HomeMy WebLinkAboutMINUTES - 07122005 - SD5 TO: BOARD OF SUPERVISORS Contra
FROM: SILVANO B. MARCHESI, COUNTY COUNSEL Costa
County
DATE: July 12, 2005 Is 1 M40-V
SUBJECT: Consider County Counsel Report on Kelo v. City of New
London, Recent U.S. Supreme Court Case on Government Authority to Take Private
Property for Economic Development
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
1. RECOMMENDATIONS: ACCEPT the attached report by County Counsel on Kelo v. City of
New London, the recent U.S. Supreme Court Case on the government's authority to exercise its
power of eminent domain for the purpose of economic development.
11. FISCAL IMPACT: None
111111. REPORT: Attached.
CONTINUED ON ATTACHMENT: X YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVEOTHER
SIGNATURE(S):
ACTION OF BOARD ON 0')c (19- a APPROVED AS RECOMMENDED_. OTHER
VOTE OF SUPERVISORS
V UNANIMOUS(ABSENT &10 14 1 HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY
OF AN ACTION TAKEN AND ENTERED N THE MINUTES OF THE
AYES: NOES: BOARD OF SUPERVISORS ON THE DATE SHOWN.
ABSENT: ABSTAIN: ATTESTED 00*+t I O;L--j
CLERK OF THE BOARD OF SUPERVISORS AND COUNTY
ADMINISTRATOR
BYe
DEPUTY
Originating Dept:County Counsel
cc: County Administrator Office
LTF/eh
Office of the County Counsel Contra Costa County
651 Pine Street, 9th Floor Phone: (925)335-1800
Martinez, CA 94553 Fax: (925)646-1078
Date: July 7,2005
To: Board of Supervisors
From: Silvan B. Marchesi,County Counsel.Xkk
Re: Kelo v. City of New London, Government Authority to Exercise its Power of
Eminent Domain for Economic Development
SUMMARY:
Y:
The recent U.S. Supreme Court decision in Kelo v. City of New London' reaffirms the
government's right to exercise its power of eminent domain to acquire property to promote the
economic well-being of a region. The Supreme Court deferred to state and local legislatures in
dem public use. In California,the Kelo case is expected to have little impact,as the
Community Redevelopment Law requires a finding of blight, which was not the case with the
Connecticut statutes at issue in the Kelo case.
DISCUSSION:
The 51 Amendment of the United States Constitution limits government's ability to "take"
private property by requiring that any governmental taking be for a public use and only upon
payment of just compensation. The 5 h Amendment reads:
No person shall be held to answer for a capital, or otherwise infamous
crime unless on a presentment or indictment of a grand jury,except in
cases arising in the land or naval forces, or in the militia,when in actual
service in time of war or public danger;nor shall any person be subject
for the same offense to be twice put in jeopardy of like or limb;nor be
deprived of life,liberty, or property,without due process of law;nor
shall private property be taken for public use without just
compensation. (Emphasis added.)
In the recent case of Kelo v. City of New London, the United States Supreme Court affirmed
long-standing rulings that the 5'Amendment's"public use"requirement is not limited only to
facilities to be opened to the general public,but also includes acquisition of property for a
"public purpose." The Court also renewed its deference to legislative judgments as to what
public needs justify the use of the tapings power. The Court found that the 5"Amendment does
I Kelo v City of New London(2005) U.S. ,2005 U.S.Lexis 5011;all subsequent page
references follow Lexis pagination_
Board of Supervisors
.July 7,2005
Page 2
not prohibit Connecticut from using eminent domain in order to promote economic development,
even in the absence of blight.
Background of The Kelo v, Co-,o New London Case
The U.S. Supreme Court maj ority ruling in Kelo does not depart from prior legal rul i ngs,on the
taki clause-. The majority's decision follows aline of takings cases in which economic
development bas been held to justify the of private property,subject to the payment of just
compensation. In fact,some commentators express surprise at the closeness of the vote(5-4)in
light of such past decisions by the Supreme Court.
The facts in the Kelo case have generated much sympathy for the affected property owners_. The
Supreme Court previously determined that non-blighted property could be included in a blighted
redevelopment area and taken to make way for redevelopment(Berman v. Parker(1954) 348
U.S. 26,35). In this case,the non-blighted homes of the property owners in a non-blighted area
were condemned to make way for a development project to be implemented by private
developers(who would reap the immediate financial benefits of the plan),primarily because the
plan would generate more taxes and create more jobs. This situation has caused alarm.
In any case, after decades of economic decline,a State of Connecticut agency had designated the
City of New London as a"distressed municipality." Thereafter,in 1996,the Federal government
closed a naval base at the Fort Trumbull area of the City,causing a loss of 1,500 jobs. In 1998,
the City's unemployment rate was nearly double that of the rest of the State,and its population of
24,000 was at its lowest since 1920. Due to these conditions,the City of New London,
particularly its Fort Trumbull area,was targeted for economic revitalization. In 2000,the City of
New London approved a development plan for the Fort Trumbull area,which plan was approved
by appropriate state agencies. The plan called for the development of a"small urban village,"
including restaurants, shopping,a marina, and research and office space to take advantage of a
large pharmaceutical company's recent relocation to the area (It was hoped that the
pharmaceutical company's relocation to the area would draw additional commerce to the area.)
The plan was intended to create jobs,generate tax revenue,help build momentum for the
revitalization of the downtown area, and make the City"more attractive"and create leisure and
recreational opportunities,(Kelo at page 9.) The planning activity was supported by a$5.35
million bond issue by the State in 1998.
Of the 115 parcels in the development area, 100 were acquired by the City's development agent
without resort to eminent domain proceedings. However,condemnation actions had to be
initiated against the nine owners of the remaining 15 properties, including one owner who was
born in Fort Trumbull in 1918 and lived there her entire life.
