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A Tale of Texas Takings:

The Houston Chronicle has an interesting story about an ongoing eminent domain case where the city of Houston is seeking to comdemn property for the benefit of a politically influential developer [HT: Instapundit]:

When finished, the .09-acre patch of land near the Galleria will be the city's smallest park. Too small even for a basketball court, Post Oak Lane Park might be big enough for a game of horseshoes, a few benches and greenery.

Using its power of eminent domain, the city of Houston seized the land for the park from brothers James and Jock Collins last year. Officials claimed there was a "public necessity" for the park in the Uptown area, despite the fact that a much larger one — the 4.7-acre Grady Park — is just two blocks away.

What will the new "pocket park" be used for? That's hard to say. The city has yet to draw up any plans for the land at the corner of Post Oak Lane and San Felipe. In fact, city parks director Joe Turner testified in a sworn deposition last month that his department did not come up with the idea for the park and that he opposed using condemnation powers for its creation.

What the park will provide is a landscaped gateway to an upscale development planned next door, called BLVD Place.

Mayor Bill White and council members insist they condemned the land last year as a matter of good faith to taxpayers. The city needed some of the land to widen San Felipe and will turn the rest into the park.

But documents obtained by the Houston Chronicle show the move also helped BLVD Place developer Ed Wulfe, a major donor to White, seal the deal on a $12.5 million land sale related to his ambitious mixed-use development.

If the Chronicle's description is accurate, this is a typical case of the use of eminent domain for the benefit of private interest groups under a thin veneer of advancing the public interest. The landowners are trying to fight the taking in court. But, as the Chronicle points out, they face an uphill legal struggle because "[p]roving abuse of eminent domain authority could be difficult, legal experts said." I agree with the unnamed experts consulted by the Chronicle reporters. Texas law allows the condemnation of almost any property for nearly any plausible-seeming reason presented by government officials.

You may wonder how this could be. After all, Texas is one of 43 states that adopted a new eminent domain reform law in the wake of the massive public backlash after the Supreme Court's hugely unpopular decision in Kelo v. City of New London. The answer is that Texas' 2005 law is one of many that purports to constrain eminent domain without actually doing so. Although the new statute forbids takings that transfer property to private parties for "economic development," it allows essentially identical condemnations that promote "community development;" under the new law, virtually any real or imagined benefit to the public can be portrayed as facilitating "community development." The new statute also perpetuates previous laws allowing state and local governments to declare almost any area "blighted," thereby making it eligible for condemnation in order to facilitate alleviation of the supposed "blight." I discuss Texas' bogus post-Kelo "reform" law on pp. 31-33 of this article, which also analyzes similarly ineffective reforms in many other states.

UPDATE: I suppose I should reiterate that, unlike, in Kelo, much of the condemned land here may end up as part of a publicly-owned facility: a city park. However, some will apparently be used as a "landscaped gateway" for a privately owned development project. If that happens, there would effectively be a transfer of at least some of the condemned land to a private entity, even if the city might continue to own the "gateway" on paper.

themighthypuck (mail):
So we really are, in the end, a Nation of men.
12.30.2008 7:20pm
Hedberg:
This deal smells. Not only is the condemnation clearly designed to benefit the mayor's cronies, the property owners are being given much less for their land than the developers had offered previously. According to the article, one justification for the taking is that part of the land had to be taken for a street widening and it would not cost much more to take the rest as well. So, the public purpose seems to be that land can be grabbed cheap.

You know it has to be bad when the cheer leaders at the Chronicle (a paper that surely should be ranked below the Midland Reporter-Telegram among Texas papers) think something stinks.
12.30.2008 7:24pm
Dan Simon (mail) (www):
Ilya, you seem to be arguing the rather non-controversial point that the power of eminent domain is a power, and that therefore, like any other power, it can be abused if exercised dishonestly and corruptly. In particular, this case seems to me to have nothing whatsoever to do with Kelo, since as you yourself point out, the ostensible purpose of the taking is a clear-cut public use (a city park).

Did you have a particular legal reform in mind that would prevent corrupt, dishonest local governments from exercising their eminent domain powers corruptly and dishonestly? Or is this just one of those stern morality tales about the evils of government (cf., CRA, Fannie Mae/Freddie Mac) that libertarians seem so fond of reciting these days?
12.30.2008 7:36pm
Steve:
As in all things, surely the best answer must be a federal remedy.
12.30.2008 7:46pm
J. Aldridge:
Must be another of those "pay to play" schemes.
12.30.2008 7:51pm
Seerak (mail):
The answer is that Texas' 2005 law is one of many that purports to constrain eminent domain without actually doing so.

