By: Peter M. Agnetti
One of the most awesome powers of government is the ability to
condemn and take privately owned property through eminent
domain. Over the past few decades many state courts and
legislatures have come to interpret the state and federal Public
Use Clauses in a manner that allows state and municipal governments
to condemn and take private property for virtually any reason, as
long as there is a somewhat rationally stated economic benefit in
store for the government fisc. Indeed, such a rationale was
recently endorsed by the U.S. Supreme Court in Kelo v. City of
New London—any protection against economically motivated
government takings that primarily benefit other private entities,
also known as economic development takings, must now come from the
states through legislative or judicial means. Despite the
trend among state legislatures expanding the traditional meaning of
the Public Use Clause, several recent state court decisions have
successfully reined in expansive executions of eminent domain
power.
In that same vein, the Michigan Supreme Court, in County of
Wayne v. Hathcock, has seemingly given hope to private owners
of real property by providing a “public use” standard for economic
development takings. The court held that Michigan
municipalities do not have the power under the state’s Public Use
Clause to condemn private property for the purpose of transfer to
another private party in order to spur economic development, except
under exceptional circumstances. However, the court left open
the issue—which is facing states nationwide—of what standard should
be applied to economic development takings effectuated under the
ruse of opportunistic classifications of property as
“blighted.”
This Comment asserts that takings that do not fall within one of
the limited exceptions outlined by the Michigan Supreme Court, and
that primarily benefit a private entity at the expense of owners of
non-blighted private property, not only fail to pass constitutional
muster but also work in an economically inefficient manner so as to
perpetually threaten all ownership of real property in the United
States. The Comment also addresses and offers solutions to the
widespread abuse of economic development takings done pursuant to
blight designations, especially in the wake of Kelo.