Condemnation Series

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On theRECORD blog

This stretch of vacant storefronts along Washington Boulevard in Pigtown is one of at least 12 redevelopment projects in Baltimore that are highly dependent on condemnation.

A DAILY RECORD SPECIAL REPORT

Condemnation drives urban renewalEminent domain has helped reshape much of city, but some say its no longer necessary

MAXIMILIANFRANZ

Additional coverage to accompany

our condemnation series:

k Take an interactive quizTake our quiz to discover how much

you already know about the govern-ments ability to exercise eminent do-main.Embedded online with the maincondemnation story.

g Video glossaryWatch our video glossary to get the truemeanings of eminent domain, quick-take,urban renewal and the process of con-demnation.Embedded online with themain condemnation story.

c Interactive area mapSee the top sites where the Baltimore Citygovernment has used eminent domainas a development tool.Posted online as aseparate story.

This supplemental reporting is available onour Web site at www.mddailyrecord.com

The governments right to condemn andseize private property, sometimes perfectly

intact and well-maintained, and convey it

to another private owner is the engine driv-

ing many of the citys most important de-

velopment efforts.Despite several recent court cases and

laws that check the powers of municipalitiesto take property, condemnations are accel-erating in the city: More than $22 million ineminent domain seizures have been autho-rized this year, up nearly 250 percent from2007, and nearly 12 times the inflation-ad-

justed dollar amount of seizures authorizedin 2003, The Daily Record has found. Thesestatistics were determined as part of an ex-amination of nearly 1,000 pages of publicrecords covering the last five years.

To put that number in context, $22 mil-

lion is about seven times what the city ex-

pects to spend in fiscal 2009 to fight home-

lessness, and about 10 percent of what the

city will spend on schools.Public records also show that at least

12 major redevelopment projects in the city,representing more than $2.5 billion in in-

vestment, depend on condemnations tomove forward, and that the city continues tomake liberal use of a controversial methodof seizure known as quick-take, in whichcity agencies chiefly the housing depart-ment place a deposit in court and gain im-

or many people, the words condemned buildingbring to mind a creaky, dilapidated house withboarded-up windows and caution signs posted:

somewhere you dont dare go without a hard hat.But in Baltimore, the use of condemnation powers

otherwise known as eminent domain has become syn-onymous with urban renewal.

CONDEMNEDA 3-PART SERIES

Baltimores use of eminent domain

SEE CONDEMNED PAGE 11A

FRIDAY: In Baltimore, the use ofcondemnation powers has becomesynonymous with urban renewal.

MONDAY: The issue of condemnationtouches on one of the U.S. Constitutionsmost fundamental rights the right toown property.

TUESDAY: Small business owners inBaltimore affected by condemnationtell their stories.

FBY ROBBIE WHELAN | [email protected]


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mediate title to a property, giving its own-er only 10 days to contest the taking. Thecity authorized quick-take proceedingsmore than 1,000 times in the last five

years, and, as of October, had approvedits use more than 280 times in 2008.

Hundreds of the citys 1,676 emi-nent domain seizures over the last five

years have been used to take vacant,derelict properties that have been aban-doned by their owners or fallen into

squalor due to speculating, absenteelandlords. These properties have thenbeen razed or rehabilitated and includ-ed in massive redevelopment effortssuch as the East Baltimore Scienceand Technology Park and the resi-dential projects surrounding it.

But others have been takings ofhomes occupied by families and build-ings occupied by small companies thatare generally located in low-incomeneighborhoods or thinly populated in-dustrial districts, for which the cityspends millions more to relocate busi-nesses and families against their will.

So extensive is Baltimores use ofeminent domain that the Institute forJustice, a libertarian public-interestlaw firm based in Arlington, Va., hasdubbed the city the second-worst abus-er of eminent domain powers in thecountry, trailing only New York.

Defenders of the practice present aclassic but for test as a key rationalefor the use of condemnations: But forthe citys intervention, the argumentgoes, certain areas would lie vacant andinactive indefinitely and would neverreceive the investment they need to beremade as safe, healthy neighborhoods.

Opponents argue that market forcesshould govern the transfer and redevel-opment of city property, and that con-demnation unfairly targets small-busi-ness people who cater to largely poor

clientele. The citys intervention, theyargue, is a gross violation of private prop-erty rights and is based largely on a mis-interpretation of the U.S. Constitution.

The case for condemning

Standing before huge picture win-dows in a 16th-floor conference room ofhis downtown office building, Balti-more Development Corp. PresidentM.J. Jay Brodie gestures out over the

downtown skyline toward the InnerHarbor.

History is not unuseful, he said.If you need proof for why we need touse eminent domain, you need look nofurther than Charles Center or the InnerHarbor.

These two projects, which began inthe late 1950s and early 1970s, respec-tively, with the support of civic andbusiness leaders one a cluster of of-fice buildings surrounding a large green

public space that fronts on LombardStreet in the middle of downtown, theother a huge swath of waterfront prop-

erty filled with offices, museums, re-tail properties and hotels are oftencited as hallmarks of urban renewal inBaltimore. Both depended heavily oncondemnation.

More than 700 properties wereseized, many of them seedy, dilapidatedwarehouses, and 300 businesses relo-cated, all to great success and benefit ofthe city, according to Martin Millspaugh,a former journalist and planner who,as CEO of Charles Center-Inner Har-bor Management Inc. in the 1960s, wasinstrumental in getting both projectsoff the ground.

The mood was one of desperation,and the leaders of the community

public and private were searchingfor a solution, he wrote in a recent e-mail to The Daily Record. The processof acquiring all of the necessary parcelsthrough voluntary negotiations wouldhave required an unknown, uncontrol-lable amount of time, during which themarket for any new use or the fi-

T H E D A I L Y R E C O R D 11AF R I D A Y , D E C E M B E R 5 , 2 0 0 8

Condemnations by project area in Baltimore, 2003-2008The numbers below show where property seizures were authorized in Baltimore over the last five years. In 2005, the number of houses taken in EBDI, the area associated with the JohnsHopkins-driven East Side biotechnology initiative, spiked at 315, which accounts for most of the housing authoritys takings that year (Chart: Condemnations in Baltimore City, 2003-2008). Oth-er areas of the city, including Gateway South, the Westside, and Washington Village, see condemnat ions carried out mostly by the BDC. Som e condemnations authoriz ed by city documentsare not associated with a particular project or site acquisition, although most are.

Year East Balt. Park Westside Gateway American Uplands Poppleton Fairfield Baker/ Upton Washington Broadway Total

Development Heights South Brewery Division Village Corridor properties

Inc. /Pigtown authorized

2003 5 0 2 0 0 0 0 0 1 79 0 0 255

2004 159 0 0 0 0 0 0 0 0 9 0 84 273

2005 315 0 3 0 0 0 0 0 0 0 0 9 437

2006 42 1 5 0 15 0 7 8 10 23 8 24 224

2007 11 12 2 6 12 5 26 2 11 7 0 3 204

2008 78 9 4 1 20 5 25 91 17 2 0 1 283

Totals 610 22 16 7 47 10 58 101 39 120 8 121 1,676

Source:Daily Record research

Continued from page 1A


Condemned

Condemnations in Baltimore City, 2003-2008The money for condemnations in Baltimore comes from two main offices connected with the city: the Department of Housing and CommunityDevelopment and the Baltimore Development Corp. Housing condemnations by far outpace BDC condemnations, but the latter tend to be moreexpensive deals because they deal with commercial properties.

Year Baltimore City Baltimore Quick take Regular Total TotalDepartment of Housing and Development condemnation properties monies

Community Development Corp. targeted authorized

2003 252 3 176 79 255 $1,593,419.00

2004 270 3 101 172 273 $3,204,868.33

2005 433 4 437 0 437 $5,117,028.65

2006 200 24 190 34 224 $7,067,767.78

2007 195 9 166 38 204 $8,053,234.39

2008 177 102 280 3 283 $22,241,408.00

Total 1,527 145 1,350 326 1,676 $47,277,726.15

Source: Daily Record research

History is not unuseful. If you need proof for whywe need to use eminent domain, you need look nofurther than Charles Center or the Inner Harbor.

CONDEMNEDBaltimores use of eminent domain

M.J. Jay Brodie

President, Baltimore Development Corp.

Clearing the site of One Charles Center in 1961. The B&O Railroad headquarters can be seen in the right

background. In center background is the old Hub department store, which was demolished shortly

after this picture was taken to make way for the Blaustein Building.

