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Spotlight 404 Blocking Eminent Domain Abuse in NC: It’s past time for well-crafted constitutional amendment

Spotlight 404 Blocking Eminent Domain Abuse in NC: It’s past time for well-crafted constitutional amendment

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Key facts: • There is optimism that an eminent domain amendment will pass this upcoming legislative session. The amendment must be carefully drafted, however, to properly protect property owners.
• An amendment is necessary for many reasons including:
– There is no state constitutional protection from eminent domain abuse, such as the government seizing private property for economic development.
– In fact, North Carolina has the weakest property rights protection in the country; it is the only state in the country that does not have a Constitution that expressly addresses eminent domain.
– The North Carolina Supreme Court has held that the government can take private property and transfer an interest in that property to a private company for its sole and exclusive use.
– The government seizes private property for other private parties through various means, such as blight laws.
• After Kelo, eight states passed constitutional amendments, including the two neighboring states of Georgia and South Carolina.
• A model amendment would, among other things:
– Prohibit takings for private uses. A prohibition on takings for economic development is not enough, since many takings that involve the transfer of property from one private party to another private party are not connected to economic development.
– Prohibit the government from improperly using “blight” and other pretexts for seizing private property in order to promote economic development or to achieve some other improper objective.
– Require the government to have the burden of proof to demonstrate that a taking is for a proper public use.
– Require just compensation to make property owners whole, by including the payment of relocation costs, loss of business goodwill, and attorneys fees.
Key facts: • There is optimism that an eminent domain amendment will pass this upcoming legislative session. The amendment must be carefully drafted, however, to properly protect property owners.
• An amendment is necessary for many reasons including:
– There is no state constitutional protection from eminent domain abuse, such as the government seizing private property for economic development.
– In fact, North Carolina has the weakest property rights protection in the country; it is the only state in the country that does not have a Constitution that expressly addresses eminent domain.
– The North Carolina Supreme Court has held that the government can take private property and transfer an interest in that property to a private company for its sole and exclusive use.
– The government seizes private property for other private parties through various means, such as blight laws.
• After Kelo, eight states passed constitutional amendments, including the two neighboring states of Georgia and South Carolina.
• A model amendment would, among other things:
– Prohibit takings for private uses. A prohibition on takings for economic development is not enough, since many takings that involve the transfer of property from one private party to another private party are not connected to economic development.
– Prohibit the government from improperly using “blight” and other pretexts for seizing private property in order to promote economic development or to achieve some other improper objective.
– Require the government to have the burden of proof to demonstrate that a taking is for a proper public use.
– Require just compensation to make property owners whole, by including the payment of relocation costs, loss of business goodwill, and attorneys fees.

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Categories:Types, Research, Law
Published by: John Locke Foundation on Jan 28, 2011
Copyright:Attribution Non-commercial

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The John Locke Foundation
is a501(c)(3) nonprot, nonpartisan researchinstitute dedicated to improving public policy debate in North Carolina. Viewpoints expressed by authors do not necessarilyrefect those o the sta or board o the Locke Foundation.
200 W. Morgan, #200Raleigh, NC 27601
phone:
919-828-3876
ax:
919-821-5117www.johnlocke.org
spot
light
No. 404 – January 27, 2011
B
locking
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minEnt
D
omain
a
BusE
 
in
nc
 It’s past time or well-crated constitutional amendment
key facts:• thr i opimim h n minn domin mnd-mn will p hi upoming lgiliv ion. th mndmn mu brull drd, howvr, o proprl pro propr ownr.• an mndmn i nr or mn ron inluding:– thr i no  oniuionl proion rom minn domin bu,uh  h govrnmn izing priv propr or onomi dvlop-mn.– In , Norh crolin h h w propr righ proion in hounr; i i h onl  in h ounr h do no hv  coniu-ion h xprl ddr minn domin.– th Norh crolin suprm cour h hld h h govrnmn n priv propr nd rnr n inr in h propr o  privompn or i ol nd xluiv u.– th govrnmn iz priv propr or ohr priv pri hroughvriou mn, uh  bligh lw.• ar
 Kelo
, igh  pd oniuionl mndmn, inluding hwo nighboring  o Gorgi nd souh crolin.• a modl mndmn would, mong ohr hing:– Prohibi ing or priv u. a prohibiion on ing or onomidvlopmn i no nough, in mn ing h involv h rnro propr rom on priv pr o nohr priv pr r no on-nd o onomi dvlopmn.– Prohibi h govrnmn rom improprl uing “bligh” nd ohr pr-x or izing priv propr in ordr o promo onomi dvlop-mn or o hiv om ohr impropr objiv.– Rquir h govrnmn o hv h burdn o proo o dmonr h ing i or  propr publi u.– Rquir ju ompnion o m propr ownr whol, b inludingh pmn o rloion o, lo o buin goodwill, nd orn.
more >>
 
