Missouri Supreme Court Rules Against Developer & Municipality in Takings Case
My friend Antonio French at PubDef has the scoop on the court’s ruling on the Centene Corporation in Clayton Missouri. At issue was Missouri’s definition of “blighted;”
“that portion of the city within which the legislative authority of such city determines that by reason of age, obsolescence, inadequate or outmoded design or physical deterioration have become economic and social liabilities, and that such conditions are conducive to ill health, transmission of disease, crime or inability to pay reasonable taxes.”Â
While the crux of the Kelo decision related to economic development to justify the taking of property the “and social liabilities” phrasing in Missouri law seems to have created a road block to those justifying taking functioning property in the high-value City of Clayton, the county seat of St. Louis County.
One judge, concurring with the decision but disagreeing with some points of the main decision had this to say about blight:
The difficulty is that, although the PGAV report quotes the language from section 353.020(2) defining “blight” and, thus, its authors seem to have been aware that social liability is part of the analysis, the entirety of the conclusion, as well as the relevant discussion relating to the specific factors analyzed, focuses on economic liability. While Centene suggests that the absence of the term “social liability” may just have been an oversight, the level of detail and attention given to every other aspect of the statutory definition of “blight” makes the suggestion that a finding of social liability was accidentally omitted and should be “read into” the report rather implausible.
I intend to take a detailed look at this case in the near future. In the meantime, here is the court’s summary ruling.
No kidding… the definition of social liability has yet to be defined in our fine state yet municipalities have used the “blighted” definition often and forced owners out of their property. Sections of our constitution are based on the principle of private property and the duty of government to protect such. That has been the essence of our success but in St Louis, local governmental units have attempted to use their unfounded and illegal powers to take from Peter to pay Paul. Absolutely shameful as it sends a message to corporations and other investors that only “preferred” entities are provided what all deserve. And we wonder why our investment climate is below par…
you know, i read it earlier, but sometimes its good to pass these things along. is it cool if i post follow-ups or seconding of things i read here? providing links back of course…
I agree with the court. By definition, pretty much any property can have a “higher and better” use. And yes, given our sales-tax-based funding structure, it comes as no surprise that some governments are more aggressive and creative in “defining” blight, no matter how tenuous it might be. I’m a big believer, however, in private property rights. These are all commercial properties, not people’s homes. It should boil down to a transaction between the private parties – Centene needs to pay its neighbors what they think is a fair price for their land IF they really need/want it. The city obviously has an interest in Centene succeeding, but they “cross the line” when they start taking sides. As it is, life ain’t fair, especially in business, and you sure don’t need the (power of the) government as an adversary or a silent partner. Bottom line, however, the problem rests in Jefferson City – if the legislature had the cojones, they’d come up with a more narrowly-defined definition of blight that reflects the viewpoints of most Missouri residents.
Too true Jim that the responsibility lies in Jeff City but should that be an excuse for local governments to abuse this unfounded power? Where’s the integrity? The role of government shouid be to create a level playing field and not to take sides. In the StL region though, local governments have made taking sides the preferred strategy. This inevitably lowers the quality of life, creates depopulation problems, etc.
City managers and other administrators’ salaries and career path become dependent on this strategy woking for them. Municipal codes are not enforced in order to create blighting conditions. After the problems are created, then officials use ED to solve the problems they help create. What perversity… and it is common here.
NJ is starting to tighten their requirements:
http://www.philly.com/inquirer/local/20070614_Ruling_tightens_N_J__land_seizure.html
Perhaps NJ is moving forward but so did MO…supposedly. However, not far enough as MO ED Abuse Coalition, rates our state with a “D”: Although House Bill 1944 exempts farm land from being declared blighted, it continues to let cities condemn whole neighborhoods as ‘blighted’ based on vague, subjective factors,”. Such factors include “inadequate street layout,” “unsafe conditions” and “obsolete platting.” Any Missouri community, no matter how well maintained, could be at risk. This story in Clayton proves their point in spades!
We elect who we elect. We can vote the rascals out, but in (nearly?) every local case, the property owners getting screwed are far out-numbered by other voters who are receiving more services and/or lower taxes from redevelopment. It’s all about the almighty tax dollar. The local sales tax pie is finite. In aggregate, across the region we only make so much money, we can only spend so much money, and the governments can only extract so much in sales taxes. Where the equation breaks down is that sales taxes go to the jurisdiction where the money is spent, not to the jurisdiction where the spender lives and demands services. That’s why most communities are chasing sales taxes (and employing condemnation to build new retail centers) – it’s simply easier to (try and) increase sales tax collections from visitors who don’t vote and demand services than it is to increase property taxes on residents who can and do vote and typically don’t want to pay higher taxes! It all boils down to fiscal responsibility and hard choices – nothing in life is free. A politician either needs to cut back on (or not increase) services OR they need to find more tax revenues. Do the math – one Walgreens generates a lot more tax revenue than the 6-8-10 houyses it replaces. Bottom line, we get the government we deserve.
And the truism “you can’t fight city hall” holds no more true than when it applies to condemnation. Sure, a property owner can contest both the valuation placed on their property and the underlying assumption of blight, but how many of us has the resources or the stomach for that kind of fight? It’s taken the guy in NJ 4 years and who knows how much in attorney’s fees to get a Supreme Court decision in his favor (and there was no guarantee that he would prevail)! It all really boils down to who we elect, not the laws they’re trying to bend to fit their will and “vision”!
Choosing to increase sales taxes by favoring commercial development over residential development because of property tax concerns is one thing. I would be happier about those choices if the school system got some gain out of the increased value, which it doesn’t because of ubitquitous tax abatements.
My real problem with the Centene Project, Loughborough Commons, Century Building, etc. is favoring the interests (profit) of large businesses over the interests of smaller businesses (also profit) by the use of eminent domain, economic incentives, etc. Correct me if I’m wrong, but don’t small businesses employ most people in this country (and one might presume, the City)?
It also troubles me when government chooses to displace one group of citizens (usually poor/black/elderly/children/etc) in favor of people who are seen as more desirable and uses our tax dollars to do so. I’m thinking here about the subdivision that got the recall on Bosley started, McCree Town, etc. If the market does it on its own, fine, but I see subsidies as questionable.
Subsidy (public) investments is simply the physical manifestation of the public’s will. No real estate development receives public support (subsidy) without successfully navigating years’ of bureaucratic, neighborhood and political gauntlets.
If the legislature had the cojones, they’d come up with a more narrowly-defined definition of blight that reflects the viewpoints of most Missouri residents.