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Friday, December 5, 2008 • Volume 120 • Number 56 $79 per year • $1 per copy

MAXIMILIAN FRANZ

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 renewal


Eminent domain has helped reshape much of city, but some say it’s no longer necessary
Additional coverage to accompany

CONDEMNED
BY ROBBIE WHELAN | robbie.whelan@mddailyrecord.com our condemnation series:

or many people, the words “condemned building” k Take an interactive quiz

F bring to mind a creaky, dilapidated house with


boarded-up windows and caution signs posted:
somewhere you don’t dare go without a hard hat.
Baltimore’s use of eminent domain
A 3-PART SERIES

FRIDAY: In Baltimore, the use of


Take our quiz to discover how much
you already know about the govern-
ment’s ability to exercise eminent do-
main. Embedded online with the main
condemnation story.
But in Baltimore, the use of condemnation powers — condemnation powers has become
otherwise known as eminent domain — has become syn- synonymous with urban renewal.
MONDAY: The issue of condemnation
g Video glossary
Watch our video glossary to get the true
onymous with urban renewal. touches on one of the U.S. Constitution’s meanings of eminent domain, quick-take,
The government’s right to condemn and justed dollar amount of seizures authorized most fundamental rights — the right to urban renewal and the process of con-
own property. demnation. Embedded online with the
seize private property, sometimes perfectly in 2003, The Daily Record has found. These
main condemnation story.
intact and well-maintained, and convey it statistics were determined as part of an ex- TUESDAY: Small business owners in
to another private owner is the engine driv- amination of nearly 1,000 pages of public Baltimore affected by condemnation
ing many of the city’s most important de- records covering the last five years.
To put that number in context, $22 mil-
tell their stories. c Interactive area map
See the top sites where the Baltimore City
velopment efforts.
Despite several recent court cases and lion is about seven times what the city ex- vestment, depend on condemnations to government has used eminent domain
pects to spend in fiscal 2009 to fight home- move forward, and that the city continues to as a development tool. Posted online as a
laws that check the powers of municipalities
make liberal use of a controversial method separate story.
to take property, condemnations are accel- lessness, and about 10 percent of what the
erating in the city: More than $22 million in city will spend on schools. of seizure known as “quick-take,” in which
eminent domain seizures have been autho- Public records also show that at least city agencies — chiefly the housing depart- This supplemental reporting is available on
ment — place a deposit in court and gain im- our Web site at www.mddailyrecord.com
rized this year, up nearly 250 percent from 12 major redevelopment projects in the city,
2007, and nearly 12 times the inflation-ad- representing more than $2.5 billion in in- SEE CONDEMNED PAGE 11A

Auction sales 6A Public notice 8B For subscriptions


INDEX
A daily listing of content
Calendar of events
Marketplace
6B
1B
Real estate
Sealed proposals
2B
9B
c Online On the RECORD blog
www.mddailyrecord.com Follow the link on our Web site
call 1-800-451-9998 or
e-mail circ@DolanMedia.com
FRIDAY, DECEMBER 5, 2008 THE DAILY RECORD 11A

CONDEMNED
Baltimore’s use of eminent domain

History is not unuseful. If you need proof for why

“ ”
we need to use eminent domain, you need look no
further than Charles Center or the Inner Harbor.
— M.J. “Jay” Brodie
President, Baltimore Development Corp.

downtown skyline toward the Inner


Condemned
Continued from page 1A
Harbor.
“History is not unuseful,” he said.
“If you need proof for why we need to
mediate title to a property, giving its own- use eminent domain, you need look no
er only 10 days to contest the taking. The further than Charles Center or the Inner
city authorized quick-take proceedings Harbor.”
more than 1,000 times in the last five These two projects, which began in
years, and, as of October, had approved the late 1950s and early 1970s, respec-
its use more than 280 times in 2008. tively, with the support of civic and
Hundreds of the city’s 1,676 emi- business leaders — one a cluster of of-
nent domain seizures over the last five fice buildings surrounding a large green
years have been used to take vacant, public space that fronts on Lombard
derelict properties that have been aban- Street in the middle of downtown, the
doned by their owners or fallen into other a huge swath of waterfront prop-
squalor due to speculating, absentee erty filled with offices, museums, re-
landlords. These properties have then tail properties and hotels — are often
been razed or rehabilitated and includ- cited as hallmarks of urban renewal in
ed in massive redevelopment efforts Baltimore. Both depended heavily on
such as the East Baltimore Science condemnation.
and Technology Park and the resi- More than 700 properties were
dential projects surrounding it. seized, many of them seedy, dilapidated
But others have been takings of warehouses, and 300 businesses relo-
homes occupied by families and build- cated, all to great success and benefit of
ings occupied by small companies that the city, according to Martin Millspaugh,
are generally located in low-income a former journalist and planner who,
neighborhoods or thinly populated in- as CEO of Charles Center-Inner Har-
dustrial districts, for which the city bor Management Inc. in the 1960s, was
spends millions more to relocate busi- instrumental in getting both projects
nesses and families against their will.
COURTESY OF URBAN LAND INSTITUTE

off the ground.


So extensive is Baltimore’s use of “The mood was one of desperation,
eminent domain that the Institute for and the leaders of the community —
Justice, a libertarian public-interest public and private — were searching
law firm based in Arlington, Va., has for a solution,” he wrote in a recent e-
dubbed the city the second-worst abus- mail to The Daily Record. “The process
er of eminent domain powers in the of acquiring all of the necessary parcels
country, trailing only New York. through voluntary negotiations would
Defenders of the practice present a have required an unknown, uncontrol-
classic “but for” test as a key rationale lable amount of time, during which the
for the use of condemnations: But for market for any new use — or the fi- Clearing the site of One Charles Center in 1961. The B&O Railroad headquarters can be seen in the right
the city’s intervention, the argument background. In center background is the old Hub department store, which was demolished shortly
goes, certain areas would lie vacant and SEE CONDEMNED PAGE 12A after this picture was taken to make way for the Blaustein Building.
inactive indefinitely and would never
receive the investment they need to be
remade as safe, healthy neighborhoods. Condemnations in Baltimore City, 2003-2008
Opponents argue that market forces The money for condemnations in Baltimore comes from two main offices connected with the city: the Department of Housing and Community
Development and the Baltimore Development Corp. Housing condemnations by far outpace BDC condemnations, but the latter tend to be more
should govern the transfer and redevel-
expensive deals because they deal with commercial properties.
opment of city property, and that con-
demnation unfairly targets small-busi- Year Baltimore City Baltimore Quick take Regular Total Total
ness people who cater to largely poor Department of Housing and Development condemnation properties monies
Community Development Corp. targeted authorized
clientele. The city’s intervention, they
argue, is a gross violation of private prop- 2003 252 3 176 79 255 $1,593,419.00
erty rights and is based largely on a mis- 2004 270 3 101 172 273 $3,204,868.33
interpretation of the U.S. Constitution. 2005 433 4 437 0 437 $5,117,028.65
2006 200 24 190 34 224 $7,067,767.78
The case for condemning
2007 195 9 166 38 204 $8,053,234.39
Standing before huge picture win-
dows in a 16th-floor conference room of 2008 177 102 280 3 283 $22,241,408.00
his downtown office building, Balti- Total 1,527 145 1,350 326 1,676 $47,277,726.15
more Development Corp. President
M.J. “Jay” Brodie gestures out over the Source: Daily Record research

Condemnations by project area in Baltimore, 2003-2008


The 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 Johns
Hopkins-driven East Side biotechnology initiative, spiked at 315, which accounts for most of the housing authority’s 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 condemnations carried out mostly by the BDC. Some condemnations authorized by city documents
are 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


12A T H E D A I L Y R E C O R D FRIDAY, DECEMBER 5, 2008
CONDEMNED
Baltimore’s use of eminent domain

The mood was one of desperation, and the

“ ”
leaders of the community — public and
private — were searching for a solution.
— Martin Millspaugh
Former CEO, Charles Center Inner Harbor Management Inc.

