There was a decision from the United States Supreme Court in the case of Kelo v. City of New London, Connecticut that I thought, at first would be sort of a back-page “inside baseball” legal opinion for local government people. But its reverberation through the popular media, especially talk radio, has been anything but back-page, “inside baseball”, or quiet. The Court’s decision in Kelo is generating a lot of heat; a bit of fire; but also a lot of good discussion about the role of city government in the arena of economic development.
Here are the facts of the Kelo case. After approving a redevelopment project designed to revitalize the local economy and taxbase, the City of New London, CT proceeded to purchase most of the property necessary to do the project from willing sellers. However, when the City could not acquire the last few parcels of land they needed through “willing seller” transactions, the City initiated condemnation to acquire the land using the power of eminent domain. The landowners who did not want to sell their land to the City took the matter to the Courts, where they lost in the State Courts and then ultimately lost at the Supreme Court.
But first a few words about eminent domain. First, the power of eminent domain is a long established principle of law in this country that provides the government the authority to “take” property by the process of condemnation from private land owners in order to provide for the public good. Property owners, however, must be compensated for their land. It is not just taken from them. Sometimes the compensation can be quite lucrative. Sometimes only fair. But land is not appropriated from private owners without compensation through eminent domain. Second, what is squarely at issue in Kelo is the evolution of the eminent domain authority of cities from condemning land for projects that are for a “public use” for such things as roads, water plants, parks, schools, etc. to condemning land for projects that are for a “public purpose” for such things as affordable housing, slum removal, and new jobs. The long legal march towards fully legitimizing “public purpose” condemnation ended with the Court’s affirmative decision for it in Kelo. It is legitimate. I think we’ll see more of it.
But there are many interpretations of the Supreme Court’s decision in Kelo. Some of them wildly frantic about this decision “overturning” private property tights in America. That’s too dramatic. Way too dramatic. In fact, the Kelo decision, for many states, only reaffirms existing State law in the practice of eminent domain for cities. In Minnesota, I’m not sure if anything is changed by Kelo. Cities could condemn for economic development purposes pre-Kelo. If any community knows that, it’s Eden Prairie. We lost the headquarters of a world-class corporation (Best Buy) because another Minnesota community (Richfield) was willing to condemn private homes and businesses to redevelop the site at the intersection of 494 & 35W for Best Buy’s new world HQ.
I think that League of Minnesota Cities executive director Mr. Jim Miller did a nice job summarizing the potential impacts of the case in a piece that he wrote for the Star Tribune. For the “sky is falling” perspective, here’s a link to a piece written by lobbyists from the Minnesota Auto Dealer’s Association, also printed in the Star-Tribune.
We will face this decision in Eden Prairie in the near future. As we work through our Major Center Area Study we will need to discuss how we feel about the City’s potential exercise of eminent domain for economic development purposes. Is it OK for the City to condemn the final parcel or two of a large redevelopment area in order for a new private development project to be realized that will be beneficial to the entire City? What if it means that the City would have to condemn half the parcels in order for the project to go forward? What about all of them? How should the City government balance a project that negatively impacts a few and positively impacts many?
These are tough questions. They will take considerable public dialogue to resolve.

























