Norwood, OH Eminent Domain - Background

Litigation Backgrounder

Norwood, Ohio Homeowners & Small Businesses Battle City & Private Developer Over Eminent Domain Abuse

Introduction

            Carl and Joy Gamble worked hard their entire lives. Their oasis for more than 34 years has been their well-kept home, with a huge backyard, on Atlantic Avenue in Norwood, Ohio (a city surrounded by Cincinnati). They raised two kids there. When they sold their small, family-owned grocery store in November 2001 and retired, they looked forward to quiet days gardening in their yard and enjoying visits from their now-grown children.

 

But Cincinnati developer Jeffrey Anderson has different plans for the Gambles and their neighbors. He wants to expand his nearby Rookwood Commons and build private office buildings, condominiums and chain stores to replace the homes and locally owned businesses in the Gambles’ neighborhood along Norwood’s Edwards Road. Anderson bought many of the properties in the area, but the Gambles and some of their neighbors were not interested in selling. That is when Norwood’s city government became involved. Because Anderson was unable to obtain the homes and businesses in the open marketplace, he asked Norwood’s City Council to pursue an urban renewal study of the area to see if the neighborhood was “blighted.” Anderson would pay for the study.

 

Mary Beth Wilker and her husband, Nick Motz, could not believe what was being proposed. A few years ago, they bought and renovated a building in the neighborhood that would house Mary Beth’s graphic design business, Wilker Design. They were attracted to the location because it was a well-traveled area that included a nice mixture of small businesses and tidy, well-maintained homes. Why would someone even consider labeling this neighborhood “blighted” or “deteriorated?” Anderson and the Norwood City Council knew the answer: if they succeeded in getting this neighborhood declared blighted, the City would then be able to use eminent domain to force out the remaining property owners, bulldoze their properties, and turn the land over to Anderson. That is the reason why the City Council on August 26, 2003, approved the urban renewal study despite the fact that even a brief walk or drive through the neighborhood would clearly show that it is not in any way blighted. Indeed, the study itself admitted that not one of the 99 homes or businesses in the area was dilapidated or delinquent on taxes.

 

Suddenly, the Gambles, Wilker Design and everyone else in this neighborhood faced the prospect of losing their homes and businesses through eminent domain abuse—where government takes one person’s private property only to hand it over to another private party. The residents and business owners in the Edwards Road area of Norwood are unfortunately not alone; they are part of a nationwide trend of eminent domain abuse. A recent report found that in just the past five years, state and local governments across the nation have taken or threatened to take by force more than 10,000 homes, businesses, churches and private land not for a “public use”—such as a police station or post office—but for the benefit of other private parties.[1]

 

On September 23, 2003, the Washington, D.C.-based Institute for Justice joined the Gambles and eight neighboring home and business owners to fight the government-forced transfer of their property to Jeffrey R. Anderson Real Estate or any other private party. The Institute for Justice, along with local counsel Robert P. Malloy, asks the Hamilton County Court of Common Pleas to find that the Edwards Road neighborhood is not blighted and to halt the City from condemning these homes and businesses for private business development.

 

Finding Blight Where There is None

In Norwood, developer Jeffrey R. Anderson and the Miller-Valentine Group want to build a $125 million expansion of Anderson’s previous development into a neighborhood that currently consists of well-kept homes and small businesses. The so-called Rookwood Exchange, a follow-up to the adjacent Rookwood Commons, is expected to contain private offices, condos, chain stores and a parking garage on a triangular piece of property bounded by Interstate 71, and Edmondson and Edwards roads in Norwood.

Anderson bought many of the properties in this neighborhood, but he met stiff resistance from a group of home and business owners who do not wish to sell their properties or be forced out through eminent domain. So in December 2002, the developers asked the Norwood City Council to pursue an urban renewal study. The developers admitted that the “study’s findings are key only if they can’t get the property owners to sell.”[2] Anderson knew that with a finding of blight and a declaration that the area was an urban renewal zone, the City would be able to use eminent domain to force out those who refused to sell. Anderson brazenly offered to pay for the urban renewal study, and the Norwood City Council accepted his offer.

 

Given the desires of Anderson for this neighborhood and the fact that he paid for the urban renewal study, it was perhaps not surprising that the study concluded that a perfectly fine, middle-class neighborhood of 99 homes and small businesses (in addition to some vacant properties) was in fact “blighted,” “deteriorated,” and “deteriorating.” Following through on Anderson’s wishes, the urban renewal study was adopted by the Norwood City Council on August 26, 2003.