COURTESYOFURBANLA

NDI

NSTITUTE


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12A T H E D A I L Y R E C O R D F R I D A Y , D E C E M B E R 5 , 2 0 0 8

nancing of that use could disappear.The solution was to invoke eminent

domain to acquire the required prop-erties in a predictable amount of time;since the property owners were enti-tled to appeal the price they received toa jury in court proceedings, before thecity acquired possession.

In the 1950s, Baltimore was facingthe prospect of municipal bankruptcy,and the Housing Act of 1949, which pro-

vided two-thirds federal funding forcities to acquire so-called slum areasthrough eminent domain, provided anincentive for cities to spur developmentof blighted land.

In 1954, another housing act sweet-ened the deal for cities by allowingthem to provide private developers withFederal Housing Administration-backedmortgages. This second act also popu-larized the phrase urban renewal.

In Baltimore, this meant the razingand rebuilding of pre-World War II pub-lic housing projects, many of whichwere again cleared in the late 1990s tomake way for more modern facilities,often at the expense of homeownersand other private citizens.

It is an ancient legal principle thatprivate property which is needed forimportant public purposes may be tak-en by government, upon payment offair compensation, read a 1967 articletitled The Condemnation Division,which was included in the annual reportof Baltimore City Solicitor Joseph Allen.

The report goes on to anticipate sev-eral required quick-takings of indus-trial and commercial properties to makeway for Interstate 83s passage throughthe city, the Mt. Vernon Urban Re-newal Project and development alongthe Franklin-Mulberry Street corridor.

According to Millspaugh, the tak-ings were justified by the city having a

viable re-use for hundreds of vacantproperties that stood for years as an ar-gument against [redevelopment].

In the nearly 50 intervening yearssince Millspaughs massive downtownredevelopment plan began, the city hasenacted dozens of urban renewal ordi-nances laws that require approval

by the mayor and city council to con-demn land and redevelop it, either by

public or private means.Condemnations were used by the

state of Maryland to build Oriole Parkat Camden Yards and M&T BankStadium, to spruce up the area around

theHippodrome Theater

and forJohns Hopkins $1.8 billion East Sideinitiative, among dozens of other pro-

jects.According to Brodie, this is a new

kind of urban renewal it pinpointsspecific properties and takes a more

piecemeal approach to redevelopingthem, with the support of the commu-nities in which they lie. Brodie has re-ferred to condemnation, and in partic-ular its expedited version, quick-take, asa last resort tool in redeveloping thecity.

This is not the old-style CharlesCenter, Inner Harbor condemnationwhere were buying blocks and blocks,he said. Its very targeted Our pro-cess is not just us sitting here and say-ing, Gee, condemnation is nice. Weregoing out and talking to people and say-ing, How do we help revitalize thisarea?

But The Daily Records findings in-dicate otherwise: On a number of majorredevelopment projects, including the

Charles North urban renewal plan, theWest Side Superblock and the East Bal-timore biotechnology park initiative,both the BDC and the citys housingauthority have assembled dozens of

properties at a time on the front end,making use of eminent domain as a cen-

tral tool in the push to renew Baltimore.

The case for letting it be

Critics of eminent domain in Balti-more and elsewhere generally donttake issue with government seizure of

private property when it is done in ser-vice of clearly defined public use. Tak-ing a building and knocking it down tobuild a road, a school or a courthouse,for example, is not seen as terribly con-troversial in this country.

This is because the Fifth Amend-ment to the Constitution, which out-lines rather broadly the right to due

process of the law, specifies that norshall private property be taken for pub-lic use, without just compensation.Public byways and buildings constitute

public use, so there is little legal groundto argue against that sort of condem-nation.

Problems arise, critics say, whenproperty is condemned in the name ofeconomic development, because urbanrenewal would lead to higher property

tax revenue, profits for handpicked de-velopers or because a municipality sim-ply does not approve of the appearanceor inhabitants of a particular property a rundown flophouse, a strip club, aliquor store.

Baltimores West Side Superblockproject, a large-scale redevelopment ofseveral city blocks near LexingtonMarket, has been ground zero in thisdispute. The city began threatening con-demnation in the late 1990s, and in thelast five years, at least 16 propertieshave been condemned and conveyedto private developers, and many more

have been purchased by the city afterlengthy mediations.When they started eminent domain

in 98, [the Superblock] was a thrivingpedestrian mall, said John C. Murphy,an eminent domain lawyer who hasbeen defending property owners in Bal-timore for more than two decades. Ithad the highest rents in the city There were no vacancies. The problemwas who was there. For the most part itwas Korean business owners, and theircustomers were African-Americans [The city] had no allegiance at all tothe Korean business owners.

Today, the Superblock is eerily va-cant: Shuttered storefronts alternatewith uncrowded clothing retailers andwig shops. Foot traffic is scarce exceptfor a few downtown workers who seemto be walking through the blightedblocks only to get to somewhere else.

Murphy is quick to add that he doesnot accuse the city of racism just aningrained cultural inclination to inte-grate low-income retail strips at the ex-

pense of minority owners.The whole process of suburban-

ization has had a great impact on thecity, Murphy said. They think down-town should be a lot like a suburbanmall. A guy like Jay Brodie looks at itand says, This isnt good because therearent a lot of chain stores like in Tow-son Town.

But Brodie said this characteriza-tion is absolutely not how he looks atthe city. The BDC, he said, has taken

pains to keep several existing Su-perblock retailers, including the dis-count storeValu Plus, a wig shop and

A condemnation glossary

Eminent domain The power of a municipality to seize privately-owned property without theowners consent, also known as condemnation.

Public use The only reason, as defined by the Fifth Amendment to the U.S. Constitution, thata private citizen may be deprived of property. In subsequent court rulings, the definition of pub-lic use has come to include public purpose, a less broadly-defined concept that encompasseseminent domain takings for public purposes.

Quick-take An expedited version of condemnation, in which the city deposits compensationfor a property in the register of the city circuit court and gains immediate title to the proper-

ty. Under normal condemnation proceedings, a property owner has several months to contestthe taking and to perform discovery for a legal action. Under quick-take, the property ownershave only 10 days to contest the validity of a condemnation.

Urban renewal Popularized by the Housing Act of 1954, this term refers to the practice ofrevitalizing decaying inner cities using eminent domain, clearing slums and encouraging pri-

vate development on publicly-assembled parcels of land. It was popular from the 1940s

through the 1970s, and remains in use in Baltimore today.

Urban renewal act A city ordinance that enumerates acceptable uses, lays out specific de-velopment plans and identifies properties targeted for condemnation within a city-designatedredevelopment area.

Blight The Maryland Constitution gives municipalities the right to carry out urban renewalactivities in slums or a blighted area, which is defined as an area in which a majority of build-ings have declined in productivity by reason of obsolescence, depreciation or other causes toan extent they no longer justify fundamental repairs and adequate maintenance.

Condemnations were used by the state of Maryland on these projects

CondemnedContinued from page 11A


The mood was one of desperation, and theleaders of the community public and

private were searching for a solution.

Martin Millspaugh

Former CEO, Charles Center Inner Harbor Management Inc.

M&T BANK STADIUM ORIOLE PARK AT CAMDEN YARDS HIPPODROME THEATER



4/15

a clothing boutique, as part of the newplan for the district.

Mr. Murphy is very mistaken aboutmy view of the West Side, like 180 de-grees mistaken, he said. I have saidconsistently that the West Side, in terms

of retail, is not meant to imitate subur-bia; its meant to reflect the neighbor-hood and the goods and services peoplein the neighborhood want, and thegoods and services that people in Mt.

Vernon and Bolton Hill want.For the property owners, condem-

nation represents a tiresome, stressfulordeal that can ruin a business by takingaway incentives to invest, buy new in-

ventory or make capital improvements,because the threat of losing ones prop-erty can be imminent for years or evendecades.

Nam Seo Koo, who emigrated fromSouth Korea in 1978, has owned NewYork Fashions, a retail clothing outletin the Superblock, for more than 15

years. In August, the city agreed to cutthe final check $300,000 to buy up in-

ventory and fixtures in Koos shop andrelocate to another site as part of acondemnation settlement of more than

$3 million to seize Koos 25,000-square-foot shop and warehouse.

But Koos son, Linn Koo, whospeaks for the business, said he isntsure his father wants to go through thetrouble. He said he has seen firsthand

how eminent domain can tax a busi-ness owners personal life.

The first letter notifying Koo of thecondemnation came in 1998, and adecade of uncertainty about his busi-

ness, combined with declining foot traf-fic on the streets outside, has left himless than enthusiastic about relocatinghis business and starting over again.Worst of all, he said, was the uncer-tainty of a long, drawn-out process.

