The eminent-domain reform bill signed into law last week by Gov. Bill Owens will inject a note of caution into government plans to forcibly buy private land for economic development, according to those who have studied the measure.
And it will level the playing field for property owners who want to fight government “takings” in court.
“It actually gives a landowner some chance of winning,” said Donald Ostrander, a Denver lawyer who often represents governments in eminent-domain cases.
Though eminent-domain abuses have been a simmering issue in Colorado for several years, House Bill 1411 is widely acknowledged to be Colorado’s reaction to a U.S. Supreme Court decision last year that set off a furor across the country.
With Owens’ signing of the bill, Colorado became the 22nd state in the nation to tighten eminent-domain laws since Kelo vs. New London.
In that highly publicized case, justices held that governments would not violate the constitution by seizing property, including people’s homes, and selling it to private developers in the name of economic redevelopment.
“I think that really ignited the backlash,” said Leslie Fields, a Denver lawyer who frequently represents property owners in eminent-domain cases.
The changes will serve to ratchet back a process that many in Colorado think has gotten out of control, Fields said.
Previously, vacant farmland or modest homes have been deemed “blighted” and taken for redevelopment projects. Many believed the driving force behind the projects was the generation of sales-tax revenue for cash-starved municipalities.
However, those involved in drafting the changes said they wanted to leave government the ability to attack truly blighted areas, such as an old garbage dump in Sheridan that occasionally produces methane explosions.
“It won’t impede the ability to do a legitimate urban renewal project,” said Malcolm Murray, a Denver lawyer who typically represents governments in eminent-domain cases.
But Fields said the changes will force governments to meet a higher burden of proof before they can condemn.
Condemning authorities will have to show “clear and convincing” evidence the taking is necessary for elimination of blight. The previous standard had been a “preponderance” of the evidence.
In many cases, property owners complained that governments were cavalier in calling property blighted to grease the skids for condemnation.
“It certainly opens the door for challenges to blight studies and findings of blight,” said Bob Hoban, a Denver lawyer represents property owners.
Hoban said the change makes absolutely clear that revenue generation cannot be a justification for using eminent domain.
That issue came to the forefront in 2004 when Colorado Supreme Court justices issued an opinion on a condemnation case involving an Arvada lake.
In a sharp rebuke to aggressive urban renewal authorities, the justices overturned Arvada’s effort to condemn part of a lake for a Wal-Mart project.
The case addressed whether the city’s urban renewal authority could use a 1981 blight finding to justify a public taking, even though the area already had been redeveloped.
In a much-studied footnote in the case, the justices signaled that they thought there were limits to an urban renewal authority’s power to take property for redevelopment, limits that Arvada wasn’t recognizing.
Buzz Kilker is an Aurora business owner who has followed the eminent-domain debate with interest over the years.
His auto-body repair shop in the Fitzsimons area has been targeted for eminent-domain proceedings several times.
There has been a lull in activity recently, he said, for two reasons. First, the area is rejuvenating itself; and second, the scrutiny that the project has gotten has prompted outrage from citizens who think government ought to be conservative in condemning property.
Kilker welcomed the tighter controls that come with the changes in state law. He said they will allow market forces to play a greater role in determining the future of his business.
“Anything’s going to help,” he said. “This thing had gotten out of control.”
Staff writer Alicia Caldwell can be reached at 303-820-1930 or acaldwell@denverpost.com.