tax revenue, profits for handpicked de-


Condemned
Continued from page 11A
A condemnation glossary velopers or because a municipality sim-
ply does not approve of the appearance
Eminent domain – The power of a municipality to seize privately-owned property without the or inhabitants of a particular property
nancing of that use — could disappear. owner’s consent, also known as condemnation.
— a rundown flophouse, a strip club, a
The solution was to invoke eminent Public use – The only reason, as defined by the Fifth Amendment to the U.S. Constitution, that liquor store.
domain to acquire the required prop- a private citizen may be deprived of property. In subsequent court rulings, the definition of “pub-
Baltimore’s West Side Superblock
lic use” has come to include “public purpose,” a less broadly-defined concept that encompasses
erties in a predictable amount of time; eminent domain takings for public purposes. project, a large-scale redevelopment of
since the property owners were enti- several city blocks near Lexington
Quick-take – An expedited version of condemnation, in which the city deposits compensation
tled to appeal the price they received to Market, has been ground zero in this
for a property in the register of the city circuit court and gains immediate title to the proper-
a jury in court proceedings, before the ty. Under normal condemnation proceedings, a property owner has several months to contest dispute. The city began threatening con-
city acquired possession.” the taking and to perform discovery for a legal action. Under quick-take, the property owners demnation in the late 1990s, and in the
In the 1950s, Baltimore was facing have only 10 days to contest the validity of a condemnation. last five years, at least 16 properties
the prospect of municipal bankruptcy, Urban renewal – Popularized by the Housing Act of 1954, this term refers to the practice of have been condemned and conveyed
and the Housing Act of 1949, which pro- revitalizing decaying inner cities using eminent domain, clearing slums and encouraging pri- to private developers, and many more
vided two-thirds federal funding for vate development on publicly-assembled parcels of land. It was popular from the 1940s have been purchased by the city after
cities to acquire so-called slum areas through the 1970s, and remains in use in Baltimore today.
lengthy mediations.
through eminent domain, provided an Urban renewal act – A city ordinance that enumerates acceptable uses, lays out specific de- “When they started eminent domain
incentive for cities to spur development velopment plans and identifies properties targeted for condemnation within a city-designated
in ’98, [the Superblock] was a thriving
redevelopment area.
of blighted land. pedestrian mall,” said John C. Murphy,
In 1954, another housing act sweet- Blight – The Maryland Constitution gives municipalities the right to carry out urban renewal an eminent domain lawyer who has
ened the deal for cities by allowing activities 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 to
been defending property owners in Bal-
them to provide private developers with an extent they no longer justify fundamental repairs and adequate maintenance.” timore for more than two decades. “It
Federal Housing Administration-backed had the highest rents in the city …
mortgages. This second act also popu- There were no vacancies. The problem
larized the phrase “urban renewal.” by the mayor and city council — to con- Charles North urban renewal plan, the was who was there. For the most part it
In Baltimore, this meant the razing demn land and redevelop it, either by West Side Superblock and the East Bal- was Korean business owners, and their
and rebuilding of pre-World War II pub- public or private means. timore biotechnology park initiative, customers were African-Americans …
lic housing projects, many of which Condemnations were used by the both the BDC and the city’s housing [The city] had no allegiance at all to
were again cleared in the late 1990s to state of Maryland to build Oriole Park authority have assembled dozens of the Korean business owners.”
make way for more modern facilities, at Camden Yards and M&T Bank properties at a time on the front end, Today, the Superblock is eerily va-
often at the expense of homeowners Stadium, to spruce up the area around making use of eminent domain as a cen- cant: Shuttered storefronts alternate
and other private citizens. the Hippodrome Theater and for tral tool in the push to renew Baltimore. with uncrowded clothing retailers and
“It is an ancient legal principle that Johns Hopkins’ $1.8 billion East Side wig shops. Foot traffic is scarce except
private property which is needed for initiative, among dozens of other pro- The case for letting it be for a few downtown workers who seem
important public purposes may be tak- jects. Critics of eminent domain in Balti- to be walking through the blighted
en by government, upon payment of According to Brodie, this is a new more and elsewhere generally don’t blocks only to get to somewhere else.
fair compensation,” read a 1967 article kind of urban renewal — it pinpoints take issue with government seizure of Murphy is quick to add that he does
titled “The Condemnation Division,” specific properties and takes a more private property when it is done in ser- not accuse the city of racism — just an
which was included in the annual report piecemeal approach to redeveloping vice of clearly defined public use. Tak- ingrained cultural inclination to inte-
of Baltimore City Solicitor Joseph Allen. them, with the support of the commu- ing a building and knocking it down to grate low-income retail strips at the ex-
The report goes on to anticipate sev- nities in which they lie. Brodie has re- build a road, a school or a courthouse, pense of minority owners.
eral required “quick-takings” of indus- ferred to condemnation, and in partic- for example, is not seen as terribly con- “The whole process of suburban-
trial and commercial properties to make ular its expedited version, quick-take, as troversial in this country. ization has had a great impact on the
way for Interstate 83’s passage through a “last resort” tool in redeveloping the This is because the Fifth Amend- city,” Murphy said. “They think down-
the city, the “Mt. Vernon Urban Re- city. ment to the Constitution, which out- town should be a lot like a suburban
newal Project” and development along “This is not the old-style Charles lines rather broadly the right to due mall. A guy like Jay Brodie looks at it
the Franklin-Mulberry Street corridor. Center, Inner Harbor condemnation process of the law, specifies that “nor and says, ‘This isn’t good because there
According to Millspaugh, the tak- where we’re buying blocks and blocks,” shall private property be taken for pub- aren’t a lot of chain stores like in Tow-
ings were justified by the city having a he said. “It’s very targeted … Our pro- lic use, without just compensation.” son Town.’”
“viable re-use” for hundreds of vacant cess is not just us sitting here and say- Public byways and buildings constitute But Brodie said this characteriza-
properties that “stood for years as an ar- ing, ‘Gee, condemnation is nice.’ We’re public use, so there is little legal ground tion is “absolutely not” how he looks at
gument against [redevelopment].” going out and talking to people and say- to argue against that sort of condem- the city. The BDC, he said, has taken
In the nearly 50 intervening years ing, ‘How do we help revitalize this nation. pains to keep several existing Su-
since Millspaugh’s massive downtown area?’” Problems arise, critics say, when perblock retailers, including the dis-
redevelopment plan began, the city has But The Daily Record’s findings in- property is condemned in the name of count store Valu Plus, a wig shop and
enacted dozens of urban renewal ordi- dicate otherwise: On a number of major economic development, because urban
nances — laws that require approval redevelopment projects, including the renewal would lead to higher property SEE CONDEMNED PAGE 13A

Condemnations were used by the state of Maryland on these projects

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


FRIDAY, DECEMBER 5, 2008 THE DAILY RECORD 13A
CONDEMNED
Baltimore’s use of eminent domain

surgery right away, then and there, in-


Condemned
Continued from page 12A
stead of five years down the line.”
Koo sometimes sounds like he’s ar-
guing for the use of quick-take, but he is
a clothing boutique, as part of the new careful to say that he is not. At the end
plan for the district. of the day, Koo said, the city would be
“Mr. Murphy is very mistaken about better off abandoning eminent domain
my view of the West Side, like 180 de- altogether.
grees mistaken,” he said. “I have said “I think if [the city] left it alone, it
consistently that the West Side, in terms would have done fine,” he said. “I don’t
of retail, is not meant to imitate subur- think a Saks Fifth Avenue would have
bia; it’s meant to reflect the neighbor- come here, but who’s to say we need a
hood and the goods and services people Saks? ... It should not be used at all.
in the neighborhood want, and the The private sector could probably do as
goods and services that people in Mt. good or a better job at redevelopment.”
Vernon and Bolton Hill want.”
RICH DENNISON

For the property owners, condem- ‘Critical mass’


nation represents a tiresome, stressful Condemnations are carried out in
ordeal that can ruin a business by taking Baltimore mainly by two city entities
away incentives to invest, buy new in- — the BDC and the Department of
ventory or make capital improvements, Linn Koo, whose father owned retail clothing outlet New York Fashions in the Superblock for more than
Housing and Community Develop-
15 years, says he has seen firsthand how eminent domain can tax a business owner’s personal life.
because the threat of losing one’s prop- ment — and each specific instance of
erty can be imminent for years or even $3 million to seize Koo’s 25,000-square- ness, combined with declining foot traf- eminent domain must be approved by
decades. foot shop and warehouse. fic on the streets outside, has left him the mayor and the city’s spending pan-
Nam Seo Koo, who emigrated from But Koo’s son, Linn Koo, who less than enthusiastic about relocating el, the Board of Estimates.
South Korea in 1978, has owned New speaks for the business, said he isn’t his business and starting over again. Once authorized, a condemnation
York Fashions, a retail clothing outlet sure his father wants to go through the Worst of all, he said, was the uncer- must be filed in city circuit court, at
in the Superblock, for more than 15 trouble. He said he has seen firsthand tainty of a long, drawn-out process. which point an owner may challenge
years. In August, the city agreed to cut how eminent domain can tax a busi- “What a lot of people don’t under- the valuation of the property. Public
the final check — $300,000 to buy up in- ness owner’s personal life. stand is the stress it puts on a person,” officials are quick to point out that au-
ventory and fixtures in Koo’s shop and The first letter notifying Koo of the Linn Koo said. “There’s a right way to do thorizing a condemnation is not the
relocate to another site — as part of a condemnation came in 1998, and a eminent domain, and that’s quickly. It’s
condemnation settlement of more than decade of uncertainty about his busi- like going for a doctor’s visit and they do SEE CONDEMNED PAGE 14A

N
Condemnation areas in Baltimore
The map shows where most condemnations in Baltimore take place. Our research
W
S
E

shows 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 83 domain seizures in the central part of the city, especially around the
downtown area, tend to be of commercial properties, while East Side and West Side
Park Heights 140 properties tend to be houses.
Condemnations authorized: 22