The issue that the Supreme Court ultimately tely faced was whether the condemnation actions were
for a"public use,"which is allowed by the Constitution,or was for the purpose of conferring a
private benefit on a private party. The Court reaffirmed that the government may not"take the
property of A for the sole purpose of transferring it to another private party B,even though A is
paid just compensation." (Kelo,at.page 15.) "A purely private taking could not withstand the
Board of Supervisors
July 7,2005
Page 3
scrutiny of the public use requirement;it would serve no legitimate purpose of government and
would thus be void.."(Ibis, quoting from Missouri Pacific R- Co. v, Nebraska(1895) 164 U.S.
403.)
In analyzing what constitutes a public use,the maj ority noted that the U-.S. Supreme Court"long
ago rejected any literal requirement that condemned property be put into use for the general
public."(Kelo at page 17,quoting from Hawaii Housing Authority v, Midi�f(1984)457 U.S.
229,in which the U.S. Supreme Court upheld the State of Hawaii's legislation requiring lessors
to sell fee title to lessees occupying the Land in order to reduce the concentration of land
ownership,deferring to the State's determination that the eliminon of the"social and economic
evils of a land oligopoly"qualified as a valid public use,)
The majority discussed aline of public use cases that arose in a purely economic context,
particularly those arising in redevelopment situations,noting that without exception,the cases
have defined the concept of public use broadly,reflecting longstanding U.S. Supreme Court
deference to legislative judgments in this field. (Kelo,at page 20,) Specifically,the Court cited
its decision in Berman v, Parker, sera 348 U.S. 26, In that case the Court upheld a
redevelopment plan for a blighted area,in Washington,D.C. A department store owner
challenged the condemnation of his property,pointing out that his store was not blighted, The
Court unanimously refused to consider this claim individually,instead deferring to the legislative
judgment that the area,must be planned as a whole. Thus,public use was established despite the
lack of blight in the particular property in an otherwise blighted area. (Kelo,at page 21.)
In upholding the City of New London's determination of public use,the Supreme Court majority
stated:
Those who govern the City were not confronted with the need to remove
blight in the Fort Trumbull area,but their determination that the area was
sufficiently distressed to justify a program of economic rejuvenation is
entitled to our deference, The City has carefully formulated an economic
development plan that it believes will provide appreciable benefits to the
community,including--but by no means limited to --new jobs
and
increased tax revenue.As with other exercises in urban planning and
development,the City is endeavoring to coordinate a variety of
commercial,residential,and recreational uses of land,with the hope that
they will form a whole greater than the sum of its parts. To effectuate
this plan,the City has invoked a.state statute that specifically authorizes
the use of eminent domain to promote economic development, Given the
comprehensive character of the plan,the thorough deliberation that
preceded its adoption,and the limited_scope of our review,it is
.appropriate for us,as it was in Berman,to resolve the challenges of the
vidual owners_,not on a piecemeal basis,but rather in light of the
entire plan.Because that plan unquestionably serves a public purpose,
Board of Supervisors
July 7, 2005
Page 4
the takings challenged here satisfy the public use requirement of the
Fifth Amendment.
impact on California
The California Legislature and courts have adopted an expansive notion of"public use"that is
consistent with the U.S. Supreme Court's approach. For example, Government Code Section
25350.5 authorizes the county to"acquire by eminent domain any property necessary to carry out
any of the powers of functions of the county." This broad provision has been in effect for over
30 years. The courts have refused to limit the scope of"public use"to narrow,traditional
purposes such as construction of streets, highways,parks, and public buildings.2 In our view,the
Kelo decision did not add any authority to that which a public agency already had under earlier
U.S. Supreme Court decisions and under state law.
As indicated, Connecticut had enacted legislation permitting the City of New London's
development plan to alleviate conditions of"economic distress,"a"municipal development
statute." Although it upheld that statute as not violating the 5th Amendment, the Court noted that
states are free to impose greater restrictions upon their exercise of the power of eminent domain
than are encompassed by the 5'Amendment. (Kelo, at page 36.) In a footnote,the court noted
that"under California law, for instance,'a city may only take land for economic development
purposes in blighted areas,"citing Health& Safety Code Sections 33030-33037 and
Redevelopment Agency of Chula Vista v. Rados Bros. (2002) 95 Cal.App. 4th 309, 115 Cal.Rptr.
2d 234. (Kelo, at page 37.)
Indeed, the Community Redevelopment Law(Health& Saf. Code, § 33000 et seq., "CRL")
requires a condition of"'blight,"' which was not required by the Connecticut statutes.
Furthermore,the courts have not always upheld a public agency's finding of blight under the
CRL, In 99 Cents Only Stores v Lancaster Redevelopment Agency(2001)23 7 F.Supp..2d 1123,
the city argued that conde property on which the 99 Cents Store was located so that a
nearby Costco could expand into that area constituted public use, because it was for the purpose
of avoiding future blight. The court rejected that argument on the basis that the CRL authorizes
the use of eminent domain only upon a finding of existing blight, (Id,at p, 1130,) In Boelts v.
City ofLake Forest(2005) 127 CaLAppAth 116,the Court of Appeal found no blight where the
2 For example,see City of Oakland v Oakland Raiders(1982)32 CaDd 60,in which the
California Supreme Court upheld the condemnation of a sports cbise
3 "Blight"is defined in the CRL as to both physical and economic conditions. Physical
conditions leading to blight include hn a buildings,substandard.design,inadequate size of builines or lots,lack of
parking,adjacent uses that are incompatible with each other and that prevent economic development,and
substandard lots in multiple ownership_ (Health&Sa£Code, §33031(4)