Change in Eminent Domain Law Could Cost Localities Money

Eminent domain change could cost localities

By Steve Vaughan, svaughan@vagazette.comThe Virginia GazetteVirginia Gazette

6:29 p.m. EST, January 11, 2013

A change took place on Jan. 1 that could cost local jurisdictions money in the future if they have the need to acquire property though eminent domain.

A constitutional amendment passed in November says localities can’t use eminent domain to get property that is then passed on to a third party for a use that will generate more tax dollars for the locality. In short, counties and cities cannot use eminent domain as an economic development tool.

It’s Virginia’s response to the U.S. Supreme Court ruling in Kelso v. City of New London in 2005. In that case, a 5-4 majority of the court said that government couldtransfer property from one private owner to another through eminent domain for the expressed purpose of increasing tax revenues.

That decision was roundly denounced across the political spectrum and state legislatures saw a flood of bills to outlaw the practice. Although Virginia passed one of those statutes, lawmakers also thought it was a good idea to enshrine the ban on eminent domain for economic development in the state constitution.

Local governments said the amendment didn’t ban anything they’ve done, but it would likely make any use of eminent domain more costly in the future.

“Williamsburg rarely resorts to eminent domain,” said City Manager Jack Tuttle. “The last time I recall was during the construction of the Community Building in the late ’90s. I do not expect the amendment would have changed the right of that taking, but the vague language in the amendment — to be defined by the General Assembly and interpreted by future case law — could well add substantial cost to taxpayers for exercise of eminent domain, and create ‘takings’ where none has ever existed before in law for undefined profit loss and loss of access.”

James City County deputy county attorney Adam Kinsman agreed that the law wouldn’t have stopped anything the county had done in the past — because it hadn’t use eminent domain for economic development but could hinder it in the future.

“Some of the language they’ve used about fair compensation could make eminent domain much more expensive for local governments,” he said.

York County finds itself in the same position.

It won’t change the process,” a spokesman said via email. “But it might result in increased cost of acquisition.”

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