139
American Brewery
26
Condemnations authorized: 47

41
E. North Ave.

W. North Ave. Westside


Baker/Division Condemnations authorized: 16 2
Condemnations authorized: 39
66
1

66
1
83

Upton 66
40
Condemnations authorized: 120
66
40
EBDI
Condemnations authorized: 610

295

144 Inn
er H
Bo
arb st
on
or St
.
Key Hwy.

395
Uplands Poppleton
Condemnations authorized: 10 Condemnations authorized: 58

95
North
.
vd

Broadway Corridor
west
Bl

95
n

66
1 Condemnations authorized: 121
to

Harb
ng
hi
as

or

2
W

95

295
695

Washington Village/Pigtown
Condemnations authorized: 8 Fairfield
Carroll-Camden Industrial Area/ Condemnations authorized: 101
Gateway South
Condemnations authorized: 7
.
vd
Bl

95 895
n
to
ng
hi

695
as

295
W

Scale= 1 mile Source: Daily Record research, Google maps


14A T H E D A I L Y R E C O R D FRIDAY, DECEMBER 5, 2008
CONDEMNED
Baltimore’s use of eminent domain

I think Baltimore is still caught in the 1960s

“ ”
with this whole urban renewal business.
The rest of the world moved on and got over it.
— John C. Murphy
Baltimore eminent domain lawyer

“I think that in the city of Baltimore,


Condemned
Continued from page 13A
the eminent domain tool is absolutely
critical,” said Paul T. Graziano, the city’s
housing commissioner. “I’ve worked in
same as filing one, and that in many half a dozen cities in my career, and
cases, mediation between property Baltimore is in many ways a special ex-
owners and the city results in a volun- ample because it has seen massive dis-
tary sales agreement. investment and out-migration, and that
“Board of Estimates approval gets has created vast tracts of largely aban-
us near the goal line of crossing the doned property.
case, but doesn’t cross the goal line,” “And in order to [start] redevelop-
said Andrew Bailey, an attorney for ment [of] these properties, one needs to
the city. “All that accomplishes is it assemble these properties and get a
authorizes the city to commence with critical mass, and that’s not something
the suit.” that the private sector can do. It’s very,
MAXIMILIAN FRANZ

Indeed, records show that of 283 very cost prohibitive.”


condemnations authorized this year,
only 176 of them have been filed in Moving forward
court. In recent years, on average, about Despite consistent legal challenges,
half of condemnations authorized ac- the pace of condemnations in Baltimore
tually reach the stage of being filed in Eminent domain attorney John C. Murphy, who has been defending property owners in Baltimore for more
than two decades: ‘The whole process of suburbanization has had a great impact on the city.’ seems to show no signs of slowing
court: Only 44 percent of the 204 tak- down. On Election Day this year, the
ings authorized in 2007 became law- city’s voters approved two bond issues
suits; 75 percent in 2006; 50 percent in without the use of condemnation. Sev- negotiating position. This way, the city
of nearly $46 million to acquire more
2005; 38 percent in 2004; and 52 per- eral projects, including a mixed-use re- avoids costly legal battles and reloca-
properties in the Westside Initiative and
cent in 2003. tail effort called the South Side Works, tions for businesses.
near Uplands.
But Murphy, the eminent domain have made use of former industrial “We look at projects differently than
Multiple projects, including the East
lawyer, said that publicly announcing sites, but only one, a large-scale down- we did 50 years ago,” she said. “Don’t
Side initiative and Old Fairfield, are en-
the city’s intention to seize a property town build-out known as Fifth and you get a better, more valuable project
tering later stages of site acquisition
by listing it on an urban renewal ordi- Forbes, proposed the extensive use of overall when you’re knitting it into the
and may involve more condemnation
nance has essentially the same effect as condemnation. community fabric rather than laminat-
proceedings.
condemning it. That project lost steam in 2001 when ing it onto the landscape?”
“I think Baltimore is still caught in
“Once the city has the authority to then-Mayor Tom Murphy failed to woo By contrast, Baltimore has at least
the 1960s with this whole urban re-
condemn, it’s not necessary to file a Nordstrom to the area as an anchor, 12 projects that are highly dependent on
newal business,” Murphy, the attorney,
case,” he said. “Filing the court case is and eventually condemnations were condemnations. Chief among them is
said. “The rest of the world moved on
basically the last resort. But when they threatened but never used. the East Side biotechnology initiative,
and got over it.”
do it, they’re doing it under the threat of “The city of Pittsburgh has not offi- which has displaced about 400 families
For the time being, Murphy is in one
condemnation, because it’s already cially used eminent domain since the so far, with hundreds more slated for re-
sense right: Eminent domain seems to
been established that the city has the early 1980s,” said Frank Gamrat, a re- location.
not be a relic of the 1950s, the 1960s, or
right to take this property. … I think search associate at the Allegheny Insti- The main commercial projects are
even five years ago. For some city offi-
in a lot of other cities, they don’t do tute, a conservative, Pittsburgh-based the BDC’s Westside Initiative, which
cials, it’s industry standard.
this to the same extent.” public policy think tank. “Once Mayor includes the Superblock; Gateway
“How do we help the private sector
In Pittsburgh, a city with roughly Murphy left office, he kind of put emi- South, a site that will be adjacent to
do what it does in America, to get loans
half the population of Baltimore but a nent domain to rest. He tried with Fifth Baltimore’s coming slots parlors; Old
to get equity?” asks Brodie, of the BDC.
similar mid-century transformation sto- and Forbes and lost in the court of pub- Fairfield Industrial Area; Pigtown/Wash-
“Our stepping in with any of the city’s
ry, it seems that eminent domain-driven lic opinion. It hasn’t come up for nine ington Village; and Charles North.
powers is done with a judgment call
urban renewal was once a great boon to years, really.” Baltimore Housing has thousands
that the private sector is not doing it. …
the city, but has since been abandoned. Kyra Straussman, director of real of properties in line for condemnation,
In the long term, there are benefits —
In 1950, its mayor began the con- estate for Pittsburgh’s development many of them blighted and vacant, for
jobs, taxes — that you have to balance
demnation and demolition of more than arm, the Urban Redevelopment Au- several projects, including the 1,000-
against the angst.”
100 dilapidated properties in what is thority, said this is because it simply plot Poppleton renewal effort, major
now known as the “Golden Triangle,” a isn’t worth it to condemn since federal projects in Barclay, Upton, Park
pointed strip of land at the confluence funding for eminent domain seizures Heights and Oliver, and in the area sur-
of the city’s famous three rivers. It is has dried up. rounding West Baltimore’s Uplands MONDAY: The issue of condemnation
now occupied by a public park with a Instead, she said, Pittsburgh takes a housing project. touches on one of the U.S. Constitu-
picturesque fountain, surrounded by a less adversarial approach to assembling In September, a judge ruled that the tion’s most fundamental rights — the
property — integrating city-owned city could seize an entire block adja- right to own property.
striking downtown skyline filled with
commercial office towers and a busy properties with those acquired through cent to Uplands even though some of
central business district.
But in the last 10 years, redevelop-
purchase agreements by the develop-
er, without using the threat of con-
the properties involved were not blight-
ed and housed active, profitable busi- e Talk back! | Visit our Blog
mddailyrecord.com
ment efforts have proceeded largely demnation to bolster the developer’s nesses.

Voices on condemnation
“How do we help the pri- “I think that in the city “The process of acquir-
vate sector do what it of Baltimore, the emi- ing all of the necessary
does in America, to get nent domain tool is ab- parcels through voluntary
loans to get equity? Our solutely critical. I’ve negotiations would have
stepping in with any of worked in half a dozen required an unknown,
the city’s powers is done cities in my career, uncontrollable amount of
with a judgment call that and Baltimore is in time ... The solution was
the private sector is not many ways a special to invoke eminent do-
doing it. … In the long example because it main to acquire the re-
term, there are benefits has seen massive dis- quired properties in a pre-
— jobs, taxes — that you investment and out-mi- dictable amount of time;
have to balance against M.J. “JAY” BRODIE gration, and that has PAUL T. GRAZIANO since the property own- MARTIN MILLSPAUGH
the angst.” created vast tracts of ers were entitled to appeal
largely abandoned property.” the price they received to a jury in court pro-
ceedings, before the city acquired possession.”
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December 8, 2008 • Volume 120 • Number 58
MAXIMILIAN FRANZ

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

A DAILY RECORD SPECIAL REPORT

The people v. eminent domain


Opponents of condemnation are fighting a power that they say has been widely abused
| robbie.whelan@mddailyrecord.com Additional coverage to accompany

CONDEMNED
BY ROBBIE WHELAN
our condemnation series:

n Maryland, as in many parts of the country, the discussion m Historic court rulings

I over eminent domain, or the government’s power to condemn


and 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. Constitution’s
Baltimore’s use of eminent domain
A 3-PART SERIES

