Homeowners Challenge Bogus “Blight” Designation

Jim and JoAnn Saleet first saw their dream home in 1965. The house on Gridley Street in Lakewood, Ohio, was perfect for the couple. It was in a cozy neighborhood and had a sweeping view of the Rocky River and valley. Jim and JoAnn wanted that home the moment they first stepped into the yard and saw the breathtaking view of fall foliage aglow in the valley. Standing together in that yard back in 1965, they decided that they would buy the place and never move again. This was where they would raise their children and stay for the rest of their lives. Over the next 38 years, they made many improvements to the house and continued to enjoy their beautiful view as they gardened. They promised their daughter, Judy, who lives nearby and loves her childhood home, that they would leave the house to her and her family.

The Saleets, however, are not the only ones who want to enjoy that beautiful view. After nearly 40 years happily ensconced in their home, the Saleets were stunned when Lakewood Mayor Madeline Cain announced that, to increase the city’s tax base, the City was helping a developer replace their home and neighborhood with high-end shopping and upscale condos. Suddenly, the Saleets faced the prospect of losing their home through eminent domain abuse, where government takes one person’s private property only to hand it over to another private party.

The news shocked many other residents of Lakewood’s West End. Julie and Hal Wiltse’s home and business is slated to be destroyed. They have lived there for more than 40 years. Sandeep Dixit and his family had moved to the neighborhood only a few years ago. He chose it as a safe, comfortable neighborhood to raise his two young children. Christa Eckert Blum moved to the neighborhood eight years ago with her husband. Christa’s grandfather’s home was seized by the Soviets during the Bolshevik Revolution of 1917. Originally from Latvia, she and her family were forced to flee the invading Soviet forces during World War II. While forcing people out of their homes happened all the time in war-torn Europe, she certainly didn’t expect it in America.

As these and other home and business owners look around, they just can’t understand it. They keep up their colonial homes, invest money in them and make improvements. The West End has a vibrant business community, without a single commercial vacancy—compared to more than 100 commercial vacancies in the rest of Lakewood. Why does the City want West End homeowners and businesspeople to leave? Why does the Mayor of Ohio’s “City of Homes”—as the motto on the City’s official seal reads—want to take a wrecking ball to those homes?

Sadly, the residents and business owners in Lakewood’s West End are not alone; they are part of a nationwide trend of eminent domain abuse. A recent report found that in just the past five years, state and local governments across the nation have taken or threatened to take by force more than 10,000 homes, businesses, churches and private land not for a “public use”—such as a police station or post office—but for the benefit of other private parties. 1

On May 19, 2003, the Washington, D.C.-based Institute for Justice joined the Saleets and 16 neighboring families to fight the transfer of their property to Cincinnati-based developer Jeffrey R. Anderson Real Estate, as well as two other private developers, CenterPoint Properties and Heartland Developers, LLC. Twelve homes and six businesses have joined the lawsuit. The Institute for Justice, along with local counsel Michael R. Gareau & Associates, LLP, asks the Cuyahoga County Court of Common Pleas to find that the West End neighborhood is not blighted, thereby preventing the City from condemning these homes and businesses for other private business development.

If Your Home is Not Brand-New…it’s “Blight”

After eight months of living in stress and uncertainty following Mayor Cain’s announcement, the Saleets and other West End residents watched their worst nightmares come true. In December 2002, the City officially approved a “community development plan,” along with a finding that the Saleets’ neighborhood was “blighted” under Lakewood law. A “blight study” alleged that the neighborhood had a disproportionate number of police and fire department calls and was “functionally and economically obsolete.” The homeowners knew this was impossible. Not only did their neighborhood look just like all the homes in Lakewood, but there had been no major crimes or fires.

With further investigation, it turns out the owners were right. There had been only one major crime (a robbery) in the preceding two-and-a-half years. The other police calls had been minor. Even more perplexing, while many police calls were related to several bars on a commercial street, 2 the City’s development plan will actually increase the number of bars. And most of the calls to the fire department had in fact been medical emergencies. 3

The homes do not have major structural deficiencies, so the study had to use something else to find “blight.” The study’s “blighting factors” include:

· lack of a two-car attached garage,

· less than two full bathrooms,

· less than three bedrooms,

· too-small homes (less than 1,400 square feet) and

· too-small yards (less than 5,000 square feet of lot size).