 

The so-called Urban Renewal Plan for the Edwards Road Corridor Area is, frankly, a fraud. It is a study specifically designed to the reach a pre-determined result: to declare blighted an attractive, well-maintained neighborhood of homes and businesses.

 

The key to understanding the entire study is the third paragraph of the Introduction, which concedes “Private development interests, including the developers of the adjacent Rookwood projects, have proposed developing two separate mixed-use commercial projects on separate sites on opposite sides of the interstate north of Edmondson and west of Edwards Roads”—the very area declared an urban renewal zone by the City. Thus the urban renewal plan is the direct result of the desire of private developers to have this land.

 

The study put the cart before the horse. First, private developers came up with a plan, and then the City commissioned a study that declares the neighborhood to be an urban renewal area, thereby giving the City the power to use eminent domain to remove those who do not sell to the developer. This is a blatant misuse of the urban renewal law.

 

Even though the study was fueled by a desire to obtain land for a private development project, it had to concede a number of remarkable things. For instance, the study found there is not one home, business or other building that is dilapidated. Not one. Moreover, there is not one property that is delinquent on taxes. Genuine concern for and evidence of serious problems with the conditions of the structures or signs that properties have been neglected or abandoned lie at the very core of urban renewal laws. And yet these fundamental urban renewal factors are completely non-existent in the Edwards Road area.

 

Given the fine condition of the homes and businesses, the urban renewal study instead had to rely on several factors, such as broken pavement along sidewalks, standing water on roads, and poorly designed streets, over which the property owners have no control whatsoever. Indeed, if these supposed blighting characteristics exist, it is the City itself that has created them. The City thus creates these blighting factors—or at least permits them to exist—and then uses them as a basis to take the homes and businesses in the area. What a perverse and wholly illegitimate result.

 

The inclusion of such factors in the blighting categories as weeds and cars parked in front of houses is just plain absurd. No court would permit homes to be torn down because of some weeds in a yard or a car out front. Moreover, in order to beef up the blighting categories, the study illegitimately counts certain supposed problems numerous times. For instance, rather than zoning problems being counted in one category, they are counted in at least five separate blighting categories. Supposed problems with the street layout in the area are counted three times. Factors such as “lack of required safety rails, hand railings, or landings” are repeated verbatim in two separate blighting categories.

 

This double, triple, and even quintuple counting is clearly used to achieve the desired result: the declaration that this area is blighted. They are also an indication of the very real problems that plague this report. Indeed, problems with the study itself and the extremely thin reed upon which it advocates declaring this neighborhood blighted virtually invited a legal challenge.

            The City Councilors in Norwood are not the first to stretch the definition of “blight” to justify taking perfectly fine property and handing it over to a private developer. If the desire to assist a private developer is present, cities will find a way to label just about any property blighted, using preposterous justifications for their designation. On the other side of Ohio, in Lakewood, the city government declared a neighborhood very similar to the one in Norwood blighted because, among other ridiculous factors, the homes lacked two-car garages and had less than two full bathrooms. In Kentucky, a neighborhood with $200,000 homes has been declared blighted. Englewood, N.J., termed blighted a thriving industrial park that had one unoccupied building out of 37 and generated $1.2 million per year in property taxes. Richfield, Minn., labeled buildings blighted that did not have insulation that met Minnesota’s rules for energy-efficient construction of new buildings. And various California cities have tried to label neighborhoods blighted for peeling paint and uncut lawns. [3]

 

            Although city officials will usually tell citizens that blight and urban renewal designations are useful for funding and tax abatement, in fact a blight designation places all properties in the area at the mercy of both bureaucrats and developers. Residents should therefore view any blight designation as the first move in a coming land-grab. Norwood residents in the Edwards Road area are about to learn this lesson first-hand, as the City stands poised to use eminent domain under the bogus urban renewal study performed for this area.

Eminent Domain: How it Works, How it is Abused

Eminent domain is the power of government to take away a person’s home or business. It has rightly been called the “despotic” power of government.[4] Because of the vast potential for abuse of such a serious and drastic power, the Ohio and U.S. constitutions state that private property shall not be “taken for public use without just compensation.”[5] This constitutional provision imposes two important limits on the taking of private property: first, if the government takes your property, “just compensation” must be paid; and second, the government can only take your property in the first instance if it is for a “public use.” If private property could be taken for any use at all, including transferring land from one private owner to another, the term “public use” would not have been included.