FRIDAY: In Baltimore, the use of


Take a look at some of the court rulings
in cases dealing with eminent domain.
Embedded online with the main con-
demnation story.

most fundamental rights — the right to own property — which is pro- condemnation powers has become
synonymous with urban renewal. g Interview with a lawyer
Watch an interview with a lawyer who
tected by the Fifth Amendment. No citizen, the amendment says, can has litigated historic eminent domain
MONDAY: The issue of condemnation
be deprived of his or her property unless for “public use” and with- touches on one of the U.S. Constitution’s cases. Embedded online with the main
out being justly reimbursed for its value. most fundamental rights — the right to condemnation story.
own property.
Over the years, several landmark court condemnation authorizations is expect-
cases have broadened the definition of
public use to include the economic well-
ed to increase more than 250 percent be-
tween 2007 and 2008, legal battles over
TUESDAY: Small business owners in
Baltimore affected by condemnation
i Historic photo slideshow
View a series of photos documenting
being of a city, state, county or national condemnation are often pitched and pro- tell their stories. several Baltimore City development pro-
government, significantly broadening em- longed. As of October 15, 176 condemna- jects that were completed with the use of
inent domain’s use as a policy tool. Sev- tion cases had been filed in city circuit decisions delivered blows to the city’s eminent domain. Posted online as a sep-
widely used “quick-take” procedure, arate story.
eral cases have held, for example, that it is court this year, up from 91 in 2007.
perfectly legal to take property from one The West Side Superblock, one of the which gives property owners just 10 days
private business owner and give it to an- Baltimore Development Corp.’s high- to contest the validity of the taking. This supplemental reporting is available on
other, if it means more jobs and a more ro- priority projects, has been stalled for years All this, some lawyers say, represents our Web site at www.mddailyrecord.com
bust tax base. by several major lawsuits. In the city’s a major change in the public’s attitude
In Baltimore, where the dollar value of nascent Charles North district, two 2007 SEE CONDEMNED PAGE 5A

Auction sales 2A Public notice 6C For subscriptions


INDEX
A daily listing of content
Calendar of events
Marketplace
19B
1C
Real estate
Sealed proposals
2C
7C
c Online On the RECORD blog
www.mddailyrecord.com Follow the link on our Web site
call 1-800-451-9998 or
e-mail circ@DolanMedia.com
MONDAY, DECEMBER 8, 2008 5A
CONDEMNED THE DAILY RECORD

Baltimore’s use of eminent domain

In the context of the national debate, the Baltimore

“ ”
waterfront was exhibit A in the argument in favor of the
eminent domain power.
— John D. Echeverrian
Lawyer and land-use specialist,
Georgetown University’s Environmental Law and Policy Institute
RICH DENNISON

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

ages by condemning properties and re- the argument in favor of the eminent do- New urban theories, expressed in
Condemned
Continued from page 1A
developing them.
It gained further traction in 1954, when
main power,” said John D. Echeverria, a
lawyer and land-use specialist at George-
books such as Jane Jacobs’ “The Death
and Life of Great American Cities” and
the Supreme Court ruled in Berman v. town University’s Environmental Law Herbert J. Gans’ “The Urban Villagers,”
toward property rights and the govern- Parker that Washington, D.C., could con- and Policy Institute. mounted the first serious intellectual
ment’s role in real estate development: demn a supermarket to transfer it to an- “If there’s an essential rationale for challenges to urban renewal. This, paired
Emboldened by recent legal victories, other private developer simply because the use of eminent domain, it’s the hold- with public backlash against projects
property rights advocates are fighting the area around it was, in the eyes of city out problem, and it’s the difficulty of over- such as the razing of Boston’s West End
back against a government power that officials, “blighted.” coming the problem that one or 100 own- for an economic development initiative
they see as widely abused, and state Many of the big-city urban renewal ers won’t agree to sell on any reasonable that never materialized, made Charles
lawmakers are listening. plans of the 1960s — in New York, Pitts- terms. There are a variety of instances in Center-style urban renewal seem like a
burgh, Baltimore — depended on the lat- dealing with downtown development. thing of the past.
itude allowed city governments by Where that arises, eminent domain is the “Urban renewal replaced small
Gaining traction Berman, and many downtowns trans- natural tool for dealing with it.” streets, high density, mixed-use city en-
The concept of “urban renewal” first formed over the course of a decade using But in the decades that followed, as vironments with these sterile plazas and
became prevalent in the early 1950s, after eminent domain powers. federal money for cities dried up, emi- superblocks,” said Paul S. Grogan, direc-
the 1949 Housing Act provided federal in- “In the context of the national debate, nent domain-based urban renewal fell out
centives for cities to clean up their im- the Baltimore waterfront was exhibit A in of fashion. SEE CONDEMNATION PAGE 6A

Before and after


COURTESY OF URBAN LAND INSTITUTE

COURTESY OF URBAN LAND INSTITUTE

INNER HARBOR BEFORE REDEVELOPMENT, 1965 INNER HARBOR AFTER REDEVELOPMENT, 1990
6A T H E D A I L Y R E C O R D MONDAY, DECEMBER 8, 2008
CONDEMNED
Baltimore’s use of eminent domain

It’s a push and pull effect. Kelo was at first seen as a great

“ ”
boon to cities and developers. Shortly after [it] was handed
down, you saw a rush in the use of eminent domain.
— Scott G. Bullock
Senior attorney, Institute for Justice

“Two things have changed [in the past


Condemned
Continued from page 5A
decade],” he said. “One, there has been a
general change in attitude towards gov-
ernment. The general public is much more
tor of the Boston Foundation and au- sympathetic to property rights. When I
thor of a 2000 book on the policy called started on the West Side in 1998, I looked
“Comeback Cities.” at this and said, ‘I don’t want to get into
“The kind of urban renewal that [for- court because I don’t want to lose.’ ... The
mer New York City planner] Robert Moses second thing was that Kelo came. It real-
and others practiced required a kind of ly opened up the door to challenging em-
supine powerless public that didn’t have inent domain takings ... because it set up
the clout to oppose this type of things. a firestorm of protest.”
Through community organizing and the Scott G. Bullock, a senior attorney at
civil rights movement ... there began to be the Institute for Justice, and one of the
a great deal of opposition to these kinds of team that argued Kelo all the way from
projects.” Connecticut’s Superior Court to the high-
Still, Grogran added, there is a place est court in the country, called it “the
for eminent domain use as a “last resort” most universally despised decision in re-
in cities like Baltimore, Philadelphia and cent memory,” but echoed Murphy’s feel-
Detroit that have failed to reclaim the res- ings that change is in the air.
idents and work force they lost to the “It’s a push and pull effect,” he said.
suburbs in the 1950s and 1960s. “Kelo was at first seen as a great boon to
In the 1980s and 1990s, Baltimore saw cities and developers. Shortly after [it]
very little eminent domain use. was handed down, you saw a rush in the
“I don’t recall city policy involving an use of eminent domain. But in the Kelo
over-reliance on eminent domain,” said backlash, you’ve seen this tremendous
Kurt L. Schmoke, who was mayor from reaction which has led to putting the
1988-1999. “We engaged the private prop- brakes on eminent domain through state
erties in discussions about plans. Our view decisions that reject or cast doubt on the
was, let’s tell people what we have in decision.”
mind, try to bring them into the discus-
sion, and see if we can come up with the Maryland v. Kelo
private-public joint partnerships.” Since it was handed down, Kelo has
COURTESY OF INSTITUTE FOR JUSTICE

But takings entered the spotlight once been challenged by legislation passed in 42
again in 2005, when nearly a half century states — much of it in the first few months
after the Berman decision, the Supreme after the decision was made — including
Court ruled on Kelo v. City of New Lon- Maryland.
don, its first major land-use decision in A few states, like Florida, have passed
decades. aggressive laws that effectively ban emi-
In that case, a Connecticut nurse nent domain for economic development
named Susette Kelo fought the local gov- purposes. Florida requires condemners
ernment of New London, which proposed to wait 10 years after filing their case to
taking her waterfront home to build a transfer property to private developers,
$300 million research facility for pharma- effectively making it not worth it. Other
Susette Kelo stands in front of her New London, Conn., house. In 2005, a divided Supreme Court said the
ceutical giant Pfizer Inc. A divided deci- city was within its rights to take her house to make way for a $300 million research facility for
states have passed laws that simply bol-
sion held that the city was within rights to pharmaceutical giant Pfizer. ster private property owners’ rights.
take the house, and Kelo lost her home. In 2007, a Maryland Senate bill passed,
In the majority opinion, Justice John construed as “public purpose,” which has adopted “to benefit a particular class of putting a four-year shelf-life on condem-
Paul Stevens wrote that the idea that there come to be regarded as the same as “pub- identifiable individuals,” — i.e. a particu- nation authority: if the condemning au-
should be “any literal requirement that lic use.” lar private business interest. thorities don’t use it, they lose it.
condemned property be put into use for “The takings before us, however, Kelo was a turning point in the eminent The bill seems to be a legislative re-
the general public” had “eroded over time” would be executed pursuant to a ‘carefully domain debate in Baltimore, said John C. sponse to a 2004 state Court of Appeals
since the 19th century, and that the cre- considered’ development plan,” he wrote. Murphy, a land-use lawyer who has liti-
ation of jobs and higher taxes could be “[T]he City’s development plan was not gated dozens of condemnation cases. SEE CONDEMNED PAGE 7A

