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Saturday, January 14, 2006

Ind. Decisions - Yesterday's Court of Appeals eminent domain ruling reported in Fort Wayne papers

Yesterday's 29-page opinion by Judge Vaidik in Southtown Properties, Inc., et al v. City of Fort Wayne, et al (see ILB entry here, last item) is the focus of stories in the Fort Wayne papers today.

"Court affirms Southtown’s selling price" is the headline to a story by Cindy Larson in the Fort Wayne News-Sentinel. Some quotes:

The Indiana Court of Appeals on Friday ruled against the former owner of Southtown Mall, who said the mall was worth more than the $4.5 million the city paid for it.

In March 2004, the city took possession of the property through eminent domain, and has since demolished the dilapidated mall to clear way for the new Southtown Centre, which will include a Menards home-improvement store and a Wal-Mart. The mall formerly was owned by an investment group headed by North Carolina businessman Haywood Whichard.

During the 2004 trial, Whichard’s group tried to convince the jury the property was worth $8.5 million. When the jury determined it was worth only $4.5 million, Whichard said he would appeal, and did. Friday, the Appeals Court affirmed the lower court’s decision as to the value of the property and ruled in favor of the city. * * *

“We are pleased by (Friday’s) ruling in favor of the city of Fort Wayne’s efforts to revitalize the former Southtown Mall site,” Mayor Graham Richard said in a statement. “Southtown Centre has a bright future.”

"Ruling on Southtown is upheldFormer owners lose condemnation appeal" is the headline to a story by Dan Stockman in the Fort Wayne Journal Gazette. Some quotes:
The city had set aside $1 million in case the court raised the price. Richard said that money now will likely be available to help develop the site, unless the owners appeal the case to the Indiana Supreme Court.

Stephen Fink, attorney for the mall’s owners, said they will do exactly that. “We believe the private property rights are being eroded throughout the country, and if this decision is upheld it will further erode those rights,” Fink said. “We’re confident the Indiana Supreme Court will reverse the decision … thereby protecting Indiana landowners.”

Fink said the opinion ignored many facts and had a number of inconsistencies he is confident the Supreme Court will want to consider.

The appeals ruling centered on incentives the city had offered to potential buyers in hopes they would purchase the site from Southtown Properties, which was letting it deteriorate. City officials offered items such as a new entrance to the property and tax benefits, but when the question of the value went to trial, the jury was not allowed to hear about them.

The owners argued the jury also should have been allowed to consider offers made by potential buyers and evidence that the city’s developer, Barry Sturges, kept changing his view of the property’s value.

The decision, written by Judge Nancy H. Vaidik and joined by Patrick D. Sullivan and Ezra H. Friedlander, said increases or decreases in the value that would be caused by the project the land is being condemned for cannot be considered. Vaidik cited a 1969 case in which the state lost its argument that the price of land being taken for a highway should be lowered because the highway would decrease the property value.

“Evidence of changes in the value of property being brought about by the project for which the property is being taken is irrelevant,” Vaidik wrote.
City Attorney Tim Manges said the ruling means the value of the property for condemnation purposes, at least, was unrelated to the project it was being condemned for.

“You have to sort of remove the fact that there’s a condemnation going on,” Manges said. “You’ve got to look at this piece of property on its own merits.”
The city had argued that the other offers should not be considered as evidence of the land’s value because they were just offers, not contracts. The court agreed they should not have been allowed as evidence but for a different reason.

Instead, the court said, the jury should not have heard about the other offers because they were based on the incentives the city had been offering, and because the incentives are irrelevant, the offers are too. * * *

The owners also argued the price was artificially lowered by the city telling the jury that little maintenance was done on the property and it was in a state of disrepair. They said no work was done because the purchase offers they received asked them not to make any major changes and the jury should have been allowed to know why they didn’t maintain the mall. The court said the reasons the mall was falling apart were irrelevant, only the fact that it was falling apart.

Posted by Marcia Oddi on January 14, 2006 09:59 AM
Posted to Ind. App.Ct. Decisions