Property protector: Eminent domain bill in Senate’s hands

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The N.C. General Assembly gathers at noon May 14 to begin its 2014 Short Session. Over the next several issues and while the Legislature is in session, The Mecklenburg Times will be running stories on issues the Legislature will be tackling – as well as those they likely won’t – that involve governance, real estate, construction and development.

When the N.C. General Assembly reconvenes for its Short Session May 14, it may take up House Bill 8 on eminent domain, one of the left-over items on its agenda from last year.

The bill, sponsored by Rep. Chuck McGrady, R-Henderson County, would amend the state Constitution to prohibit the condemnation of private property except for public use, and would provide for the payment of just compensation in all condemnation cases through a jury trial.

Last year, the bill passed the House by a wide, bipartisan margin of 110 to 8 and was sent to the Senate. The proposal called for a constitutional amendment to be approved by voters in an effort to make clear that city and state governmental agencies can’t condemn someone’s land for private economic development.

The proposed amendment reads: “Private property shall not be taken by eminent domain except for a public use. Just compensation shall be determined by a jury at the request of any party.”

Similar bills have passed the House multiple times, including in 2007, 2010, 2011 and last year, but the Senate has been reluctant to act on it.

McGrady said he has called on Sen. Tom Apodaca, a Republican representing District 48, also in Henderson, to get a sense whether the bill will move forward.

The impetus for the proposal stems from a U.S. Supreme Court decision in 2005 that upheld a Connecticut court’s decision in favor of the city of New London, which had condemned private homes to make way for an economic development project. The controversial ruling came after six property owners lost their homes to a 90-acre development – with the promise of jobs and greater revenue for the city – that never came to fruition.

McGrady said that motivated him to clarify the language in current law.

“We don’t want that to happen here,” he said.

The North Carolina League of Municipalities has been opposed to the bill for several years, believing it is “unnecessary since eminent domain in North Carolina can only be used when the property is needed for public purposes.”

“A constitutional amendment would lead to unintended complications in court decisions,” the league said in a press release.

Paul Myer, the state league’s executive director, said it’s not just cities that are concerned with the unintended consequences of changing the state Constitution, but a number of entities in the private sector including developers, transportation officials and utilities would be impacted, which is why the legislation has been debated for so long.

Condemnation of property for private development in North Carolina is rare, but one state case brought attention to the issue, said Myer. In 1990, the Piedmont Triad Airport Authority passed a master plan to expand the Greensboro airport’s air cargo facilities. Revised in 1994, the plan called for the acquisition of property near the airport to build new facilities next to the runways.

The airport authority would hold title to the property, which would be leased to FedEx. In 1998, the PTAA condemned 2.3 acres owned by Kent Urbine, who fought the condemnation, saying it did not serve a “public purpose” since it would benefit FedEx.

In its 2001 decision, the N.C. Supreme Court ruled in favor of the airport authority, saying the expansion of the air cargo facilities served a valid public purpose and the benefit derived by FedEx from the condemnation was “incidental.”

Reached for comment on the proposed eminent domain changes, the N.C. Department of Transportation issued a statement through its vice president of communications, Mike Charbonneau: “Eminent domain power is a critically important tool for the provision of adequate public facilities.  While we never want to use that power, there are sometimes no available alternatives and we take seriously the 5^th Amendment requirement that no private property be taken for public use without with just compensation.  Any additional statutory provisions will need to be reviewed on a case-by-case basis and we’ll offer opinions on specific legislation in the appropriate forum.”

Closer to home, Mecklenburg County officials said that private land had never been taken for private development for as long as they could remember.

“To my knowledge, for at least the past 21 years, the county has never condemned land for economic development purposes,” said Mark Hahn, director of asset and facility management for Mecklenburg County.

However Tommy Odom, the managing partner at Odom Law, which has a backlog of 90 to 100 cases involving property, said no one is going to say outright that the property is being taken by the government for economic development purposes.

“There are many shades of gray in eminent domain,” he said.

More frequently, cities or counties will rezone a property for redevelopment in order to create a subdivision. As a condition for provisional rezoning, the city will require a developer to do offsite improvements for roads or sewage, for instance, on private property.

“It’s the city that does the taking of the land so it’s for public benefit or use,” said Odom.

Under the bill McGrady has proposed, Odom said that property owners must receive just compensation for the property.

Charlotte’s Chamber of Commerce worries that changing the statute’s language may be bad for business. Natalie English, senior vice president for public policy at the chamber, explained the concern.

“Anytime policies are debated that impact our ability to attract jobs and grow the economy, that concerns us,” she said. “We support policies that will encourage job growth.”