 

            Originally, “public use” was understood by everyone—courts, local governments and the general citizenry—to have its ordinary meaning, and eminent domain was intended only for projects that would be owned by and open to the public, such as to construct public works like roads and water systems and to erect public buildings like police stations.

 

Gradually, though, government has come to ignore these limits. Now, local governments take individuals’ private property and give it to other more politically powerful private parties for their economic profit. After a private entity like a developer identifies the parcels of land it wants to acquire and city agencies approve a “redevelopment project,” the city attempts to confiscate these private properties and transfer them to the developer. They routinely ignore the personal values of home and business ownership to the individuals being evicted. They do not understand that many homeowners and business owners are happy where they are and simply have no desire to sell their property.

 

Courts, instead of acting as a check on these abuses of government power, for years significantly abdicated their role and often simply deferred to whatever claims of “public purpose” a legislature or administrative agency made, no matter how attenuated. With a strong economic incentive and little judicial check on the use of eminent domain, in the eyes of state and local governments, all the benefits weigh in favor of using government power to condemn private property and evict the rightful owners.

            The erosion of the “public use” doctrine led to predictably appalling results. In 1981, Detroit destroyed Poletown, the last racially integrated neighborhood in the city, and gave the property to General Motors to build a plant.[6] The closely knit community could not be replaced, and the plant did not live up to its promise of bringing economic prosperity to the city.[7] Likewise, when the City of Oakland decided that it didn’t want the Raiders football team to move to Los Angeles, it tried to exercise eminent domain to take ownership of the team and force it to stay.[8] And in 1984, the U.S. Supreme Court allowed Hawaii to engage in a wholesale transfer of land from owners to renters.[9]

 

Eminent Domain Abuse In Ohio and Nationwide

            Ohio has had more than its fair share of eminent domain abuses in recent years. As mentioned, Lakewood, a city on the outskirts of Cleveland, has declared a neighborhood very similar to the targeted area in Norwood “blighted” so that the land can be transferred to private developers, including, incredibly, Jeffrey Anderson—the same developer who stands to profit from the Norwood condemnations. Toledo condemned many homes for a Chrysler plant that turned out to produce far fewer jobs than originally projected.[10] In total, Ohio cities have condemned or threatened to condemn more than 400 properties in just the past five years.[11]

 

            Ohio certainly isn’t alone. Included in the more than 10,000 documented instances of eminent domain abuse over the past five years are several ongoing controversies that represent just the tip of the iceberg: the Connecticut Supreme Court stands poised to decide whether the New London Development Corp. can condemn waterfront homes for an office building and other unspecified uses. Mesa, Ariz., has been trying to condemn a brake shop for a hardware store. Riviera Beach, Fla., passed a plan that will displace more than 5,000 people,[12] and San Jose, Calif., recently designated one-tenth of the entire city blighted.[13]

           

Taking Homes for a Crate and Barrel

            For all of these redevelopment projects, city leaders always assert some sort of public benefit, and the number one claim is that the project will bring tax dollars and jobs—just as the Norwood City Council argues. On a practical level, some projects may bring tax dollars and jobs; others are utter disasters. But more importantly, if the promise of greater taxes and jobs is justification enough to take someone’s property, then no one is safe. Practically any home in the United States would generate more tax dollars as a Crate and Barrel, one of the proposed stores in the new Rookwood project. Small, locally owned business, such as Wilker Design, will probably provide fewer jobs than an office complex. And houses of worship produce no tax dollars and few jobs. The implications of the jobs-and-taxes mantra is that everyone’s home, everyone’s business is up for grabs. Citizens just have to hope that no one gets a bright idea to build an office park where their homes or businesses stand. Using jobs and taxes as a justification for eminent domain gives bureaucrats (and developers) unlimited power to seize property.

 

            Condemning property for jobs and taxes has dangerous practical implications, but it is also deeply immoral. The idea that one person will be forced to sacrifice her peace and happiness so that someone else can profit financially is repugnant to the principles of a free society and the core values that led to America’s founding. It cannot be tolerated.

