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18 possible "to condemn property just because the area it is [n]o parcel of real property may be acquired by eminent in is predominately blighted."198 domain under this section except by approval by vote of at Likewise, in Missouri, the statute now requires that least two-thirds of the members of the legislative body of when there is a determination that an area is blighted, the municipality or, in the case of a municipality for which the legislative body is a town meeting or a repre- the condemning authority must "individually consider sentative town meeting, the board of selectmen.207 each parcel of property in the defined area."199 The con- demning authority may proceed with condemnation if it Even so, "the benefits to the public and any private en- finds that a "preponderance of the defined redevelop- tity that will result from the development project" must ment area is blighted...."200 As construed by a Missouri be considered, and it must be "determined that the pub- appellate court, although the statute requires a con- lic benefits outweigh any private benefits...."208 demning authority to evaluate each parcel, there is "nothing in the statute that requires the authority to 2. Requirement of Clear and Convincing Evidence make a specific finding for each parcel."201 The court In some states the burden of proof is on the public held that the condemning authority must determine agency to establish by clear and convincing evidence whether a defined redevelopment area is blighted based that a taking is necessary for the eradication of on a consideration of total square footage rather than blight.209 For example, in Michigan, the state's constitu- on whether a preponderance of the individual parcels is tion requires that in a condemnation action to take blighted.202 property "for the eradication of blight...the burden of Finally, since the Kelo decision, a Maryland court proof is on the condemning authority to demonstrate, by has held that a Maryland statute permits municipal clear and convincing evidence, that the taking of that corporations to condemn blighted properties within ar- property is for a public use."210 eas that are generally nonblighted.203 3. Time Limit for Commencing Condemnation of D. Other Changes Affecting Takings of Blighted Blighted Property Property One reform since Kelo has been the requirement that a condemnation proceed within a designated number of 1. Requirement of a Vote or a Vote by a Super-Majority years from the date the property is designated as Various states require a vote by the governing body blighted. Condemnors, for example, may be required to before the use of eminent domain or the transfer to a proceed within 4 or 5 years of authorization.211 A post- private person or entity of property taken by eminent Kelo change in Missouri is that an action to acquire domain. In Florida, where takings of blighted property property by eminent domain in a redevelopment area are prohibited, private property taken by eminent do- must be commenced no later than 5 years from the date main "may not be conveyed to a natural person or pri- of the determination that the property is blighted.212 vate entity except as provided by general law passed by However, a Missouri court has held that the post-Kelo a three-fifths vote of the membership of each house of the Legislature."204 In Georgia, a resolution by the ap- propriate governing body may be required a specified number of days prior to the condemnor being permitted to bring an action for condemnation.205 vote to condemn property in a redevelopment district); see also Some states require a vote by a super-majority of the KAN. STAT. ANN. § 12-1773 (requiring two-thirds vote of the applicable governing authority before property may be governing body for any transfer by the developer of real prop- erty acquired pursuant to this section). designated as blighted.206 In Connecticut, 207 CONN. GEN. STAT. § 8-193(b)(3)(A). 208 198 Id. See also KAN. STAT. ANN. § 12-1773(a) (providing that Jody Arogeti, Anita Bhushan, Jill M. Irwin & Jesica Kat- if a redevelopment project plan has been adopted and if two- tula, General Provisions and Condemnation Procedure: Provide thirds of the members of the governing body approve, eminent a Comprehensive Revisions of Provisions Regarding the Power domain may be used to acquire real property that the govern- of Eminent Domain, 23 GA. ST. U. L. REV. 157, 188 (2006). 199 ing body deems necessary for a project that is located within MO. REV. STAT. § 523.274(1). the redevelopment district); UTAH CODE ANN. §§ 17C-2- 200 Id. 601(2)(c)(ii)(B) and (2)(d)(ii)(B) (the sections providing that that 201 Allright Props. Inc. v. Tax Increment Fin. Comm'n, 240 an agency may not acquire by eminent domain either a single- S.W.3d 777, 779 (Mo. App. 2007). family residential, owner-occupied property or a commercial 202 Id. at 780. property unless two-thirds of all agency board members vote in 203 City of Frederick, Md. v. Pickett, 392 Md. 411, 897 A.2d favor of the acquisition by eminent domain). 209 228 (Md. Ct. App. 2006) (stating that MD. CODE ANN. art. 23A, COLO. REV. STAT. ANN. § 38-1-01(2)(b). See also ARIZ. § 2(b)(37) was "clear and unambiguous"). REV. STAT. § 12-1132(B); IDAHO CODE § 7-701A(2)(b)(ii); DEL. 204 FLA. CONST. art. X, § 6(c). CODE ANN. tit. 29, § 9501A(d); IDAHO CODE ANN. § 7-701A; 205 MICHIGAN CONST. art. X, § 2; MICH. COMP. LAWS § 213.23(4). GA. CODE ANN. § 22-1-10.1 (30 days). 210 206 MICH. CONST. art. X, § 2. CONN. GEN. STAT. § 8-193(b)(3)(A); INDIANA CODE § 32- 211 24-4.5-11(c)(2) (two-thirds); IOWA CODE § 6A.22(5)(a) (two- MD. CODE ANN. § 12-105.1(a). 212 thirds); KAN. STAT. ANN. § 17-1773(a) (requiring two-thirds MO. REV. STAT. § 523.274(2).
