May 2, 2008

Commentary:

Another Day in Blighted Paradise

By Michael Chung Klam

“Blight.” It’s an ugly word that comes off the tongue like indigestion.

The use of eminent domain — government’s ability to take over private land for public use — due to deteriorated conditions (blight) has led to a considerable amount of discomfort for small business and home owners.

Determining an area as “blighted” invariably means politics and litigation. Especially, when the private owner and/or the community disagree with the designation and revolt against what they see as abuse of power.

If the government takes the land for economic redevelopment or for reasons of “economic blight” — Wal-marts, high-rise condos, super parking lots, ballparks that will bring in more revenue than a mom-and-pop business – you get David in this corner and Goliath in the other.

In Kelo vs. the City of New London, the source of much pubic outcry due to fear of government abuses, the Supreme Court made possible not only the right to take land from private owners and convert it to public use but to take land from one private owner and give it to another “preferred” private owner to further economic development.

In San Diego, use of eminent domain based on blight has ranged from taking over vacant spaces that have too many weeds (like some of the downtown area pre-Petco Park) to condemnation for having an “oddly shaped parking lot” such as the Grantville redevelopment, still pending designation, according to Councilwoman Donna Frye.

“Nothing has happened. It hasn’t been approved, but what’s sort of frightening is that they are collecting the tax increment,” Frye said.

Eminent domain as a source of income, whether the projects move forward or not, sounds the alarm for government watchdog and owner’s rights organizations here in San Diego and across the nation.

In late January of this year, the Grantville Action Group proposed an amendment to the City of San Diego’s Committee on Rules, Open Government and Intergovernmental Relations to limit eminent domain use to public projects – schools, parks, and facilities. The proposal was shot down.

Blight designation has been used historically to take land for improvements that benefit all, but this broadly definable and powerful term has created its share of doom and gloom.

Here are two of many definitions of blight: “Any cause of impairment, destruction, ruin, or frustration; and “An extremely adverse environmental condition, such as air pollution.”

“One man’s blight is another man’s paradise,” said Scott Barnett, President of Protectour-property.org.

The definition of blight is “very subjective,” he said, citing the development of the police station in Coronado where the blight argument was something of a stretch. Blight in San Diego is nothing compared to blight in New York, Los Angeles, or Baltimore, he said.

“It’s hard for me to make a finding that an area is blighted when a business is doing well and has turned into an important business,” said Frye. “That was not the intention of redevelopment law.”

It was intended to resolve urban decay, true blight, she said. And create redevelopment that would actually provide jobs and a reinvigoration of the area. “A lot of elected officials have looked at it as a way to capture the tax increment.”

One San Diego eminent domain case that made national news saw a successful, well kept Gaslamp Quarter business turned into a parking lot. “We blighted it for them in the name of removing blight,” said Frye of the former Gran Havana Cigar Factory on J Street.

The Cigar Factory’s owner won the first round of what would turn out to be years of litigation on appeal. Redevelopment – the plan to build a Marriot Renaissance Hotel – was put on hold. The court cut the original settlement of $7.5 million in half, partly by requiring the proprietor to pay his lawyer’s fees.

In mid-February, the Community Youth Athletic Center in National City attempted to stop its designation as a “blighted site.” The boxing gym, located in the middle of a high-rise condominium and retail project on National City Boulevard, lost on a technicality. The judge said they failed to submit on time publication requirements to challenge redevelopment. The Institute for Justice, representing the program will appeal, contending that the city did not prove blight.

Vista City Council recently approved a plan to almost double its redevelopment areas. 37 percent of Vista will be considered “blighted” and fit for redevelopment money, causing a certain degree of alarm for long-time residents and small business owners.

Another concern for those paying close attention to use of eminent domain is its effects on ethnic minorities. Urban renewal takings have displaced more than 3 million Americans since World War II, most of them underprivileged, living in urban areas.

“The economically disadvantaged get pushed out of the way,” said Sean O’Connor, partner with Sheppard Mullin Richter & Hampton LLP.

“Eminent domain harms segments of the community not able to protect themselves,” he said. “Eminent domain can be good but it needs to be used responsibly and correctly. When somebody wants to take property and give it somebody else, it goes to our fundamental sense of ‘No you can’t that.’ It goes against our fundamental sense of rules,” O’Connor said.

While O’Connor does not think that the predicted extreme abuses have occurred on the heels of Kelo, he notes, “nor have we seen limitations” to the law.

But California is looking to make significant eminent domain reforms with two new Propositions on the upcoming June 3, 2008 ballot.

“Propositions 98 and 99 are where the action is,” said John Lorman, a partner with the law firm Procopio Cory Hargreaves & Savitch.

Lorman explained that the two Propositions, which are similar at first glance, have consequential differences that will need to be considered by voters.

Also, if both Propositions pass, the one with the most votes wins, he said.

Prop 98: The California Property Owner & Farmland Protection Act (CPOFPA) is supported by Californians for Property Rights Protection, which is led by the Howard Jarvis Tax Association, mobile home park owners, apartment owners, and the California Farm Bureau.

“Prop 98 protects all kinds of real estate,” said attorney Pete Potente of Lyman and Potente, APLC. “However, the Proposition’s big issue is that it ends a lot of protections for tenants including rent control.”

Gov. Arnold Schwarzenegger and Senator Diane Feinstein, who oppose Prop 98, argue that it would not only abolish rent control but that it would undermine state and local governments’ ability to protect water supply and the environment, and to upgrade infrastructure.

PROP 99: The Homeowner’s Protection Act (HOPA) is supported by the League of California Cities, the Golden State Manufactured Home Owners League (GSMOL), the Coalition of Mobile Home Owners (Comocal), Neighborhood Friends, homeowners and senior organizations.

“(Proposition 99) protects private homes, without making it more difficult for government to do its job to improve our infrastructure and protect public health and safety,” Senator Feinstein said in a press release.

Opponents of Prop 99 argue that the measure fails to reform overly broad blight designations that allow takings by eminent domain.

Eminent domain gives hope to a lot of cities for potential revitalization that may not otherwise exist, according to Potente.

“But you’ll never find a nice, clean, straight road when it comes to eminent domain. It’s a constitutional issue that’s far from clarity.”

Letters to the Editor Return to the Frontpage