is that as the experience in Tidewater has shown, eminent domain is merely a band-aid on the much bigger wounds of poverty that are still very much with Virginia.

16 Responses to No Need for Question 1 on Eminent Domain

  1. In Spotsylvania – some on the BOS characterize the question as one that represents the interests of taxpayers against the interests of property owners.

    If the question passes, it is predicted that taxpayers will end up paying a lot more for property to the property owners.

    Conservatives in Spotsylvania say that the property owner should be fully and completely compensated and that it is just and right for taxpayers to pay that level of compensation – RATHER that having the property owner take the “hit” for the “taking”.

    It’s an interesting issue that the Conservatives I’ve listened to – are passionate about.

  2. If Question One passes, would it become a law or a Constitutional amendment?

  3. Jim,
    Nice catch. It is an amendment. I have fixed

  4. The Post article describes Question 1 as going far beyond what is done in any other state.

    Great. Another case of Virginia being an outlier.

    If states were high school students, Virginia would be the goth in the back of the class.

  5. I don’t know about other states but the argument is – that a property may be more than just a piece of land with buildings on it. It may generate revenue – a business or a rental, etc. and then it’s taken and the only compensation is relative to it’s accessed value – not necessarily it’s longer term income-producing value.

    I think one can see – from a business-owners perspective that in those situations, they’ve lost far more than just the land – and you just don’t go out and find an equivalent replacement business location – they almost unique in some respects.

    the question is – is it fair to take such a property just for it’s intrinsic value and it’s almost a “duh” question and in many folks minds, it shows an unfairness in how property for public use is taken.

    the folks on the other side – government – acting on behalf of other taxpayers, will correctly point out that this could dramatically increase costs on some kinds of projects.

    It may, for instance, render a potential school or road side as just too expensive – essentially buying commercially-valued property for public infrastructure.

    It will certainly make the “need” for a project come under a stronger focus if the costs will be high and alternative sites are available for much less.

    OTOH – who is to say – for example, a store on a corner, is not going to be ultimately put out of business by another business – i.e. a corner hardware then 3 miles away a Lowes in built.

    so how do you figure the “worth” looking ahead, 5, 10, 15 years, etc?

    We have taken all this for granted up until now. We drive on interstates and other new roads that routinely “took” valuable and potentially valuable properties – for cheap according to some.

    This is another example also – of Dillon, just to tweak DJ a bit.

    Can you imagine 133 localities in Va each having it’s own imminent domain laws?

    It’s entirely true that county boundaries are historical artifacts but the same is true of states – but what is also true is the three levels of governance, national, state and local, regardless of boundaries but more with respect to what level of governance and control is appropriate for each level of governance.

    Even the US Constitution basically dictated what would be the province of the Federal govt and what would not and would be delegated/devolved – and even then – not without subsequent revisions – both legislative and judicial.

    Unlike others, I do not consider the US Constitution to be the best of all such documents on a planet with 200 other countries with their own Constitutions.

    It’s a remarkable document and way better than many other countries but there are other countries with equivalent levels of governance – national, regional/state/local…

    To those adherents of “natural law”, ownership and enjoyment of property is a God-given right and not a right of government… in theory.

    We all glide along in life never really thinking about this unless we ourselves have property “taken” a “public use” and whether or not
    it was a fair transaction or more truly a “taking” with the govt deciding what is fair.

    I would think… in my own opinionated way- that this “question” has a lot more context and substance to it that many are giving it.

    For all the ying and yang associated with the Tea Party – this is some of what they have been talking about with respect to governance and the “size” and power of government.

    Question 1 is, in some respects, a lesson in civics.

    • Once again, the General assembly attempts to do through (constitutional) legislation what should be done by the state judicial system.

      A software company forced to move a mile away due to an eminent domain “taking” suffers no “business loss” from the move. However, a local restaurant forced to move a mile away might, or might not, suffer a “business loss”.

      Instead of allowing the courts to do their job a coalition of the looney left and radical right is trying to legislate with a “big government”, “one size fits all” approach.

      And, as is far too often the case, Virginia seeks to become the extreme case of a bad idea in practice.

  6. DJ.. sometimes I wonder about you. The courts do what the Constitution and Law says.

    Our government was designed on purpose to allow the people to change the Constitution and to elect people who will make laws.

    haven’t you got this confused?

    • Larry,

      Here is the fifth amendment to the US Constitution:

      “No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”.

      Man, that packs a wallop in just a few words.

      Here is the key part of the 5th amendment for the purposes of this discussion:

      ” …nor shall private property be taken for public use, without just compensation.”.

      Here is what the existing Virginia Constitution says:

      “… that the General Assembly shall not pass any law impairing the obligation of contracts, nor any law whereby private property shall be taken or damaged for public uses, without just compensation, the term “public uses” to be defined by the General Assembly.”.

      In addition, the General Assembly passed laws in 2007 that essentially eliminated the possibility of a Kelo – like case in Virginia.

