| KAUP & SHULTZ Attorneys at Law, LC The Library |
 |
 |
 |
 |
 |
 |
Kaup & Shultz,
Attorneys at Law, LC
901 Kentucky
Suite 305
Lawrence, KS 66044
785-838-4300 phone
785-838-4302 fax
A law firm dedicated to
serving the interests of
Kansas local governments
with offices located in
Lawrence and Johnson
County, Kansas. No matter
where you are located in the
State of Kansas, we can
work with you. If your
local government needs legal
assistance, you deserve
Kansas attorneys who know
and practice Kansas local
government law on a daily
basis.
Attorneys at Law, LC
901 Kentucky
Suite 305
Lawrence, KS 66044
785-838-4300 phone
785-838-4302 fax
A law firm dedicated to
serving the interests of
Kansas local governments
with offices located in
Lawrence and Johnson
County, Kansas. No matter
where you are located in the
State of Kansas, we can
work with you. If your
local government needs legal
assistance, you deserve
Kansas attorneys who know
and practice Kansas local
government law on a daily
basis.
On this page is an article about the Supreme
Court's Kelo decision and the Kansas response to
the decision. Click here for the decision.
Court's Kelo decision and the Kansas response to
the decision. Click here for the decision.
|
|
|
|
|
|
EMINENT DOMAIN: A COMPENSATED-FOR TAKING OF
PRIVATE PROPERTY
1. Most of the drama, and anxiety, over takings of
private property involve narrow questions of when
governmental regulations and regulatory action
become noncompensated takings violative of the 5th
and 14th amendments. However, the 2005 eminent
domain decision of the U.S. Supreme Court in Kelo v.
City of New London let loose a firestorm from private
property rights advocates who rejected the use of
eminent domain for economic development purposes.
2. Basics of Eminent Domain
• Reduced to its fundamentals, eminent domain is
the inherent power of a governmental entity to take
private property and convert it to public use. The
entity is empowered to take private property, over the
objections of the owner, upon meeting the conditions
of public use and payment of just compensation.
• The power of eminent domain is a necessary
power held by a sovereign body, as it is a power
essential to the existence of government. It is
necessary to the function of government, and so
exists even in the absence of a specific grant of
authority via a constitution or statute.
• The exercise of eminent domain is subject to
constitutional limits, including payment of just
compensation and due process for the property owner
(e.g., notice and an opportunity for a hearing). The
Kansas Constitution does not expressly require
compensation for takings. However, the 5th
Amendment’s guarantee of just compensation is made
applicable to the state’s exercise of eminent domain
through the Due Process clause of the 14th
Amendment. Lone Star Industries v. KDOT, 234 Kan.
121, 671 P.2d 511 (1983)
• The power of eminent domain is held by the
sovereign state, which may delegate the exercise of
the power to subordinate units of government and/or
other entities, e.g., K.S.A. 26-501 et seq., the Eminent
Domain Procedure Act.
• Specific delegations of eminent domain power to
local units of government are the subject of over 300
Kansas statutes. Many of these empower a particular
unit to use eminent domain for a specific purpose (e.
g., K.S.A. 12-1736, city power to acquire land for public
building purposes). Other statutes delegate general
authority to exercise eminent domain powers.
• The State of Kansas has granted not only cities
and counties the power of eminent domain to advance
economic development, but also airport authorities (K.
S.A. 3-129), port authorities (K.S.A. 12-3406), industrial
districts (K.S.A. 19-3808), and public building
commissions (K.S.A. 12-1757).
3. The Kansas courts have for many years taken a
broad view of what is a public use to which the
eminent domain power can be lawfully applied. The
following excerpt from a 2003 Kansas Supreme Court
decision shows why the holding of the U.S. Supreme
Court in Kelo (discussed below) was consistent with
the law of eminent domain and takings in Kansas at
that time.
“It is elementary that the legislature possesses no
power to authorize the appropriation of one’s property
for a private use or purpose, but it is equally well-
settled that the right to take private property for a
public use is inherent in the state, and that the
legislature may authorize the acquisition and
appropriation of private property for a public use
provided the owner is compensated therefore.