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19 laws did not nullify a redevelopment authority's prior and Guidance on Supercompensation Payments In- finding of blight.213 curred for Acquisition of Real Property on Projects Eli- gible for Federal Funding" (Guidance).219 FHWA's Guid- 4. Pre-Condemnation Hearing ance responds to "questions...concerning eligibility for A public hearing may be required before proceeding reimbursement of that portion of the payment in excess with the condemnation of blighted property. In Minne- of fair market value" and confirms that that there is sota, "[i]f the taking is for the mitigation of a blighted federal-aid participation for "supercompensation" pay- area...a public hearing must be held before a local gov- ments.220 ernment or local government agency commences an Supercompensation "refers to legislatively mandated eminent domain proceeding...."214 eminent domain damage payments that are based on [the] payment of 100 percent of fair market value plus 5. Requirement of Additional Compensation some additional percentage for inconvenience, senti- A post-Kelo requirement in some states is that a con- mental value, or some other type of personal imposi- demnor must pay additional compensation,215 that is, tion." FHWA points out that in Missouri, for example, more than fair market value, when property is taken "recent legislation addressing compensation associated purely for economic development (if allowed) or if with acquisition of property by [the] exercise of eminent blighted property is taken for redevelopment.216 In domain defines `Just Compensation' to be [Fair Market Rhode Island, when property is taken for economic de- Value or FMV] multiplied by 125 percent (homestead velopment, a property owner must be compensated for a taking) or FMV multiplied by 150 percent (heritage minimum of 150 percent of the fair market value of the taking)."221 real property, as well as for incidental expenses, such as FHWA's Guidance advises that a payment in excess the charge for prepaying a mortgage entered into in of fair market value is reimbursable as part of a prop- good faith and "actual, reasonable, and necessary" relo- erty's acquisition cost. cation expenses.217 Like other costs of acquisition that exceed fair market In Kansas, the legislature may authorize the use of value (i.e. cost of administrative settlements, court eminent domain for private economic development pur- awards, and costs incidental to the condemnation process (See 23 CFR 710.203 (b)), where appropriately docu- poses, but "the legislature shall consider requiring com- mented, the amount by which just compensation exceeds pensation of at least 200 percent of fair market value to fair market value, is a direct eligible cost if all other re- property owners...."218 quirements are met.222 6. Federal Highway Administration Reimbursement of As for Replacement Housing Payments (RHP) and supercompensation payments, FHWA states: "Supercompensation" Considering supercompensation payments, defined by Although a few DOTs responding to the survey indi- state law, as a component of "acquisition cost" for pur- cated having to pay increased acquisition costs because poses of an RHP calculation is not only consistent with of post-Kelo reforms, the responses did not raise any the provisions governing reimbursement, it is also consis- issue of reimbursement by the Federal Highway Ad- tent with the manner in which other acquisition costs eli- ministration (FHWA) of the additional costs. It is be- gible for reimbursement (such as administrative settle- cause of some states' post-Kelo reforms that "mandate ments, legal settlements, or court awards) have been just compensation payments in amounts that exceed treated in determining the eligibility for, and the amount fair market value" that FHWA chose to issue its "Policy of, any RHP authorized by the Uniform Act and regula- tions at 49 CFR Part 24.223 213 Land Clearance for Redevelopment Auth. of the City of St. Louis v. Inserra, 284 S.W.3d 641, 644 (Mo. App. 2009) (the court noting that after the reforms took effect the redevelop- 219 FHWA Memorandum, Policy and Guidance on Super- ment authority's resolution affirmed the previous finding of compensation Payments Incurred for Acquisition of Real Prop- blight and that a second study concluded that the landowner's erty on Projects Eligible for Federal Funding, dated Jan. 27, property in particular was blighted). 2007, available at: 214 MINN. STAT. § 117.0412, subd. 2(a). http://www.fhwa.dot.gov/realestate/supercompguid.htm, 215 R.I. GEN. LAWS § 42-64.12-8(a) (applicable to takings for last accessed on July 5, 2011, hereafter cited as "FHWA Guid- economic development). ance," at 1. See also Federal Highway Administration, Office of 216 See also IND. CODE ANN. §§ 32-24-4.5-8(2)(A) (150 per- Real Estate Services, Accomplishments and Activities Report, cent of the fair market value of real property occupied by the dated Nov. 14, 2008, available at http://www.fhwa.dot. owner as a residence) and 32-24-4.5-11(d)(1) (requiring that for gov/realestate/accompact08.htm (supercompensation acquisitions of property in certain project areas a payment to payments reimbursable as a direct cost of acquisition pursuant an owner equal to 125 percent of fair market value); MICH. to 23 C.F.R. 710.203), last accessed also on July 5, 2011. 220 CONST. art. X, § 2 (not less than 125 percent of the property's FHWA Guidance at 1. 221 fair market value); MICH. COMP. LAWS § 213.23, § 3(5). Id. at 2. 217 222 R.I. GEN. LAWS §§ 42-64.12-8(a)-(c) and 42-64.12-8.1 (the Id. See also Federal-Aid Policy Guide (FAPG) Non- latter section applicable to tenants). regulatory Supplement for Part 24, Subpart B, § 24.102 ¶ 8. 218 223 KAN. STAT. ANN. § 26-501b(f). FHWA Guidance at 3.