Eminent domain questions persist

Lawmakers, business leaders debate how to define government’s power to commandeer land

Thursday, March 2, 2006

ANNAPOLIS — Business groups remain divided on what actions, if any, Maryland lawmakers should take to reform eminent domain.

‘‘We think there’s no need for alterations in authority and we would hope the legislature would reject any attempt to hinder those authorities or to make compensation at a level that could be prohibitive,” said Donald C. Fry, president of the Greater Baltimore Committee and a former legislator.

The group has been the catalyst for several redevelopment projects around Baltimore, including the Inner Harbor.

But the National Federation of Independent Business, a coalition of small businesses, thinks differently.

‘‘We think there need to be provisions to protect the small-business owner from every possible economic loss in any case of eminent domain,” said Ellen Valentino, the organization’s state director.

Eminent domain has drawn legislator attention in the wake of a June decision by the U.S. Supreme Court, which ruled it constitutional for the government to use its condemnation powers for economic development. Twenty-eight bills were the subject of a lengthy hearing before the Environmental Matters Committee on Tuesday. The Senate Judicial Proceedings Committee — chaired by Sen. Brian E. Frosh (D-Dist. 16) of Bethesda — held similar hearings Thursday on at least a dozen similar measures.

Both political parties want to do something, and several proposals have bipartisan support. The questions revolve around what to do.

Several bills would have government shoulder more of the costs of seizing land, by eliminating a $10,000 cap on subsidies that pay moving expenses or by forcing the government to pay the property owner’s legal fees.

Businesses would be reimbursed for losses currently unrecognized, including the loss of intangible assets or future net operating income.

The Maryland Association of Counties would oppose most of these proposals because it takes Maryland ‘‘outside the mainstream,” said David Bliden, its executive director.

‘‘These elements are not available in other states because they are inherently speculative,” Bliden said. ‘‘We’d hate to see the legislators create insurmountable impediments.”

But some reform advocates, such as Valentino, want to take fear out of the process.

‘‘We don’t think a small business should be taken to benefit a bigger business or developer,” she said.

If property is condemned, but never used, several lawmakers would force governments to sell the property back to the former owner or the former owner’s heirs.

Other bills would redefine terms such as ‘‘public use,” to exclude specifically efforts to increase tax revenue or employment.

Thomas S. Saquella, president of the Maryland Retailers Association, favors the reforms proposed by a task force that outlined 11 changes to the law, including greater compensation to displaced businesses. Saquella cited a study by the Institute for Justice that showed Maryland led all states in condemnations.

Environmentalists support preserving eminent domain, because it can revitalize communities and focus development away from greenfields, said Dru Schmidt-Perkins of 1,000 Friends of Maryland.

The Maryland Chamber of Commerce supports governments using eminent domain for economic development projects that have a public use. The organization also would support some of the reforms under discussion.

One area that has exposed a partisan divide is how to enact the changes — through statutes or with changes to the state constitution.

Sen. Allan H. Kittleman (R-Dist. 9) of West Friendship said the GOP believes prohibitions for eminent domain for economic development should be written into the constitution.

‘‘Our plan is no loophole,” Kittleman said. Thirteen of the Senate’s 14 Republicans and 42 of the House’s 43 Republicans have signed on to constitutional amendments.

House Speaker Michael E. Busch, a Democrat, rejected a constitutional amendment, saying a statute will give future legislatures the flexibility to handle unforeseen issues.

‘‘We need to balance the rights of property owners and the overall benefit of the community,” said Busch (Dist. 30) of Annapolis. He was confident that the complexity of the issue and the range of proposals would not deter the legislature from enacting sweeping legislation this session.

Kittleman, however, remarked on the frequent imbalance of power when property owners have to defend themselves in condemnation proceedings.

‘‘People who lose businesses are small businesses. Nobody seems to condemn a wealthy corporation’s property. No one seems to condemn a rich person’s house,” he said.