[Citation omitted.] The difficulty often encountered
lies in the inability of courts comprehensively to
define the concept of a public use or purpose, due, no
doubt, to the exigencies shown by the facts and the
diversity of local conditions and circumstances in an
ever-changing world.
“In our opinion the concept of the terms public
purpose, public use, and public welfare, as applied to
matters of this kind, must be broad and inclusive…
The mere fact that through the ultimate operation of
the law the possibility exists that some individual or
private corporation might make a profit does not, in
and of itself, divest the act of its public use and
purpose.” State ex rel. Tomasic, 265 Kan. 779, 789-
90, 962 P.2d 543 (quoting State, ex rel., Fatzer v.
Urban Renewal Agency of Kansas City, 179 Kan. 435,
438, 296 P.2d 656 [1956]).
The 2005 Decision in Kelo et. al v. City of New London
et. al, 545 U.S. 469, 125 S. Ct. 2655, 73 USLW 4552
(2005)
The U.S. Supreme Court held in Kelo v. City of New
London that the “public use” provision of the takings
clause of the 5th Amendment to the U.S. Constitution
permits the use of eminent domain for economic
development purposes.
The case involved an economic development plan for
the City of New London, Connecticut. The city has
been in economic decline for many decades. In 1998,
Pfizer, Inc. announced plans to build a large research
facility in New London on a site adjacent to the Fort
Trumbull neighborhood. This neighborhood had a high
vacancy rate for nonresidential buildings, old
buildings in poor shape, and fewer than half of the
residential properties were in average or better
condition.
The nonprofit New London Development Corporation
(NLDC) was formed to help the city plan for economic
development. After the Pfizer announcement, the city
authorized NLDC to put together an economic
development plan for 90 acres in Fort Trumbull. The
plan’s goals were to create a development that would
complement the facility that Pfizer was planning to
build, create jobs, increase tax and other revenues,
encourage public access to and use of the city’s
waterfront, and eventually to build momentum for the
revitalization of the rest of the city, including its
downtown area.
Voluntary sales were achieved for 100 of the 115
properties in the neighborhood. The owners of the
remaining 15 lots filed suit claiming that the use of
eminent domain as contemplated by the plan violated
the state and federal constitutions.
The Supreme Court, in a 5-4 decision, recognized that
the U.S. Constitution prohibits a “taking” whose “sole
purpose” is to transfer one person’s private property
to another private person, even if just compensation is
paid. However, the Court explained, this was not the
issue before the Court. Rather, “The disposition of
this case therefore turns on the question whether the
City’s development plan serves a “public
purpose…Without exception, our cases have defined
that concept broadly, reflecting our longstanding
policy of deference to legislative judgments in this
field…To effectuate this plan, the City has invoked a
state statute that specifically authorizes the use of
eminent domain to promote economic development.”
The Court found that New London’s economic
development plan served a “public purpose” under the
“public use” provision of the U.S. Constitution. “Those
who govern the City were not confronted with the
need to remove blight in the Fort Trumbull area, but
their determination that the area was sufficiently
distressed to justify a program of economic
rejuvenation is entitled to our deference. The City has
carefully formulated an economic development plan
that it believes will provide appreciable benefits to the
community, including – but by no means limited to –
new jobs and increased tax revenue.”
The Court acknowledged that “…nothing in our
opinion precludes any State from placing further
restrictions on its exercise of the takings power.
Indeed, many States already impose “public use”
requirements that are stricter than the federal
baseline. Some of these requirements have been
established as a matter of state constitutional law,
while others are expressed in state eminent domain
statutes that carefully limit the grounds upon which
takings may be exercised.”
Kansas Appellate Court Decisions on Economic
Development as a “Public Purpose” for Which Eminent
Domain Power Can be Exercised
Years prior to Kelo, the Kansas Supreme Court had
upheld local government’s exercise of eminent
domain to take private property for economic
development purposes, as lawful under state law.