 

            The legal landscape is finally shifting away from rubber-stamping condemnation projects. In the past few years, numerous courts have rejected condemnation projects where the purpose was to transfer the land to private parties. Last year, the Illinois Supreme Court issued a stinging rebuke to an agency that sought to condemn a business for a nearby racetrack.[14] The Connecticut Supreme Court rejected the condemnation of a neighborhood diner for a high-end apartment and retail building.[15] And California courts have overturned a series of ludicrous blight designations.[16]

 

Moreover, a growing grassroots rebellion is also underway against abusive eminent domain actions. In Baltimore County, Md., legislation that expanded the power of eminent domain beyond its constitutional limits provoked a revolt by concerned property owners and citizen activists who placed a referendum on the November 2000 ballot to eliminate the power.[17] The expanded eminent domain power was defeated at the ballot box by a 70 percent to 30 percent vote.[18] In November 2000, Pittsburgh residents joined by the Institute for Justice defeated a proposal to demolish about one-fifth of the downtown area and displace more than 120 businesses so the City could give the land to a developer to build an urban shopping mall.[19] Also, citizens in New Rochelle, N.Y., scuttled a plan by the City government to condemn an entire neighborhood to make way for an IKEA department store.[20] Groups of citizen activists who oppose eminent domain abuse have sprung up all over Ohio in communities around Evendale, Lakewood, West Chester, Willowick, as well as Norwood.

 

The Institute for Justice created the Castle Coalition (www.castlecoaltion.org) after watching and helping several groups of grassroots activists successfully fight off attempts to take their property for other private parties. The Castle Coalition is a grassroots group that provides a central bank of information, strategizes with property owners, and helps activists connect with each other in fighting the abuse of eminent domain.

 

Litigation Strategy

            The Institute for Justice is committed to a program of litigation that will help restore judicial protection of private property rights—the basic rights of every American to responsibly use and enjoy their property. As the U.S. Supreme Court stated a decade ago, “Individual freedom finds tangible expression in property rights.”[21] Property rights are the foundation of all our other rights; without constitutionally protected private property, there is no freedom of the press, no freedom of speech, and no right to assemble, among our many other American birthrights. The choices a person makes concerning her home or business are among the most personal and important decisions she will ever make. When government exercises eminent domain, it can take someone’s home or livelihood, exacting enormous personal costs. The Institute is especially concerned with the way that government actions affect those who have relatively limited economic means to defend themselves against such outrages.

 

            Norwood’s attempt to take these properties violates the Ohio and U.S. Constitutions and Ohio statutes. While the City claims the area is “blighted” or “deteriorating,” nothing could be further from the truth. In fact, it is crystal clear that the reason why the City declared this area to be an urban renewal zone was because it needed a legal excuse to grab the homes and businesses from those who chose not to sell. Norwood’s urban renewal declaration defies both the law and common sense.

 

            Taking homes and businesses from one person to give to another is not a “public” use. The public won’t own the stores, offices and condos; the developer will. And while Ohio courts have been somewhat flexible in defining public use, the Ohio Supreme Court has also stated that eminent domain may not be used to take private property for private purposes.[22]

 

Conclusion

            Across the country, local governments are labeling thriving neighborhoods “blighted” as an excuse for transferring property to private developers. If the Edwards Road neighborhood in Norwood can be condemned based on a ludicrous blight designation, then so can any other neighborhood. Keeping cities honest about blight is therefore vital to preserving the rights of ordinary citizens to enjoy their property and their neighborhood in peace. Without constitutional constraints, all the incentives promote government’s aggressive, unbridled use of the eminent domain power for the benefit of private economic interests, regardless of the impact on innocent property owners. Now is the time to shift the balance away from government power and back to the constitutional rights of citizens.

 

Litigation Team

            The litigation team for this case for the Institute for Justice is headed by Senior Attorney Scott Bullock, who litigates property rights and free speech cases nationwide. Bullock has been involved in a number of cases challenging the government's abuse of eminent domain laws. Among his recent accomplishments in this area is spearheading the litigation that saved the land and homes of the Archie family in Canton, Miss. from an effort by the State to take it for a Nissan plant. For that accomplishment, he was awarded in 2002 the top civil rights prize by the Mississippi chapter of the Southern Christian Leadership Conference. Bullock is also co-counsel in a lawsuit in New London, Conn. that has so far saved 11 homes from private takings. In 2000, he led the Institute’s successful campaign against eminent domain abuse in downtown Pittsburgh, where the mayor proposed taking more than 120 privately owned businesses to build an urban shopping mall. Ably assisting the Institute for Justice as local counsel is noted Cincinnati land use attorney Robert P. Malloy of Wood & Lamping, LLP.

