Local Businesses Urging City to Reinstate Eminent Domain Authority

Most of the media surrounding eminent domain -- and eminent domain for redevelopment purposes in particular -- involves claims of eminent domain abuse and grass roots efforts to limit the government's ability to condemn property. 

In the City of Ukiah, however, local business owners are apparently taking the opposite stance, urging the City to reinstate its eminent domain powers that lapsed in 2001 to deal with a blight situation that business owners believe are hurting them.  We initially reported on the issues with the Palace Hotel back in Februrary, but a July 9 article in The Ukiah Daily Journal, "Residents plea for city to take action on 'black-hole' Palace Hotel," explains that the public is the driving force behind the current efforts:

Several downtown business owners, frustrated by the long vacant Palace Hotel, urged the Ukiah City Council to reinstate powers of eminent domain for the city's redevelopment agency during a special meeting Wednesday night.

The problem is that the old hotel property is apparently in a serious state of disrepair, and efforts to cause the property's owner to rehabilitate it have failed.  One resident summed up the public's mood as follows:

"When I moved here 20 years ago, I heard the Palace Hotel would be rehabilitated, but ever since then, it's just been more and more blight," said Richard Gardiner, describing eminent domain as a good motivating tool. "A cop rarely has to use his gun, but knowing he has it keeps people in line."

I'll admit that I've never been to Ukiah and I know nothing about the Palace Hotel, its history, or the efforts to rehabilitate it.  I do know, however, that since 2005's Kelo decision, I have rarely seen a news report evidencing such overwhelming support to condemn property for redevelopment.

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California Eminent Domain Report - August 24, 2011 1:02 PM
The existence of California's redevelopment agencies continues to make headlines across the state
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Tim Kowal - July 11, 2010 1:37 PM

I took note of your earlier reference to the Palace Hotel, wondering if anyone knows what sorts of regulatory circumstances might impact efforts to rehabilitate/restore the hotel, assuming the owners desired to take up such efforts. (See here: http://notesfrombabel.wordpress.com/2010/02/27/more-eyebrow-raising-redevelopment-efforts/.)

It seems entirely possible to me the owners might be put to an impossible choice here: endure the prohibitively costly measures imposed by historic district or other legal restrictions, or risk losing the property through condemnation.

Anything to this theory? Or is this just over-exercised skepticism?

Rick Rayl - July 20, 2010 1:48 PM

Tim --
You raise a good point; this is a very real concern for people who own properties with historic designations. Often, the rehabilitation (or even basic upkeep) costs are massive. Maybe even more problematic, when an owner tries to find a new use for an obsolete building, the restrictions may make changes necessary to convert to something economically viable impractical, or even impossible.

This is why anyone considering acquiring a designated site should take care to ensure they understand the restictions and obligations before committing to the purchase. If they don't, they may find themselves sitting on a lovely site with lots of history -- and no way to generate income.

In the end, this is a complicated issue, as it's easy to see both the public's interest in preserving key historical sites and the owner's interest in making an economically viable use of its property without an impossible upkeep burden.

Ultimately, eminent domain may be a good solution for some of these sites, as the owner gets paid for the property and the burden of preserving and maintaining the site shifts to the taxpayers. If those taxpayers aren't willing to pay for the property and its upkeep, maybe it isn't all that important to preserve it after all, and the owner should be allowed to make another use of the property.

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