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Thursday, July 15, 2010
Ind. Law - Interesting Kelo-type case in South Bend?
A long story today in the South Bend Tribune, reported by Jeff Parrott, and headed "Private or public use? Homeowners hire attorney to fight South Bend over eminent domain tactics." Some quotes:
City and neighborhood revitalization advocates in 2005 told The Tribune that they wanted to start building the new homes in 2007. The nonprofit Northeast Neighborhood Revitalization Organization has used about $3 million in city money to buy and demolish most of the properties, helping residents relocate.But construction has yet to start. Left standing, like an island in a sea of weed-strewn empty lots, are the homes owned by [Wayne] Curry and his next-door neighbors, Sam and Betty Kariuki.
For nearly six years, Curry and the couple have been unable to agree with the NNRO on a price for their properties.
Curry says the NNRO won't offer him enough money to pay off his mortgage and buy a comparable home in the neighborhood he has come to love. The NNRO offered him $114,000 at one point, but he thinks he deserves at least $200,000.
"Basically I'm trying to get a house," he said. "You lay awake at night. I can't sleep. It's not a good experience."
In the landmark Kelo v. City of New London case, the U.S. Supreme Court in 2005 ruled that local governments can take private property for economic development uses, such as revitalizing distressed areas. Previously, governments could only take land for uses that clearly benefited the public, such as new schools, freeways or bridges.
In the wake of the ruling, many states rushed to pass new laws protecting property owners' rights.
Indiana was one of them. In 2006, it enacted Public Law 163, which requires the property owner, as a willing seller in a city-led economic development project, to be paid 150 percent of the property's appraised value, along with attorney and appraisal fees. [ILB: PL163-2006 = HEA 1010-2006]
But cities exercising their traditional public-use eminent domain power don't have to follow P.L. 163.
City attorney Chuck Leone says the city needs Curry's and the Kariukis' properties for a "public use" because a proposed street in the new subdivision would run through their property boundaries.
Curry said it's not fair that the city is using its eminent domain power for a private project. Ultimately the city's redevelopment commission will convey the land to a private developer, who will have it replatted and subdivided before selling it off to new home buyers.
Masters agrees.
"I think there's a question here as to whether they really need to take their properties for a street," Masters said. "They could put that street anywhere. I think this process is designed to skirt around the protections of the law, and I don't like it." * * *
The NNRO has finally broken off talks with Curry and the Kariukis and deferred their cases to the city. This week, the city's Board of Public Works decided to take their properties with its eminent domain power, a process that affords property owners fewer rights than when they were negotiating with the NNRO.
Curry and the Kariukis are fighting the move and have hired attorney James Masters, who specializes in eminent domain cases. * * *
"There is no question that this is a private development project," Curry said. "The question is should they be able to separate the road work from the private development when the road work would never be done by itself, if not for the private development."
Posted by Marcia Oddi on July 15, 2010 09:56 AM
Posted to Indiana Courts