This Is Not Your Land Anymore

An outrageous story of eminent-domain abuse.

WSJ.com

By Jonathan V. Last

The legal phrase "eminent domain" has become all too familiar to non-lawyers in recent years as the U.S. Supreme Court has gradually expanded the power of municipalities to condemn private property and seize it for "public" use--even if they just end up handing property over to another private party. The court's now infamous Kelo decision (2005) no doubt pleased the city fathers of New London, Conn., who had taken possession of some residential neighborhoods for the sake of private developers. But it outraged nearly everyone else, not least Susette Kelo, the plaintiff whose home was coveted.

Outrage, appropriately, is the sustained effect of Carla Main's "Bulldozed," the case study of another instance of eminent-domain abuse, this time in the working-class town of Freeport, Texas (pop. 13,500), on the Gulf coast. Six years ago, after decades of decline, Freeport decided to revitalize itself by building a private marina on the Old Brazos River, which runs through the center of town. City leaders hoped that the development would attract hotels, restaurants, art galleries and tourists. But to make it all happen, they needed the land of a local family business. "Bulldozed" tells the story of a fight over domain, eminent and otherwise.

Ms. Main begins with the members of the Gore family, whose shrimping business has operated in Freeport since the 1940s. They own 330 feet of riverfront land, where shrimp boats dock and unload, and a state-of-the-art processing plant nearby. The family's company, called Western Seafood, employs more than 50 people and pays Freeport nearly $20,000 in taxes every year. Not that such good citizenry was enough to shield the company from the hazards of municipal overreach.

In March 2002, a group of private investors, led by a man named H. Walker Royall, formed a company called Freeport Waterfront Properties. Six months later, consultants hired by the city released a redevelopment plan--and, amazingly, it recommended a private marina, just what Mr. Royall's investors had hoped for. The city did not open the marina project to competition; it just handed it over to Freeport Waterfront.

Conveniently, Mr. Royall sat on the board of Sun Resorts, another company that the city selected, also without competition, this time to manage the marina once it was built.

The cozy arrangements didn't stop there. Freeport agreed to give the private investors $6 million in the form of a no-recourse loan. (The city's annual budget was $13 million.) It promised to cover their cost overruns with a loan of up to $400,000. It gave them a tax abatement. And it limited the investors' financial liability to $250,000 in cash, leaving the city on the hook for other cost overruns.

The only obstacle to this sweetheart deal was Western Seafood. It owned the land where Mr. Royall and his friends wanted to build. The city came up with a clever way around this problem. Claiming eminent domain, it proposed to take only part of the company's land--paying the Gores $260,000 in compensation. But the part the city officially wanted was riverfront land. Without it, Western Seafood wouldn't have access to its shrimpboats, and the "problem" of the rest of Western Seafood's land--expensive property, crowded with buildings and industrial equipment--would take care of itself. The city would get it virtually without paying for it.

The tale gets worse. Freeport was in a position to consider building a marina in the first place only because a "guillotine gate" in the river--insulating boats from hurricanes and storm surges--made Freeport a safe harbor. When the guillotine gate needed modernization several years ago, Ms. Main reports, the city didn't have the money for the $300,000 job. So the Gores gave the city a gift of $150,000. If they hadn't been so generous, the city never would have tried to take their land.

Ms. Main's legal background and reporting skills serve her well as she navigates the Gores' messy, twisting fight against city hall. Her tone is usually judicious, though not always. (Recounting one insincere proposal from the city to create a tiny buffer between Western Seafood and the marina, she exclaims: "Buffer, my ass!") From time to time, she steps away from Freeport to give a primer on eminent domain and the legal arguments surrounding the claims of municipalities on private land.

But "Bulldozed" is at heart a story about trouble in a small town, a sort of eminent-domain version of "In Cold Blood," although it lacks a satisfying conclusion. In 2003, the Gores and Freeport took one another to court and fought a long, rancorous battle. After a series of defeats, the family was seemingly victorious. Freeport abandoned its plan for a private marina--only to unveil a plan for a public marina that would also need much of the Gores' land. As "Bulldozed" closes, the two sides are heading back to the courthouse once more.

Mr. Last is a staff writer at The Weekly Standard.

Click here to purchase a copy of "Bulldozed."