Key dates: An emine


1940s 1950s 1960s 197

1 2 3 4 5
1949 1 1958 3 1975 6 1984 7
Federal Housing Act provides federal Baltimore planners present Charles Cen- In Prince George’s County v. Collington Hawaii Housing Authority v. Midkiff
funding for two-thirds of the cost of ter urban renewal plan to mayor, the Crossroads Inc., the Maryland Court of finds the Supreme Court ruling in favor of
eminent domain acquisitions in cities first major building project in the city Appeals upholds eminent domain tak- the state’s right to condemn massive
like Baltimore since before World War II. ings for the purposes of economic de- swaths of privately-owned property and
velopment. The county successfully con- redistribute it to multiple private owners.
1954 2 1962 4 demns a pricey parcel of private land for The case was meant to break Hawaii’s
In Berman v. Parker—the Supreme Court One Charles Center, the iconic Mies van the purpose of building an industrial park. “land oligopoly” — a situation in which a
unanimously upholds the right of the Dis- der Rohe office tower, opens. This case would be used as precedent tiny number of property owners con-
trict of Columbia to seize a department in a number of significant decisions, in- trolled the vast majority of Hawaii’s land,
store as part of a massive redevelopment 5 cluding Poletown v. Detroit, a 1981 ap- thus inflating prices and skewing the
1963 pellate court decision that upheld that
plan to fight blight, even though the store Mayor Theodore McKeldin an- housing market.
was not blighted. This is the first case to city’s seizure and clearance of a residen-
nounces the Inner Harbor urban re-
specify that the constitution’s “public use” tial neighborhood to build a General Mo-
newal plan. A master plan is accepted
clause includes “public purpose” in its four years later, and acquisition by tors assembly plant on the site.
definition, allowing government to con- condemnation and clearance of down-
demn privately owned property and con- town properties begins.
vey it to another private owner.
MONDAY, DECEMBER 8, 2008 THE DAILY RECORD 7A
CONDEMNED
Baltimore’s use of eminent domain

Condemned
Continued from page 6A

case, Reichs Ford Road Joint Venture v.


State Highway Administration, which
found that private owners whose land is
seized or threatened with seizure must
be compensated for losses other than the
value of their property.
In this case, a Frederick County gas
station operator refused to renew his lease
with the property owner after finding out
that the state planned to condemn the
property and build a highway interchange.
That plan never came to fruition, and the
condemnation 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 in
sponsoring SB 294, a measure that would
have banned condemnation takings for
economic development. The bill died in
committee.
Kittleman said in a recent interview
that in practice, eminent domain produces
a “reverse Robin Hood effect,” in which
properties are taken from the poor and
small business owners and given to the
rich and well connected. A poll that he
commissioned in 2005, he said, showed
broad support from Democrats and Re-
publicans alike for a measure banning
economic development takings.
“The Democratic majority doesn’t like
a law that says you can’t have eminent
RICHARD SIMON

domain for economic development, but


they don’t want to be on record as having
opposed it, so they just decided not to
have a vote,” he said of the measure.
Also in 2007, two Baltimore City cases
Attorney James Thompson: ‘The city has used
were decided in the state’s highest court,
leading to two key victories for anti-con-
quick-take condemnation over the last 50 years to From the negotiating table to the court
basically bulldoze major blocks of Baltimore City. When the city authorizes a condemnation seizure, it doesn’t always file an action in Baltimore
demnation activists. It’s been a major tool, used sometimes unfairly at City Circuit Court to actually take the property. Often, the city will come to an agreement to pur-
The first, Mayor and City Council of the expense of property owners.’ chase the property from the owner after lengthy mediation. In some cases, a property will be placed
Baltimore v. Valsamaki, dealt with the under the city’s receivership after repeated and unresolved housing code violations. Over the past
Magnet Bar, a tavern on North Charles five years, about half of the condemnations approved by the city’s Board of Estimates have been
to possess the restaurant and several ad- filed in city courts. Most of these have been residential properties, and Daily Record research shows
Street owned by George Valsamaki, which jacent buildings, which had sat unused that so far this year, more than 60 percent of condemnations authorized have gone to court.
was condemned as a “quick-take” as part for more than a decade in the heart of an
of the city’s Charles North Urban Renew- emerging commercial district near Balti-
al Plan. The Court of Appeals ruled that Year Condemnations Condemnations Percent of authorized
more’s main train station. authorized filed in court condemnations that
without a specific, detailed plan like the have gone to court
one presented by the city of New Lon- ‘You don’t know how we do it 2003 255 133 52%
don in Kelo, and without demonstrating an over here’ 2004 273 104 38%
immediate need to seize the property, the James Thompson, an attorney with 2005 437 219 50%
city could not use quick-take. Rockville-based Miller, Miller and Can- 2006 224 170 76%
A few months later, the Court of Ap- by who litigated Valsamaki, said the case 2007 204 91 45%
peals handed down another decision, was important because it was the first 2008 283 176 62%
Mayor and City Council v. Sapero, which time the city had ever lost a quick-take
dealt with the Chesapeake Restaurant Total 1,676 893 53%
case.
site, just down the street from the Magnet “The city has used quick-take con-
Bar, which the city was also trying to seize demnation over the last 50 years to basi-
by quick-take. The high court ruled that
there was no immediate need for the city SEE CONDEMNATION PAGE 8A
Source: Daily Record research

ent domain timeline


70s 1980s 1990s 2000s

6 7 8 9 10 11
1998 8 2005 9 2005 10 2006 - 2007 11
Baltimore begins condemnation pro- Kelo v. City of New London, the first Reich’s Ford Joint Venture v. State High- Two high-profile condemnation suits,
ceedings for two major West Side urban federal court challenge to eminent do- way Administation establishes that the Mayor and City Council of Baltimore v.
renewal projects, Centerpoint and the main in more than two decades, up- threat of condemnation can lead to ma- Sapero and Mayor and City Council of
Superblock. Centerpoint will be built holds the central tenet of Berman, that jor losses for a small business that are re- Baltimore v. Valsamaki, find that the
within a few years, coinciding with the a city can condemn property for the coverable as damages to the business city has abused its “quick-take” con-
renovation of the Hippodrome theater. “public purpose” of economic develop- owner. A Frederick County gas station demnation powers, and rules that the
The Superblock is still stalled today. ment, when the Connecticut town con- owner lost his anchor tenant when the city must demonstrate immediate need
demns Susette Kelo’s house for the con- operator refused to renew a 10-year lease for taking a property by this aggressive,
struction of a pharmaceutical compa- agreement because the state was threat- expedited method, and have a plan in
ny’s corporate campus. Protesters sug- ening to condemn the site for a new high- place for the future of the property.
gested that a local condemning author- way interchange.
ity take Justice David Souter’s “blighted”
New Hampshire vacation home and re-
place it with a “Lost Liberty Hotel,” as a
symbolic act of defiance.

Source: Daily Record research


8A T H E D A I L Y R E C O R D MONDAY, DECEMBER 8, 2008
CONDEMNED
Baltimore’s use of eminent domain

The use of eminent domain has got a dirty reputation in

“ ”
recent history. If you look around the city at where eminent
domain happens — Fairfield, Poppleton, Washington
Village — these are really destitute areas.
— Elva E. Tillmann
Attorney, specializing in land-use