What a lot of people dont under-stand is the stress it puts on a person,Linn Koo said. Theres a right way to doeminent domain, and thats quickly. Itslike going for a doctors visit and they do

surgery right away, then and there, in-stead of five years down the line.

Koo sometimes sounds like hes ar-guing for the use of quick-take, but he iscareful to say that he is not. At the endof the day, Koo said, the city would bebetter off abandoning eminent domainaltogether.

I think if [the city] left it alone, itwould have done fine, he said. I dont

think a Saks Fifth Avenue would havecome here, but whos to say we need aSaks? ... It should not be used at all.The private sector could probably do asgood or a better job at redevelopment.

Critical mass

Condemnations are carried out inBaltimore mainly by two city entities the BDC and the Department ofHousing and Community Develop-

ment and each specific instance ofeminent domain must be approved bythe mayor and the citys spending pan-el, the Board of Estimates.

Once authorized, a condemnationmust be filed in city circuit court, atwhich point an owner may challengethe valuation of the property. Publicofficials are quick to point out that au-thorizing a condemnation is not the

T H E D A I L Y R E C O R D 13AF R I D A Y , D E C E M B E R 5 , 2 0 0 8



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Fairfield

Condemnations authorized: 101

Uplands


Park Heights


Condemnation areas in BaltimoreThe map shows where most condemnations in Baltimore take place. Our researchshows that eminent domain use is not limited to one particular part of town; instead,large-scale site acquisition projects using the tool are spread out over a wide area.However, eminent domain seizures in the central part of the city, especially around thedowntown area, tend to be of commercial properties, while East Side and West Sideproperties tend to be houses.

Baker/DivisionCondemnations authorized: 39

UptonCondemnations authorized:

120

PoppletonCondemnations authorized: 58

Washington Village/PigtownCondemnations authorized: 8

Carroll-Camden Industrial Area/Gateway SouthCondemnations authorized: 7

Broadway Corridor


Westside


EBDI


American Brewery


Source:Daily Record research, Google maps

Linn Koo, whose father owned retail clothing outlet New York Fashions in the Superblock for more than

15 years, says he has seen firsthand how eminent domain can tax a business owners personal life.

RICH

DENNISON



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I think Baltimore is still caught in the 1960swith this whole urban renewal business.

The rest of the world moved on and got over it.

John C. Murphy

Baltimore eminent domain lawyer

same as filing one, and that in manycases, mediation between propertyowners and the city results in a volun-tary sales agreement.Board of Estimates approval getsus near the goal line of crossing thecase, but doesnt cross the goal line,said Andrew Bailey, an attorney forthe city. All that accomplishes is itauthorizes the city to commence withthe suit.

Indeed, records show that of 283condemnations authorized this year,only 176 of them have been filed incourt. In recent years, on average, abouthalf of condemnations authorized ac-tually reach the stage of being filed incourt: Only 44 percent of the 204 tak-ings authorized in 2007 became law-suits; 75 percent in 2006; 50 percent in2005; 38 percent in 2004; and 52 per-cent in 2003.

But Murphy, the eminent domainlawyer, said that publicly announcingthe citys intention to seize a propertyby listing it on an urban renewal ordi-nance has essentially the same effect ascondemning it.

Once the city has the authority tocondemn, its not necessary to file acase, he said. Filing the court case isbasically the last resort. But when theydo it, theyre doing it under the threat ofcondemnation, because its alreadybeen established that the city has theright to take this property. I thinkin a lot of other cities, they dont dothis to the same extent.

In Pittsburgh, a city with roughlyhalf the population of Baltimore but asimilar mid-century transformation sto-ry, it seems that eminent domain-drivenurban renewal was once a great boon tothe city, but has since been abandoned.

In 1950, its mayor began the con-demnation and demolition of more than

100 dilapidated properties in what isnow known as the Golden Triangle, a

pointed strip of land at the confluenceof the citys famous three rivers. It isnow occupied by a public park with a

picturesque fountain, surrounded by astriking downtown skyline filled withcommercial office towers and a busycentral business district.

But in the last 10 years, redevelop-ment efforts have proceeded largely

without the use of condemnation. Sev-eral projects, including a mixed-use re-tail effort called the South Side Works,have made use of former industrialsites, but only one, a large-scale down-town build-out known as Fifth andForbes, proposed the extensive use ofcondemnation.

That project lost steam in 2001 whenthen-Mayor Tom Murphy failed to woo

Nordstrom to the area as an anchor,and eventually condemnations werethreatened but never used.

The city of Pittsburgh has not offi-cially used eminent domain since theearly 1980s, said Frank Gamrat, a re-search associate at the Allegheny Insti-tute, a conservative, Pittsburgh-based

public policy think tank. Once MayorMurphy left office, he kind of put emi-nent domain to rest. He tried with Fifthand Forbes and lost in the court of pub-lic opinion. It hasnt come up for nine

years, really.Kyra Straussman, director of real

estate for Pittsburghs developmentarm, the Urban Redevelopment Au-

thority, said this is because it simplyisnt worth it to condemn since federalfunding for eminent domain seizureshas dried up.

Instead, she said, Pittsburgh takes aless adversarial approach to assembling

property integrating city-ownedproperties with those acquired throughpurchase agreements by the develop-er, without using the threat of con-demnation to bolster the developers

negotiating position. This way, the cityavoids costly legal battles and reloca-tions for businesses.

We look at projects differently thanwe did 50 years ago, she said. Dont

you get a better, more valuable projectoverall when youre knitting it into thecommunity fabric rather than laminat-ing it onto the landscape?

By contrast, Baltimore has at least

12 projects that are highly dependent oncondemnations. Chief among them isthe East Side biotechnology initiative,which has displaced about 400 familiesso far, with hundreds more slated for re-location.

The main commercial projects arethe BDCs Westside Initiative, whichincludes the Superblock; GatewaySouth, a site that will be adjacent toBaltimores coming slots parlors; OldFairfield Industrial Area; Pigtown/Wash-ington Village; and Charles North.

Baltimore Housing has thousandsof properties in line for condemnation,many of them blighted and vacant, forseveral projects, including the 1,000-

plot Poppleton renewal effort, majorprojects in Barclay, Upton, ParkHeights and Oliver, and in the area sur-rounding West Baltimores Uplandshousing project.

In September, a judge ruled that thecity could seize an entire block adja-cent to Uplands even though some ofthe properties involved were not blight-ed and housed active, profitable busi-nesses.

I think that in the city of Baltimore,the eminent domain tool is absolutelycritical, said Paul T. Graziano, the cityshousing commissioner. Ive worked inhalf a dozen cities in my career, andBaltimore is in many ways a special ex-ample because it has seen massive dis-investment and out-migration, and thathas created vast tracts of largely aban-doned property.

And in order to [start] redevelop-ment [of] these properties, one needs toassemble these properties and get acritical mass, and thats not somethingthat the private sector can do. Its very,

very cost prohibitive.

Moving forward

Despite consistent legal challenges,the pace of condemnations in Baltimoreseems to show no signs of slowingdown. On Election Day this year, thecitys voters approved two bond issuesof nearly $46 million to acquire more

properties in the Westside Initiative andnear Uplands.

Multiple projects, including the EastSide initiative and Old Fairfield, are en-tering later stages of site acquisitionand may involve more condemnation

proceedings.I think Baltimore is still caught in

the 1960s with this whole urban re-newal business, Murphy, the attorney,said. The rest of the world moved onand got over it.

For the time being, Murphy is in onesense right: Eminent domain seems tonot be a relic of the 1950s, the 1960s, oreven five years ago. For some city offi-cials, its industry standard.

How do we help the private sectordo what it does in America, to get loansto get equity? asks Brodie, of the BDC.Our stepping in with any of the citys

powers is done with a judgment callthat the private sector is not doing it. In the long term, there are benefits

jobs, taxes that you have to balanceagainst the angst.


Eminent domain attorney John C. Murphy, who has been defending property owners in Baltimore for morethan two decades: The whole process of suburbanization has had a great impact on the city.

MAXIMILIANFR

ANZ

Voices on condemnation

How do we help the pri-

vate sector do what itdoes in America, to getloans to get equity? Our

stepping in with any ofthe citys powers is donewith a judgment call that

the private sector is notdoing it. In the longterm, there are benefits

jobs, taxes that youhave to balance againstthe angst.

I think that in the city

of Baltimore, the emi-nent domain tool is ab-solutely critical. Ive

worked in half a dozencities in my career,and Baltimore is in

many ways a specialexample because ithas seen massive dis-

investment and out-mi-gration, and that hascreated vast tracts of

largely abandoned property.

