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Wednesday, April 16, 2014

Another eminent domain battle lost: Colorado couple sell their dream property for an amount that barely covered their legal costs…

Ceil and Andy Barrie lose their dream cabin

The problem with eminent domain in a case like this is what constitutes "just compensation"  
"All condemnations under Colorado law in some way must be justified as advancing the public interest; the property must be used by the public, or the acquisition must serve a public purpose or generate a public benefit."

There is no doubt the government can do this (that is not arguing it should be done, just that it can be done), condemning land for park land (even if the government intent and interest here is definitely questionable) is certainly within traditional "public use" designations.  This is not like the Kelo abomination case where Madison's public use requirement was essentially rendered completely meaningless, but little good that does the (former) cabin owners here.

But when you have a unique dream property that is not easily measured in market value, what constitutes just compensation?  Obviously if the government might have to pay what it was really worth to these owners, the government would be less inclined to act and the owners less bitter if forced to sell.  Because what happened to the Barries in this case was definitely not just.  There is no easy answer to this. Shouldn't the value be determined by a jury, after hearing the testimony and determining what is a fair price given all the evidence?  

7 comments:

  1. Okay, this post hit a nerve. I, as well as my family long ago, were caught up in the federal taking of land for the Sleeping Bear National Lake-Shore...something that they now propose to designate a "wilderness"...it is if you consider Winnetka, Illinois a "wilderness" by comparison ...it is all a lie. Haz has visited the area and I doubt he noticed it was a National Park.

    Anyway, the taking of lands designated to be part of the park was quick, but payment at fair market value took over a dozen years and millions in court costs to get paid. My part was small, a few lots, but my in-laws' was huge, acres upon acres for which they finally got paid about 40% of the value, after 12+ years in court.

    We finally sold out home on Lake Michigan inside the park, not taken, because the tax base had shrunk so much that the taxes on the remain lake front lots were astronomical. A family bought it that is an old line wealth family and we were glad to have them show up. I will only say that most of you all have seen their brand in markets everywhere for over 80 years. We were priced out. The "Feds" were looking for a toe hold in the in-holder area and offered less than 25% of the true value...we were not obligated to entertain the federal offer, nor were our neighbors. Thank fully. And this absurd taking occurred in 1960-1962....the practice has merely grown now in arrogance and mendacity.

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  3. Actually, there's a very easy answer to this, and you've already given it: The only fair price is the one that these owners will willingly accept. Full stop.

    The only justification for eminent domain is what's called the "hold-out" (or "hold-up") problem, which arises when the government is trying to acquire multiple parcels of property in order to use the entire site for a legitimate public purpose. It works like this: Suppose that the targeted land contains 10 individual parcels, and each owner is really willing to sell for $100,000. Suppose also that the government is willing to pay up to $2 million in order to use this particular land rather than some other spot. If any 9 of the private owners sells at $100,000, the 10th owner has an incentive to hold out for the max that the government would pay, which in this example is $1.1 million. But any of the 10 owners would like to be in that position, so they all might jointly demand more than the $2 million the gov is willing to pay. (This result won't necessarily occur; it's just a possibility.) The gov then goes shopping for a site less suited to the intended use but easier to buy. The result is that everyone is worse off than they'd be w/o the attempt by the private owners to "hold up" the gov. If the gov uses eminent domain and pays anywhere b/w $100K and $200K for each of the 10 parcels, the deal is a net winner for all concerned. But the key is the requirement that the gov pay "fair market value."

    In this Colo. case there is no such situation. AFAIK there's only one parcel of land being taken, so the rationale I sketched out above is irrelevant. "Fair market value" is simply the minimum price at which the owners are willing to sell.

    It's a fucking outrage.

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    1. It is an outrage. I am willing to recognize not all takings are inherently evil and some things need to happen to make legitimate needs occur (be it roads, schools, even parks). But I recognize that there has to be a balance to takings and the original intent of Madison that if forced it had to be just. We are so fucking far from that goal that the clause has no meaning any more.

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    2. I hear what you are saying. I find eminent domain less offensive than say, regulatory takings (where they don't condemn your land but just restrict it so much you can't use it for anything). They usually offer you nothing for a regulatory taking and you have to file a lawsuit to get them to offer anything. If they want it so bad and contend they have a compelling public interest pay for it. Just pay a fair amount.

      Leaving it for a jury is not a bad outcome since if someone makes a compelling reason why their land is special and that the government's offer is not sufficient a jury should be able to get that. Of course, your proposal is even better for the land owner and I would not mind that at all.

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  4. The Lefty land grab has gone from science to art.

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    1. If you consider confiscations of private property "art"

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