Sounds like Prop 99 in California.
12.30.2008 7:55pm
Ilya Somin:
Ilya, you seem to be arguing the rather non-controversial point that the power of eminent domain is a power, and that therefore, like any other power, it can be abused if exercised dishonestly and corruptly. In particular, this case seems to me to have nothing whatsoever to do with Kelo, since as you yourself point out, the ostensible purpose of the taking is a clear-cut public use (a city park).

As the article points out, some of the land is to be used to facilitate the construction of a private development and the eventual use of the rest is unclear. So at least some will be transferred to private parties for economic development purposes - exactly as in Kelo.

To the extent that some is intended to be used for a park, I would still urge the adoption of legal rules that ensure that such public uses are not mere pretexts for private ones. Texas law in fact does have such a provision, but it is rendered ineffective by the fact that public use is defined so broadly.
12.30.2008 7:55pm
Ilya Somin:
The answer is that Texas' 2005 law is one of many that purports to constrain eminent domain without actually doing so.

Sounds like Prop 99 in California.


Exactly, though with many differences in the details. I blogged about Prop 99 extensively earlier this year. See this thread.
12.30.2008 8:00pm
RPT (mail):
Now that the president is free to get back into baseball, do the Texas Rangers need another stadium in Houston?
12.30.2008 8:44pm
Oren:

UPDATE: I suppose I should reiterate that, unlike, in Kelo, much of the condemned land here may end up as part of a publicly-owned facility: a city park. However, some will apparently be used as a "landscaped gateway" for a privately owned development project.

Is the public generally allowed to make us of "landscaped gateways"? I'm not clear on the actual planned disposition of the land.
12.30.2008 9:49pm
Dan Simon (mail) (www):
I would still urge the adoption of legal rules that ensure that such public uses are not mere pretexts for private ones.

I like it: "Henceforth, no political figure or body shall dissemble about their true motives for any of their actions while in office. Offenders are subject to fines, imprisonment and suspension from office. Judges and officers of the court are hereby empowered to perform brain scans on suspects to determine whether their purported public-spirited intentions are in fact mere pretexts for private ones. Voters who insist on voting for politicians discovered to have been acting on mere pretexts will be declared ignorant, and their voting rights annulled."

Is that what you had in mind?
12.30.2008 11:02pm
subpatre (mail):
Dan Simon claims "...this case seems to me to have nothing whatsoever to do with Kelo, since as you yourself point out, the ostensible purpose of the taking is a clear-cut public use "

"Clear-cut public use" should not be the standard, else condemning your house (perhaps you dissed the mayor) for a micro-park fits your criteria perfectly. Condemning your house to provide parking for a business executive could arguably —ala Kelo— fit that same standard, as does budgeting the micro-park for construction in the year 2073.

The standard needs to be: for a public use, not met by another or a lesser method, minimally enacted, for a demonstrated public need, as a last resort, and with surplus publicly auctioned.

Texas is just one more example (not a 'stern morality tale') of governments that duped their constituents when they enacted fake meaningless reforms.
12.30.2008 11:25pm
Jonathan F.:
Ilya wrote:

"[Using some land] as a 'landscaped gateway' for a privately owned development project . . . would effectively be a transfer of at least some of the condemned land to a private entity, even if the city might continue to own the 'gateway' on paper."

I recognize that the gateway would almost entirely benefit BLVD, but in what way does that amount to an "effective[] . . . transfer" of the land? I suspect an effort on your part to shoehorn this taking into a "transfer" because saying that this land is "transferred" to a private developer sounds more objectionable than saying the city will use it in a way that enures to the developer's benefit. I'd be willing to object to the latter, too -- but I think it requires a more rigorous analysis than simply declaring that building this gateway is pretty much a "transfer" of the land.
12.30.2008 11:29pm
David M. Nieporent (www):
Ilya, you seem to be arguing the rather non-controversial point that the power of eminent domain is a power, and that therefore, like any other power, it can be abused if exercised dishonestly and corruptly. In particular, this case seems to me to have nothing whatsoever to do with Kelo, since as you yourself point out, the ostensible purpose of the taking is a clear-cut public use (a city park).
Your statement goes off target at "therefore." How about "therefore, like any other power, it will be abused"?
12.30.2008 11:59pm
David M. Nieporent (www):
I recognize that the gateway would almost entirely benefit BLVD, but in what way does that amount to an "effective[] . . . transfer" of the land? I suspect an effort on your part to shoehorn this taking into a "transfer" because saying that this land is "transferred" to a private developer sounds more objectionable than saying the city will use it in a way that enures to the developer's benefit. I'd be willing to object to the latter, too -- but I think it requires a more rigorous analysis than simply declaring that building this gateway is pretty much a "transfer" of the land.
I think the argument is not that the taking will benefit the private developer -- after all, any taking will benefit some private entity; building a road in a particular location will benefit some merchants at the expense of others. Rather, it's that this taking (assuming the facts as reported are accurate) will benefit solely the developer, and not the public.