M.J. JAY BRODIE PAUL T. GRAZIANO

The process of acquir-

ing all of the necessaryparcels through voluntarynegotiations would have

required an unknown,uncontrollable amount oftime ... The solution was

to invoke eminent do-main to acquire the re-quired properties in a pre-

dictable amount of time;since the property own-ers were entitled to appeal

the price they received to a jury in court pro-ceedings, before the city acquired possession.

MARTIN MILLSPAUGH

MONDAY:The issue of condemnationtouches on one of the U.S. Constitu-tions most fundamental rights theright to own property.


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On theRECORD blog

Land-use attorney John C. Murphy, in the middle of the West Side S uperblock: there has been a general change in attitude towards government. The general public is much more sympathetic to property rights.


The people v. eminent domainOpponents of condemnation are fighting a power that they say has been widely abused

MAXIMILIANFRANZ

Additional coverage to accompanyour condemnation series:

m Historic court rulingsTake a look at some of the court rulingsin cases dealing with eminent domain.Embedded online with the main con-

demnation story.

g Interview with a lawyerWatch an interview with a lawyer whohas litigated historic eminent domain

cases.Embedded online with the maincondemnation story.

i Historic photo slideshowView a series of photos documentingseveral Baltimore City development pro-

jects that were completed with the use ofeminent domain.Posted online as a sep-arate story.


Over the years, several landmark courtcases have broadened the definition of

public use to include the economic well-being of a city, state, county or nationalgovernment, significantly broadening em-inent domains use as a policy tool. Sev-eral cases have held, for example, that it is

perfectly legal to take property from oneprivate business owner and give it to an-other, if it means more jobs and a more ro-bust tax base.

In Baltimore, where the dollar value of

condemnation authorizations is expect-ed to increase more than 250 percent be-tween 2007 and 2008, legal battles overcondemnation are often pitched and pro-longed. As of October 15, 176 condemna-tion cases had been filed in city circuitcourt this year, up from 91 in 2007.

The West Side Superblock, one of theBaltimore Development Corp.s high-

priority projects, has been stalled for yearsby several major lawsuits. In the citysnascent Charles North district, two 2007

decisions delivered blows to the cityswidely used quick-take procedure,which gives property owners just 10 daysto contest the validity of the taking.

All this, some lawyers say, representsa major change in the publics attitude

n Maryland, as in many parts of the country, the discussionover eminent domain, or the governments power to condemnand seize private property in the name of public purpose, is

mainly a legal debate rather than a policy one.The issue, after all, touches on one of the U.S. Constitutions

most fundamental rights the right to own property which is pro-tected by the Fifth Amendment. No citizen, the amendment says, canbe deprived of his or her property unless for public use and with-out being justly reimbursed for its value.





MONDAY: The issue of condemnation

touches on one of the U.S. Constitutionsmost fundamental rights the right toown property.


IBY ROBBIE WHELAN | [email protected]


7/15

Before and after

T H E D A I L Y R E C O R D 5AM O N D A Y , D E C E M B E R 8 , 2 0 0 8


toward property rights and the govern-

ments role in real estate development:

Emboldened by recent legal victories,

property rights advocates are fighting

back against a government power thatthey see as widely abused, and state

lawmakers are listening.

Gaining tractionThe concept of urban renewal first

became prevalent in the early 1950s, after

the 1949 Housing Act provided federal in-centives for cities to clean up their im-

ages by condemning properties and re-

developing them.It gained further traction in 1954, when

the Supreme Court ruled in Berman v.Parkerthat Washington, D.C., could con-demn a supermarket to transfer it to an-

other private developer simply because

the area around it was, in the eyes of cityofficials, blighted.

Many of the big-city urban renewalplans of the 1960s in New York, Pitts-

burgh, Baltimore depended on the lat-

itude allowed city governments by

Berman, and many downtowns trans-

formed over the course of a decade using

eminent domain powers.In the context of the national debate,

the Baltimore waterfront was exhibit A in

the argument in favor of the eminent do-

main power, said John D. Echeverria, alawyer and land-use specialist at George-

town Universitys Environmental Law

and Policy Institute.If theres an essential rationale for

the use of eminent domain, its the hold-

out problem, and its the difficulty of over-coming the problem that one or 100 own-

ers wont agree to sell on any reasonable

terms. There are a variety of instances indealing with downtown development.

Where that arises, eminent domain is the

natural tool for dealing with it.But in the decades that followed, as

federal money for cities dried up, emi-nent domain-based urban renewal fell out

of fashion.

New urban theories, expressed in

books such as Jane Jacobs The Death

and Life of Great American Cities andHerbert J. Gans The Urban Villagers,

mounted the first serious intellectualchallenges to urban renewal. This, paired

with public backlash against projects

such as the razing of Bostons West Endfor an economic development initiative

that never materialized, made Charles

Center-style urban renewal seem like athing of the past.

Urban renewal replaced small

streets, high density, mixed-use city en-vironments with these sterile plazas and

superblocks, said Paul S. Grogan, direc-


SEE CONDEMNATION PAGE 6A

The West Side Superblock, one of the Baltimore Development Corp.s high-priority projects, which has been stalled for years by several major eminent domain lawsuits

RICH

DENNISON

INNER HARBOR BEFORE REDEVELOPMENT, 1965 INNER HARBOR AFTER REDEVELOPMENT, 1990

In the context of the national debate, the Baltimorewaterfront was exhibit A in the argument in favor of theeminent domain power.

John D. Echeverrian

Lawyer and land-use specialist,Georgetown Universitys Environmental Law and Policy Institute

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6A T H E D A I L Y R E C O R D M O N D A Y , D E C E M B E R 8 , 2 0 0 8

Its a push and pull effect.Kelo was at first seen as a greatboon to cities and developers. Shortly after [it] was handeddown, you saw a rush in the use of eminent domain.

Scott G. Bullock

Senior attorney, Institute for Justice


tor of the Boston Foundation and au-thor of a 2000 book on the policy calledComeback Cities.

The kind of urban renewal that [for-mer New York City planner] Robert Mosesand others practiced required a kind ofsupine powerless public that didnt havethe clout to oppose this type of things.Through community organizing and thecivil rights movement ... there began to bea great deal of opposition to these kinds of

projects.

Still, Grogran added, there is a placefor eminent domain use as a last resortin cities like Baltimore, Philadelphia andDetroit that have failed to reclaim the res-idents and work force they lost to thesuburbs in the 1950s and 1960s.

In the 1980s and 1990s, Baltimore sawvery little eminent domain use.

I dont recall city policy involving anover-reliance on eminent domain, saidKurt L. Schmoke, who was mayor from1988-1999. We engaged the private prop-erties in discussions about plans. Our viewwas, lets tell people what we have inmind, try to bring them into the discus-sion, and see if we can come up with the

private-public joint partnerships.But takings entered the spotlight once

again in 2005, when nearly a half centuryafter theBerman decision, the SupremeCourt ruled onKelo v. City of New Lon-don, its first major land-use decision indecades.

In that case, a Connecticut nursenamed Susette Kelo fought the local gov-ernment of New London, which proposedtaking her waterfront home to build a$300 million research facility for pharma-ceutical giant Pfizer Inc. A divided deci-sion held that the city was within rights totake the house, and Kelo lost her home.

In the majority opinion, Justice JohnPaul Stevens wrote that the idea that thereshould be any literal requirement thatcondemned property be put into use forthe general public had eroded over time

since the 19th century, and that the cre-ation of jobs and higher taxes could be

construed as public purpose, which hascome to be regarded as the same as pub-lic use.

The takings before us, however,would be executed pursuant to a carefully

considered development plan, he wrote.[T]he Citys development plan was not

adopted to benefit a particular class ofidentifiable individuals, i.e. a particu-lar private business interest.

Kelowas a turning point in the eminentdomain debate in Baltimore, said John C.

Murphy, a land-use lawyer who has liti-gated dozens of condemnation cases.

Two things have changed [in the pastdecade], he said. One, there has been ageneral change in attitude towards gov-ernment. The general public is much moresympathetic to property rights. When Istarted on the West Side in 1998, I lookedat this and said, I dont want to get intocourt because I dont want to lose. ... Thesecond thing was thatKelo came. It real-ly opened up the door to challenging em-inent domain takings ... because it set upa firestorm of protest.

Scott G. Bullock, a senior attorney attheInstitute for Justice, and one of theteam that arguedKelo all the way fromConnecticuts Superior Court to the high-

est court in the country, called it themost universally despised decision in re-cent memory, but echoed Murphys feel-ings that change is in the air.

Its a push and pull effect, he said.Kelo was at first seen as a great boon tocities and developers. Shortly after [it]was handed down, you saw a rush in theuse of eminent domain. But in theKelobacklash, youve seen this tremendousreaction which has led to putting thebrakes on eminent domain through statedecisions that reject or cast doubt on thedecision.

