drachillix, but I’m not saying that the government doesn’t have the right of eminant domain. They do. I’m not saying the rabble-rousters shouldn’t be ousted. They should be. All I meant is that they receive fair compensation. Maybe fair compensation is the residential value of the property. Maybe it’s much more. It’d be a case-by-case kind of thing. Imagine this:
100 houses valued at $100,000 each residential. That’s $10 million dollars. Let’s say $15 million is what the locality spends to buy everyone out and pay relocation and overhead. Let’s then say that Wal-Mart pays the city $13 million for the property. In this case, the homeowners were fairly compensated; they got fair market value, and the city took the loss in order to count on increased tax revenue and whatnot.
But imagine the same values and expenses, and Wal-Mart pays $30 million for the property. Now is when the city should pay the homeowners the difference in profit.
It looks like a double-standard, but it’s not. In both cases, the homeowener gets what the property is truly worth. If the city takes a loss, it’s the city’s problem. But the city should never, ever take the profit and run with it.
On that note, though, yeah, the troublemakers shouldn’t be able to hold the city hostage either. It’s a group deal. Everyone gets their fair share. No hostage-taking allowed.
In Stockton there is a big push for downtown redevelopment, which they have decided can’t happen on small parcels. The City picks an area and a function, then collects the properties within it and THEN shops around for the developer it can get the best deal from. The developer ends up with the property, but never has to buy even a little of it. (Or pay the cost of redrawing the parcel maps.)
The theater complex was a design-build-operate contract. IIRC the land reverts to the developer after three or so years of successful operation.
Any comments on this pre-collection?
How about emiment domain for widening the road to go out to a new mall or sports area? It’s a City need, but due to the increased traffic from new development.
As an aside, housing developers in Stockton are charged fees to upgrade streets, sewers, etc. according to the capacity added by the development. So housing development and commercial/city ammenities development are treated differently.
I don’t see how anyone can respond to this without tipping this thread irretrievably into Great Debates. I think I will wait until someone else does so, and respond over there.
I think what you may be missing here is that a city govt is not a bottomess pit of money, it is US. If they took a 2 million dollar loss in the deal, its going to come out of the services we recieve as citizens of the city.
I do not have a problem with the city taking a profit, because once again, we benefit from it. If in your hypothetical scenario they did get triple that prior value for a $20 million profit and used the proceeds to:
Replace several aging pieces of fire apparatus
Buy several new buses to increase stop frequency on high volume bus routes along with drivers
Buy some new police cars, put 5 more officers on the street per day
Put another clerk on the lines at the city offices.
Expand the streets in another unrelated high traffic area.
Create under or overpasses where trains are creating traffic problems
and appraised value is the most fair way to determine that. Glad you see it that way, I was just waiting for this to go GD or IMHO.
So really, you’re saying that each of the desposed residents paid a $200,000 tax!
The nice things you mentioned are niuce, and this is what we all (as a community) pay taxes for. If the city needs this kind of stuff, it should raise a bond issue. Allow a millage vote. Otherwise plan without ripping people off. You’re right – good things came of it, but in a case where the city receives more than it paid, it’s really stealing from the property owners. Presumably by sponsering the development, the city is already going to see increased capital based on the new land assessment. If it’s an income-tax city, it’ll see increased taxes from new employment. Surrounding property values may rise, in which case property taxes will either rise immediately, or like here in Michigan at sale of the property.
By allowing unlimited use of eminant domain, cities can actually cripple one of the strongest, most sure investments in America – property. Property speculation is as much an honest business as any other commercial development. It helps neighborhoods and city coffers as it increases land values. But no one is ever going to want to speculate if the municipality can just come and offer a low-ball value.
And yes, I realize that home owners aren’t speculators, but they deserve the fruit of their good fortune.
It appears that the city leased the property to the developer, with the option of purchase after 3 years. So the developer does have to buy it, but not until after 3 years, and only if the developer wants to continue on the property.
I’ve been close to two eminent domain situations, one involving the house of my grandparents, and one the house of some friends. I don’t know if their experiences were typical, but both cases took almost 20 years from the time the land was proposed to be taken, and the time it was. In those twenty years, none of the affected neighbors sold their property because the market value wasn’t there; who wants to buy property that’s to be taken away for so-called market value at any moment. and noone did any property improvements, since the value of the property wasn’t going to go up as a result. So, for that twenty years, the value and the condition of the neighborhoods slid. It was fairly depressing.
Both of these cases were for use for city projects, like freeways, so I’m not sure how fast things move when a commercial establishment needs to be built. While a city may be happy to wait 20 years for a freeway to be built, I’m not sure Walmart would put up with that. So perhaps my experiences aren’t relevant in this instance.