In State ex rel. Tomasic v. Unified Government of
Wyandotte County/Kansas City, 265 Kan. 779 (1998),
the Court upheld provisions of the tax increment
financing (TIF) law which authorized special obligation
(STAR) bonds, and the use of eminent domain to build
the Kansas Speedway in Wyandotte County. The
Court held that the development of the race track
facility and related projects were valid public
purposes for which TIF and STAR bonds could be
issued and eminent domain authority could be
exercised.
In a 2003 decision, the Kansas Supreme Court not
only approved of economic development as a public
purpose, but also recognized Home Rule as a source
of eminent domain authority for Kansas county
governments. In General Building Contractors, LLC v.
Board of Shawnee County Commissioners, 275 Kan.
525 (2003) the Court held that Shawnee County’s
condemnation of a private business owner’s property,
for use as a national merchandiser’s distribution
facility was a valid public purpose, and that its power
of eminent domain is to found within the county Home
Rule Statute, K.S.A. 1-101a et seq. and related
statutes authorizing industrial and economic
development activities by local governments.
Post-Kelo
In the aftermath of Kelo property rights advocates
have promoted various new restrictions upon eminent
domain in statehouses across the country. Some of
the ideas advanced included: prohibiting the transfer
of property from one private use to another private
use; limiting “public use” to only those identified by
the state legislature; and requiring “blight” to be a
condition upon any private property taken for
economic or industrial development purposes.
KANSAS LEGISLATION IN RESPONSE TO THE KELO
DECISION
The 2006 session of the Kansas Legislature
considered several bills affecting the power of
eminent domain, several of which would effectively
end all local government authority to exercise the
power, and passed Senate Substitute for SB 323 (L.
2006, ch. 192).
As was the case in state legislatures around the
country, Kansas legislators in 2006 rushed to “defend”
property owners against the threat of an economic
development-based exercise of eminent domain.
The whereas clauses introducing Sub. for SB 323 well
state the mindset, i.e., the intent, of the Kansas
legislature as it responded to Kelo:
WHEREAS, The Kansas and United States Supreme
Courts have ruled that the taking and transferring of
private property from one private party to another is a
valid use of the power of eminent domain; and
WHEREAS, the people of Kansas support the
protection of private property rights and seek to
heighten the protection of private property rights from
the level expressed by recent court rulings; and
WHEREAS, the people of Kansas agree that the use of
eminent domain for the taking and transferring of
private property from one private party to an other
should only be allowed in extraordinary and limited
situations and with explicit procedural safeguards:
Now therefore,
L. 2006, ch. 192 imposed significant new limitations
upon state and local governments’ power of eminent
domain.
The 2006 law generally prohibits using eminent
domain to promote economic development without
the express approval of the Kansas Legislature. It
also generally affects the requirements for use of
eminent domain. Among the specifics of the new law:
1. On and after July 1, 2007, the taking of private
property by eminent domain for the purpose of selling,
leasing or transferring it to another private entity is
not permitted unless the taking meets any one of the
following:
• The property is deemed excess real property
that was taken lawfully and incidentally to the
acquisition of right-of-way for a public road, bridge or
public improvement project of the Kansas Department
of Transportation or a municipality;
• The taking is by any public utility;
• The taking is by any gas gathering service,
pipeline company or railroad;
• The private property owner has acquiesced in
writing to the taking;
• The property has defective or unusual conditions
of title or unknown ownership interests in the
property; or
• The property was unsafe for occupation by
humans under the municipality’s building codes.
2. Any taking of private property for the purpose of
transferring it to any private entity, except as
authorized above, must be expressly authorized by
the Legislature on or after July 1, 2007, by enactment
of a law that identifies the specific tract or tracts to
be taken. The Legislature is required to consider
providing extra compensation to the person whose
land will be taken of at least 200% of the fair market
value.
3. The tax increment financing law is amended to
provide that on or after July 1, 2007, the power of
eminent domain could be exercised only with state
legislative approval by passage of a bill approving
eminent domain for a specific project.
