Eminent Domain Changes Spook Cities

Ranking elected officials in Fredericksburg are raising alarm over a proposed amendment to Virginia's Constitution which would protect current legislation restricting the government's ability to take private property for public purposes through eminent domain. 

The Virginia Municipal League, which lobbies on behalf of Virginia's 38 independent cities, say the proposed amendment is unnecessary and could lead to frivolous lawsuits and more costly public improvements. 

Proponents of the amendment say that it protects private property owners from overreaching eminent domain.

The amendment was approved by the General Assembly last year. Virginia constitutional amendments must be approved by two General Assemblies. This year, it has been reintroduced by Delegate Rob Bell (R-Albemarle). 

In response, the VML is urging its members to lean on their local statehouse representatives to amend the amendment in terms more favorable to localities.

Amendment Detailed

Moves to reform eminent domain powers received a shot in the arm in 2005 when the Supreme Court ruled that the city of New London, Ct., could seize property and turn it over to a private company in the name of economic development. The rationale was that the economic development was a public use because it would bring jobs and tax revenue to the city. 

The ruling, referred to simply as the Kelo case, outraged private property rights activists nationwide. By 2008, 37 states had passed laws prohibiting eminent domain for economic development. Virginia did so in 2007 with the support of the VML.

According to Mark Flynn, VML's director of legal services, Republicans have championed the amendment, but its appeal cuts across party lines.

The amendment enshrines the existing protections into the state constitution, where they are harder to modify once adopted. It expands on existing language, explicitly prohibiting eminent domain to boost jobs, tax revenue or economic development. 

The also changes how property in eminent domain situations is valued. By law, property owners subjected to eminent domain are compensated for the fair market value of the property. The amendment allows property owners to be compensated for the value of the property taken as well as lost profits, lost access and other damages. 

Too Broad For City Hall

City officials and lobbyists say the economic and tax prohibitions are too far reaching. They also say that the new compensation rules will increase the cost of infrastructure projects. On the losing end, in their mind, is the taxpayer who will pay higher taxes for more expensive projects while living in a town whose economic growth is retarded by restrictive eminent domain laws. 

"The change to the constitution that is being contemplated is far-reaching and expensive," according to a presentation given by Flynn at last October's annual VML conference in Henrico County. "It would drive up the cost of acquiring land to a point where some projects simply will become too expensive to build – even a routine road widening."

With eminent domain prohibited for the purpose of economic development, cities trying to buy property to build an industrial park could be held up by a property owner who refuses to sell, according to Flynn. 

"If a court rules the constitution means that eminent domain cannot be used because the purpose is economic development – the fair market value standard doesn’t apply," according to Flynn. "The price is whatever the landowner wants.  Either the locality pays it or doesn’t do the project."

Critics of the amendment say the expansion of the profits and access compensation rules opens the door to frivolous lawsuits. As an example, Flynn says that if a locality used eminent domain to build a bypass to relieve congestion, then every business on the old road could bring suit seeking lost profits once the new road opens. 

Lobbying Begins 

The VML has turned to its member cities and asked them to contact their local legislators to lobby for changes to the amendment. The VML has also set up a website for localities to submit examples of how the proposed amendment would affect their operations. In the Fredericksburg region, access to ranking area Republican legislators is highly sought after by the VML. 

"Persuasion with the Republican leaders in your area could prove extremely valuable," wrote Flynn in an email to Howe on November 25. 

Heeding the call, Mayor Thomas Tomzak and Ward 3 Councilor Fred Howe are trying to organize a meeting with House of Delegates Speaker Bill Howell (R-Stafford) to discuss the amendment.

"The legislation coming before you has raised serious concerns about our abilities as a City to operate, address public improvements, expand & improve business corridors," wrote Howe in an email to Howell. 

Last week, the Fredericksburg City Council approved its annual legislative agenda, a sort of legal wish-list from city leaders to representatives in Richmond. Included in the list is the City Council's opposition to the amendment. 

"The City feels that the eminent domain protections that are currently in place in the Virginia Constitution and Virginia Code strike an appropriate balance between the rights of private property owners and the duty of the government to protect the common interest of all citizens through the acquisition of property for public projects," reads the letter. "Further protections through a constitutional amendment are not warranted."