The study counted weeds and sidewalk cracks as site condition deficiencies. And it found homes “economically obsolete” if they were valued at less than $75 per square foot. 4

Of course, such “blighting factors” do not distinguish the West End from any other part of Lakewood. Almost no home in Lakewood has a two-car attached garage. A large majority have less than two full bathrooms. More than half are valued at less than $75 per square foot. Indeed, as it turns out, the homes of the Mayor and all of the City Council members (along with the vast majority of all Lakewood homes) would be blighted under the standards the “blight study” and the City applied to the West End homes. 5 The Saleets’ neighborhood really is like every other neighborhood in Lakewood.

No one could honestly say the area is blighted. It’s far too attractive. Even Mayor Madeline Cain described it as a “cute neighborhood.” 6 But it’s a cute little neighborhood with a beautiful view. Richer people might pay for that view and thus generate more tax dollars—at least that’s what the City is hoping. Mayor Cain even recognizes how being uprooted can affect families, because her family home was once threatened with condemnation. “I vividly remember the trauma that began when they first talked about buying the land. … I remember the trauma in my family. I’ve lived through it, and I don’t wish that on anybody.” 7 Anybody except the home and business owners of the West End, that is.

Unfortunately, the Saleets and their neighbors are just the latest example of a frightening trend. Other private property owners in Ohio and nationwide find their property rights under attack from unethical marriages of convenience between developers and local governments. The result is an erosion of a fundamental constitutional right.

The bureaucrats in Lakewood are not the first to stretch the definition of “blight” to justify taking perfectly fine property and handing it over to a private developer. Cities will find a way to label anything blighted, using preposterous justifications for their designation. In Kentucky, a neighborhood with $200,000 homes has been declared blighted. Englewood, N.J., termed blighted a thriving industrial park that had one unoccupied building out of 37 and generated $1.2 million per year in property taxes. Richfield, Minn., labeled buildings blighted that did not have insulation that met Minnesota’s rules for energy-efficient construction of new buildings. And various California cities have tried to label neighborhoods blighted for peeling paint and uncut lawns. 8

Although city officials will usually tell citizens that blight designations are useful for funding and tax abatement, in fact a blight designation places all properties in the area at the mercy of both bureaucrats and developers. Residents should therefore view any proposed blight designation as the first move in a coming land-grab.

Eminent Domain: How it Works, How it is Abused

Eminent domain is the power of government to take away a person’s home or business. It has rightly been called the “despotic” power of government. 9 Because of the vast potential for abuse of such a serious and drastic power, the Ohio and U.S. constitutions state that private property shall not be “taken for public use without just compensation.” 10 This constitutional provision imposes two important limits on the taking of private property: first, that the use must be public, and second, that just compensation must be paid. If private property could be taken for any use at all, the term “public” would not have been included.

Originally, “public use” was understood by everyone—courts, local governments and the general citizenry—to have its ordinary meaning, and eminent domain was intended only for projects that would be owned by and open to the public, such as to construct public works like roads and water systems and to erect public buildings like post offices.

Gradually, though, government has come to ignore these limits. Now, local governments take individuals’ private property and give it to other more politically powerful private parties for their economic profit. After a private entity or developer identifies the parcels of land it wants to acquire and city agencies approve a “redevelopment project,” the city attempts to confiscate these private properties and transfer them to the developer. They also ignore the personal values of home and business ownership to the individuals being evicted.

Courts, instead of acting as a check on these abuses of government power, have significantly abdicated their role and often simply defer to whatever claims of “public purpose” a legislature or administrative agency makes, no matter how attenuated. With a strong economic incentive and little judicial check on the use of eminent domain, in the eyes of state and local agencies, all the benefits weigh in favor of using government power to condemn private property and evict the rightful owners.

