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Fresh bid to crack domain rules.

Omelets require broken eggs. And building big things in the big city can mean running up against resistance from smaller property owners.

From Lincoln Center to Atlantic Yards, eminent domain has been a tool in some of the city's largest development projects.

The legal mechanism allows the city, state or federal government to step in to support development deemed to be in the public good, seizing private properly in exchange for what the government determines is just compensation.

Eminent domain is making it possible for Columbia University to expand in Harlem, and it was used in the 1990s as part of the economic revitalization of Times Square.

But not everyone is a fan. And some federal lawmakers are trying to tip the balance of power a little more towards private landowners.

Late last month, the U.S. House of Representatives passed, by voice vote, a bill that would prevent the use of eminent domain on property to be used for economic development in all but a list of specific cases, including the construction of a road, hospital, airport, or military base.

The bill has been referred to the Senate, where a similar proposal may be considered as an amendment to the larger Transportation Reauthorization bill, according to some observers.

The proposed law could have serious implications for development in New York.

In the immediate term, it would bring development of Willet's Point in Queens to a halt, according to Lisa Bova-Hiatt, deputy chief in the New York City Law Department, where she is in charge of condemnation and eminent domain.

"This bill would hurt urban cities like New York and Chicago and Atlanta the must, where the housing stock is old," Bova-Hiatt said. "Eminent domain is a vital tool to acquire blighted property, especially when there are holdouts."

The House bill was sponsored by Rep. E James Sensenbrenner (R-WI), who has championed the bill for defending the interests of economically disadvantaged property owners. Under the bill, cities or states that violated the new rules would be suspended from receiving federal economic development funds for two years.

New York Congressman Jerrold Nadler submitted testimony against the bill to the House Judiciary Committee.

"Historically, eminent domain has been used to destroy communities for projects having nothing to do with economic development, at least as defined in this bill," Nadler wrote, noting that highways would still be allowed to cut through communities under the proposed law. "It will permit many of the abuses and injustices of the past, while crippling the ability of state and local governments to perform genuine public duties."

After a Supreme Court decision in 2005 established a relatively permissive federal standard for eminent domain, many state governments have enacted their own, stricter, eminent domain laws.

"I question whether Congress should now come charging in and presume to sit as a national zoning board," Nedler wrote in his testimony.

The city's message to congress would also be to argue for more local control, according to Bova-Hiatt. "What this bill is trying to fix isn't broken, and states should be able to legislate how eminent domain is used in their own jurisdiction," she said.
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Author:Trefethen, Sarah
Publication:Real Estate Weekly
Date:Mar 21, 2012
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