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Group files to condemn properties

The Roanoke Times
June 30, 2007
By Matt Chittum

The Roanoke Redevelopment and Housing Authority's perfect record of acquiring land for Roanoke's Riverside Centre for Research and Technology without fully flexing its condemnation muscles came to an end Friday.

The authority filed a petition to condemn two properties on Reserve Avenue that are home to Surfaces, a flooring company.

B&B Holdings LLC, the company that owns the land, filed its own claim against the authority Friday for damages to the property resulting from water pouring into it because of construction going on all around it.

According to the authority's petition, B&B was offered just over $1 million for the last two parcels needed to complete the 27-acre first phase of the center, but B&B refused it. The two parcels total almost 3 acres and are assessed for city tax purposes at $845,100.

"The price was extremely low," said Norfolk lawyer Joe Waldo, who represents B&B. "Take the land values up around there, take the land values that RRHA has been selling for, it's significantly undervalued based on the market in the immediate area."

The authority's attorney, Mark Loftis, declined to comment on either petition.

The matter has been bound for court for months, and landed there to no one's surprise. Waldo handles condemnation cases all over the state -- including in Roanoke where he's taken on the authority before. B&B principal Brad Allen is a member of the Virginia Property Rights Coalition and is well-versed in eminent domain issues.

Land acquisition for Riverside Centre progressed smoothly until Friday, in significant part because of the authority's willingness to pay owners considerably more than the assessed value of their land.

The authority has paid a total of about $20 million in taxpayer funds, with a substantial portion of it coming from Roanoke city.

The city created the South Jefferson Redevelopment Area in March 2001, declaring the area blighted and therefore eligible for taking under eminent domain -- a law that allows government entities to take land for public purposes, after paying the owners a price based on the land's "highest and best use."

Historically, condemnation has been used for the creation of parks and highways and setting up utilities.

But in 2005, the U.S. Supreme Court, in Kelo v. City of New London, upheld a governmental taking of land for economic development purposes so a locality could transfer the property to a private developer.

Virginia's General Assembly passed its own law, with tighter restrictions on when eminent domain can be used, that takes effect Sunday -- days after the authority's petition was filed.

Nevertheless, Waldo takes issue with whether the Surfaces site is blighted, and therefore eligible for condemnation.

"They're operating a very successful business there," he said.

Allen has said in the past that his disagreement with the authority is a matter of principle. "The big picture is, are we or are we not, in Virginia ... going to do this [governmental takings] for enhancing revenue, which is something I don't believe our Constitution intended," he said.

B&B's claim against the authority, which Waldo filed, is an inverse condemnation. It's a claim that the work being done around the Surfaces property has facilitated the flow of water and debris onto the land. The water interferes with the use of the land and amounts to a temporary taking of the land each time it happens, the claim states. The claim seeks financial compensation for the loss.

Waldo said a judge could consolidate the two petitions.

If they go forward separately, B&B's claim would first go before a judge who would determine if the claim is factual. If the judge rules in B&B's favor, the matter would go before a jury to determine the amount of compensation.

B&B, meanwhile, has 21 days to respond to the authority's petition for condemnation. Waldo said Friday he's yet to talk to his clients about if or how they will fight it.