      The biggest issue with the proposed amendment is the “lost profits” concept. Under this ill-defined theory, government would not only have to provide “just compensation” as described in the US Constitution, Virginia Constitution and state statute but would also have to compensate businesses for “lost profits”.

      I believe that the question of what constitutes “just compensation” is a matter for the courts rather than an item to be legislated in the state constitution.

  7. This reform very much needs to be in the form of an Amendment to the VA Constitution to protect our reforms from erosion.

    http://hamptonroads.com/2012/09/protecting-homes-farms-and-businesses

    Robert Dean, Steve Merill, Tom Cantrell and I were there when reform was begun, and we have seen the lobbyists employed by localities work to erode those reforms from the beginning.

  8. I am thinking while typing here, so don’t crucify me too badly …yet.
    I am sitting here thinking about the many aspects of this question, the intended, and unintended consequences and I am wondering why the GA can’t come up with something akin to a public-private partnership but separate from redevelopment agencies? Or using a specific redevelopment agency, working with landowners, to create a ranking system for the use of eminent domain?
    Most localities that have PDR programs have specific criteria that must be met using a categorized numerical ranking system and I’m thinking the same system could be extremely beneficial here… but like I said before, I haven’t thought it through yet.

  9. Andrea – I think that no matter what kind of authority or entity that is set up – that at the end of the day it boils down to that entity deciding that a property it does not own – is needed for a public use.

    are you suggesting that, for instance, a school would have a rating and a highway a rating…a new jail.. a rating… etc?

    not sure what that would accomplish unless you’d be using it to deny some “takings” for having insufficient justification.

    We are adding a 3rd lane to a road down this way – the land that is being taken is all zoned commercial. Several property owners believe that they are not getting anywhere near what the properties are worth in terms of future business income, over and above what the properties are “worth”.

  10. I am thinking each facility would have to meet a numerical “needs test” for lack of a better way to say it, that is designed to measure the different values of the taking. For example,
    Location: Location of proposed facility vs. at least three other site selections studied for the same purpose.
    Need: Compare the need for the proposed facility to other facilities similarly situated.
    Cost: Including the cost of takings

    Each element has a ranking spread. Add all of the categories together, and a proposed facility might have a target range that should be met to safeguard the public funds and the landowners.

    I warned you I was thinking while typing, and my own question tends to be who makes the determinations. But if Jim can rake leaves, surely we could figure out a common sense approach :)

  11. And rather than trying to estimate the future value of any one property, why don’t they just require two or three independent appraisals and go from there? To say a property is worth anything more than the existing use produces is a slippery slope.

  12. re: ” To say a property is worth anything more than the existing use produces is a slippery slope.”

    mostly agree but how do you figure lost profits in the future for the existing use?

    and the locality has to have a hearing which gives citizens/taxpayers the opportunity to weigh in on the cost.

    I tend to not be in favor of thresholds as inevitably some situation comes along that is unique and the rules gum up the works.

    for instance, there may be one property of several, the last one and deadlines are approaching and the locality wants it badly enough, that they’ll pay a premium to get it – then the rules say – “nope”.

    or a fire and rescue station that has to be located in a certain area and all the properties are not cheap.. would you forgo location a station there?

    I think letting the locality decide the priorities is the right way myself.

    I actually have far more concerns with VDOT – that tends to be mostly immune from citizens and voters on takings.

    but they have the same problem. They may have a road with 50 properties and they got them all except one and are ready to start turning dirt but one guy is adamant…. at some point – you’ve got to have the ability to go forward or it’s going to cost time and money.

    I have a counter proposal. Turn over the job to an agency that is separate from the agency that wants to condemn.

    have a real estate agency that is independent from VDOT or localities whose job it is to acquire the needed properties by whatever transactions they can – a lot like private entities do who don’t screw around with long-drawn out legal battles to get land on the cheap. they just pay and get on with the job and save the legal fees. I note that in some VDOT cases, the legal fees EXCEED the cost of the property and yet VDOT would rather do that – that up the price offered to buy down a delay.

  13. re: “just compensation”..

    now that’s a troublesome phrase for most lawyer types.

    what good is a Constitution if the end result is to let some old geezers substitute their interpretation for what may have been different from the esteemed founding fathers?

    However, the esteemed founders DID give people the opportunity to “refine” the Constitution if it was found to be not precise enough for modern times.

    I still think “just compensation” cannot be decided by the same entity that wants to take.

    Let’s separate it so that an independent agency does it – and only rare circumstances force a true taking and the standard is willing seller, willing buyer.

    I think the legal fees and delays probably exceed the costs that would have paid early on – in many cases.

    the premise used by VDOT and other public entities is that costs to the taxpayer take precedence over costs to the property owner.

    when you give the entity that needs the land the right to directly negotiate for it – and it’s supposedly representing taxpayers over the property owner – it does not seem “just” to me.

    and remember.. I’m a “libtard” to DJ… :-)

  14. It was just a thought to address the “fairness” feeling held by some. But I have seen localities authorize the use of ID, literally, hundreds of times, and I have NEVER seen anyone speak to the issue. Not even the property owners, and in most cases, they have the opportunity.

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