Can the private owner of a residence or business be required, as a matter of law, to sell their property to a developer intending to use that property, along with others, to create a new comprehensive project designed to serve the general public?
The Supreme Court of the United States answered this question in the affirmative last summer in the landmark decision, Kelo v. City of New London, Connecticut. The decision set off a firestorm of protest concerning the long established practice of “eminent domain.” Eminent domain is the right of local governments, including school districts, highway departments, and some utility companies, to force the sale of certain real estate and to condemn the title thereto in consideration for payment to the owner of the property’s fair market value as determined through a court determined procedure. Expansion of the process nationally over the past half century has resulted in “takings” of real estate that wind up in the hands of private development companies rather than be titled to public entities. Instead of building roads, eminent domain has increasingly been used to build stadiums, office complexes, and shopping centers. Private property rights vie with governments’ desire to eradicate deteriorated or blighted areas, create new taxes/jobs, and stimulate growth. The controversial Centenne project in the heart of Clayton is just one local example of this battle. Legislative changes have already happened in Missouri. What lies ahead both national and locally?
Gary Feder is a member of the Land Use Development and Financing Practice Group in the St. Louis office of Husch and Eppenberger, LLC. His primary areas of concentration are real estate law, corporate law, and related litigation. He is a former member of the Clayton Board of Education and Clayton’s City Plan Commission and Architectural Review Board. Gary is a frequent speaker on real estate development issues, such as the use of tax increment financing, transportation development districts and urban redevelopment corporations.