Hands off

Property owners and community activists were reeling in the wake of a U.S. Supreme Court decision that said governments can seize private property, not for public works but to turn it over to private commercial developers.

The court ruled, in a 5-4 vote, that seven New London, Conn., property owners must give up their homes in the Fort Trumbull neighborhood to make way for offices, upscale condos and a waterfront hotel. The decision, Kelo v. New London, can be read at www.supremecourtus.gov.

“These five members of the Supreme Court have ignored the wisdom of the founders who understood that private property is in fact the foundation of our freedom,” said David Schumann of the Nevada Committee for Full Statehood. “They have issued a license to steal to every state and local government which wants to increase its tax income.”

Harry Pappas of Las Vegas, whose family fought for 11 years to prevent the condemnation of its downtown shopping center to help the Fremont Street casino district, told the Las Vegas Review-Journal that the New London decision reminded him of the Nazi government that oppressed his mother’s family in Greece. But former Las Vegas mayor Jan Jones said the Pappas property had to be seized: “You have to preserve the core. You have to give people a reason to still go downtown.”

In some states, there are protections in the state constitution or state law that trump the Kelo ruling, but it is uncertain whether Nevadans can call on such protection.

“Thank God we’re protected in Michigan,” attorney Alan Ackerman told the Detroit News. Ackerman last year won a landmark decision by the Michigan Supreme Court that said condemnation can be used under the Michigan Constitution only for public works.

The city of Seattle, which in 1987 tried to accommodate a private development, the Westlake Center mall, by ordering the demolition of several businesses, was blocked by the Washington Supreme Court because the mall was not a public work. (The center was still built, but the changes had to be made—and paid for—by private business.)

In Nevada, the state constitution reads, “Private property shall not be taken for public use without just compensation having been first made, or secured, except in cases of war, riot, fire, or great public peril, in which case compensation shall be afterward made.” The meaning of public use isn’t further defined.

The opinion in Kelo said state governments can set their own restrictions on government seizure of private homes and businesses, and the Nevada Legislature just passed some new laws in the field, but there is doubt that they are strong enough to do the job. (During a debate on condemnation powers at Nevada’s 1864 constitutional convention, a Storey County delegate said, “If the Constitution of the United States conflicts with the constitution of the state, the latter must yield,” but the Kelo decision concedes stricter limits to states.)

Nevada statutes on condemnation are extremely permissive, permitting commercial businesses like monorail companies, mining corporations and sugar beet factories to use eminent domain (the bureaucratic term for condemnation).

During the state legislative session this year, lawmakers—responding to concerns about the Pappas case and Washoe’s Ballardini Ranch acquisition—enacted new language covering condemnation cases, but the language was heavily watered down by the time the final form of the bills were approved.

Las Vegas attorney Laura Fitzsimmons, who was working on a legal brief on eminent domain when the Kelo decision came down, says the new state law has limited effect.

“The bills introduced by Senator [Terry] Care and Assemblyman [William] Horne will resonate more in the city halls than in the courthouses of Nevada. Both bills were well intended and started out with pretty significant protections against redevelopment land grabs. But the gaggle of government employees who waddle around the halls of the Legislature, paid with our tax dollars, were able to keep pecking away at the bills, so the end result is that there was some progress, but not enough. State law still permits the government to seize property owned by the little guy and give it to some powerful insider who has access to local politicians. The only way the courts will stop the process is if the landowner is actually lucky enough to get a photograph of the payoff—a showing of fraud or bribery is required.”

Steve Greenhut, author of a book on abuses by redevelopment agencies, says the sharp reaction to the New London court decision means that even if Nevada law doesn’t protect property owners, the climate of public opinion is changed.

“Given the backlash following Kelo from Americans on the left and the right, targeted homeowners will no longer have to fight for their property without sympathy from fellow citizens. … The key is to build grassroots opposition that counters the establishment support for what is blandly called ‘economic development.’ In the post-Kelo world, citizens should be able to draw on broader community support by organizing protests, political recalls and demonstrations at city council chambers. The fight is not over. The court was clear that the decision did not preclude changes in the law or challenges in state courts.”

Fitzsimmons agrees.

“But local elected officials are generally becoming wary about seizing property for private redevelopment projects. Carson City is a good example of this. So are the Clark County commissioners and the Las Vegas city council, after the Fremont Street acquisitions blew up in their faces. Reno has been the exception.”

Efforts to change Nevada’s condemnation statutes have often failed. The town of Gold Hill, which was created by mining but became a tourist attraction, went to war with the mining industry in 1979-81 when Houston Oil and Mining excavated much of the town and threatened to use eminent domain to carve out the rest. A decline in the price of minerals saved the town, and the next session of the Legislature left the condemnation powers of mining in place.