More likely the parcel is being provided for nothing or next to nothing. New roads or lanes are built at public expense. This is done in anticipation of huge sales tax collections. (And to a lesser degree, reduction of public expenses related to unemployment and revenue from payroll taxes).
I’d be more willing to approve of eminent domain if the development in question was part of a master plan or strategic development plan drawn up with the involvement of the community affected and approved by a vote. That way you can demonstrate in a concrete way that the public wants to devote this area to a park and that area to a shopping center. In every case, the value of a development should align with the values of the immediate community rather than solely to the value of the dollars changing hands.
Actually this is not true. Most of the time the developers have to pay for road, water, sewer, and power improvements in the immediate area. In the case of some major redevelopment around here they even made the developer build them a fire station. The city still outfitted the station but the developer provided the structure.
Also not entirely true, an appraised value of an improvement isn’t going to change much because the place is going to become a parking lot. Put in a pool and the city is paying for a house with a pool no matter what they are using it for later. When I purchased my house part of the price comparison was to three other nearby homes that had sold in the last year. I would have a hard time imagining in any decent sized neighborhood that several hundred families would have little or no turnover. Hell plenty of people would have died in 20 years.
My home is in a “proposed” eminent domain area right now as well. So I have reason to look into such matters for my own interests. I’m not real worried about it.
From a certain point of view yes, from another they are leveraging this purchase into providing better services than current property taxes allow for. Whch will make everyone elses property values go up, and things like homeowners insurance actually get cheaper especially for commercial structures. Many times large businesses will not set up shop in smaller cities because their smaller fire departments cannot provide adequate coverage to the size of facility they need, therefore insurance companies jack up their insurance rates.
If this argument were valid, we’d expect to see a large percentage of commercial property and new construction coming from eminent domain. In reality, eminent domain “takings” are a tiny fraction of one percent of all commercial development – and the fraction of private commercial development via eminent domain was far lower -almost zero- until the new expanded interpretations of 20 years ago.
In short, almost all commercial development in the US took place without even a threat of eminent domain. It is rare that the government has such a compelling interest in a project, without reasonable alternatives, that it must usurp the rights of any of the citizens it was created to protect and serve.
Note that Walmart (or the factory or whatever) is free to close -and sell the property- if the anticipated profits fail to materialize, or the corporate owner has unrelated financial problems. The nation is studded with failed factories and malls that closed within a decade of opening - many times more land, I daresay, than has been taken by eminent domain on the behalf os “commercial developments”. No matter how much developers have invested in improvements, they may have to “cut bait”
This is not just hypothetical. It’s been the fate of the largest eminent takings in the area where I live. Boston has, for example, Lafayette Place, which was several downtown blocks, developed and abandoned within ten years. Worcester has the Galleria (the name of one major mall; alas, I don’t know the name of the entire renewal project) next to city hall in the city center, which was almost empty for a decade from the day it opened - it didn’t revitalize anything: any success it had 15-20 years later was due to an independent recovery of the local economy. Lowell and the other “mill towns” in MA/NH have had countless renovated urban mills/warehouses which flourished briefly or cyclically, but didn’t endure or contribute much. I don’t know which were taken by eminent domain, because many were abandoned buildings which were taken for back taxes and safety issues.
Interestingly, I’ve seen many developments (and proposals) that weren’t far from similar projects that failed 10-15 years ago. Why not use the existing renovated facilities if demand/need is so high? The reasons are many; I think you can make your own list.
It’s interesting to notice that developers and their associates can make a ton of money building projects that don’t succeed after construction. It’s also common for developers to try to squeeze further financial concessions from desperate communities in the years before their projects close or go belly-up.
Ordinarily, if you don’t want to sell your land, you don’t, and the developer finds someone who will. Private business have had to forego parcels they’ve desired every day since the nation was founded. If this is “nothing being built”, then the US would be a giant strip mall -or strip mine- by now if “stuff got built as it should” in prior centuries. Personally, I think we’re better off for the two centuries of development that didn’t have the strong eminent domain law.
Daniel Okrent’s absolutely wonderful book, Great Fortune: The Epic of Rockefeller Center has a hilarious chapter on the lengths the Rockefellers had to go to assemble the parcel on which Rockefeller Center would be built. A long litany of eccentrics, misers, grouches, and fanatics refused to sell their properties, for longer or shorter periods of time. Eventually the complex was built around the holdouts and their properties were only gradually brought in as the original owners died.
Apparently, eminent domain was never considered, even though this was in the midst of the Depression, this was the only building project happening in all of New York so derailing it would have been catastrophic, and the Rockefellers had City Hall in their pocket. Times have changed.