s
2
s
ince 2006, the North Carolina House twice passed a constitutional amendment to address eminent domainabuse.
1
Both times, those amendments ailed to be considered in the North Carolina Senate.
2
 As the new legislative session begins with a new political make-up or both chambers, there is hope thatthe North Carolina legislature will nally pass an eminent domain amendment. Even i an amendment does getpassed, however, it must be careully drated to properly address eminent domain abuse. The House-enacted eminentdomain amendments were very narrow in scope and provided little protection or property owners.
3
Recently, theHouse introduced an amendment that is identical to the weak amendment it passed in 2010.
4
  An amendment certainly should be drated in response to the United States Supreme Court case,
 Kelo v. City o  New London
(2005).
5
In that case, the Court held that the government could seize private property and transer it toanother private party i the taking is or economic development.
6
As a result, the government, or example, can take aperson’s home and give it to a developer who could supposedly generate more tax revenue o the property by buildinga strip mall.While the amendment must eature a clear prohibition against these “economic development takings,” it shouldalso protect against the ways the government nds end runs around such a prohibition.Furthermore, while economic development takings receive most o the attention, they are simply a subcategory o takings that make up the real problem. The amendment should specically prohibit the taking o private property tobenet another private party, whether it be or economic development or another reason.This
Spotlight
will briefy explain why North Carolina needs an eminent domain amendment. It will outline thekey protections that are necessary in an eminent domain amendment and provide model language or an eectiveamendment.
Wh an amndmn i Nr
1) Fundamental rights should be protected by the Constitution.
I the United States Supreme Court gutted a undamental right such as ree speech, it would be highly unlikelythat legislators or the public would want ree speech to be protected by state statutes alone that could change at thewhim o political interests.The same logic applies to property rights, which are also undamental rights. Property rights were gutted in the
 Kelo
case, and currently the only thing that may provide limited protection rom economic development takings arestate statutes. An amendment is the only way to provide the necessary protection rom economic development takings. Since itwould require the legislature to obtain a three-ths vote in both chambers and a majority vote o the public to get rido the amendment,
7
an eminent domain amendment could not easily be scrapped due to political interests.
 2) North Carolina has the weakest property rights protection in the country.
North Carolina is the only state in the country that does not have a “takings clause” in its state constitution, whichis a provision that expressly states the government may only take private property or a public use upon the paymento just compensation.
8
 The North Carolina Supreme Court has had to read this protection into the Constitution.
9
As a result o thisweak constitutional protection, even had
 Kelo
never occurred, North Carolina would have needed an eminent domainamendment.
 
3
 3) The North Carolina Supreme Court has given the green light to takings or private uses.
In a case called
 Piedmont Triad Airport Authority v. Urbine
(the Federal Express case),
10
an airport authorityseized private property or a cargo acility. Federal Express was given sole use o the acility, and the general publichad no right to use the property.
11
 The North Carolina Supreme Court held that the purpose o the taking was to improve the airport, not to benetFederal Express — the use by Federal Express was incidental to the public use o improving the airport.
12
 That is the type o “game” common with eminent domain — so long as any public use can be identied or seizingprivate property, even i it is obviously secondary to the real reason or seizing property, it will likely be ound consti-tutional.It should be noted that this case had nothing to do with economic development. The alleged public use was theimprovement o the airport, not economic development. Yet it still is a case o eminent domain abuse because propertywas taken or a private use. An amendment is needed to overturn the result o this absurd case and ensure that the government is unable toseize private property just because it can identiy some secondary public use or seizing private property. The FederalExpress case is a great example o why a prohibition on economic development takings alone is not sucient.
 4) The Triangle Transit Authority and public transportation: more takings or private use.
In 2006, the Triangle Transit Authority had a potential arrangement with a private developer, Cherokee Partners,to develop areas around speculative local rail sites.
13
At the time, the TTA knew that it was highly unlikely that prop-erty seized or a rail system would be used — the ederal unding required or the project had allen through.
14
  Ater repeatedly stating that eminent domain would not be used or economic development reasons,
15
the TTA -nally admitted that an eminent domain amendment “threatens TTA’s partnership with Cherokee because it prohibits
th tringl trni auhori nd eminn Domin abu
 May 27, 2006: TTA Board o Trustees meeting
 This author made the ollowing comments regarding the proposed public/private partnership between the TTA and CherokeePartner:We are told that economic development takings can’t occur in this state. I the TTA seizes private property orhigh-density development, this authority will clearly show that economic development takings are alive andwell in North Carolina.Taking or threatening to take property or high-density development because it might help a rail that some-day could exist is not a proper public use and clearly is an economic development taking.
16
 TTA General Counsel Wib Gulley responded (as described in the TTA minutes):He added that TTA has not and will not engage in economic development takings and that it is stated clearlyin the agreement that TTA’s eminent domain authority cannot be used to acquire peripheral properties.
17
 
 May 27, 2006: From a
Carolina Journal
 Exclusive that ran the same day as the TTA meeting:
Private-property advocates wonder whether TTA could seize land because North Carolina law allows eminentdomain when “it is useul or the purposes o public transportation.” But TTA’s interim director, Wib Gulley,ruled out the possibility that the agency would take any land or private development.

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