Events since the U.S. Supreme Court’s 2005 Kelo ruling underscore the wisdom of the 5-4 decision that allowed states and local communities to determine what constitutes a “public use” in eminent domain proceedings.
Property rights advocates had demanded that the high court forbid the city of New London – or anyone else – from condemning property for the purpose of economic redevelopment.
Many Americans cringe at the notion of a city condemning Grandma’s cottage to expand Wal-Mart’s parking lot. But although the Fifth Amendment to the U.S. Constitution states “nor shall private property be taken for public use without just compensation,” it doesn’t define “public use.” Rather than pretend that an anti-Wal-Mart clause exists in some mysterious “penumbra,” the court turned to 10th Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”
If short, the court said, local governments are creatures of the states. If you have a problem about the way cities are using eminent domain, go see your state legislatures.
Actually, the Colorado legislature acted to rein in abusive condemnations even before the high court invited it to do so. The most notorious case involved Arvada’s attempt to condemn a private development to make way for (you guessed it) a new Wal-Mart. The Colorado Supreme Court enforced the new law and blocked the condemnation.
In 2004, the legislature passed another law, House Bill 1203, forbidding cities to condemn land outside their city limits for parks and open space. That law was aimed directly at stopping Telluride from condemning land in the valley floor at the entrance to the town owned by San Diego-based developer Neal Blue to preserve it as open space.
District Judge Charles Greenacre threw out the law saying it was trumped by the home-rule powers granted cities under Article XX of the Colorado Constitution.
The case was then moved to Delta County, where a jury last week decided the town should pay $50 million to buy the 570 acres along Colorado 145. Telluride had argued that the land was worth just $26 million.
When I talked to Mayor John Pryor Friday, he said the town has no current plans to appeal the verdict. Instead, it’s busy raising the extra money through the private Valley Floor Preservation Partnership.
“Anything is possible in Telluride,” the mayor said, noting that the public and private funds available already total 70 percent of the needed cash.
The outcome of this case makes me question whether the legislature had any business in trying to block open space condemnations in the first place, as long as a fair price is paid for such acquisitions.
There is a fiscal postscript to this case that also underscores the wisdom of letting local officials handle local matters. Telluride’s share of the judgment will come from part of its real estate transfer tax – a 3 percent tax on real estate sales that raised $5.3 million last year.
Such taxes – even with voter approval – were forbidden by the ham-handed 1992 Taxpayer’s Bill of Rights written by Douglas Bruce – who buys and sells a lot of real estate. Telluride was allowed to keep its levy only because it adopted the tax prior to TABOR’s passage.
Such a tax would be wholly inappropriate for cities like Denver that are trying to attract new residents. But in an exclusive resort like Telluride, it makes sense to tax a small portion of the fortunes raised by real estate sales to preserve the open space and other amenities that lure so many residents to these special communities in the first place.
Because one size never fits all, it’s wise to allow as much local control as practical on local issues. The 10th Amendment recognizes that principle – and the state of Colorado should remember it as well.
Bob Ewegen (bewegen@denverpost.com) is deputy editorial page editor of The Denver Post.
