insights (2005-42)

Eminent Domain’s Propriety in Knoxville

Public acquisition of private property via condemnation has long been a contentious issue, all the more so in the wake of the U.S. Supreme Court’s recent decision in a cause celebre case known as Kelo.

In that case, the court upheld New London, Conn.’s use of eminent domain to acquire a 90-acre site along the city’s waterfront for mixed-use redevelopment even though the property included a number of residences that were in no way blighted. Redevelopment that fosters economic growth represents a valid public purpose for taking private property under a Connecticut statute crafted for that purpose, the court held in a 5-to-4 decision. But the majority opinion went on to say that other states and localities could set more restrictive condemnation criteria and procedures.

In the ensuing furor, there’s been a lot of saber-rattling on the part of property rights advocates about ways and means of doing so. Here in Knoxville, City Councilman Steve Hall has now come forward with a proposed amendment to the City Charter that would require a supermajority of seven votes on that nine-member body to authorize any exercise of eminent domain. Moreover, it would prohibit any delegation of that authority to “any agency, subordinate governmental entity or other authority.”

The prime target of that prohibition is Knoxville’s Community Development Corp., which acts as the city’s agent in carrying out Council-approved redevelopment plans. As it happens, KCDC gets its eminent-domain authority directly from the state. So it’s highly doubtful whether a City Charter amendment could impinge on that authority because state law, as a rule, prevails over conflicting local enactments.

Be that as it may, the real question is whether Council should seek to impinge upon a process that’s stood the city in good stead for many years. The process starts with Council’s designation of a redevelopment area that specifies all of the properties to be included in it. KCDC then prepares a plan that establishes redevelopment objectives and sets the basis on which property may be acquired in order to fulfill them. After a public hearing, the plan is submitted to Council for its approval. So there are two stages at which Council decides whether to subject any given piece of property to condemnation.

Unlike Connecticut, in Tennessee economic development per se is not a valid purpose for initiating a redevelopment plan. Rather, state law requires that plans can only address areas that have been determined blighted. The state Supreme Court has long since held that not all of the property in an area has to be blighted in order for KCDC to proceed with its redevelopment as a whole. But KCDC can’t just take property from one owner in order to transfer it to another for private redevelopment that’s deemed preferable.

In implementing a plan, KCDC typically starts by asking affected property owners to submit plans for rehabilitation of their buildings or areas on their own. In many cases, remediation of blight is all that’s required. And in every case, KCDC assesses the capabilities of existing owners, financial and otherwise, to achieve the purposes of the plan before moving to acquire the property of those who can’t—initially via negotiation and only as a last resort via eminent domain.

In some larger-scale redevelopment areas, such as the site of the Whittle building that’s become a federal courthouse, some predetermined use may cast a shadow on the premise that redressing blight is the primary impetus for a plan. But when KCDC acquires property, its subsequent resale to a new owner or developer must be conducted via a competitive selection process.

Absent KCDC’s judicious exercise of its state-conferred powers, Knoxville wouldn’t have had a World’s Fair or a World’s Fair Park to show for it. There wouldn’t be a Riverview Tower, or TVA Towers or a Center Square office complex or a Hilton Hotel, at least not on their present sites.

More recently, KCDC’s Market Square redevelopment plan accomplished the restoration of a number of historic buildings that had become debilitated. Only two pieces of property were actually acquired and resold by KCDC. But the threat of condemnation is believed to have helped induce the owner of several dilapidated buildings, Frank Gencay, to sell them to Scott and Bernadette West for redevelopment that’s ensued.

It’s not as if city government could have accomplished all those purposes through the exercise of eminent domain, subject to City Council approval. With a limited exception, the city can take property only for public use, such as a park, a road or a public building. As a rule, only KCDC can make acquisitions for resale that facilitates private redevelopment, within the ambit of constitutional and statutory constraints on what constitutes a public purpose.

For City Council, after mandating a redevelopment plan, to interject itself into the implementation of the plan would serve to politicize and discombobulate a process under which KCDC exercises its authority with great care and often confidentiality where determinations about a property owner’s capabilities are concerned.

Steve Hall’s proposed City Charter amendment may have burnished his image as a champion of property rights amid a difficult reelection campaign. But it is an ill-conceived proposal, and Council should reject it.

© 2005 MetroPulse. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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