The erosion of the doctrine of eminent domain has led to predictably appalling results. In 1981, Detroit destroyed Poletown, the last racially integrated neighborhood in the city, and gave the property to General Motors to build a plant. 11 The closely knit community could not be replaced, and the plant did not live up to its promise of bringing economic prosperity to the city. 12 Likewise, when the City of Oakland decided that it didn’t want the Raiders football team to move to Los Angeles, it tried to exercise eminent domain to take ownership of the team and force them to stay. 13 And in 1984, the U.S. Supreme Court allowed Hawaii to engage in a wholesale transfer of land from owners to renters. 14

Eminent Domain Abuse Statewide…and Nationwide

Ohio has had more than its fair share of eminent domain abuses in recent years. Norwood, a suburb near Cincinnati, is considering condemning another attractive residential neighborhood for a shopping mall expansion in which Jeffrey R. Anderson Real Estate is also involved. As a prerequisite to future condemnations, Norwood authorized a blight study on April 8, 2003. 15 Toledo condemned many homes for a Chrysler plant that turned out to produce far fewer jobs than originally projected. 16 In total, Ohio cities have condemned or threatened to condemn more than 400 properties in just the past five years. 17

Ohio certainly isn’t alone. Included in the more than 10,000 documented instances of eminent domain abuse over the past five years are several ongoing controversies that represent just the tip of the iceberg: the Connecticut Supreme Court stands poised to decide whether the New London Development Corp. can condemn waterfront homes for an office building and other, unspecified, uses. Mesa, Ariz., has been trying to condemn a brake shop for a hardware store. Riviera Beach, Fla., passed a plan that will displace more than 5,000 people, 18 and San Jose, Calif., recently designated one-tenth of the entire city blighted. 19

“Nobody’s Home is Safe”

“If our home isn’t safe, nobody’s home is safe,” said Jim Saleet. Sadly, he is absolutely right.

For all of these redevelopment projects, city leaders must assert some sort of public benefit, and the number one claim is that the project will bring jobs and tax dollars—just as Mayor Cain and the Lakewood City Council argue. On a practical level, some projects may bring tax dollars and jobs; others are utter disasters. More importantly, if the promise of greater jobs or profits is enough to take someone’s property, then almost no one is safe. Practically any home in the United States would generate more tax dollars as a Costco. Small businesses provide fewer jobs than an industrial park. And houses of worship produce no tax dollars and few jobs. The implications of the jobs-and-taxes mantra is that everyone’s home, everyone’s business is up for grabs. Citizens just have to hope that no one gets a bright idea to build an office block where their homes and businesses stand. Using jobs and taxes as a justification for eminent domain gives bureaucrats (and developers) unlimited power to seize property.

Condemning property for jobs and taxes has dangerous practical implications, but it is also deeply immoral. The idea that one person will be forced to sacrifice her peace and happiness so that someone else can profit financially is repugnant to our society and the core principles that led to our founding. It cannot be tolerated.

The legal landscape seems finally to be shifting away from rubber-stamping all condemnation projects. In the past few years, numerous courts have actually rejected condemnation projects where the purpose was transfer to private parties. Last year, the Illinois Supreme Court issued a stinging rebuke to an agency that sought to condemn land for a nearby racetrack. 20 Connecticut rejected the condemnation of a neighborhood diner for a high-end apartment and retail building. 21 And California has overturned a series of ludicrous blight designations. 22

Moreover, a growing grassroots rebellion is also underway against abusive eminent domain actions. In Baltimore County, Md., legislation that expanded the power of eminent domain beyond its constitutional limits provoked a revolt by concerned property owners and citizen activists who placed a referendum on the November 2000 ballot to eliminate the power. 23 The expanded eminent domain power was defeated at the ballot box by a 70 percent to 30 percent vote. 24 In November 2000, Pittsburgh residents joined by the Institute for Justice defeated a proposal to demolish about one-fifth of the downtown area and displace more than 120 businesses so the City could give the land to a developer to build an urban shopping mall. 25 Also, citizens in New Rochelle, N.Y., scuttled a plan by the City government to condemn an entire neighborhood to make way for an IKEA department store. 26 Groups of citizen activists who oppose eminent domain abuse have sprung up all over Ohio, in communities around Norwood, Evendale, Willowick and West Chester, as well as Lakewood.