officials hope to attract renewed


Condemned
Continued from page 7A
commercial investment.
The city’s law department, which
How the condemnation process works
files condemnation actions, changed
its policies after Valsamaki, said City Urban renewal area identified
cally bulldoze major blocks of Baltimore (either by the city, a particular neighborhood community, or a business interest)
City,” he said in a recent interview. “It’s Solicitor George A. Nilson.
been a major tool, used sometimes un- “We sharpened our pencils and
fairly at the expense of property owners. took a closer look at regular condem-
... When this begins to be a stretch is when nation proceedings,” he said. “The
you go in and take property that’s not agencies we represent worked harder Urban renewal ordinance passed by City Council,
to anticipate the needs to acquire the specifying, among other things, properties the city is authorized to condemn
blighted. There’s no health, no safety is-
sues. It’s just some guy’s house, or the property, making it less necessary to
Magnet Bar.” use quick-take.”
Furthermore, he said the notion of So far this year, his office has not
“RFP condemnation” — the city’s is- yet actually filed a quick-take in cir- Monies authorized by the Mayor and city’s Board of Estimates
suance of a “request for proposals” to cuit court, although 280 of them have for acquisition costs of private property.
redevelop an area, then awarding de- been authorized.
velopment contracts to private enti- In February, the city used quick-
ties before the city even owns the take to seize several properties — us-
property — may be commonplace in ing BDC money — on Warner Street in Two assessments of the property’s value commissioned by independent appraisers;
Baltimore, but it’s not elsewhere in South Baltimore as part of the Gate- city required by law to use the highest of two appraisals
Maryland. way South project. At the time, The
“This is unheard of outside of Bal- Daily Record reported that the owner
timore,” he said. “Here in Montgomery of a large architectural salvage and an-
County, we have the largest political ju- tiques business located on the site was Purchase offer made to property owner
risdiction in the state. We have 900,000 happy with the arrangement after the
people, the biggest tax base in the city renegotiated to give him a better
state. The idea of taking someone’s price for his property.
property and spinning it off to a private For Gateway South, city officials Offer accepted Offer rejected
developer is unheard of.” said, the issue was that financing for
Thompson recalled a 2006 phone the project was contingent on the city
conversation with Paul Dombrowski, taking immediate title on the proper-
at that time the head of the BDC’s ty, and they emphasized that land ac- Condemnation suit filed in Circuit Court
Charles North initiative, in which he quisition only reaches the point City takes
where condemnation is necessary af- title to property
asked Dombrowski what the city’s
plans were for the Magnet Bar site. ter mediation and fair-market offers
The BDC said, according to Thomp- have failed.
son, that a plan had not yet been for- “The use of eminent domain has
mulated. got a dirty reputation in recent his- Property owner disputes city’s taking of property
“Dombrowski said, ‘Mr. Thompson, tory,” said Elva E. Tillman, an attor-
you don’t know how we do it over here,’” ney with the city who specializes in
Thompson said. “Well, the Constitution land-use. “If you look around the city
at where eminent domain happens Based on city’s appraisal of property value Based on city’s right to take
applies in Baltimore City as well.”
Dombrowski said he remembered a — Fairfield, Poppleton, Washington
phone conversation with Thompson Village — these are really destitute
in which he “explained the law pro- areas.”
Litigation proceeds; Owner disputes
cess they follow for condemnation,” And for now, the power to con- fair market value determined by a judge legitimacy of Urban Renewal ordinance
because Thompson “didn’t seem clear demn a property — destitute or other-
on how we do things,” but added that wise — and give it to another private
he did not remember making that spe- entity, remains intact, invaluable to
cific remark. city leaders and developers eager to Judge rules
Since Valsamaki, the BDC’s au- remake the city, but a thorn in the side City takes either for or against owner, decision may
of independent property owners who title to property be appealed to a higher court
thorization of quick-takes has all but
ceased. Most quick-takes are carried are not eager to pick up and move to
out by the housing department on make way for the next good thing.
smaller, vacant properties. Howev-
If for; If against;
er, in September, the city’s Depart-
the owner keeps the owner
ment of Housing and Community TUESDAY: Small business owners
the property disputes city’s
Development, using money from in Baltimore affected by condemna- appraisal and
BDC-controlled city accounts, au- tion tell their stories. starts the process
thorized the quick-take seizure of 80 over again at the
lots in Old Fairfield, a South Balti-
more industrial district to which city e Talk back! | Visit our Blog
mddailyrecord.com Source: Daily Record research
city’s taking of
property

Voices on condemnation
“I don’t recall city poli- “Urban renewal re- “The Democratic
cy involving an over-re- placed small streets, majority doesn’t like a
liance on eminent do- high density, mixed- law that says you can’t
main. We engaged the use city environments have eminent domain
private properties in dis- with these sterile for economic develop-
cussions about plans. plazas and su- ment, but they don’t
Our view was, let’s tell perblocks. Through want to be on record as
people what we have in community organizing having opposed it, so
mind, try to bring them and the civil rights they just decided not to
into the discussion, and movement…there be- have a vote,” he said of
see if we can come up gan to be a great deal the measure.
with the private-public KURT L. SCHMOKE of opposition to these PAUL S. GROGAN ALLAN H. KITTLEMAN
joint partnerships.” kinds of projects.”
MARYLAND’S BUSINESS & LEGAL NEWS SINCE 1888

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December 9, 2008 • Volume 120 • Number 59
RICH DENNISON

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 doesn’t seem fair.’

A DAILY RECORD SPECIAL REPORT

Condemning what stands in the way


City’s liberal use of eminent domain poses threat to independent property owners
| robbie.whelan@mddailyrecord.com Additional coverage to accompany

CONDEMNED
BY ROBBIE WHELAN
our condemnation series:

here is a white dry-erase board in the conference room of o Audio Story

T Fleet Transit Inc.’s main offices in the Fairfield industrial


district of Baltimore, with notes left over from a business
strategy meeting scrawled on it:
“The 3-Year Plan: Growth — Better Than the Alternative —
Baltimore’s use of eminent domain
A 3-PART SERIES

FRIDAY: In Baltimore, the use of


George J. Herrmann moved his business
– and his life – to Prince George’s County
after his liquor store on Howard St. was
condemned. Hear him tell his story at
www.mddailyrecord.com. Embedded on-
condemnation powers has become line with the main story.
Death…Employer growth attracts new people.” synonymous with urban renewal.
Between Growth and Death, Fleet’s owner Kevin McNeil has
clearly chosen the life-affirming option, but because of a recent
MONDAY: The issue of condemnation
touches on one of the U.S. Constitution’s
h Audio slideshow
After relocating their retail hat store
fight with the city over condemnation, things aren’t working out most fundamental rights — the right to twice, Lou and Judy Boulmetis’ business
the way he thought they would. own property. is finally prospering. Hear Lou share the
ups and downs of his business. Posted
TUESDAY: Small business owners in
on our blog On the Record.
McNeil built his petroleum product ship- site known as Old Fairfield. Baltimore affected by condemnation
ping company, which employs 140 with a There, he owns about 80 small lots that tell their stories.
payroll of about $6 million, on the site of
an old South Baltimore oil terminal over
are interspersed with city-owned lots. His
dream, he said, is to expand Fleet Transit, ban Renewal Plan for Old Fairfield. Under
a Download the series
Download the entire three-day series as
more than 30 years. Located in an area and at the same time, attract several port-re- the city’s plans, McNeil would be awarded a single PDF file. Posted online as a
across the Hanover Street Bridge from Fed- lated tenants and develop the land as a small about four of the 25 acres seized from him, separate link.
eral Hill that is populated mostly by chemi- business park. but at least eight acres of it would be con-
cal plants and auto shipping terminals, he But in September, the city of Baltimore veyed to another private developer with a
This supplemental reporting is available on
had planned until recently to expand his op- took steps to seize the 80 lots owned by Mc- similar plan: to build a business park. our Web site at www.mddailyrecord.com
eration north of Chesapeake Avenue, to a Neil and redistribute them as part of an Ur- SEE CONDEMNED PAGE 9A

Auction sales 5A Public notice 8B For subscriptions


INDEX
A daily listing of content
Calendar of events
Marketplace
2B
1B
Real estate
Business services
2B
8A
c Online On the RECORD blog
www.mddailyrecord.com Follow the link on our Web site
call 1-800-451-9998 or
e-mail circ@DolanMedia.com
TUESDAY, DECEMBER 9, 2008 9A
CONDEMNED THE DAILY RECORD

Baltimore’s use of eminent domain

There are also always going to be circumstances in

“ ”
which you need eminent domain to really make a project
work. The Superblock is an example.
— George A. Nilson
Baltimore City Solicitor
RICH DENNISON

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.

posal for the land simply wasn’t the best


Condemned
Continued from page 1A
one.
“We’ve worked with Mr. McNeil and
we’ve encouraged him,” he said. “Our
“My biggest issue is, if I own a thing, judgment was that … he can’t do it by
and I want to develop it, and you want to himself.”
take it away from me and give it to some- In 2006, the BDC issued a request for
one else, that doesn’t seem fair,” McNeil proposals — the normal procedure when
said. “I can’t do anything with the land be- redeveloping city-owned land — for five
cause it’s all tied up. I can’t bring somebody plots in Old Fairfield. The catch was that
down here, look them in the eye, and tell much of the land was owned by McNeil,
them to put all their money into it and not the city, so the BDC was effectively
then have the city take it away from me.” making economic development plans for
McNeil’s story is emblematic of the parcels that it did not own. Or rather, that
RICH DENNISON