4. Another restriction is made to county home rule
(K.S.A. 19-101a) to provide that a county may not
exempt itself from or effect changes in this new set of
restrictions upon eminent domain.
L. 2006, ch. 192 was, to be kind, an ill-conceived,
haphazard set of solutions in search of a problem. In
the rush to prove to the public that it was the guardian
of private property rights, the Legislature bestowed
upon itself the authority to decide what historically
has been the decision of locally-elected, locally-
accountable governing bodies – when is economic
development a public purpose which can justify the
exercise of eminent domain?
PRIVATE PROPERTY
1. Most of the drama, and anxiety, over takings of
private property involve narrow questions of when
governmental regulations and regulatory action
become noncompensated takings violative of the 5th
and 14th amendments. However, the 2005 eminent
domain decision of the U.S. Supreme Court in Kelo v.
City of New London let loose a firestorm from private
property rights advocates who rejected the use of
eminent domain for economic development purposes.
2. Basics of Eminent Domain
• Reduced to its fundamentals, eminent domain is
the inherent power of a governmental entity to take
private property and convert it to public use. The
entity is empowered to take private property, over the
objections of the owner, upon meeting the conditions
of public use and payment of just compensation.
• The power of eminent domain is a necessary
power held by a sovereign body, as it is a power
essential to the existence of government. It is
necessary to the function of government, and so
exists even in the absence of a specific grant of
authority via a constitution or statute.
• The exercise of eminent domain is subject to
constitutional limits, including payment of just
compensation and due process for the property owner
(e.g., notice and an opportunity for a hearing). The
Kansas Constitution does not expressly require
compensation for takings. However, the 5th
Amendment’s guarantee of just compensation is made
applicable to the state’s exercise of eminent domain
through the Due Process clause of the 14th
Amendment. Lone Star Industries v. KDOT, 234 Kan.
121, 671 P.2d 511 (1983)
• The power of eminent domain is held by the
sovereign state, which may delegate the exercise of
the power to subordinate units of government and/or
other entities, e.g., K.S.A. 26-501 et seq., the Eminent
Domain Procedure Act.
• Specific delegations of eminent domain power to
local units of government are the subject of over 300
Kansas statutes. Many of these empower a particular
unit to use eminent domain for a specific purpose (e.
g., K.S.A. 12-1736, city power to acquire land for public
building purposes). Other statutes delegate general
authority to exercise eminent domain powers.
• The State of Kansas has granted not only cities
and counties the power of eminent domain to advance
economic development, but also airport authorities (K.
S.A. 3-129), port authorities (K.S.A. 12-3406), industrial
districts (K.S.A. 19-3808), and public building
commissions (K.S.A. 12-1757).
3. The Kansas courts have for many years taken a
broad view of what is a public use to which the
eminent domain power can be lawfully applied. The
following excerpt from a 2003 Kansas Supreme Court
decision shows why the holding of the U.S. Supreme
Court in Kelo (discussed below) was consistent with
the law of eminent domain and takings in Kansas at
that time.
“It is elementary that the legislature possesses no
power to authorize the appropriation of one’s property
for a private use or purpose, but it is equally well-
settled that the right to take private property for a
public use is inherent in the state, and that the
legislature may authorize the acquisition and
appropriation of private property for a public use
provided the owner is compensated therefore.
[Citation omitted.] The difficulty often encountered
lies in the inability of courts comprehensively to
define the concept of a public use or purpose, due, no
doubt, to the exigencies shown by the facts and the
diversity of local conditions and circumstances in an
ever-changing world.
“In our opinion the concept of the terms public
purpose, public use, and public welfare, as applied to
matters of this kind, must be broad and inclusive…
The mere fact that through the ultimate operation of
the law the possibility exists that some individual or
private corporation might make a profit does not, in
and of itself, divest the act of its public use and
purpose.” State ex rel. Tomasic, 265 Kan. 779, 789-
90, 962 P.2d 543 (quoting State, ex rel., Fatzer v.
