Eminent Domain and Redevelopment Areas

Next big test of power to seize property?



Owner gets plans for the property approved by planning commission. But developer named for the redevelopment area demands $800,000 or 50% of the business, and sues to condemn.

The developer, Gregg Wasser of G&S Port Chester, told Didden he'd have to pay $800,000 or give G&S a 50 percent stake in the CVS business. If Didden refused, Mr. Wasser said, he would have Port Chester condemn and seize his property and instead of a CVS he'd put a Walgreens drugstore on the site.

There actually is another side to this story. The developer spent $100 Million redoing the area in exchange for the profits. Furthermore, although it's not raised by the article, without that developer coming in to spend their money on redevelopment, I'd wager the guy's plan would not have drawn an interested chain. But 1) I can't see that one brand name or the other of drugstore makes a significant difference to the plan, and 2) Who says the municipality that benefitted from having the developer come in and redevelop cannot pay for the rights of this person that have been abridged? Seems to me that municipality got a large amount of benefits for not much in the way of expenditure by curtailing those property owner's rights.

For decades Port Chester tried to persuade various developers to launch urban renewal projects in the village. None did. Then in 1999, G&S agreed to undertake the challenge - and risk. The company proposed a 27-acre, $100 million project to replace run-down buildings with new retail stores, new roads, utilities, and a multiplex movie theater.



In exchange, the village agreed to give the developer exclusive power to decide which properties within the redevelopment zone would be acquired through negotiation and which would be seized by eminent domain. It also gave the developer the exclusive right to build - and profit from - the project.

In other words, the bad guy here isn't the developer, who was promised certain benefits in exchange for spending their money to benefit the town. The bad guy here is the municipality who curtailed the rights of the property owners without just compensation while benefiting greatly.



As I keep saying in eminent domain, the issue is money (or actually, wealth transfer). This is an abuse of power not by the developer, but by the municipality. It isn't politically popular to make this observation, but it remains the correct interpretation.



Now any award from the town to the property owner should be offset by the value added to the property by the redevelopment zone, but the gentleman in question should nonetheless be entitled to an award of cash.