May 30, 2002
From the desk of Mindles H. Dreck:Property Rights Eroding
Cypress California is exercising eminent domain to take land legitimately purchased by a church. The Cypress City Council voted 4-0 in favor Tuesday night. Why? In order that Costco might build a tax-paying retail store on the spot. Not even to build a road or install some "vital" public service.
Eminent domain, therefore, is justified purely by the government's need to optimize land use to maximize tax revenues. Furthermore, the municipality has used its zoning and permitting powers to minimize the compensation it will have to pay to Cottonwood Christian Center. It doesn't take a Libertarian to be alarmed by this precedent.
The Wall Street Journal editorializes today on this topic:
Cypress's city fathers aren't bigots; they simply insist that Cottonwood's 17.9 acres are too valuable as potential tax revenue to be allowed to remain in the hands of a tax-exempt church. But the whole point of property rights is that bureaucrats don't get to pick and choose who owns what. Ditto for businesses such as Costco, which should buy their land in the open market instead of relying on local governments to seize a juicy location at below-market prices.The powers of eminent domain are tricky enough when exercised for highways, schools or other public uses. But when invoked on behalf of a private business it represents the worst form of political collusion. Our advice to Cottonwood is not to turn the other cheek.
I couldn't agree more. I don't have a firm legal perspective on eminent domain (Volokh? Reynolds?, Schrank?), but there must be greater legal checks on its use. Furthermore, zoning and land-use policy must be separated from the power of eminent domain and eliminated from the valuation of property when eminent domain is exercised. Is Cypress going to lose in court, or should I be very afraid?
Info and news links can be found at The Becket Fund, which is defending Cottonwood.
UPDATE:Fritz clarifies; Cypress blogger Ann Salisbury provides greater detail. She claims the Cottonwood folks have been both nasty and incompetent. While this is unfortunate, it doesn't allay my concern on the underlying issues (at least the nasty part doesn't - lord knows the private sector can be nasty).
My reaction - Fritz picks up on something I worded poorly - "highest and best use" should certainly be the standard for property valuation (although I have direct experience with how that concept can be manipulated in court). My concerns are as follows:
1) Can a municipality use its zoning and permitting powers (not to mention it s ability to alter the use or zoning of neighboring parcels) to effectively pay less when it takes property? Doesn't the highest and best use change when any applicable regulation changes? For instance, changes in Wetlands policy (or interpretation thereof) have drastically altered the highest and best use of millions of acres of land in this country. What are the checks on government's power to do this?
2) I don't think optimizing tax revenue should be considered a legitimate public purpose. It puts government directly at odds with land owners, and causes it to favor tax-paying constituents. Thankfully, Fritz feels tax revenues as sole justification wouldn't hold up in court.
Posted by Mindles H. Dreck at May 30, 2002 8:47 AM | Technorati inbound links"); ?>Something similar is occurring in my hometown in Glendale, Wisconsin. The city of Glendale is going to use "eminent domain" to buy some commercial buildings on Silver Spring Drive and then turn around and sell the bldgs/land to the neighboring shopping mall so that it can expand. Thus the shopping mall developer gets to use the power of the government to force the sale of private property to itself. The mall developer can then build upscale condos and expensive shops to make itself money.
Somehow this annoys me as it uses public power for a private purpose. This would not be publically owned property. The rationale is that it would help to create a central "downtown" for the community. Further it would increase overall property valuation in the city and thus help keep homeowners property taxes down proportionately(very costly here). On the other side, the applicable state law requires that the current owners be compensated for their property at fair-market rates. But what good are fair-market rates if you have no interest in selling your property to another? It's your property and you want to keep and use it. Where does the government get the need/right to favor one taxpayer (not govt vs private party) over another? Doesn't the ante for the purchaser need to get raised significantly at this point? In an arms-length transaction they would have to pay whatever was the acceptable price from the sellers viewpoint.
The mall is counting on the power of the govt to overcome any objections, especially since one of the owners who would be pushed out is Anthony Palermo, who incidentally is rich from his land holdings on Rodeo Drive in Beverly Hills. He is opposed to the taking.
I'm curious as to your thinking about this.
I wondered why traffic on my site was suddenly up. ;)
May I make a clarification? While Cottonwood was mean, it was a different church in a different city that was incompetent, and even that may be too harsh a characterization. I think "uninformed" fits the bill better.
Thanks!
Posted by: Ann Salisbury on June 1, 2002 8:09 PM"Cottonwood was mean. . ." So if you come and invite me to sell my land, which I want to keep, and I say no, does that make me mean? What if I say, "Hell no!" Or, is it when you say, we have the power to take your land, and we plan to do just that -- and then I fight with all I can muster to keep my land, does that make me mean?
It seems the meanest thing of all is to forcibly take somebody's property. (I'm sure who said what when will all come out in court). If the fight by Cottonwood to protect what it owns has been limited to words alone, I don't see how that can be viewed as mean. I would call it restraint. I think your spin on the story is a bit biased and inaccurate.
Posted by: Chris Busch on June 4, 2002 1:36 AMComments are Closed.