Urban Renewal Agency of Kansas City, 179 Kan. 435,
438, 296 P.2d 656 [1956]).
The 2005 Decision in Kelo et. al v. City of New London
et. al, 545 U.S. 469, 125 S. Ct. 2655, 73 USLW 4552
(2005)
The U.S. Supreme Court held in Kelo v. City of New
London that the “public use” provision of the takings
clause of the 5th Amendment to the U.S. Constitution
permits the use of eminent domain for economic
development purposes.
The case involved an economic development plan for
the City of New London, Connecticut. The city has
been in economic decline for many decades. In 1998,
Pfizer, Inc. announced plans to build a large research
facility in New London on a site adjacent to the Fort
Trumbull neighborhood. This neighborhood had a high
vacancy rate for nonresidential buildings, old
buildings in poor shape, and fewer than half of the
residential properties were in average or better
condition.
The nonprofit New London Development Corporation
(NLDC) was formed to help the city plan for economic
development. After the Pfizer announcement, the city
authorized NLDC to put together an economic
development plan for 90 acres in Fort Trumbull. The
plan’s goals were to create a development that would
complement the facility that Pfizer was planning to
build, create jobs, increase tax and other revenues,
encourage public access to and use of the city’s
waterfront, and eventually to build momentum for the
revitalization of the rest of the city, including its
downtown area.
Voluntary sales were achieved for 100 of the 115
properties in the neighborhood. The owners of the
remaining 15 lots filed suit claiming that the use of
eminent domain as contemplated by the plan violated
the state and federal constitutions.
The Supreme Court, in a 5-4 decision, recognized that
the U.S. Constitution prohibits a “taking” whose “sole
purpose” is to transfer one person’s private property
to another private person, even if just compensation is
paid. However, the Court explained, this was not the
issue before the Court. Rather, “The disposition of
this case therefore turns on the question whether the
City’s development plan serves a “public
purpose…Without exception, our cases have defined
that concept broadly, reflecting our longstanding
policy of deference to legislative judgments in this
field…To effectuate this plan, the City has invoked a
state statute that specifically authorizes the use of
eminent domain to promote economic development.”
The Court found that New London’s economic
development plan served a “public purpose” under the
“public use” provision of the U.S. Constitution. “Those
who govern the City were not confronted with the
need to remove blight in the Fort Trumbull area, but
their determination that the area was sufficiently
distressed to justify a program of economic
rejuvenation is entitled to our deference. The City has
carefully formulated an economic development plan
that it believes will provide appreciable benefits to the
community, including – but by no means limited to –
new jobs and increased tax revenue.”
The Court acknowledged that “…nothing in our
opinion precludes any State from placing further
restrictions on its exercise of the takings power.
Indeed, many States already impose “public use”
requirements that are stricter than the federal
baseline. Some of these requirements have been
established as a matter of state constitutional law,
while others are expressed in state eminent domain
statutes that carefully limit the grounds upon which
takings may be exercised.”
Kansas Appellate Court Decisions on Economic
Development as a “Public Purpose” for Which Eminent
Domain Power Can be Exercised
Years prior to Kelo, the Kansas Supreme Court had
upheld local government’s exercise of eminent
domain to take private property for economic
development purposes, as lawful under state law.
In State ex rel. Tomasic v. Unified Government of
Wyandotte County/Kansas City, 265 Kan. 779 (1998),
the Court upheld provisions of the tax increment
financing (TIF) law which authorized special obligation
(STAR) bonds, and the use of eminent domain to build
the Kansas Speedway in Wyandotte County. The
Court held that the development of the race track
facility and related projects were valid public
purposes for which TIF and STAR bonds could be
issued and eminent domain authority could be
exercised.
In a 2003 decision, the Kansas Supreme Court not
only approved of economic development as a public
purpose, but also recognized Home Rule as a source
of eminent domain authority for Kansas county
governments. In General Building Contractors, LLC v.
Board of Shawnee County Commissioners, 275 Kan.