Maryland v. Kelo

Since it was handed down,Kelo hasbeen challenged by legislation passed in 42

states much of it in the first few monthsafter the decision was made includingMaryland.

A few states, like Florida, have passedaggressive laws that effectively ban emi-nent domain for economic development

purposes. Florida requires condemnersto wait 10 years after filing their case totransfer property to private developers,effectively making it not worth it. Otherstates have passed laws that simply bol-ster private property owners rights.

In 2007, a Maryland Senate bill passed,putting a four-year shelf-life on condem-nation authority: if the condemning au-thorities dont use it, they lose it.

The bill seems to be a legislative re-sponse to a 2004 state Court of Appeals


Key dates: An emin

1958Baltimore planners present Charles Cen-ter urban renewal plan to mayor, thefirst major building project in the city

since before World War II.

1962One Charles Center, the iconic Mies vander Rohe office tower, opens.

1954InBerman v. Parkerthe Supreme Court

unanimously upholds the right of the Dis-

trict of Columbia to seize a department

store as part of a massive redevelopment

plan to fight blight, even though the storewas not blighted. This is the first case to

specify that the constitutions public use

clause includes public purpose in its

definition, allowing government to con-

demn privately owned property and con-

vey it to another private owner.

3

4

1975InPrince Georges County v. Collington

Crossroads Inc., the Maryland Court of

Appeals upholds eminent domain tak-

ings for the purposes of economic de-velopment. The county successfully con-

demns a pricey parcel of private land for

the purpose of building an industrial park.This case would be used as precedent

in a number of significant decisions, in-

cludingPoletown v. Detroit, a 1981 ap-

pellate court decision that upheld that

citys seizure and clearance of a residen-tial neighborhood to build a General Mo-

tors assembly plant on the site.

6 1984Hawaii Housing Authority v. Midkiff

finds the Supreme Court ruling in favor of

the states right to condemn massive

swaths of privately-owned property andredistribute it to multiple private owners.

The case was meant to break Hawaiis

land oligopoly a situation in which a

tiny number of property owners con-

trolled the vast majority of Hawaiis land,thus inflating prices and skewing the

housing market.

7

1963Mayor Theodore McKeldin an-nounces the Inner Harbor urban re-newal plan. A master plan is acceptedfour years later, and acquisition bycondemnation and clearance of down-town properties begins.

5

2

1 2

1940s 1950s 1960s 19

1949Federal Housing Act provides federalfunding for two-thirds of the cost ofeminent domain acquisitions in cities

like Baltimore

1

3 4 5


Susette Kelo stands in front of her New London, Conn., house. In 2005, a divided Supreme Court said thecity was within its rights to take her house to make way for a $300 million research facility forpharmaceutical giant Pfizer.

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T H E D A I L Y R E C O R D 7AM O N D A Y , D E C E M B E R 8 , 2 0 0 8


case,Reichs Ford Road Joint Venture v. State Highway Administration, which

found that private owners whose land is

seized or threatened with seizure mustbe compensated for losses other than the

value of their property.In this case, a Frederick County gasstation operator refused to renew his lease

with the property owner after finding out

that the state planned to condemn theproperty and build a highway interchange.

That plan never came to fruition, and thecondemnation was left hanging in the air

for nearly a decade, resulting in major

lost profits for the landlord.In March 2007, state Sen. Allan H. Kit-

tleman, R-Carroll and Howard, was joined

by a dozen other Senate Republicans insponsoring SB 294, a measure that would

have banned condemnation takings for

economic development. The bill died incommittee.

Kittleman said in a recent interview

that in practice, eminent domain producesa reverse Robin Hood effect, in whichproperties are taken from the poor and

small business owners and given to therich and well connected. A poll that hecommissioned in 2005, he said, showedbroad support from Democrats and Re-

publicans alike for a measure banningeconomic development takings.

The Democratic majority doesnt likea law that says you cant have eminentdomain for economic development, butthey dont want to be on record as havingopposed it, so they just decided not tohave a vote, he said of the measure.

Also in 2007, two Baltimore City caseswere decided in the states highest court,leading to two key victories for anti-con-demnation activists.

The first,Mayor and City Council ofBaltimore v. Valsamaki, dealt with theMagnet Bar, a tavern on North CharlesStreet owned by George Valsamaki, whichwas condemned as a quick-take as part

of the citys Charles North Urban Renew-al Plan. The Court of Appeals ruled thatwithout a specific, detailed plan like theone presented by the city of New Lon-don inKelo, and without demonstrating animmediate need to seize the property, thecity could not use quick-take.

A few months later, the Court of Ap-

peals handed down another decision,

Mayor and City Council v. Sapero, whichdealt with the Chesapeake Restaurant

site, just down the street from the Magnet

Bar, which the city was also trying to seizeby quick-take. The high court ruled that

there was no immediate need for the city

to possess the restaurant and several ad-

jacent buildings, which had sat unused

for more than a decade in the heart of anemerging commercial district near Balti-

mores main train station.

You dont know how we do it

over here

James Thompson, an attorney withRockville-based Miller, Miller and Can-

bywho litigated Valsamaki, said the case

was important because it was the firsttime the city had ever lost a quick-take

case.The city has used quick-take con-

demnation over the last 50 years to basi-


nt domain timeline

1998Baltimore begins condemnation pro-

ceedings for two major West Side urban

renewal projects, Centerpoint and the

Superblock. Centerpoint will be builtwithin a few years, coinciding with the

renovation of the Hippodrome theater.

The Superblock is still stalled today.

8 2005Kelo v. City of New London, the first

federal court challenge to eminent do-

main in more than two decades, up-

holds the central tenet ofBerman, thata city can condemn property for the

public purpose of economic develop-

ment, when the Connecticut town con-

demns Susette Kelos house for the con-

struction of a pharmaceutical compa-

nys corporate campus. Protesters sug-

gested that a local condemning author-

ity take Justice David Souters blighted

New Hampshire vacation home and re-

place it with a Lost Liberty Hotel, as a

symbolic act of defiance.

9 2005Reichs Ford Joint Venture v. State High-

way Administation establishes that the

threat of condemnation can lead to ma-

jor losses for a small business that are re-coverable as damages to the business

owner. A Frederick County gas station

owner lost his anchor tenant when the

operator refused to renew a 10-year lease

agreement because the state was threat-

ening to condemn the site for a new high-

way interchange.

10 2006 - 2007Two high-profile condemnation suits,

Mayor and City Council of Baltimore v.

Sapero andMayor and City Council of

Baltimore v. Valsamaki, find that thecity has abused its quick-take con-

demnation powers, and rules that the

city must demonstrate immediate need

for taking a property by this aggressive,

expedited method, and have a plan in

place for the future of the property.

11

0s 1980s 1990s 2000s

6 7 8 9 10 11

SEE CONDEMNATION PAGE 8A

Attorney James Thompson: The city has used

quick-take condemnation over the last 50 years to

basically bulldoze major blocks of Baltimore City.

Its been a major tool, used sometimes unfairly atthe expense of property owners.

RICHARDSIMON

From the negotiating table to the courtWhen the city authorizes a condemnation seizure, it doesnt always file an action in Baltimore

City Circuit Court to actually take the property. Often, the city will come to an agreement to pur-chase the property from the owner after lengthy mediation. In some cases, a property will be placedunder the citys receivership after repeated and unresolved housing code violations. Over the past

five years, about half of the condemnations approved by the citys Board of Estimates have been

filed in city courts. Most of these have been residential properties, and Daily Record research showsthat so far this year, more than 60 percent of condemnations authorized have gone to court.

Year Condemnations Condemnations Percent of authorizedauthorized filed in court condemnations that

have gone to court

2003 255 133 52%

2004 273 104 38%

2005 437 219 50%

2006 224 170 76%

2007 204 91 45%

2008 283 176 62%

Total 1,67

6 8

93 53

%




10/15

cally bulldoze major blocks of Baltimore

City, he said in a recent interview. Itsbeen a major tool, used sometimes un-

fairly at the expense of property owners.

... When this begins to be a stretch is whenyou go in and take property thats not

blighted. Theres no health, no safety is-

sues. Its just some guys house, or theMagnet Bar.

Furthermore, he said the notion of

RFP condemnation the citys is-suance of a request for proposals to

redevelop an area, then awarding development contracts to private enti-

ties before the city even owns the

property may be commonplace inBaltimore, but its not elsewhere in

Maryland.