The Institute for Justice is the nation’s leading legal advocate against the abuse of eminent domain, currently fighting battles across the nation against the taking of private properties by governments for the benefit of private parties. These include cases in Lakewood, Ohio; New London, Conn; Mesa, Ariz.; and metropolitan New York. IJ has already scored victories against the abuse of eminent domain in court and in the court of public opinion in Atlantic City, N.J.; Canton, Miss.; Pittsburgh, Penn.; and Baltimore, Md.

 

For more information contact:

 

John Kramer

Vice President for Communications

Institute for Justice

901 N. Glebe Road, Suite 900

Arlington, VA 22203

W: (703) 682-9320 , ext. 205

 

Lisa Knepper

Director of Communications

Institute for Justice

901 N. Glebe Road, Suite 900

Arlington, VA 22203

W: (703) 682-9320 , ext. 202

C: (703) 597-2523

 

 

            The Institute for Justice is a Washington, D.C.-based public interest law firm, which through strategic litigation, training and outreach, advances a rule of law under which individuals control their own destinies as free and responsible members of society. It litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties, and to restore constitutional limits on the power of government. In addition, it trains law students, lawyers and policy activists in the tactics of public interest litigation to advance individual rights. The Institute was founded in September 1991 by William Mellor and Clint Bolick.



[1] Dana Berliner, Public Power, Private Gain, at 159-68 (Institute for Justice April 2003) (available at www.castlecoalition.org/report).

[2] Susan Vela, “Norwood may OK blight study of development area,” The Cincinnati Enquirer, March 25, 2003.

[3] Dana Berliner, Public Power, Private Gain, at 159-68 (Institute for Justice April 2003) (available at www.castlecoalition.org/report).

[4] VanHorne’s Lessee v. Dorrance, 2 U.S. 304, 311 (1795).

[5] U.S. Const. amend. V; Ohio Const., art. I, § 19.

[6] See Poletown Neighborhood Council v. City of Detroit, 304 N.W.2d 455 (Mich. 1981).

[7] James Risen, “Poletown Becomes Just a Memory,” Los Angeles Times, September 25, 1985.

[8] The California Supreme Court held that this might satisfy a public purpose, City of Oakland v. Oakland Raiders, 646 P.2d 835 (Ca. 1982), although the takeover was rejected eventually on different legal grounds.

[9] Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984).

[10] Gideon Kanner, “The new robber barons,” The National Law Journal, May 21, 2001, at A19.

[11] Dana Berliner, Public Power, Private Gain, at 159-68 (Institute for Justice April 2003) (available at www.castlecoalition.org/report).

[12] Scott McCabe, “Residents Vow to Fight Riviera Plan,” The Palm Beach Post, Dec. 17, 2001, at 1B.

[13] Mike Zapler & Janice Rombeck, “Challenge to criteria for San Jose blight plan,” San Jose Mercury News, July 26, 2002, at A1.

[14] Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC, 768 N.E.2d 1 (Ill. 2002).

[15] Aposporos v. Urban Redev. Comm’n, 790 A.2d 1167 (Conn. 2002).

[16] E.g., Beach-Courchesne v. City of Diamond Bar, 95 Cal. Rptr. 2d 265 (Cal. App.), rev. denied, 2000 Cal. LEXIS 6388 (Cal. 2000).

[17] Sheila Hotchkin, “Two eminent domain questions evoke varying responses,” Associated Press, November 7, 2000.

[18] David Nitkin and Joe Naworski, “Condemnation bill defeated; Baltimore County plan to renew east side loses by 2 to 1,” Baltimore Sun, November 8, 2000.

[19] Dave Copeland, “Revitalization plan back to square one,” Pittsburgh Tribune-Review, November 28, 2000.

[20] Elizabeth Ganga & Ken Valenti, “IKEA drops plan for store,” The Journal News (Westchester County, NY), Feb. 1, 2001, at 1A.

[21] United States v. James Daniel Good, 510 U.S. 43, 61 (1993).

[22] State ex. rel. Bruestle v. Rich, 110 N.E.2d 778, 786 (Ohio 1953).


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