525 (2003) the Court held that Shawnee County’s
condemnation of a private business owner’s property,
for use as a national merchandiser’s distribution
facility was a valid public purpose, and that its power
of eminent domain is to found within the county Home
Rule Statute, K.S.A. 1-101a et seq. and related
statutes authorizing industrial and economic
development activities by local governments.
Post-Kelo
In the aftermath of Kelo property rights advocates
have promoted various new restrictions upon eminent
domain in statehouses across the country. Some of
the ideas advanced included: prohibiting the transfer
of property from one private use to another private
use; limiting “public use” to only those identified by
the state legislature; and requiring “blight” to be a
condition upon any private property taken for
economic or industrial development purposes.
KANSAS LEGISLATION IN RESPONSE TO THE KELO
DECISION
The 2006 session of the Kansas Legislature
considered several bills affecting the power of
eminent domain, several of which would effectively
end all local government authority to exercise the
power, and passed Senate Substitute for SB 323 (L.
2006, ch. 192).
As was the case in state legislatures around the
country, Kansas legislators in 2006 rushed to “defend”
property owners against the threat of an economic
development-based exercise of eminent domain.
The whereas clauses introducing Sub. for SB 323 well
state the mindset, i.e., the intent, of the Kansas
legislature as it responded to Kelo:
WHEREAS, The Kansas and United States Supreme
Courts have ruled that the taking and transferring of
private property from one private party to another is a
valid use of the power of eminent domain; and
WHEREAS, the people of Kansas support the
protection of private property rights and seek to
heighten the protection of private property rights from
the level expressed by recent court rulings; and
WHEREAS, the people of Kansas agree that the use of
eminent domain for the taking and transferring of
private property from one private party to an other
should only be allowed in extraordinary and limited
situations and with explicit procedural safeguards:
Now therefore,
L. 2006, ch. 192 imposed significant new limitations
upon state and local governments’ power of eminent
domain.
The 2006 law generally prohibits using eminent
domain to promote economic development without
the express approval of the Kansas Legislature. It
also generally affects the requirements for use of
eminent domain. Among the specifics of the new law:
1. On and after July 1, 2007, the taking of private
property by eminent domain for the purpose of selling,
leasing or transferring it to another private entity is
not permitted unless the taking meets any one of the
following:
• The property is deemed excess real property
that was taken lawfully and incidentally to the
acquisition of right-of-way for a public road, bridge or
public improvement project of the Kansas Department
of Transportation or a municipality;
• The taking is by any public utility;
• The taking is by any gas gathering service,
pipeline company or railroad;
• The private property owner has acquiesced in
writing to the taking;
• The property has defective or unusual conditions
of title or unknown ownership interests in the
property; or
• The property was unsafe for occupation by
humans under the municipality’s building codes.
2. Any taking of private property for the purpose of
transferring it to any private entity, except as
authorized above, must be expressly authorized by
the Legislature on or after July 1, 2007, by enactment
of a law that identifies the specific tract or tracts to
be taken. The Legislature is required to consider
providing extra compensation to the person whose
land will be taken of at least 200% of the fair market
value.
3. The tax increment financing law is amended to
provide that on or after July 1, 2007, the power of
eminent domain could be exercised only with state
legislative approval by passage of a bill approving
eminent domain for a specific project.
4. Another restriction is made to county home rule
(K.S.A. 19-101a) to provide that a county may not
exempt itself from or effect changes in this new set of
restrictions upon eminent domain.
L. 2006, ch. 192 was, to be kind, an ill-conceived,
haphazard set of solutions in search of a problem. In
the rush to prove to the public that it was the guardian
of private property rights, the Legislature bestowed
upon itself the authority to decide what historically
has been the decision of locally-elected, locally-
accountable governing bodies – when is economic
development a public purpose which can justify the
exercise of eminent domain?
| More Zoning Articles |
| EMINENT DOMAIN: THE KANSAS RESPONSE TO KELO V. CITY OF NEW LONDON |