This is unheard of outside of Bal-timore, he said. Here in Montgomery

County, we have the largest political ju-

risdiction in the state. We have 900,000 people, the biggest tax base in the

state. The idea of taking someones

property and spinning it off to a privatedeveloper is unheard of.

Thompson recalled a 2006 phoneconversation with Paul Dombrowski,

at that time the head of the BDCs

Charles North initiative, in which he

asked Dombrowski what the citys plans were for the Magnet Bar site.

The BDC said, according to Thomp-son, that a plan had not yet been for-

mulated.

Dombrowski said, Mr. Thompson,you dont know how we do it over here,

Thompson said. Well, the Constitution

applies in Baltimore City as well.Dombrowski said he remembered a

phone conversation with Thompsonin which he explained the law pro-

cess they follow for condemnation,

because Thompson didnt seem clearon how we do things, but added that

he did not remember making that spe-

cific remark.Since Valsamaki, the BDCs au-

thorization of quick-takes has all butceased. Most quick-takes are carriedout by the housing department on

smaller, vacant properties. Howev-

er, in September, the citys Depart-

ment of Housing and Community

Development, using money from

BDC-controlled city accounts, au-thorized the quick-take seizure of 80

lots in Old Fairfield, a South Balti-more industrial district to which city

officials hope to attract renewed

commercial investment.

The citys law department, whichfiles condemnation actions, changed

its policies after Valsamaki, said City

Solicitor George A. Nilson.We sharpened our pencils and

took a closer look at regular condem-

nation proceedings, he said. Theagencies we represent worked harder

to anticipate the needs to acquire the

property, making it less necessary touse quick-take.

So far this year, his office has notyet actually filed a quick-take in cir-

cuit court, although 280 of them have

been authorized.In February, the city used quick-

take to seize several properties us-

ing BDC money on Warner Street inSouth Baltimore as part of the Gate-

way South project. At the time, The

Daily Record reported that the ownerof a large architectural salvage and an-

tiques business located on the site was

happy with the arrangement after thecity renegotiated to give him a better

price for his property.For Gateway South, city officials

said, the issue was that financing for

the project was contingent on the citytaking immediate title on the proper-

ty, and they emphasized that land ac-

quisition only reaches the point

where condemnation is necessary af-ter mediation and fair-market offers

have failed.The use of eminent domain has

got a dirty reputation in recent his-

tory, said Elva E. Tillman, an attor-ney with the city who specializes in

land-use. If you look around the city

at where eminent domain happens Fairfield, Poppleton, Washington

Village these are really destituteareas.

And for now, the power to con-

demn a property destitute or other-wise and give it to another private

entity, remains intact, invaluable to

city leaders and developers eager toremake the city, but a thorn in the side

of independent property owners whoare not eager to pick up and move tomake way for the next good thing.

8A T H E D A I L Y R E C O R D M O N D A Y , D E C E M B E R 8 , 2 0 0 8

The use of eminent domain has got a dirty reputation inrecent history. If you look around the city at where eminentdomain happens Fairfield, Poppleton, Washington

Village these are really destitute areas.


Elva E. Tillmann

Attorney, specializing in land-use


How the condemnation process works

Urban renewal area identified(either by the city, a particular neighborhood community, or a business interest)

Urban renewal ordinance passed by City Council,specifying, among other things, properties the city is authorized to condemn

Monies authorized by the Mayor and citys Board of Estimatesfor acquisition costs of private property.

Two assessments of the propertys value commissioned by independent appraisers;city required by law to use the highest of two appraisals

Purchase offer made to property owner

Offer accepted Offer rejected

City takes

title to property

Condemnation suit filed in Circuit Court

Property owner disputes citys taking of property

Based on citys right to takeBased on citys appraisal of property value

Litigation proceeds;fair market value determined by a judge

City takes

title to property

Ju

d

ge r

ule

seither for or against owner, decision may

be appealed to a higher court

If for;

the owner keeps

the property

If against;

the owner

disputes citys

appraisal and

starts the process

over again at the

citys taking of

property

Owner disputeslegitimacy of Urban Renewal ordinance


Voices on condemnation

I dont recall city poli-

cy involving an over-re-

liance on eminent do-

main. We engaged the

private properties in dis-

cussions about plans.

Our view was, lets tell

people what we have in

mind, try to bring them

into the discussion, and

see if we can come up

with the private-public

joint partnerships.

Urban renewal re-

placed small streets,

high density, mixed-

use city environments

with these sterile

plazas and su-

perblocks. Through

community organizing

and the civil rights

movementthere be-

gan to be a great deal

of opposition to these

kinds of projects.KURT L. SCHMOKE PAUL S. GROGAN

The Democratic

majority doesnt like a

law that says you cant

have eminent domain

for economic develop-

ment, but they dont

want to be on record as

having opposed it, so

they just decided not to

have a vote, he said of

the measure.

ALLAN H. KITTLEMAN

TUESDAY: Small business ownersin Baltimore affected by condemna-tion tell their stories.

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On theRECORD blog

Fleet Transit owner Kevin McNeil: My biggest issue is, if I own a thing, and I want to develop it, and you want to take it away from me and give it to someone else, that doesnt seem fair.


Condemning what stands in the wayCitys liberal use of eminent domain poses threat to independent property owners

RICHD

ENNISON

Additional coverage to accompanyour condemnation series:

o Audio StoryGeorge J. Herrmann moved his business and his life to Prince Georges Countyafter his liquor store on Howard St. wascondemned. Hear him tell his story atwww.mddailyrecord.com.Embedded on-line with the main story.

h Audio slideshow After relocating their retail hat storetwice, Lou and Judy Boulmetis business

is finally prospering. Hear Lou share theups and downs of his business. Posted

on our blog On the Record.

a Download the seriesDownload the entire three-day series asa single PDF file. Posted online as aseparate link.


McNeil built his petroleum product ship-ping company, which employs 140 with apayroll of about $6 million, on the site ofan old South Baltimore oil terminal overmore than 30 years. Located in an areaacross the Hanover Street Bridge from Fed-eral Hill that is populated mostly by chemi-cal plants and auto shipping terminals, hehad planned until recently to expand his op-eration north of Chesapeake Avenue, to a

site known as Old Fairfield.There, he owns about 80 small lots that

are interspersed with city-owned lots. Hisdream, he said, is to expand Fleet Transit,and at the same time, attract several port-re-lated tenants and develop the land as a smallbusiness park.

But in September, the city of Baltimoretook steps to seize the 80 lots owned by Mc-Neil and redistribute them as part of an Ur-

ban Renewal Plan for Old Fairfield. Underthe citys plans, McNeil would be awardedabout four of the 25 acres seized from him,but at least eight acres of it would be con-

veyed to another private developer with asimilar plan: to build a business park.

here is a white dry-erase board in the conference room ofFleet Transit Inc.s main offices in the Fairfield industrialdistrict of Baltimore, with notes left over from a business

strategy meeting scrawled on it:The 3-Year Plan: Growth Better Than the Alternative

DeathEmployer growth attracts new people.Between Growth and Death, Fleets owner Kevin McNeil has

clearly chosen the life-affirming option, but because of a recentfight with the city over condemnation, things arent working outthe way he thought they would.





MONDAY: The issue of condemnation

touches on one of the U.S. Constitutionsmost fundamental rights the right toown property.


TBY ROBBIE WHELAN | [email protected]


12/15

T H E D A I L Y R E C O R D 9AT U E S D A Y , D E C E M B E R 9 , 2 0 0 8


My biggest issue is, if I own a thing,and I want to develop it, and you want totake it away from me and give it to some-one else, that doesnt seem fair, McNeil

said. I cant do anything with the land be-cause its all tied up. I cant bring somebodydown here, look them in the eye, and tellthem to put all their money into it andthen have the city take it away from me.

McNeils story is emblematic of thecitys attitude toward the property rightsof small business owners over the pastfive years: If a business stands in theway of a city development plan, the citywill not hesitate to condemn the prop-erty occupied by the business, seize it,and sell it to a new developer that city of-ficials see as more capable or with moreappropriate plans.

In more than a dozen interviews withsmall business owners and legal counselrepresenting them, The Daily Record

has found the city frequently solicitsplans for property redevelopment fromthe private sector before it owns the

property in question.The practice underscores the fact

that redevelopment efforts in Baltimoredepend heavily on eminent domainseizures and the threat that eminent do-main powers pose to independent prop-erty owners.

Indeed, threatening a business withcondemnation, even without filing legalaction to take the property, is oftenenough put a business owner under orconvince land owners to abandon their

plans for the plots that they own.And in Baltimore, eminent domain

use is becoming more widespread, risingmore than 250 percent in the dollar valueof condemnations authorized in 2008 over2007, and calling into question the citys at-titude toward small-business owners.

