Georgia voters are not fans of eminent domain — the condemnation of private property by government — especially when government officials do it to fatten their tax base.
In 2006, Georgia voters sent as strong a message as you are likely to hear when 83 percent of them said government shouldn’t seize private property for economic development projects.
The amendment to the state constitution they voted for and a complementary new law were part of a wave of reforms states passed in the wake of Kelo v. City of New London. That 2005 verdict by a split U.S. Supreme Court said governments could seize private property and then transfer it to others for economic development purposes without violating the U.S. Constitution.
“Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded,” Justice Sandra Day O’Connor wrote critically of the decision.
Suddenly property rights activists were standing in intersections waving signs protesting eminent domain “abuse.” In all, 45 states passed some sort of reforms restricting the practice, though few moved quicker than Georgia.
The bill allows local governments to use their power of eminent domain to condemn blighted property and transfer that property to private developers. With powerful backers, HB 434 sped through both chambers, gaining final passage in the closing hours of the legislative session Thursday.
The bill now heads to Gov. Nathan Deal for his signature.
The bill worries people like Charles Ruffin, an attorney with the Atlanta firm Baker Donelson whose practice focuses on protecting private property owners from the heavy hand of government. When I told him about the bill, he groaned.
“Wendell is a friend of mine, but on this issue he and I just disagree,” he said. “It’s good for government, but it’s bad for citizens in my judgment. End of story.”
Right now, if the government takes your property through condemnation, it cannot be converted to a private use – like a new apartment building or coffee shop – for 20 years. That two-decade pause is there to stop governments from seizing a property for a “public use,” like widening a road, and then immediately selling to a developer for something else.
HB 434 would allow a government to immediately transfer your property to a developer, which is exactly what voters in 2006 said they didn’t want. Powerful lobbying interests like the Georgia Municipal Association support the bill, just like they opposed tougher eminent domain rules in 2006.
The bill has safeguards. For instance, for a government to seize property for an economic development project it has to prove to a judge that the property is blighted and property owners got their day in court to fight the accusation. If they lose, they can appeal the decision.
Once appeals are exhausted, the government can take the property by paying the owners “just compensation” for it and then sell the property to a private developer.
“I think the average citizen in this state would be appalled that government could come in and take your property, transfer it to another private entity for them to make use of it,” Ruffin said. “What this is trying to do is to get around the ability of the landowner to negotiate the price that they want.”
Willard, R-Sandy Springs, said the change will allow local governments to deal with urban blight in a way they can’t now.
“You have a number of cities in the state from Atlanta to Augusta to Columbus to Savannah to Macon that are experiencing blighted property problems,” he said.
These cities want to see those troubled areas fixed, and the free market needs help, he said.
Often blighted areas involve multiple, small parcels of abandoned property where the owner is hard to find. An investigation by The Atlanta Journal-Constitution found owners of rundown properties often hide behind shadowy LLCs to avoid taking responsibility for them. These areas can become problematic for a city, attracting drugs and other criminal activity, Willard said.
Developers won’t come in on their own and try to buy the property, he said. “You are not going to have people interested and trying to go in and negotiate under those circumstances,” he said.
Now is the point where it should be revealed that, in private life, Willard is an attorney. One of his clients is the city of Sandy Springs, which used the threat of eminent domain to further its Center Springs mixed-use development.
Tochie Blad, a Sandy Springs Council of Neighborhoods board member, is worried.
“We see this as expanding eminent domain,” she said. “How do you define blight? It is in the eyes of the beholder.”
More power to take private property isn’t what organizations like the Washington-based Institute for Justice think government needs. The libertarian non-profit was one of the groups that helped organize the response to the Kelo decision.
Institute lawyer Robert McNamara looked at HB 434 and said it is a step back from the 2006 reforms. While he said he is pleased the bill does not substantially weaken the legal definition of blight, he said it does open the door to using an awesome government power to increase tax revenue.
“If you give the government an inch,” he said, “they’ll take your yard.”
Right now the institute is involved one such case in Elberton, Ga., a city of 4,500 northeast of Athens, where the city is trying to condemn a small office building on the town square. The city claims it needs a pedestrian walkway and the building, which is not blighted, is in the way. It also is adjacent to a historic downtown hotel the city purchased and renovated to spur economic development downtown.
The owners of the building, Bob and Rina Thomas, have run their family business out of the small office for 20 years and are fighting the city over taking it. A hearing is scheduled for Friday.
“Regardless of the outcome of that hearing, the Thomases are not giving up their property,” institute lawyer Paul Avelar told me.
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