city’s attitude toward the property rights it did not own yet.
of small business owners over the past After McNeil bid on the RFP and re-
five years: If a business stands in the jected a purchase offer from the city in
way of a city development plan, the city 2007, the city moved to seize the proper-
will not hesitate to condemn the prop- ties and pay McNeil $2.2 million. The plan
Kevin McNeil works at his Fleet Transit headquarters in Fairfield, which houses 90 trucks and moves about
erty occupied by the business, seize it, selected by the BDC offered McNeil a
1.5 to 2 million gallons of petroleum-based products per day.
and sell it to a new developer that city of- portion of the land to develop himself,
ficials see as more capable or with more use is becoming more widespread, rising roads and air thick with industrial fumes but also brought in Chesapeake Real
appropriate plans. more than 250 percent in the dollar value until its last houses were cleared in the Estate Group, a developer that has had
In more than a dozen interviews with of condemnations authorized in 2008 over early 2000s. previous relationships with the city.
small business owners and legal counsel 2007, and calling into question the city’s at- McNeil said he had to wait until all Chesapeake redeveloped the Bagby
representing them, The Daily Record titude toward small-business owners. the people who lived in Old Fairfield were Building in Little Italy, a former furniture
has found the city frequently solicits If eminent domain is used widely as a gone before even considering trying to factory that has now become a handsome
plans for property redevelopment from front-end tool for development, does that buy more land for his industrial park idea. commercial retail property with a Veri-
the private sector before it owns the mean the city’s interests are more impor- In the meantime, he said, the Baltimore zon store. In July, the BDC approved
property in question. tant that the property rights of small-busi- Development Corp. decided that he was Chesapeake’s plans to build 400,000
The practice underscores the fact ness owners? stalling, and the reason was that he wasn’t square feet of industrial space on the Bow-
that redevelopment efforts in Baltimore capable of developing such a large parcel. ley’s Lane landfill site, which it sold to
depend heavily on eminent domain ‘Different ways to renew’ “The only thing I’ve heard is that I’m the developer.
seizures and the threat that eminent do- The details of Kevin McNeil’s prob- not a developer — I don’t develop land,” In September, Jim Lighthizer, a prin-
main powers pose to independent prop- lems in Old Fairfield are hardly unique. he said. cipal with Chesapeake, told The Daily
erty owners. He has owned the properties since “Well, I built this place from scratch,” Record that he had hired a broker and
Indeed, threatening a business with 1980, when the area still had a small, most- he said, gesturing out the window of his was sending out mailers trying to attract
condemnation, even without filing legal ly black residential community that dated office at the Fleet Facility, which houses tenants, and that he was trying to con-
action to take the property, is often to the 19th century adjacent to its factories 90 trucks and moves about 1.5 to 2 million vert “a dumpy area to a nice business
enough put a business owner under or and scrap yards. A small white clapboard gallons of petroleum-based products per park setting.”
convince land owners to abandon their church still stands on Fairfield Road as a day. “I think it was all political.” But McNeil called Lighthizer and his
plans for the plots that they own. testament to the community’s existence. It BDC President M.J. “Jay” Brodie said
And in Baltimore, eminent domain was surrounded by poorly maintained in a recent interview that McNeil’s pro- SEE CONDEMNED PAGE 10A
10A T H E D A I L Y R E C O R D TUESDAY, DECEMBER 9, 2008
CONDEMNED
Baltimore’s use of eminent domain

This is my retirement plan, this building, and just to

“ ”
kick us out, it’s not fair. It’s like something in a
communist country.
— Yun O. Park
Owner, Modern Mode
RICH DENNISON

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

owned by Nam Seo Koo, another Korean-


Condemned
Continued from page 9A
American property owner on the West
Side who has been in a pitched legal bat-
tle against the city over condemnations for
partners speculators. Three years ago, the better part of a decade.
Chesapeake bought 22 acres at an adja- “If we had to depend on this store,
cent site and built a 25,000-square-foot we’d starve to death,” said Park, who
truck repair facility on it. Their property added that the last time business was
was never listed for condemnation. Mc- good was at least three years ago. “If there
Neil said the only thing keeping him from are more stores around here, it will be a
developing his land, besides the fact that good spot.”
many of the lots scattered among the ones More businesses are exactly what the
he owns belong to the city, is the threat of city has in mind. The BDC issued a re-
condemnation. quest for proposals for 51 Superblock
“People come down here and say it properties in 2003, and has since issued
RICH DENNISON

looks awful, you know? Give me two two more RFPs, for 15 additional proper-
guys, a couple of bulldozers and a few ties in and around the project. In late 2004,
days, and I’ll have it cleaned out,” he the BDC entered an exclusive negotiat-
said. “If [Chesapeake] gets to speculate, ing agreement with Lexington Square
why can’t I?” Hippodrome Hatters was moved twice by the city, in March 2001 from the unit block of N. Eutaw Street Partners, a development team made up
Similar situations — in which the to the 400 block of W. Baltimore Street, then to its current location at 318 W. Baltimore Street. of companies from New York and Atlanta,
city tires of waiting for redevelopment to for the properties in the first RFP.
Nilson. “Sometimes one lot or one prop- learned that her building was listed for But some business owners, like Koo,
happen and uses condemnation to speed erty at a time works. There are also al- condemnation in 2006. She said she plans whose 25,000-square-foot clothing store
up the process — can be found all over ways going to be circumstances in to retire in 10 years, and that she doesn’t and warehouse space, New York Fash-
the city. which you need eminent domain to re- want to relocate because she has a good ions, had been under threat of condem-
In September, the BDC moved to ally make a project work. The Su- customer base and the area is safe. nation for nine years before the city fi-
seize the Parkway Theater, a 93-year- perblock is an example.” “This is my retirement plan, this build- nally took it in August, were not so lucky
old movie house in the Charles North ing, and just to kick us out, it’s not fair,” as to stay in business.
Urban Renewal Area, which had been on West Side stories she said. “It’s like something in a com- Linn Koo, who speaks on behalf of
a condemnation list for most of the time The “Superblock” project is a 3.6-acre munist country.” his father’s business interests, said that
since its owner, Charles Dodson, pur- parcel of land between Liberty Street and Park hired attorney John C. Murphy, Superblock businesses were doing quite
chased it in 2002. Howard Street that falls under the city’s who said he showed BDC officials the in- well until the city intervened, starting in
Dilapidated buildings in the West Market Center Urban Renewal Act. Since side of the store to show them that the the late 1990s. By 2005, he said, New York
Side’s Pigtown neighborhood were seized the late 1990s, the city has condemned business was not blighted — rather it was Fashions’ sales, for which he declined to
earlier this year after years of disuse, un- or threatened to condemn the property of clean, professional and thriving. The city give a dollar amount, were down by 50
der another urban renewal plan. at least six small businesses, in many cas- backed down and removed Park from the percent.
The legal formalities of acquiring large es paying thousands of dollars to relocate condemnation list. “Look at this place — there’s no peo-
assemblages of property, city officials say, them to other parts of the city. Still, Park says business has suffered ple,” he said, standing at the corner of
often require that eminent domain be used Yun O. Park, a Korean-American who since the talk of condemnations began. Park and Lexington Streets. “Once the
on the front end of a project. since 1994 has owned Modern Mode, a Her store is flanked by two empty retail city started taking the buildings, there
“There are different ways to renew,” women’s apparel store on Lexington storefronts, one that was taken last year
said Baltimore City Solicitor George A. Street in the heart of the Superblock, by the city and the former A.M. Fashions, SEE CONDEMNED PAGE 11A
TUESDAY, DECEMBER 9, 2008 THE DAILY RECORD 11A
CONDEMNED
Baltimore’s use of eminent domain

Condemned
Continued from page 10A

was no reason for people to come around


anymore. The percentage of people walk-
ing around really dropped off.”

The small business shuffle


Other small businesses have been hurt
almost as much by being forced to relocate
as by the condemnation threats on their
property.
George J. Herrmann owned People’s
Liquors, a carryout business on the corner
of Howard and Fayette streets, which said
he did brisk business with customers com-
ing and going from the nearby light rail
stop, from 1995 to 1998.
He received notice from the city that he
would have to relocate. The building was
being condemned, and as a tenant, he’d
have to move out to make way for the $85
million Bank of America-financed Center-
MAXIMILIAN FRANZ

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 Baltimore
Street from the recently restored Hippo-
drome Theater. There, he said, he no longer
Yun O. Park, left, owner of Modern Mode, a women’s apparel store on Lexington Street in the heart of the Superblock, talks with land-use attorney John C.
had access to the bus and light rail traffic Murphy. The city listed her building for condemnation in 2006.
he once got, and his customers no longer
knew where his store was located.
Business immediately fell off 60 per-
cent, recovered slightly, and then stayed
flat for four years.
“It became pretty obvious, pretty quick-
ly, that [the city] did not want a liquor store
there,” he said.
In 2004, Herrmann decided to sell his
business and found a buyer to pay $400,000
for it. The same year, the city decided to
condemn 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 don’t have a location, I can’t sell my
business,” he said. “When I tried to sell
the business, the potential buyer who put
a contract on the business, the BDC told
him they were ultimately going to con-
demn the property. They didn’t tell him
when. I don’t blame the guy. I wouldn’t
have bought the business, either. Just the
word that the BDC was going to condemn
those properties, it queered the deal I had
on selling the property.”
RICH DENNISON

