Zoning, Planning and Use
Aug. 15, 2002
Political Pawns
Forum Column - By Michael M. Berger - "Farmers near Mexico City guard their land with machetes in an effort to keep it from being seized for construction of an airport." Photo caption for Richard Boudreaux & Rafael Aguirre, "Standoff Over Land Continues in Mexico," L.A. Times, July 13, 2002.
By Michael M. Berger
"Farmers near Mexico City guard their land with machetes in an effort to keep it from being seized for construction of an airport." Photo caption for Richard Boudreaux & Rafael Aguirre, "Standoff Over Land Continues in Mexico," L.A. Times, July 13, 2002.
They do things differently south of the border. The story behind the rather frightening photographs coming out of an area east of Mexico City was simply that the government had decided to acquire 13,300 acres of land for a new airport. While the officials apparently managed to mollify environmentalists, who feared the loss of a dry lake bed used as a winter home by migratory birds, the farmers who owned the land were another story altogether.
They were aggrieved - strongly so.
Families comprising some 34,000 people own the land that sprawls across 13 Mexican communities. All of them would have to go so that Mexico City could have a new airport, the largest in Latin America.
It's not that the Mexican government failed to offer compensation for the land. It did. According to press reports, it offered 7 pesos per square meter of land, which is roughly 8 cents per square foot. Not enough, according to the owners.
In the United States, the action would have taken place in court. In Mexico, however, both sides took hostages. The Mexican government recently decided to seek a different site.
The underlying story is really rather common, one shared by thousands of Americans, particularly those who own land or live in areas slated for redevelopment. Large government projects require large blocks of land.
The engine of change is the government's power of eminent domain, the power to compel private citizens to sell their land, whether for a new airport (acquisitions in Palmdale for what originally was dubbed an "intercontinental" airport lasted for years), a new sports center (the Staples Center displaced numerous individuals and businesses) or any of the ubiquitous shopping malls that have sprouted throughout the land.
There's a lesson in the Mexican story that shouldn't be lost on American authorities. The message is not that Americans are going to start rioting and taking hostages to protest government land acquisitions, although some have come close in the past. Rather, the point is that acquisitions that displace large neighborhoods and disrupt family and commercial patterns tend to rouse deep emotional responses.
It's not just about money. Sometimes it's about the proposed "public" project. Most people can understand when their homes or businesses need to be taken for a new fire station, hospital or city hall. Emotions tend to run a bit hotter when their land is being taken simply to turn it over to some private business so that it can make money. And that is happening with greater frequency.
The problem had its genesis with the U.S. Supreme Court. Half a century ago, the court approved the concept of slum clearance, now called urban redevelopment, in the landmark case of Berman v. Parker, 348 U.S. 26 (1954). There, the court held that it didn't matter that one particular building in the slum clearance area was not dilapidated if consolidation of ownership was necessary to achieve the planners' goals. The owner's constitutional rights were satisfied on receipt of just compensation for the property taken.
The fact that the land wouldn't be "used" by the public, or for a genuinely public purpose, didn't mean that it wasn't being taken "for public use," as required by the 5th Amendment, because the "public use" was slum clearance - and what happened to it after the taking was none of the condemnee's business.
That theme was amplified 30 years later in Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), a strange case from the Sandwich Isles. Most land in Hawaii that wasn't owned by a government agency was owned by one of a handful of powerful estates. Those who lived or worked on the surface of that land leased it from the owners.
The Legislature decided to break up this land oligopoly by permitting the state to condemn the land title and convey it to the tenants. Again, the public didn't use the land, but the high court concluded that establishing a system of land tenure consonant with the rest of the country was public use enough.
The sweep of these opinions emboldened public agencies - and their friends. They thought that this broad interpretation of the concept of "public use" granted them virtual carte blanche to redistribute land titles.
Some redevelopment projects made little pretense of clearing slums (or even, in a more refined version, eliminating blight). They simply made use of the government's power to compel land sales to consolidate large blocks of property for development. Profits soared for the new owners, and redevelopment agencies benefited from increased tax revenues.
Landowners continued to protest such actions, however, and courts have begun to look with a jaundiced eye at some of the more outrageous attempts to loan the government's awesome power of eminent domain to politically connected individuals. There seems to be hope for the future.
In 99 Cents Only Stores Inc. v. Lancaster Redevelopment Agency, 2001 U.S.Dist.LEXIS 9894 (C.D. Cal. June 26, 2001), a redevelopment agency resolved to condemn a successful, local low-price store at the instigation of a larger low-price store next door in a redeveloped shopping center and convey the former to the latter for $1 - that's right, one buck.
Costco decided that it needed to expand its Lancaster store and that the only way to do so would be by taking over the adjoining space occupied by 99 Cents Only. The court enjoined the taking, concluding that such a maneuver had no conceivable public use, because the shopping center was not blighted (in fact, the redevelopment agency praised it as one of its great success stories) and ousting a successful Costco competitor had no public purpose - other than pleasing a company that Lancaster openly referred to as the town's "800 pound gorilla."
The Illinois Supreme Court dealt with a similar, if larger-scale, problem in Southwestern Illinois Development Authority v. National City Environmental, 768 N.E.2d 1 (Ill. 2002). The agency advertised that, for a price, it would exercise its power of eminent domain to acquire property from its private owners so that other private parties could develop it.
The developer of a race track took the agency's offer and sought condemnation of a neighboring property to expand a parking lot. There was no public study or determination of the need to condemn. The neighbor operated a successful metal recycling facility and had simply refused to sell voluntarily to the race track operator. Hence, the condemnation.
The Illinois Supreme Court would not allow it. Concluding that "[t]he power of eminent domain is to be exercised with restraint, not abandon," it refused to permit the forced acquisition of an on-going business just so a neighbor could increase the value of its own business. Government agencies, said the court, are not supposed "to act as a default broker of land."
New Jersey has been a hotbed of condemnations for private use and an equally hot area for protests. In one case, matters got so heated when Atlantic City wanted to eliminate homes to improve the access to its casinos that Time magazine editorialized that the government "stands prepared to wield the power of eminent domain, a legal term meaning 'we can do anything we want.'" Steve Lopez, "In the Name of Her Father," Time, July 14, 1997, at 4.
The popular notion that eminent domain means "we can do anything that we want" is the public perception that condemning authorities want people to have. They prefer that people not exercise their right to protest but simply take what is being offered for their land and go away.
But it's not working. Not even in New Jersey. Shortly after that Time magazine commentary, a trial court stopped Donald Trump in his tracks. "The Donald," as he prefers to be called, wanted to condemn land near his Trump Plaza Hotel to build a driveway and parking area for limousines used by the casino's high rollers - or maybe something else.
The arrangement that Trump worked out with the local redevelopment authority required him to use it for a parking lot only "for a reasonable period of time." After that, he could do with it as he pleased.
The court balked. By no stretch of the imagination would that be a public use - or even in the public interest. The taking was not allowed. Casino Redevelopment Auth. v. Banin, 727 A.2d 102 (N.J. Super. 1998).
The moral here is that those who wield the power of eminent domain need to exercise it with care. Time magazine notwithstanding, the phrase doesn't mean carte blanche. The protesters don't always win, but courts finally are catching on to the game that has been played for too long in the shadow of the Supreme Court's expansive language in Berman.
There are limits. And they are starting to be enforced. We haven't reached the level of rage exhibited recently in Mexico, but feelings about land ownership run deep. They are discounted at the cities' peril.
Michael M. Berger is a shareholder of Berger & Norton in Los Angeles. He represented the landowner in the 99Cents case.
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