Tempe has issued the first challenge to the landmark Randy Bailey condemnation case, asking the Arizona Supreme Court to overturn it as the city tries to seize land for a massive shopping center.
The city argues that the public will benefit from seizure of blighted properties, even if that means condemning land and turning it over to a private developer who will profit in the deal.
Tempe’s challenge could shape the way governments use eminent domain in Arizona for years to come if the Supreme Court overturns Mesa’s Bailey case. The case could have just as substantial an impact if the Supreme Court upholds the Bailey standard for seizing land in redevelopment efforts.
Tempe Mayor Hugh Hallman said the city is challenging the Bailey case to ensure it can fix safety and environmental hazards. The 120-acre site Tempe wants is heavily polluted and was once designated by the Environmental Protection Agency as a Superfund site.
"Remember these are messes made not by the city of Tempe, not by the taxpayers, but by people who have used and abused that property for the last 40 years," Hallman said. "And the taxpayers deserve at least as good a treatment in this process as the property owners."
The city asked the court to clarify the Bailey case if it doesn’t overturn it by expanding the standard for "public use" to more readily include things such as environmental cleanup and economic growth.
A representative of the holdout landowners said Tempe’s challenge is "outrageous."
"They’re saying it was too tough for them to meet the public use standard so they are asking the court to make it easier," said Jennifer Barnett, a staff attorney for the Arizona chapter of the Institute for Justice. The group has worked with attorneys who represent landowners who refuse to sell to Tempe Marketplace developers.
The institute successfully defended brake shop owner Randy Bailey when Mesa tried to condemn his land so a hardware store could be built there. Mesa lost the case in 2003, when the Arizona Court of Appeals ruled the proposed public benefit didn’t outweigh the seizure of land for a private landowner.
The highly publicized case got attention on CBS’s "60 Minutes" and continues to be cited by critics of eminent domain as an abuse of government power.
Tempe’s legal challenge states the Bailey case set an "unworkable legal standard." The court shouldn’t use benefits to private businesses as a counterweight to public benefit, the city argues.
"Our concern here is that we really think the court should have focused on the substantial public benefit of slum clearance, environmental cleanup and area redevelopment — and those are all proper public uses," City Attorney Marlene Pontrelli said.
Hallman said it’s still possible to build Tempe Marketplace if the court upholds Bailey. For example, the court could issue a ruling that gives Tempe more grounds for condemning land. And Hallman said other solutions could arise from the legal case, though he declined to say if that means other negotiations are ongoing to buy remaining parcels.
Most of the land is in the hands of Miravista Holdings and Vestar Development Co. The developer has all but 28 acres of the property on the southwest corner of loops 101 and 202. Tempe argues those holdouts are blocking its efforts to clean two former landfills, remove potentially explosive methane gas and tear down dilapidated buildings that are a fire hazard.
Barnett argues the city can fix the problems without getting the remaining properties. And if the city or developer want the parcels, she said, they must be purchased on the open market without forcing the sale.
"Any time that a city is trying to take private property from one individual and turn it over to another individual, that’s an abuse of the eminent domain power," Barnett said.
The Arizona Court of Appeals ruled on Sept. 13 that Tempe’s attempted condemnation didn’t meet the standards for public use. The city’s challenge asks the state Supreme Court to consider a highly controversial recent U.S. Supreme Court ruling on the issue.
The U.S. court ruled in favor of New London, Conn., which tried to seize land to redevelop nearly 90 acres of waterfront. The court said the city could seize homes in certain economically depressed areas even if they weren’t formally declared a slum or blighted. Some homeowners argued the city couldn’t do that because the goals were purely for economic development. The U.S. court ruled the condemnation was a justifiable public benefit.
The city argues that since the Tempe Marketplace site was declared a slum, this condemnation serves a public use.