Some Major Problems with Using Eminent Domain for Commercial Projects by Lynn Fugaro

Some Major Problems with Using Eminent Domain for Commercial Projects
by: Lynn Fugaro

In SeaTac, the suburb that surrounds the Seattle-Tacoma airport, the city council recently unveiled plans for a massive city center across from the airport light rail station that would include local shops, housing, and services. Among the city's stated plans is to use eminent domain to take a parking lot from its current owner in order to build . . . a parking lot.

So the plan is to actually build a parking garage, but, still, what sense does that make? If there were sufficient demand for parking to support a garage, it is likely that the lot owners would be more than happy to develop their property, especially if they were given some relatively minor concessions as part of the development project. But to take the successful and privately owned business away from its owners when they are already using the land in the way the development calls for just makes no sense. Here's why we should always be dubious when eminent domain is being used for commercial projects:

Why destroy existing homes and businesses?

If land is already being used by residents and owners, why should we strive to redevelop the land? Existing homes are more likely to be paid off, and their owners more able to contribute to a stable tax base for the community. New developments are often filled by people who have been offered inappropriate loans by unscrupulous loan officers. Many of them sit around half-vacant after foreclosures. Apartment buildings and condos are likely not actually built in response to any expressed need for housing, and may also end up half-empty.

Do we need more corporate welfare?

Eminent domain commercial projects often involve taking the land from a local owner who paid full value, often incurring significant debt, to give the land to a multinational corporation for a low price, or, sometimes, for free. These huge corporations already have no trouble outcompeting local businesses in terms of offering the same goods for lower prices, do they need more help bankrupting our citizens?

The ostensible trade-off is that these big corporate projects will bring jobs and tax revenue to a city, but often job growth and tax revenues are overestimated. Consider the Atlantic Yards project in New York City, which constitutes a billion-dollar subsidy of Forest City Ratner Companies (FCRC). Initial estimates promoted by FCRC showed that the development would create 10,000 permanent jobs and 15,000 temporary jobs. The 15,000 temporary jobs are actually only 1500 jobs over the span of ten years, and the initial estimate of 10,000 permanent jobs was reduced to 2500 by external evaluation, and only 700 of those jobs would be new to New York City. In other words, the city would be paying $1.5 million dollars per job created.

Who is making the plans?

Very often, the person behind a commercial development is either the city council itself or a private investor with a significant stake in the outcome, neither of whom can be trusted to be a good judge of the likely future of the plan. City councils are notorious for coming up with development plans that look good on paper, but in reality are disastrous. Private investors often cannot be trusted because they often design developments so that they make their money on the initial construction and don't care whether the final project succeeds or fails.

The lack of appropriate audits or evaluation of a project can be a disastrous oversight, but it can also be the basis for a successful battle against eminent domain.

If your Florida property is being threatened with condemnation for a commercial development, the Florida Property Rights Law Firm, PA may be able to help you protect it on the basis of Florida's ban on the use of eminent domain for private use. Please visit our website for more information.

About The Author

If your Florida property is being threatened with condemnation for a commercial development, the Florida Property Rights Law Firm, PA may be able to help you protect it on the basis of Florida's ban on the use of eminent domain for private use. Please visit our website for more information.

The author invites you to visit:
http://www.florida-eminent-domain.com