If eminent domain is used widely as afront-end tool for development, does thatmean the citys interests are more impor-tant that the property rights of small-busi-ness owners?

Different ways to renewThe details of Kevin McNeils prob-

lems in Old Fairfield are hardly unique.He has owned the properties since

1980, when the area still had a small, most-ly black residential community that datedto the 19th century adjacent to its factoriesand scrap yards. A small white clapboardchurch still stands on Fairfield Road as atestament to the communitys existence. Itwas surrounded by poorly maintained

roads and air thick with industrial fumesuntil its last houses were cleared in theearly 2000s.

McNeil said he had to wait until allthe people who lived in Old Fairfield were

gone before even considering trying tobuy more land for his industrial park idea.In the meantime, he said, the BaltimoreDevelopment Corp. decided that he wasstalling, and the reason was that he wasntcapable of developing such a large parcel.

The only thing Ive heard is that Imnot a developer I dont develop land,he said.

Well, I built this place from scratch,he said, gesturing out the window of hisoffice at the Fleet Facility, which houses90 trucks and moves about 1.5 to 2 milliongallons of petroleum-based products perday. I think it was all political.

BDC President M.J. Jay Brodie saidin a recent interview that McNeils pro-

posal for the land simply wasnt the bestone.

Weve worked with Mr. McNeil andweve encouraged him, he said. Our

judgment was that he cant do it byhimself.

In 2006, the BDC issued a request forproposals the normal procedure when

redeveloping city-owned land for fiveplots in Old Fairfield. The catch was thatmuch of the land was owned by McNeil,not the city, so the BDC was effectivelymaking economic development plans for

parcels that it did not own. Or rather, thatit did not own yet.

After McNeil bid on the RFP and rejected a purchase offer from the city in2007, the city moved to seize the proper-ties and pay McNeil $2.2 million. The planselected by the BDC offered McNeil a

portion of the land to develop himself,but also brought in Chesapeake RealEstate Group, a developer that has had

previous relationships with the city.Chesapeake redeveloped the Bagby

Building in Little Italy, a former furniture

factory that has now become a handsomecommercial retail property with a Veri-zon store. In July, the BDC approvedChesapeakes plans to build 400,000square feet of industrial space on the Bow-leys Lane landfill site, which it sold tothe developer.

In September, Jim Lighthizer, a prin-cipal with Chesapeake, told The DailyRecord that he had hired a broker andwas sending out mailers trying to attracttenants, and that he was trying to con-

vert a dumpy area to a nice businesspark setting.

But McNeil called Lighthizer and his



Baltimore City Solicitor George A. Nilson stands in front of City Hall. City officisls say the legal formalities of acquiring large assemblages of property often require that eminent domain be used on the front end of a project.

RICH

DENNISON

There are also always going to be circumstances inwhich you need eminent domain to really make a projectwork. The Superblock is an example.

George A. Nilson

Baltimore City Solicitor

Kevin McNeil works at his Fleet Transit headquarters in Fairfield, which houses 90 trucks and moves about

1.5 to 2 million gallons of petroleum-based products per day.

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partners speculators. Three years ago,Chesapeake bought 22 acres at an adja-

cent site and built a 25,000-square-foot

truck repair facility on it. Their property

was never listed for condemnation. Mc-Neil said the only thing keeping him from

developing his land, besides the fact thatmany of the lots scattered among the ones

he owns belong to the city, is the threat of

condemnation.

People come down here and say it

looks awful, you know? Give me two

guys, a couple of bulldozers and a few

days, and Ill have it cleaned out, he

said. If [Chesapeake] gets to speculate,

why cant I?

Similar situations in which the

city tires of waiting for redevelopment to

happen and uses condemnation to speed

up the process can be found all over

the city.

In September, the BDC moved to

seize the Parkway Theater, a 93-year-old movie house in the Charles North

Urban Renewal Area, which had been on

a condemnation list for most of the time

since its owner, Charles Dodson, pur-

chased it in 2002.

Dilapidated buildings in the West

Sides Pigtown neighborhood were seized

earlier this year after years of disuse, un-

der another urban renewal plan.

The legal formalities of acquiring large

assemblages of property, city officials say,

often require that eminent domain be used

on the front end of a project.There are different ways to renew,

said Baltimore City Solicitor George A.

Nilson. Sometimes one lot or one prop-erty at a time works. There are also al-

ways going to be circumstances inwhich you need eminent domain to re-

ally make a project work. The Su-perblock is an example.

West Side stories

The Superblock project is a 3.6-acreparcel of land between Liberty Street and

Howard Street that falls under the citys

Market Center Urban Renewal Act. Sincethe late 1990s, the city has condemned

or threatened to condemn the property of

at least six small businesses, in many cas-es paying thousands of dollars to relocate

them to other parts of the city.Yun O. Park, a Korean-American who

since 1994 has owned Modern Mode, a

womens apparel store on LexingtonStreet in the heart of the Superblock,

learned that her building was listed forcondemnation in 2006. She said she plans

to retire in 10 years, and that she doesnt

want to relocate because she has a good

customer base and the area is safe.This is my retirement plan, this build-

ing, and just to kick us out, its not fair,she said. Its like something in a com-

munist country.Park hired attorney John C. Murphy,

who said he showed BDC officials the in-

side of the store to show them that thebusiness was not blighted rather it was

clean, professional and thriving. The city

backed down and removed Park from thecondemnation list.

Still, Park says business has suffered

since the talk of condemnations began.Her store is flanked by two empty retail

storefronts, one that was taken last year

by the city and the former A.M. Fashions,

owned by Nam Seo Koo, another Korean-American property owner on the West

Side who has been in a pitched legal bat-tle against the city over condemnations for

the better part of a decade.

If we had to depend on this store,wed starve to death, said Park, who

added that the last time business was

good was at least three years ago. If thereare more stores around here, it will be a

good spot.

More businesses are exactly what thecity has in mind. The BDC issued a re-

quest for proposals for 51 Superblock

properties in 2003, and has since issuedtwo more RFPs, for 15 additional proper-

ties in and around the project. In late 2004,

the BDC entered an exclusive negotiat-ing agreement with Lexington Square

Partners, a development team made upof companies from New York and Atlanta,

for the properties in the first RFP.

But some business owners, like Koo,whose 25,000-square-foot clothing store

and warehouse space, New York Fash-

ions, had been under threat of condem-

nation for nine years before the city fi-nally took it in August, were not so lucky

as to stay in business.Linn Koo, who speaks on behalf of

his fathers business interests, said that

Superblock businesses were doing quitewell until the city intervened, starting in

the late 1990s. By 2005, he said, New YorkFashions sales, for which he declined to

give a dollar amount, were down by 50

percent.Look at this place theres no peo-

ple, he said, standing at the corner of

Park and Lexington Streets. Once thecity started taking the buildings, there



This is my retirement plan, this building, and just tokick us out, its not fair. Its like something in acommunist country.

Yun O. Park

Owner, Modern Mode

Lou Boulmetis, left, works with a customer at his Hippodrome Hatters, a 78-year-old haberdashery: In my case its so far so good, but not in everybodys case.

RICHD

ENNISON

Hippodrome Hatters was moved twice by the city, in March 2001 from the unit block of N. Eutaw Street

to the 400 block of W. Baltimore Street, then to its current location at 318 W. Baltimore Street.

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was no reason for people to come aroundanymore. The percentage of people walk-ing around really dropped off.

The small business shuffle

Other small businesses have been hurtalmost as much by being forced to relocateas by the condemnation threats on their

property.George J. Herrmann owned Peoples

Liquors, a carryout business on the cornerof Howard and Fayette streets, which saidhe did brisk business with customers com-ing and going from the nearby light railstop, from 1995 to 1998.

He received notice from the city that hewould have to relocate. The building wasbeing condemned, and as a tenant, hedhave to move out to make way for the $85million Bank of America-financed Center-

point project, a mixed-use retail and resi-dential complex which opened in 2006.

The city paid him $10,000, he said, to

move to a new store across BaltimoreStreet from the recently restored Hippo-drome Theater. There, he said, he no longerhad access to the bus and light rail traffiche once got, and his customers no longerknew where his store was located.

Business immediately fell off 60 per-cent, recovered slightly, and then stayedflat for four years.

It became pretty obvious, pretty quick-ly, that [the city] did not want a liquor storethere, he said.