But Nilson, the city solicitor, speaking


of the West Side urban renewal efforts,
said everything that was done was done
with good cause.
“There is a very strongly held view that George J. Herrmann stands in front of the shuttered People’s Wine & Spirits store on Baltimore Street. In 2004, the city said it was going to condemn the building
you need the impetus of these large as- and redevelop the property, but it has yet to do so.
semblages to really make a project work,” Senate Bill 3, which passed in 2007 and
he said. became part of the state code, did just
Herrmann took a 40 percent loss on that, urging local authorities to condemn
the sale of the business, and most of the only when absolutely necessary, and re-
money went toward paying debts to his quiring them to compensate businesses
suppliers and moving costs. He now owns for losses in value in order to preserve
a home improvement business in Prince “goodwill.”
George’s County. The pen that O’Malley used to sign
Four years later, the city has still not yet the bill into law hangs behind a frame of
seized and redeveloped the property — a glass plaque in Boulmetis’ shop.
the “People’s Wine & Spirits” sign (he But the uncertainty of the future
changed the name of the store after his of one’s business, a product of the
first move) still hangs today over a steel- moving ordeal, was very stressful, the
shuttered storefront, and Herrmann has couple said.
not yet settled all his debts on the busi- “I would never buy property again in
ness. Baltimore City,” Lou Boulmetis added.
“I’m still paying it off,” Herrmann said.
RICH DENNISON

“That was going to be my retirement.” A variety of businesses


Other businesses, however, have land- The small businesses that suffer as a
ed on their feet after a condemnation-re- result of condemnation are not limited
lated move, but only after suffering serious to retail storefronts in central downtown
hardship and stress. business districts. Office-based employ-
Charles Dodson sits on the stairs at the Parkway Theater, a 93-year-old movie house in the Charles North
Lou and Judy Boulmetis, who own Urban Renewal Area that the BDC moved to seize in September.
ers, industrial producers and service in-
Hippodrome Hatters, a 78-year-old hab- dustry businesses have also been target-
erdashery near the theater that shares its hold your breath and hope you do better,” has made an activist out of Judy Boul- ed in the last year in Baltimore.
name, were relocated in March 2001 from Lou Boulmetis said. “In my case it’s so far metis. She collects photocopies of arcane In September, a city circuit court
the unit block of North Eutaw Street to so good, but not in everybody’s case. We laws having to do with eminent domain judge dismissed a 4-year-old lawsuit
the 400 block of West Baltimore Street to grew the first time and we grew the sec- and newspaper clippings related to West brought against the city by a handful of
make room for the Centerpoint project, ond time we moved.” Side development in a thick blue binder. property owners on the Uplands Triangle,
and then again to their current location in Sales have more doubled, he said, The couple has lobbied Gov. Martin a three-sided block off Edmonson Av-
the 300 block of West Baltimore Street, a since the first move, due in large part to O’Malley, who they know from his days as enue in West Baltimore that the city
high-ceilinged showroom within the Cen- their new location, which is on a busy a Baltimore City councilman, for more wants to redevelop as a “gateway” to a
terpoint complex itself. block of Baltimore Street next to a Star- stringent laws to protect properties own-
“Each time, you cross your fingers, you bucks. Still, their condemnation ordeal ers that have been relocated. Maryland SEE CONDEMNED PAGE 12A
12A T H E D A I L Y R E C O R D TUESDAY, DECEMBER 9, 2008
CONDEMNED
Baltimore’s use of eminent domain

[Old Fairfield] would develop fine if the city would

“ ”
just leave it alone. The idea that the city needed to do
this is just lunacy.
— John C. Murphy
Baltimore land-use attorney

Condemned
Continued from page 11A

$200 million affordable housing develop-


ment nearby, known as Uplands.
Arthur W. Lambert, owner of Lam-
bert Insurance Agency Inc., is one of the
business owners under threat, and the
main claimant in the lawsuit. He said the
city should not have to right to take his
business because it’s not blighted — it’s
just near several properties that are —
and that the prospect of having to move
has driven clients away and made his life
more difficult.
Investors have expressed interest, he
said, in buying up the nearby blighted
commercial properties, which would
make Lambert’s own office more attrac-
tive. But the looming possibility that the
city will condemn the properties has driv-
en those investors away.
“It’s been a long, drawn-out thing,” he
said. “Even during the process, it’s been in-
convenient. … It’s taken away from my
business. … People have contacted me
about purchasing property, and I have to
tell them what’s going on, and they back
away very quickly. It is the threat of these
properties being taken over by the city
that has kept this area from being what it
could 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 the
same site since 1985 — seven years after
he immigrated from South Korea. The
profits from his business, he said, have
allowed him to give his three children col-
lege educations at New York University,
the University of Pennsylvania and Uni-
versity of Maryland.
“I’d like a fair relocation,” he said. “All
fair is fine. All my clients say, ‘Young,
please stay here. Maybe [move] half a
mile!’”
Others aren’t so hopeful about moving.
Razaq Raja, who owns a pizza and
MAXIMILIAN FRANZ

carryout shop around the corner from


Young, said that if forced to move, his
business would not survive.
“We’ll lose the business if we go some-
where else,” he said. “My customers are
around here. … I feel it’s really very sad Yoo Young, in front of his auto repair shop at the Uplands Triangle in West Baltimore. He said the profits from his business, which has been on the same site
for me. … I built this business from zero since 1985, have allowed him to send three children to college.
up. Four years I’ve been here.”
The city’s position, according to Hous- tion, sued the city to challenge the validi- the city that they hope will be a suitable al- power of eminent domain to stimulate
ing Commissioner Paul Graziano, is simi- ty of the urban renewal ordinance that ternative to condemnation. economic development, then cities will
lar to the decision handed down in authorized his condemnation. That case In the meantime, however, a plan by not develop; and if cities do not develop,
Berman v. Parker, a 1954 U.S. Supreme was litigated in November and awaits Ruppert Homes to build a set of town- if they do not adapt to changing times
Court decision: The businesses at Up- judgment. Gillin and a city lawyer involved houses with waterfront views is stalled. and changing economic circumstances,
lands Triangle may not be blighted them- with the case declined to comment for “We’re still in limbo,” Woods said. city residents suffer.”
selves, but because many of the properties this story. “[Condemnation] has not been withdrawn, Back in Old Fairfield, where Kevin
around them are, it’s necessary to take Also in September, the city added but it hasn’t been acted upon. It’s still out McNeil’s land lies overgrown and strewn
them. property belonging to three businesses there. … Obviously, that would need to be with trash, undeveloped and threatened
“It was very clear that in order to ad- located in West Covington, a waterfront resolved before we started anything.” with condemnation, it’s easy to see what
dress that area, we needed to address the region on the Middle Branch of the Pat- the city lawyers who wrote those words
entire frontage on Edmonson Avenue,” apsco — Schuster Concrete, Ruppert Same place, different perspective might mean — it’s a patch of earth that
Graziano said. “I would argue that the Tri- Homes and Allied Waste Services — to When the U.S. Supreme Court ruled in has not adapted to changing times. In fact,
angle is a mix of some very viable and the West Covington Urban Renewal Plan, 2004 on the most important recent case it looks as if changing times have long
very appropriate uses and some very trou- a city law authorizing the city to seize the surrounding eminent domain, Kelo v. City since forgotten and abandoned Old Fair-
blesome uses. There’s a liquor store out properties and redevelop them as a mixed- of New London, Conn., the city of Balti- field.
there where a police officer was mur- use complex. The city’s original plan was more’s legal department filed an amicus But John C. Murphy, McNeil’s lawyer,
dered. … It’s a mixed bag.” to locate a facility for sportswear com- curiae brief in support of the decision to looks at the same place and sees some-
Elsewhere, it’s the same story. In Pop- pany Under Armour Inc. on the site, but uphold a city’s right to condemn property thing completely different.
pleton, a West Baltimore neighborhood that fell through last year. for purposes of economic development. “To me, [Old Fairfield] is like the great-
that abuts the University of Maryland’s Scott Woods, the CFO for Ruppert “Petitioners’ arguments, if accepted, est place in the world. It’s pure heavy in-
rapidly growing biotech campus, the city Homes, one of the companies under would threaten the ability of Baltimore dustry, next to three superhighways and
has condemned property owned by the threat, said that as of late November, con- and other cities to use the power of emi- great port facilities,” Murphy said. “And
J.M. Gillin Corp., which manufactures demnation was still looming for his busi- nent domain to stimulate economic de- the best part is, there’s not one thing there.
the aluminum enclosures that are attached ness. The three West Covington busi- velopment in places where, for many No one to complain about it. It would de-
to telephone poles as switch boxes. nesses have hired an attorney from decades, there has been little or no such velop fine if the city would just leave it
Owner James Gillin and a nearby Gildea & Schmidt LLC, to represent development,” the document read. alone. The idea that the city needed to
church, also under threat of condemna- them, and help them present a plan to “If cities are prohibited from using the do this is just lunacy.”

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