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COURT LIMITS EMINENT DOMAIN USE

BY IAN RITTER

The Michigan Supreme Court’s July 30 ruling limiting the government’s use of eminent domain is “a loud wake-up call” for developers, says John Echeverria, executive director of Georgetown University’s Environmental Law and Policy Institute. “Many major malls and projects have relied on eminent domain, and the loss of this tool would be devastating,” he said.

In Wayne County v. Hathcock, a unanimous state Supreme Court reversed a lower court’s decision in the 1981 Poletown Neighborhood Council v. Detroit case, saying that with the latter, “the ownership of real property is perpetually threatened by the expansion plans of any large discount retailer, megastore or the like.”

Eminent domain allows governments to obtain private property by compulsory purchase. But the state Supreme Court ruled that though government can employ it to facilitate building such public projects as highways, it can’t do so to benefit a private entity.

The decision might well reverberate beyond Michigan, says Jeffrey Finkle, president and CEO of the International Economic Development Council, Washington, D.C., asserting that it “absolutely” could be cited in battles over urban redevelopment projects in other states. “In order to build new, large-scale hotels in cities, you need large tracts of land,” Finkle said. He notes also that eminent domain made possible such projects as the redevelopment of New York City’s Times Square and several urban shopping centers.

The state Supreme Court ruled in the Poletown case that some 1,500 residents and 50 businesses could be displaced to make way for a General Motors plant. Though made by a state supreme court, the decision has been used as a case law precedent around the United States.

The current case involved Wayne County’s attempt to condemn property that then would be used for a business park. ICSC filed an amicus brief supporting eminent domain, though disagreeing with its application in this case.