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Anti-blight bill raises property-rights concerns

The Virginian-Pilot
January 30, 2009
By Dave Forster

RICHMOND -- An anti-blight bill borne out of Hampton Roads' struggles with vacant homes appeared to be cruising through the General Assembly when it passed a House committee 22-0 last Friday.

People back home watched closely. City officials in Norfolk had targeted the bill as a priority. Civic activists in Portsmouth had helped craft it.

"This thing had been out on the streets heavily for months, and nobody had ever said 'Peep,' " said Mark Flynn, director of legal services for the Virginia Municipal League.

Instead, somebody said "eminent domain."

By Thursday, the bill's future was in doubt.

"We didn't see it coming," said Bryan Pennington, Norfolk director of intergovernmental relations.

Pennington told a caucus of Hampton Roads legislators Thursday morning that the rumor around the statehouse was that the bill has been "marked for death" in the House.

The opposition surfaced Tuesday at a Senate committee meeting.

Representatives from Waldo & Lyle, a Norfolk law firm that specializes in property rights, and from The Family Foundation, an advocacy group that scrutinizes government intervention, spoke against the bill.

Stephen Clarke, an attorney for Waldo & Lyle, called the bill an end-run attempt around eminent domain laws.

"I think that's when they really started to rally the troops," Pennington said.

Proponents insist the law offers only incentives and makes it easier for cities to work with owners to fix their property.

"It simply does not have anything related to eminent domain," Flynn said.

The legislation, HB1671 and SB1094, would allow localities to offer a tax incentive to owners to demolish or renovate derelict buildings. Cities could ask owners to fix up a property and give them a tax abatement for 15 years. The owner would continue to pay the tax on the home's pre-renovated value during that time.

The legislation allows cities to expedite the permitting process for the owner to remove the property. Cities also could seek a court-ordered sale of such properties if they are delinquent on taxes for one year, instead of the current two years, under the proposed law.

Pennington pointed to the proliferation of vacant dilapidated homes by CM Development in Norfolk and Portsmouth as an impetus for the legislation. The bankrupt housing company came under scrutiny after an investigation by The Virginian-Pilot.

Opponents cite the bill's definition of derelict buildings as their main concern. Under the law, a home that is vacant, boarded-up and not connected to electricity for six months is considered derelict.

That could put vacation homes in jeopardy, said Victoria Cobb, president of The Family Foundation.

"You just can't leave the door open to localities," she said.

Del. Sal Iaquinto, R-Virginia Beach, voted for the bill in a House committee but said he is reconsidering his stance after hearing about the eminent domain concerns.

A staunch property rights advocate, Iaquinto said the bill may be better off going to a courts committee for further scrutiny.

"This is an extremely important issue, and I just want to make sure we get this right," Iaquinto said.