Imagine you sign a two-year lease with your landlord. After the first year, you decide you're tired of paying rent and would like to buy the property instead. You make him an offer, which he rejects as too low. In response, you go to the board of aldermen and ask them to declare the apartment blighted, condemn it, and turn it over to you for redevelopment. It might sound absurd, but something very similar is happening right now in Saint Louis. The story demonstrates just how ripe for abuse Missouri's eminent domain laws have become. And there's little reason to think the eminent domain bill the state legislature passed in May will prevent such abuses in the future, because the "blight" loophole being used by the city was not closed by the legislation.
One year ago today, in the case of Kelo v. New London, the Supreme Court ruled that local governments have wide latitude to transfer property from one private party to another for purposes of "economic development." The public was outraged. In response, politicians across the nation pledged to enact state legislation to strengthen property rights. Last month, the legislature passed House Bill 1944 into law, which Governor Blunt touted as "protecting the rights of responsible property owners."
Last November, Clayton business owner Dan Sheehan learned from the newspaper that his property suffered from "age, deteriorated condition, and outmoded design." That was a surprise to him because the property is located in one of the most prosperous neighborhoods in St. Louis and is home to four thriving small businesses, including his own. If the buildings were "deteriorated" and "outmoded," their customers didn't seem to notice. Yet the city of Clayton has begun making plans to seize Sheehan's property — and four others on the 7700 block of Forsyth — using eminent domain.
In January of 2004, the city of Arnold unveiled a plan to re-develop a large chunk of Arnold commonly referred to as the Arnold Triangle. The plan envisioned 250,000 square feet of retail space, a Dierbergs Market and a Lowe’s store. Unfortunately, there were 52 homes and businesses already occupying the area. They don’t pay as much in taxes as the city expects to get from the big box retailers, and the city has decided to remove them in favor of wealthier businesses. One of the property owners the city wants to displace is dentist Homer Tourkakis.
Missouri schools suffer from a shortage of math and science teachers. Rigid salary requirements prevent school districts from attracting new teachers in these shortage areas. Missouri should allow districts to use hiring incentives to address the math and science teacher shortage.
Last summer, Missouri’s elected officials promised to crack down on eminent domain abuse. Last week’s legislation falls far short of that promise. It makes some changes to the process of eminent domain takings, but it fails to curb “blight” takings, which are the primary justification for the abuse of eminent domain.
Missouri’s cable franchise law restricts competition and leaves consumers with few choices. Since the Texas legislature passed cable franchise reform, Texas consumers have benefited from better service and lower prices. Missouri should enact similar legislation to attract investment and increase competition.
The summer of 2005 was not a good one for Sharon Fitzgerald. On Memorial Day, she learned she had inoperable lung cancer. Three days later, she got a knock on her door. It was Jonathan Browne, head of real estate developer Novus Equities. He wanted to buy her house. And he made it clear that this was an offer she couldn't refuse. "He told us that if we didn't sell, he'd just use eminent domain and take our home anyway," said Sharon, "What could we do? With my health and everything and the chance to lose our home anyway, we didn't really have a choice."
For 30 years, the city of Saint Louis has lagged behind its suburbs in economic growth. The city’s earnings tax drives businesses and residents out of Saint Louis and penalizes workers who remain in the city. Repealing the earnings tax will attract economic development and generate greater revenue for the city.