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Local officials express mixed views of proposal

Monday, November 5, 2012

By PAUL COLLINS - Bulletin Staff Writer

Henry County Attorney George Lyle said the proposed state constitutional amendment on eminent domain is “property-owner friendly” to enhance the rights of property owners, and it puts more burdens on entities such as governments that use eminent domain to take properties.

Lyle said the Henry County Board of Supervisors rarely has taken property by eminent domain — “maybe two or three times in the last century.” And the board has taken no position on the proposed constitutional amendment, he said.

Lyle said the board of supervisors rarely has used eminent domain because it makes fair offers for properties, negotiates and makes sales.

But in urban areas, where land is at a premium, governments may have more difficulty, Lyle said.

Bill Kirby, attorney for the Henry County Public Service Authority, said the PSA has not taken any position on the proposed amendment. “It (the proposed amendment) sets forth laudable objectives, but I’m not really sure such an amendment is necessary.”

“I think the amendment as it is currently being considered may be a little broad and may lead to some issues which could increase the difficulty in assessing what the proper compensation is,” Kirby said.

He said he favors fine-tuning the existing legislation rather than “cluttering the constitution with amendments that can be addressed by statute as well.”

“I don’t know the passage of the amendment would affect operations of the PSA any at all,” he said.

Martinsville Mayor Kim Adkins said city council’s 2012 legislative agenda included an item opposed to “passage of a state constitutional amendment affecting use of eminent domain.”

“I introduced it,” she said, adding she thought a constitutional amendment “was really unnecessary and (would) hurt our abilities in economic development.”

She said she believes it could make project costs prohibitive, affecting such things as infrastructure and road development.

City council approved the 2012 legislative agenda before the General Assembly approved placing the proposed amendment on the ballot, Adkins said.

The Virginia Municipal League, a number of business groups and the Virginia Association of Counties oppose the proposed amendment on the Nov. 6 ballot to restrict eminent domain. The Virginia Farm Bureau Federation and other property rights advocacy groups are urging support.

Trey Davis, Virginia Farm Bureau Federation assistant director of governmental relations, stated in a news release that the proposed amendment “will ensure that if land is taken for a legitimate public use, the property owner will receive fair compensation.”

“This amendment to the constitution in no way prohibits localities, states or utilities from using eminent domain for building roads, schools or other legitimate public uses,” Davis said. “It will ensure that if land is taken for a legitimate public use, the property owner will receive fair compensation.”

“Under no circumstances can private property be taken for private revenue, increasing the amount of tax revenue or under the guise of economic development,” he added.

Andrew Barker, president of the Henry County Farm Bureau, said recently he favors passage of the amendment. He said more than just Farm Bureau members have lost land through eminent domain and were not adequately compensated.

Barker also said he opposes taking private property for speculative economic development projects. If property is taken by eminent domain, the property owner should be fairly compensated, he added.

Scott Dulaney, a Roanoke businessman, spoke in favor of the proposed amendment to 60-70 people attending the Henry County Farm Bureau’s annual meeting Thursday night.

Dulaney is one of the owners of Metro Heavy Duty Distributors Inc., and James Duncan is president and principal owner, Duncan said in a phone interview Monday.

According to Dulaney and Duncan, the state highway department is in the process of taking their business’ property through eminent domain. They said they have found another suitable site for the business, but the site is much smaller than the current site of 1.5 acres to 2 acres with several buildings, and it will cost several times more than the state is offering for the company to buy the new site and make improvements. They both said the state is offering no compensation for loss of business.

Dulaney said regardless of how their case turns out (the company is being represented by an attorney), the public should think about their families and other people they know who might suffer if their properties were taken by eminent domain and they were not fairly compensated.

For instance, he said, if a farm is split by an eminent domain project and the farmer can’t get from one side of his land to the other, “that’s a problem.” Or a farmer may “get something for his land” if it is taken by eminent domain, but what about loss of future yield/future income? Dulaney asked.

According to the Virginia Municipal League website, “A number of prominent business groups have realized that the proposed constitutional amendment dealing with eminent domain will have an enormous negative effect on the building industry and the long-term economic health of Virginia.

“The list of associations, chambers of commerce and other pro-business groups opposed to the wording of the proposed amendment includes the Home Builders Association of Virginia, the Virginia Association of Realtors and the Northern Virginia Business Industry Association. They agree with VML that the wording of the amendment — designed to protect personal property rights — needs to be reworked.

“If passed, the legislation will prove costly to taxpayers and stifle economic development. It would benefit selected business owners at the expense of residents, since residents would have to pay, through higher taxes, the substantial costs of ‘lost profits’ and ‘lost access,’ two new rights created by the amendment.”

Substantial unintended consequences of the proposed amendment include jeopardizing major transportation projects, stripping the General Assembly of its ability to control what constitutes a public use and unnecessarily driving up the cost of crucial economic development projects to a point where they become prohibitively expensive, according the VML website.

According to online information, the Virginia Association of Counties opposes the proposed constitutional amendment because it believes:

• “The constitutional amendment is flawed and unnecessarily expensive.

• “Paying businesses for lost profits and lost access will enrich developers at the expense of residents who pay the taxes necessary to pay lost profits and lost access.

• “This provision goes well beyond the Kelo decision and the current statute. No other state has a similar lost profits/lost access provision.

• “Litigation to determine lost profits/loss of access will prove expensive and financially problematic for specific projects. Projected costs will be difficult to ascertain.”

In a 2005 case from Connecticut, the U.S. Supreme Court upheld taking private property and transferring to a private business for economic development purposes, and the court also said that states could restrict the use of eminent domain (Kelo v. City of New London, 545 U.S. 469), according to information on the Virginia State Board of Elections website.

 

 
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