0.09 acres is really really tiny for a park. Hell, it's tiny for a backyard.
12.31.2008 12:04am
Dan Simon (mail) (www):
How about "therefore, like any other power, it will be abused"?

Okay, have it your way. Is that a reason for taking one more power--the power to decide whether a given "public use" is a "pretext" or not--away from accountable, elected officials, and placing it in the hands of unelected, unaccountable judges?
12.31.2008 12:16am
Daedalus (mail):
Private property ownership is one of the foundations of our republic. When powerful developers can coerce, intimidate, or bribe (pick the appropriate method or add another word to describe it) politicians to achieve their end result, nothing is safe. This just shows how corrupt our politicians have become.
12.31.2008 12:37am
Dave N (mail):
Now that the president is free to get back into baseball, do the Texas Rangers need another stadium in Houston?
No. The Texas Rangers play in the Rangers Ballpark at Arlington, which is in suburban Dallas.

For the geographically illiterate, Dallas and Houston are approximately 240 miles apart.
12.31.2008 12:58am
RPT (mail):
Dave N:

Thank you for the rather obvious geography lesson, but I think you missed the somewhat subtle point that Republican Bush made a good portion of his fortune in a non-free market eminent domain seizure of land for the Fort Worth/Dallas-based Rangers' private use when he was the managing partner of the Rangers.
12.31.2008 1:26am
subpatre (mail):
RPT wrote: "I think you missed the somewhat subtle point that Republican Bush made a good portion of his fortune in a non-free market eminent domain seizure of land for the Fort Worth/Dallas-based Rangers' private use when he was the managing partner of the Rangers."

An this has to do with post-Kelo reforms ... how? Oh wait, we get it! It has nothing to do with that, it is a gratuitous snip at a politician not in your favorite party. Like bringing up Obama and Rezko, and Rezko's contributions to Obama, and how Rezko obtained scads of money —including eminent domain seizure of land— so he could give a portion to politicians like Obama. [There RPT, fixed the search engine for you.]


It was Democrat Rep. Tip O'Neil who said "All politics is local." The non-partisan truth in that is how effectively local developers get 'concessions' and cooperation from local governments ... and how effectively the developers reward the political class that enables them. It is those relationships that finance the parties, not the few multi-millionaires like Soros.
12.31.2008 7:14am
MikeB (www):
Houston has come to Bedford County, Pennsylvania -- about two hours from Washington DC.

Speaking as someone actually fighting eminent domain in federal court (Johnstown, PA), I can confirm that the traditional interpretation of eminent domain is shifting. It is supposed to be the "taking" of property or property rights under the badge of government for the "public good," based on just compensation.

In too many cases today, however, eminent domain has less to do with projects for the "public good," and everything to do with the financial good of publicly held corporations.

Today, eminent domain means someone wants your property, and the government helps them take it.

In Bedford County, Pennsylvania, property owners are being hauled into federal court by Houston-based Spectra Energy Corporation and backed by the power of the Federal Energy Regulatory Commission (FERC). The landowners' property is sitting on top of the gas-rich Marcellus Shale; but they can't develop that because Spectra Energy wants to use the Oriskany sands layer (which is under the Marcellus) for a 12 billion cubic feet underground natural gas storage facility. They say it is critical -- even though Pennsylvania has more underground gas storage sites than any other state in the continental US, according to the DOE's Energy Information Administration.

Keep in mind that property owners possess the key asset -- the land! -- but they are not treated as stakeholders in this process. They are mere obstacles to Spectra Energy and FERC.

For info: Spectra Energy: using eminent domain to trample private property rights
12.31.2008 7:37am
Jack Jack (mail):
While corporate scandals were the story over the past 30 years, I believe that government corruption will be the story of the next 20 years. As the wheels of history turn and the government's power increases (ala 1930-1980), the corrupt government hacks, especially in local government where the low pay attracts an even lower class of hack, will not be able to resist temptation. The fact that the media is actively committing suicide will limit their ability to play watchdog.

