For the second time in two months, Maryland's highest
court has found fundamental flaws in Baltimore's favored economic development
strategy, a near-instantaneous type of eminent domain called "quick
take."
In a decision released yesterday, the Court of Appeals soundly
slapped Baltimore development officials for abusing the property seizure tactic
in a way that, judges say, constrains a landowner's exercise of constitutional
rights.
The court ruled that the Baltimore Development Corp. failed to
show any justification for using quick take, which is intended for emergencies,
to immediately seize the former Chesapeake Restaurant on North Charles Street
in 2005 for a redevelopment project.
"There certainly was no evidence
that quick-take was necessary for the public's health, safety, or immediate
welfare, and it was not asserted that [the property owner] was a 'holdout' of
any sort," wrote Judge Dale R. Cathell.
"In fact, the city had the power
to initiate condemnation for approximately a year and a half and chose to wait,
apparently, until the last minute, and then decided to make use of a type of
action that curtailed the property owner's ability to present a
defense."
The high court came down hard on Baltimore's quick-take
technique in February, too, ruling that the BDC had no urgent need to seize a
Charles North bar called The Magnet owned by George Valsamaki.
Yet
another challenge - this time from a group of west-side shop owners who said
the BDC's secretive ways kept them from fighting the agency's seizure of their
property for the superblock redevelopment effort - prompted the high court in
November to force the BDC to open its books and meetings.
George Nilson,
Baltimore's city solicitor, said yesterday that the court's message,
underscored in the Valsamaki case, is that the city must change its ways -
though not necessarily stop using quick take.
"The Court of Appeals
could have thrown out the quick-take process. It didn't," Nilson said. "It
reminded us - not that we needed to be reminded - that we have a burden of
proof to establish before a taking."
The Chesapeake seizure happened
before the Valsamaki ruling. Since then, Nilson said, Baltimore has reformed.
He said those involved with eminent domain - both at the BDC and the city's
housing department - now understand that they must make stronger cases for
takings and that quick take is not always the answer.
"The next time a
quick take comes up - and it will be soon - we'll have everything ready to go,"
Nilson said. "There will be compelling cases for quick take."
During
arguments before the Court of Appeals a month ago, the city vigorously defended
its seizure of the long-closed Chesapeake Restaurant, saying owner Robert
Sapero's refusal to sell was scuttling a $50 million renovation of the Charles
North area.
In the fall of 2005, although Sapero said he was about to
sell the prominent property, which sits a few doors down from the popular
Charles Theatre and about a block from
Pennsylvania
Station, the BDC promised it to private developers, Station North
Development Partners LLC. The developers had a $50 million plan for a complex
of condominiums, townhouses, artists lofts, shops, restaurants, a parking
garage and an art gallery...
The developers include Tower Hill
Development & Consulting LLC; Michael and Alan Shecter, who own
The
Charles Theatre and the Everyman Theater; Florida-based developer the
Miller Group; and Stephen A. Masciola.
The city seized the restaurant
that December, offering $770,000 for it even though Sapero, who bought the
restaurant in 1986, said he had a contract with someone for $2
million.
"It is interesting that their appraisals were so woefully low
when compared with the modern marketplace," Sapero's attorney Alan R. Engel
said yesterday. "It's 'If you don't make a deal with us, we'll just go in and
take it right now.' That's the abuse the court is trying to protect all
citizens from."
The court accused Baltimore of using quick take, which
gives property owners just 10 days to challenge seizures, as a "litigation
tactic," bringing it in when purchase negotiations with property owners break
down.
Both Valsamaki and Sapero complained that the quick-take process
was so fast that it left no time for their attorneys to use the discovery
period of the suit to gather information to defend their cases.
"The use
of quick-take should always be subject to close scrutiny," Cathell concluded.
"It must not be forgotten that private property rights are fundamental
constitutional rights."
The Court of Appeals remanded the case back to
Circuit Court.
Timothy Sandefur, an attorney with the Pacific Legal
Foundation who wrote a brief in the Valsamaki case, said these decisions show
Maryland's high court is not only "strongly in favor of property rights" but
"really upset by the abuse of the quick-take power by local
officials."
"In recent years, courts have tended to defer to local
officials to such a degree that city officials think that they can do pretty
much whatever they want with people's property," he said. "It's refreshing to
see a court stepping in and saying no, the Constitution limits what you can
do."
By limiting quick take, Maryland joins a handful of states whose
judiciaries have restrained the property seizure powers that the U.S. Supreme
Court granted government in 2005's Kelo v. New London decision. There the high
court ruled that government can take homes or businesses for private economic
development projects.
Armando Carbonell, a senior fellow at the Lincoln
Institute of Land Policy in Massachusetts, said with the Kelo backlash,
governments are becoming "sensitized" to eminent domain controversy. However,
he adds, it's still an important revitalization tool for cities like
Baltimore.
"It is not the preferred way of doing planning and making
cities," Carbonell said, "but it may be the necessary way in some cases. We
need to proceed in a thoughtful way and use it conscientiously."