In 2004, Herrmann decided to sell hisbusiness and found a buyer to pay $400,000for it. The same year, the city decided tocondemn his new location, as part of a re-lated effort to beautify his part of the West-side, and added the property to an urban

renewal plan list.If I dont have a location, I cant sell my

business, he said. When I tried to sellthe business, the potential buyer who puta contract on the business, the BDC toldhim they were ultimately going to con-demn the property. They didnt tell himwhen. I dont blame the guy. I wouldnthave bought the business, either. Just theword that the BDC was going to condemnthose properties, it queered the deal I hadon selling the property.

But Nilson, the city solicitor, speakingof the West Side urban renewal efforts,said everything that was done was donewith good cause.

There is a very strongly held view thatyou need the impetus of these large as-

semblages to really make a project work,he said.

Herrmann took a 40 percent loss onthe sale of the business, and most of themoney went toward paying debts to hissuppliers and moving costs. He now ownsa home improvement business in PrinceGeorges County.

Four years later, the city has still not yetseized and redeveloped the property the Peoples Wine & Spirits sign (hechanged the name of the store after hisfirst move) still hangs today over a steel-shuttered storefront, and Herrmann hasnot yet settled all his debts on the busi-ness.

Im still paying it off, Herrmann said.That was going to be my retirement.

Other businesses, however, have land-ed on their feet after a condemnation-re-lated move, but only after suffering serioushardship and stress.

Lou and Judy Boulmetis, who ownHippodrome Hatters, a 78-year-old hab-erdashery near the theater that shares itsname, were relocated in March 2001 fromthe unit block of North Eutaw Street tothe 400 block of West Baltimore Street tomake room for the Centerpoint project,and then again to their current location inthe 300 block of West Baltimore Street, ahigh-ceilinged showroom within the Cen-terpoint complex itself.

Each time, you cross your fingers, you


MAXIM

ILIANFRANZ

hold your breath and hope you do better,Lou Boulmetis said. In my case its so farso good, but not in everybodys case. Wegrew the first time and we grew the sec-ond time we moved.

Sales have more doubled, he said,since the first move, due in large part totheir new location, which is on a busyblock of Baltimore Street next to a Star-bucks. Still, their condemnation ordeal

has made an activist out of Judy Boul-metis. She collects photocopies of arcanelaws having to do with eminent domainand newspaper clippings related to WestSide development in a thick blue binder.

The couple has lobbied Gov. MartinOMalley, who they know from his days asa Baltimore City councilman, for morestringent laws to protect properties own-ers that have been relocated. Maryland

Senate Bill 3, which passed in 2007 andbecame part of the state code, did justthat, urging local authorities to condemnonly when absolutely necessary, and re-quiring them to compensate businessesfor losses in value in order to preservegoodwill.

The pen that OMalley used to signthe bill into law hangs behind a frame ofa glass plaque in Boulmetis shop.

But the uncertainty of the futureof ones business, a product of themoving ordeal, was very stressful, thecouple said.

I would never buy property again inBaltimore City, Lou Boulmetis added.

A variety of businesses

The small businesses that suffer as aresult of condemnation are not limitedto retail storefronts in central downtownbusiness districts. Office-based employ-ers, industrial producers and service in-dustry businesses have also been target-ed in the last year in Baltimore.

In September, a city circuit courtjudge dismissed a 4-year-old lawsuitbrought against the city by a handful of

property owners on the Uplands Triangle,a three-sided block off Edmonson Av-enue in West Baltimore that the citywants to redevelop as a gateway to a

RICHDENNISON

Charles Dodson sits on the stairs at the Parkway Theater, a 93-year-old movie house in the Charles North

Urban Renewal Area that the BDC moved to seize in September.

RICHDENN

ISON

Yun O. Park, left, owner of Modern Mode, a womens apparel store on Lexington Street in the heart of the Superblock, talks with land-use attorney John C.

Murphy. The city listed her building for condemnation in 2006.

George J. Herrmann stands in front of the shuttered Peoples Wine & Spirits store on Baltimore Street. In 2004, the city said it was going to condemn the building

and redevelop the property, but it has yet to do so.



15/15

$200 million affordable housing develop-ment nearby, known as Uplands.

Arthur W. Lambert, owner ofLam-bert Insurance Agency Inc., is one of thebusiness owners under threat, and themain claimant in the lawsuit. He said thecity should not have to right to take hisbusiness because its not blighted its

just near several properties that are and that the prospect of having to movehas driven clients away and made his lifemore difficult.

Investors have expressed interest, hesaid, in buying up the nearby blightedcommercial properties, which wouldmake Lamberts own office more attrac-tive. But the looming possibility that thecity will condemn the properties has driv-en those investors away.

Its been a long, drawn-out thing, hesaid. Even during the process, its been in-convenient. Its taken away from mybusiness. People have contacted meabout purchasing property, and I have totell them whats going on, and they backaway very quickly. It is the threat of these

properties being taken over by the citythat has kept this area from being what itcould have been.

Yoo Young, another Triangle business

owner who is being forced out by the city,has run an auto repair shop with a loyal

Asian-American customer base, on thesame site since 1985 seven years afterhe immigrated from South Korea. The

profits from his business, he said, haveallowed him to give his three children col-lege educations at New York University,the University of Pennsylvania and Uni-

versity of Maryland.Id like a fair relocation, he said. All

fair is fine. All my clients say, Young,please stay here. Maybe [move] half amile!

Others arent so hopeful about moving.Razaq Raja, who owns a pizza and

carryout shop around the corner fromYoung, said that if forced to move, his

business would not survive.Well lose the business if we go some-

where else, he said. My customers arearound here. I feel its really very sadfor me. I built this business from zeroup. Four years Ive been here.

The citys position, according to Hous-ing Commissioner Paul Graziano, is simi-lar to the decision handed down inBerman v. Parker, a 1954 U.S. SupremeCourt decision: The businesses at Up-lands Triangle may not be blighted them-selves, but because many of the propertiesaround them are, its necessary to takethem.

It was very clear that in order to ad-dress that area, we needed to address theentire frontage on Edmonson Avenue,

Graziano said. I would argue that the Tri-angle is a mix of some very viable and

very appropriate uses and some very trou-blesome uses. Theres a liquor store outthere where a police officer was mur-dered. Its a mixed bag.

Elsewhere, its the same story. In Pop- pleton, a West Baltimore neighborhoodthat abuts the University of Marylandsrapidly growing biotech campus, the cityhas condemned property owned by theJ.M. Gillin Corp., which manufacturesthe aluminum enclosures that are attachedto telephone poles as switch boxes.

Owner James Gillin and a nearbychurch, also under threat of condemna-

tion, sued the city to challenge the validi-ty of the urban renewal ordinance thatauthorized his condemnation. That casewas litigated in November and awaits

judgment. Gillin and a city lawyer involvedwith the case declined to comment forthis story.

Also in September, the city addedproperty belonging to three businesseslocated in West Covington, a waterfrontregion on the Middle Branch of the Pat-apsco Schuster Concrete, Ruppert

HomesandAllied Waste Services tothe West Covington Urban Renewal Plan,a city law authorizing the city to seize the

properties and redevelop them as a mixed-use complex. The citys original plan wasto locate a facility for sportswear com-

pany Under Armour Inc. on the site, butthat fell through last year.

Scott Woods, the CFO for RuppertHomes, one of the companies underthreat, said that as of late November, con-demnation was still looming for his busi-ness. The three West Covington busi-nesses have hired an attorney fromGildea & Schmidt LLC, to representthem, and help them present a plan to

the city that they hope will be a suitable al-ternative to condemnation.

In the meantime, however, a plan byRuppert Homes to build a set of town-houses with waterfront views is stalled.

Were still in limbo, Woods said.[Condemnation] has not been withdrawn,but it hasnt been acted upon. Its still outthere. Obviously, that would need to beresolved before we started anything.

Same place, different perspective

When the U.S. Supreme Court ruled in2004 on the most important recent casesurrounding eminent domain,Kelo v. Cityof New London, Conn., the city of Balti-mores legal department filed an amicuscuriae brief in support of the decision touphold a citys right to condemn propertyfor purposes of economic development.

Petitioners arguments, if accepted,would threaten the ability of Baltimoreand other cities to use the power of emi-nent domain to stimulate economic de-

velopment in places where, for manydecades, there has been little or no suchdevelopment, the document read.

If cities are prohibited from using the

power of eminent domain to stimulateeconomic development, then cities willnot develop; and if cities do not develop,if they do not adapt to changing timesand changing economic circumstances,city residents suffer.

Back in Old Fairfield, where KevinMcNeils land lies overgrown and strewnwith trash, undeveloped and threatenedwith condemnation, its easy to see whatthe city lawyers who wrote those wordsmight mean its a patch of earth that

has not adapted to changing times. In fact,it looks as if

Condemnation Series

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