While I am no legal expert, it is hard for us laymen to imagine a worse decision than Kelo, which was passed by the liberal wing of the Supreme Court. Hey -- anything that expands government power has got to be good, right?
12.31.2008 8:57am
Houston Lawyer:
Houston has a lot of eminent domain cases. Expanding I-10 to 20 lanes or so takes up a lot of space. In the Republican primary, several judges were defeated because they allowed too generous awards to individuals who had their land taken for legitimate purposes, such as road construction.

In this case, the developer apparently insisted that the land be acquired by the City in order to seal the deal. Looks like our mayor and the city council acted as the developer's bitch on this one.

One of the reasons we don't have zoning laws in Houston is that the people believe that it will give the government (and those with connections) more opportunities to screw with their property rights. Power will be abused, given the opportunity.
12.31.2008 9:14am
Brandyjane (mail):
This story is actually even worse than it's presented here. The wife of one of the members of the city council is an investor in the development company. Rather than abstaining, he voted for the land grab.

There's a lot of talk around the Houston area that Mayor White might run for the Senate. His potential opponents should file this story away for the campaign. Though I'm a conservative, I actually like Bill White (a Democrat). Compared to previous Houston mayors, he's done a great job, though I don't particularly want to see him as governor or U.S. Senator.
12.31.2008 10:02am
speedwell (mail):
I live in Houston, less than a mile from this place. I drive by the plot every day. It is not big enough for a highway rest stop. It is not big enough to support a single picnic table pavilion and a common backyard swing set at the same time if they put a driveway through the middle. I could throw a baseball clear across the length of it, and I'm a nerd girl. Anyone using the "park" will have to park their cars in the strip mall next door because there is just no room there.

As for Wulfe's development company, I don't want to say anything I can't prove, but I worked for real estate companies for three years in this city and I've heard a thing or two that don't exactly argue for clean hands in this matter. Not that any other development company around here would have done better, IMHO.
12.31.2008 11:19am
luagha:
Obviously, the current owners of the land should dump toxic chemicals on it until it becomes a Superfund site to protect it from the eminent domain taking.
12.31.2008 1:23pm
Ubu Roi (mail) (www):
Even Brandyjane is only scratching the surface. Houston is about to waste somewhere north of $3B on at-grade rail, and one of the lines has been drawn to pass right by this place. Down the center of one of the busiest streets in the city, no less. The developer is one of the biggest boosters of the rail project.

More on some special consideration he's gotten can be found here and here.
12.31.2008 2:35pm
Doug Collins (mail):
It seems to me that the politicians, with a sufficiently large part of the electorate, want to be able to seize land for private purposes. The Supreme Court has not been a bulwark and neither have these phoney eminent domain restriction laws.

How about another approach: If the highest economic use of a piece of property is a business development of some sort, and the use of the property for anything else is depriving the State of tax funds, then that property has a potential value as that business development.
The value that the owner should receive to recompense him for his loss when the property is seized should include this potential value. But how can you calculate the value of something that doesn't exist yet?

Easy. Make him a partner in the business development as part of his compensation. If the politician's friends don't want him as a partner - then don't seize his property. This way if the seized property eventually allows the developers to make large profits, the deprived landowner shares in these profits. Since his share of the partnership was free, he would (properly since his participation was involuntary) not share in any losses.
12.31.2008 11:39pm
Rorschach (mail) (www):
Doug, in effect that is what Ed Wulfe tried to do to the Collins Brothers. The brothers, who are in their mid 70's were offered 1.4 Mil for the land, to which they agreed to the price, but the terms were that they had to carry the paper on the purchase for several years, effectively making them unwilling investors in the BLVD project. The Collins brothers, recognizing that:

A: They may not live long enough to collect on the total purchase price.

B: The project might fail to be economically viable and leave them holding worthless paper and a contested deed that would cost more to litigate and clear up than the land was worth. This prediction actually came to pass when Wulfe put the project on hold due to economic issues.

... insisted that any purchase price had to be in the form of a lump sum payment. At that point Wulfe walked away and two weeks later the City condemned the land for him at a FRACTION of the original offer. Further, the head of the parks Department testified that he did not want the land for a park but that Council member Pam Holm, who had received significant campaign support from Wulfe, wrote out a memorandum in the parks department head's name requesting the condemnation, and then pressured him to sign it.
1.2.2009 12:16pm
Rorschach (mail) (www):
This is not by the way the first attempt by Bill White to grab some prime real estate for his developer buddies. He tried to kick a bunch of Mentally handicapped people out of the only home many of them ever had.
1.2.2009 12:24pm
dizi (mail) (www):
thanks very very good
1.4.2009 6:20am

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