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Roanoke: Eminent-Domain Case Look Like Kelo Redux

Richmond Times-Dispatch
September 29, 2009
By A. Barton Hinkle

When the Supreme Court handed down its disastrous 2005 ruling on eminent domain in Kelo v. New London, Justice Sandra Day O'Connor made a prediction. "Any property may now be taken for the benefit of another private party," she lamented, "but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms." Kelo, in effect, took away David's slingshot and gave Goliath a bigger club.

Time is proving O'Connor right. So is the city of Roanoke.

In a case remarkably similar to New London, Conn.'s, seizure of Susette Kelo's home for economic development related to a Pfizer research facility, Roanoke has been fighting to seize a building housing a flooring company owned by Jay and Stephanie Burkholder for the benefit of Carilion Clinic (formerly Carilion Health System).

With 10 hospitals and $2 billion in revenue, Carilion already has a huge footprint in the area -- and it is getting bigger. In conjunction with Virginia Tech, Carilion is establishing a research institute and a Roanoke medical school. The Burkholders' business, B&B Holdings, is rather less grand; the flooring company on Reserve Avenue employs fewer than 50 full-time and contract workers.

The offices and warehouse stand in the way of a new taxpayer-subsidized business park dreamed up by Roanoke officials a few years ago. In 2001, the Roanoke City Council and the city's Redevelopment and Housing Authority mapped a redevelopment area around Jefferson Street, and hired a consultant who determined that a majority of the area was blighted or -- consider the implications of this -- "improperly developed."

The city began buying out property owners in the designated area. As The Roanoke Times reported last year, it "relocated existing businesses with compensation, demolished and removed structures, and sold the real estate at a loss to Carilion Clinic to redevelop. Carilion is already putting up a large medical office building, has finished an office building and two parking garages, and plans a medical school and research laboratory. The state will furnish $59 million for construction and startup costs." (The medical school is now well under construction.)

The housing authority offered to buy out the Burkholders, too. They declined. So the housing authority decided to take their property by force. It initiated condemnation proceedings, even though the Burkholders' building was not designated a blighted property. Under laws then in effect, the building did not need to be -- so long as a majority of properties in the redevelopment area were (that itself is a point of considerable contention).

The housing authority's lawyer insists Roanoke is not simply trying to take the Burkholders' property and give it to Carilion for economic redevelopment. "We are acquiring property in the redevelopment area for the purpose of eliminating blight and blighting influences," he said last spring. Yet the redevelopment plan itself states that the "primary goal" is "to provide for reinvestment and economic growth through redevelopment by private enterprise."

The Fifth Amendment's Takings Clause states: "nor shall private property be taken for public use, without just compensation." For decades, a plain reading of that language prevailed: "public use" had to mean something actually was employed by the public, as for example by riders on a railway. But the Supreme Court gradually twisted the meaning of the words. Public use became public purpose, which became public welfare, broadly defined -- meaning pretty much anything public officials want it to.

As a result, matters in many states now stand precisely where O'Connor warned they would: "The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."

Indeed, Judge William Broadhurst -- in whose court the Roanoke case now rests -- already has written that "to make the B&B Property available to a private owner . . . would not prevent the taking from qualifying as a 'public use,' so long as RRHA's primary purpose" is to "eradicate blight and encourage economic development."

After Kelo, some states tightened their eminent-domain laws. Virginia, for instance, now stipulates that a property must be itself blighted in order to be condemned. But Roanoke initiated its condemnation of the Burkholders' property before the change in law took effect -- so they are out of luck.

In his own Kelo dissent, Justice Clarence Thomas noted the odd position in which the case put the judicial branch: Courts would never defer to the other branches of government by letting them dictate what constitutes the constitutional grounds for searching a property. Yet they now defer almost wholesale when it comes to "the infinitely more intrusive step" of tearing one down.

This summer Judge Broadhurst heard the B&B condemnation case in Roanoke Circuit Court. Any day now he will deliver a ruling that will decide whether, once again, a Goliath can use the power of the state to clobber any inconvenient Davids who stand in its way.

My thoughts do not aim for your assent -- just place them alongside your own reflections for a while.

--Robert Nozick.