The Institute for Justice created the Castle Coalition (www.castlecoaltion.org) after watching and helping several groups of grassroots activists successfully fight off attempts to take their property for other private parties. The Castle Coalition provides a central bank of information and helps activists connect with each other in fighting the abuse of eminent domain.

Litigation Strategy

The Institute for Justice is committed to a program of litigation that will help restore judicial protection of private property rights—the basic rights of every American to responsibly use and enjoy their property. As the U.S. Supreme Court stated a decade ago, “Individual freedom finds tangible expression in property rights.” 27 Property rights are the foundation of all our other rights; without constitutionally protected private property, there is no freedom of the press, no freedom of speech, no right to assemble, among our many other American birthrights. The choices a person makes concerning her home or business are among the most personal and important decisions she will ever make. When government exercises eminent domain, it can take someone’s home or livelihood, exacting enormous personal costs. The Institute is especially concerned with the way that government actions affect those who have relatively limited economic means to defend themselves against such outrages.

Lakewood’s attempt to take these properties violates the Ohio and U.S. Constitutions and Ohio statutes. While the City claims the area is “blighted,” nothing could be further from the truth. In fact, the only reason the City even tries to label the property blighted is that the City needs a legal excuse to grab the homes. Lakewood’s blight declaration defies both the law and common sense.

Taking homes and businesses from one person to give to another is not a “public” use. The public won’t own the stores and condos; the developer will. And while Ohio courts have been somewhat flexible in defining public use, the Ohio Supreme Court has also stated that eminent domain may not be used to take private property for private purposes. 28

Conclusion

Across the country, local governments are labeling thriving neighborhoods “blighted” as an excuse for transferring property to private developers. If the West End neighborhood can be condemned based on a ludicrous blight designation, then so can any other neighborhood. Keeping cities honest about blight is therefore vital to preserving the rights of ordinary citizens to enjoy their property and their neighborhood in peace. Without constitutional constraints, all the incentives promote government’s aggressive, unbridled use of the eminent domain power, regardless of the impact on innocent property owners. It is time to shift the balance away from government power and back to its citizens.

Litigation Team

The litigation team for this case for the Institute for Justice is Senior Attorney Dana Berliner, who litigates property rights, economic liberty and First Amendment cases nationwide, and Staff Attorney Bert Gall, who litigates property rights and school choice cases. Berliner’s first eminent domain case was on behalf of an elderly widow from Atlantic City who successfully fought Donald Trump’s taking of her home through a state agency. She is also author of the report, “Public Power, Private Gain,” which is the first study ever to document the widespread abuse of eminent domain nationwide. Prior to joining the Institute, Gall spent two years in private practice at a large firm in Charlotte, and one year as a clerk for Judge Karen Williams of the 4th U.S. Circuit Court of Appeals. Ably assisting the Institute for Justice as local counsel are Michael Gareau, Sr., and David Gareau, both of Michael R. Gareau & Associates, LLP.

The Institute for Justice is the nation’s leading legal advocate against the abuse of eminent domain, currently fighting battles across the nation against the taking of private properties by governments for the benefit of private parties. These include cases in metropolitan New York; New London, Conn.; and Mesa, Ariz. IJ has already scored victories against the abuse of eminent domain in court and in the court of public opinion in Atlantic City, N.J.; Baltimore; Pittsburgh; and Canton, Miss.

For more information contact:

Lisa Knepper

Director of Communications

Institute for Justice

901 N. Glebe Road, Suite 900

Arlington, VA 22203

W: (703) 682-9320 , ext. 202

C: (703) 597-2523

John Kramer

Vice President for Communications

Institute for Justice

901 N. Glebe Road, Suite 900

Arlington, VA 22203

W: (703) 682-9320 , ext. 205

The Institute for Justice is a Washington, D.C.-based public interest law firm, which through strategic litigation, training and outreach, advances a rule of law under which individuals control their own destinies as free and responsible members of society. It litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties, and to restore constitutional limits on the power of government. In addition, it trains law students, lawyers and policy activists in the tactics of public interest litigation to advance individual rights. The Institute was founded in September 1991 by William Mellor and Clint Bolick.