Daily Development for
By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of
Of Counsel: Blackwell Sanders Peper Martin
Kansas City,
prandolph@cctr.umkc.edu
EMINENT DOMAIN; POWER TO CONDEMN; REDEVELOPMENT;
"BLIGHT:"
Rukab v. City of
The Jacksonville Redevelopment Agency designated 350 acres as
a blighted area in the mid-80's. It used one of the standard bases for such
designation, finding that the property was "an area in which there exists
faulty or inadequate street layout; inadequate parking facilities; or roadways,
bridges or public transportation facilities incapable of handling the volume of
traffic flow into or through the area, either at present or following proposed
construction."
Rukab acquired three lots in the
area in 1994. He applied for rezoning
from residential to a more intensive classification in order to develop the
property in a fashion consistent with the redevelopment plan. But the City concluded that his property was too
small to qualify for development consistent with the plan, and denied the
rezoning. Although Rukab later obtained control of
additional properties, by that time the City had entered into a redevelopment
agreement with another developer for Rukab's property
and the surrounding lots, and, two years after Rukab
failed to obtain rezoning, the City brought an action to condemn his property
to acquire it to implement the agreement with the other developer.
In the condemnation action, Rukab
attempted to challenge the validity of the original designation of the property
as "blighted." The City argued
that Rukab was barred from challenging the blight
designation because (a) Rukab had acquired the
property subject to the Redevelopment plan; (b) in any event, a prior case,
brought by others and not involving Rukab,
challenging the designation, had been resolved in favor of the City. The City contended that the sole issue
The trial court agreed with the City that, because of
resolution of the issue in the earlier case Rukab
could not challenge the validity of the blight designation, and limited Rukab's issues to whether Rukab's
lots were within the Redevelopment Plan and whether the proposed development
purpose was consistent with the plan and the statute. It resolved those issues in favor of the
City, and Rukab appealed.
On appeal: reversed:
The court first ruled that under Palazzolo
principles, Rukab was not barred from challenging the
blight designation because he had bought after the plan had been adopted. The court acknowledge that Palazzolo was an inverse condemnation case involving an
argued regulatory taking, but saw no distinction with respect to the question
of permitting subsequent purchasers to challenge as unconstitutional the basis
for the original agency action. It
further noted that the first opportunity that the Rukabs
would have to challenge the confiscatory nature of
the inappropriate designation would be in this action, since the mere
designation of property within a redevelopment plan has been held not to be a
"taking" of property.
Further, the court found that no principle of res judicata or collateral
estoppel applied to prevent Rukab from relitigating the question of the validity of the blight
designation, since in every eminent domain proceeding
the condemning authority must demonstrate that there is an appropriate public
purpose. The agency cannot take private
property for the benefit of another private interest. The only basis presented by the City for
taking Rukab's property was that the property had
been declared blighted, and Rukab was entitled to
challenge that determination now, more than fifteen years after the fact. No statute of limitations affected such
challenge, and the court opined that it was up to the legislature to determine
whether there ought to be a limitations period.
The court did note that the challenge could only address whether the
property was blighted at the time of the original designation, and not now.
Comment 1: It remains to be seen whether this case is another
small step in the developing momentum of challenge to private condemnation in
aid of development represented by such cases as The Southwestern Illinois
Development Authority v. National City Environmental, 2002 WL 501593 (Ill.
4/04/02), the DIRT DD for 4/09/02, where the Illinois Supreme Court held that
condemnation of property to facilitate a NASCAR race track development is not a
public purpose. (The
The court in Rukab noted that in
two prior appellate decisions in which landowners had been permitted to
challenge blight designations, the court had upheld the validity of those
designations, and also noted that the city was entitled to a presumption of
validity.
On the other hand, delay tactics often can kill development,
and if landowners can drag the city into a series of challenges and appeals
about the blight designation in every eminent domain proceeding, even when that
designation has been earlier upheld, this can be a potent weapon in the arsenal
of a well financed landowner.
Comment 2: Condemnation for redevelopment purposes clearly is one of the more controversial issues emerging on the horizon of real estate development law today. Many claim that public agencies are overreaching in these matters - finding blight where none exists simply because they prefer one private development proposal over another. It is likely that the real battles over these issues will be fought in the legislatures, and these court skirmishes are only the leading edge of the war, but stay tuned..
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Items in the Daily Development section
generally are extracted from the Quarterly Report on Developments in Real
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