In 2007, Mayor Foster told the Journal News that she wanted to “forbid the City from acquiring land by eminent domain.” Five years later, the Mayor has had a change of heart, as she and the Council are now considering invoking eminent domain to secure a site for a new central firehouse.
Taxpayers must ask, is the use of eminent domain necessary or even desirable?
The “Fire Station Location Study” says that the proposed location is merely “good,” not ideal, and not even “central,” as the proposed firehouse is misnamed. The implication is that there are other “good” locations where the City would not have to exercise eminent domain to acquire the land necessary for firehouse consolidation.
Moreover, the decision whether to renovate existing houses, or to consolidate and build new, rests entirely on a report whose assumptions have not been fully vetted. For example, has the public been given a satisfactory answer regarding the study’s assumptions that the soft costs and contingency budget for renovation far exceeds those for new construction?
When a consulting firm proposes that the City spend more than $15.68 million on a project – an amount equal to nearly half of the City’s annual budget – it behooves the Council to get a second opinion, or at the very least, to critically examine all the firm’s assumptions, explicit and implicit.
Even if we assume that building a firehouse in the middle of the business district on one of the City’s most heavily travelled roads is the ideal location, which I do not believe it is, this still begs the question as to what “just compensation” the owners of seized property are owed under the Takings Clause of the Fifth Amendment.
The Supreme Court has repeatedly stated that the standard for “just compensation” is: “What has the owner lost? not, What has the taker gained?”
Given the unprecedented soft real estate market in the Tri-State area, where prices have declined by as much as 22.5% since 2005, it would seem the owner of 1141 Main Street would have a strong incentive to sue the City, should it attempt to force him to take a capital loss on his building. The public record shows that he paid $485,000 for his property near the height of the market on September 9, 2005. And the City required him to put in new windows to conform to the City’s historic district code. (Ironically, the City recently repealed the historic code with respect to his house, so the firehouse could be located on his land.)
It would seem a question of first impression whether a City could, through eminent domain, force a property owner to realize an unrecoverable capital loss on his property.
Litigation risk also exists with respect to the owners of the Crossroads Plaza. They claim they have a competing valuation for their land and buildings far in excess of what the City wants to pay. At best, this creates a triable issue of fact regarding what “just compensation” is for these owners, something only a jury can decide.
In short, should the City invoke eminent domain, it will in all likelihood subject taxpayers to substantial litigation risk. The firehouse project could be tied up in the courts well beyond the current Mayor’s term.