Some Have Smelt Blood
High Court Ruling May Aid Construction 7/4/2005
By Sherie Winston
Ending? Rehnquist may resign. (Photo by AP/Wideworld)
In one of the final decisions in its 2004-05 term, the U.S. Supreme Court has bolstered local governments’ ability to seize homes and businesses for private development, but also handed a defeat to "property rights" advocates. The June 23 ruling in Kelo v. City of New London essentially extends the scope of the Fifth Amendment, which lets governments take private property through eminent domain if the land is for "public use."
Eminent domain "has been indispensable for revitalizing local economies, creating much-needed jobs and generating revenue," says Washington, D.C., Mayor Anthony A. Williams, who also is president of the National League of Cities. Mike Kennedy, the Associated General Contractors’ general counsel, adds that as an economic development tool, the High Court ruling "certainly creates market opportunities for the construction industry."
n a 5-4 decision, the court said local officials, not federal judges, are most knowledgeable in deciding whether a community would be best served by a proposed project. "It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular project area," Justice John Paul Stevens wrote for the majority, which included Justices Anthony Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.
In general, says Indianapolis Mayor Bart Peterson, city officials only take property "in the context of an overall economic development project that will provide significant benefits to a neighborhood." Mayors say the mechanism has worked in older cities that lack sufficient undeveloped land. They cite Baltimore’s Inner Harbor and Kansas City’s Kansas Speedway as examples of successful projects that used eminent domain.
The Kelo decision clears the way for razing several New London, Conn., homes to make way for a riverfront hotel and office complex. Backers of a proposed Washington, D.C., baseball stadium say they are optimistic that the decision may remove possible obstacles to the project, planned for a site along the Anacostia River.
Officials of the Institute for Justice, Washington, D.C., which represented the plaintiff in Kelo, criticized the ruling. Says Institute President Chip Mellor: "The majority and the dissent both recognized that the action now turns to state supreme courts where the public use battle will be fought out under state constitutions."
The June 27 close of the court’s term also heightened speculation that Chief Justice William H. Rehnquist, who has thyroid cancer, may resign. Rehnquist had made no announcement by ENR’s June 28 deadline, but rumors were circulating about whom the White House might nominate to replace him. A change on the court would have "consequences for the business community," says Carter G. Phillips, a partner with Sidley Austin Brown & Wood.
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