Eminent domain in Alabama is on the rise; what's the risk?

By Connor Sheets | csheets@al.com 

Alabama has a strong tradition of protecting property rights against incursions by government, but the usurping power of eminent domain has long played a key role in the statewide march toward development and progress.

The legal power of eminent domain, by which a government or agency acquires privately-owned real estate in order to facilitate development deemed to be in service of the public good, has cleared the way for everything from highways to courthouses across Alabama, and it continues to do so to this day.

But eminent domain and its place in society have undergone a fundamental reassessment in the wake of the 2005 U.S. Supreme Court's decision in Kelo v. City of New London.

The case pitted New London homeowner Suzette Kelo against the Connecticut city's government, which wanted the land upon which her home sat to be repurposed as part of a sizeable pharmaceutical campus.

The Supreme Court ruled in a 5-4 decision that the land could be taken from Kelo and transferred in such a manner, finding that the project would have sufficient benefit to the public. But the pharmaceutical campus and the jobs and economic development it promised never materialized, and all that was left in the place of Kelo and her neighbors' razed homes was an empty lot.

The decision sent shockwaves through legal circles across the country, and in the intervening years many states have enacted state constitutional amendments and legislation aimed at ensuring that their citizens will not be kicked out of their homes to make room for malls or office parks.

Alabama's state legislature was the first in the nation to respond to the Kelo decision by passing a law protecting its citizens from having their private property taken from them and transferred to developers of private projects without clear public benefit.

The new law -- and similar laws and amendments approved in more than 40 states -- effectively bans the use of eminent domain for retail and other private projects. A situation like the one in which the city of Alabaster turned to eminent domain in 2004 to transfer land to a retail developer became far less likely in the wake of the new law.

Less than two months after the Kelo decision was handed up, then-Gov. Bob Riley signed the legislation, declaring that "[a] property rights revolt is sweeping the nation, and Alabama is leading it."

The law codified the concept of blocking developers from relying on eminent domain to acquire land on which to build private projects, but the state and municipalities across Alabama have continued to use the power in pursuit of their own public projects in the decade since Kelo.

That's not necessarily a bad thing, as many such projects -- particularly roads and highways -- would not have been possible without eminent domain, and people are entitled to "just compensation" in exchange for their property.

But what exactly "just compensation" might be for a specific building or parcel of land is much less cut and dry, and thereby drives most of the controversy over eminent domain in Alabama in recent years, according to Jesse Evans III, a partner at the Birmingham law firm Rumberger, Kirk and Calwell with experience in condemnation and eminent domain cases.

"There's not been a great deal that's been controversial insofar as the right of government to take land," Evans said. "The primary controversies have been over what is fair market value or what is 'just compensation' within the state and federal constitutions."

Jefferson County found itself at the center of just such a controversy in 1999 when it attempted to harness the power of eminent domain to condemn the privately owned, 17-story 2121 Building at 2121 Reverend Abraham Woods Jr. Blvd. in Birmingham to use it for administrative space. The county claimed that doing so was "necessary and in the public interest," but the buildings' owner, California's Emerik Properties balked, finding particular fault with the low appraisal price the city quoted.

Warren Herlong, an experienced eminent domain and condemnation lawyer at the Mobile law firm Helmsing Leach, represented Emerik and helped the company secure higher compensation in exchange for the valuable property.

"Jefferson County was leasing a heck of a lot of the space and they felt that they could save the county money by owning the building. They needed to put more county offices in there, and they thought it would work out better economically if they became the landlord," Herlong said. "There was litigation, yes. The city got the building, but they paid significantly more than they appraised it for."

Alabama passed a law in 2013 that was widely perceived as an attempt to water down the state's protections against eminent domain abuses. But its power is still seen as diminished enough by the widespread backlash against the Kelo decision to serve as something of a deterrent for many governments and developers across the state, according to Herlong.

"The city of Tuscaloosa used eminent domain to acquire the land to build the [federal] courthouse, which is clearly public use. But they backed off acquiring the additional blocks they had planned to acquire via the blight statute because after Kelo the political will wasn't there," he explained.

"The city of Huntsville was acquiring property to add to their research park with the idea that to develop a research park and attract private business was a public benefit and a public use, and they stopped that in reaction to Kelo. That was not a political will issue, that was a legal issue. The law no longer allowed them to do what they wanted to do."

But the national legacy of Robert Moses-style eminent domain looms large in the collective memory of Americans, and its specter continues to arise in potential development schemes across Alabama.

At least three developers are currently attempting to purchase dozens of homes in the Roebuck Plaza neighborhood of Irondale outside Birmingham in order to convert the neighborhood into a large shopping center or other private development. Developers' representatives and Irondale Mayor Tommy Joe Alexander have sent out letters informing the community of the plans and urging residents to negotiate fair deals to sell their house, which a number of the homeowners are deeply opposed to doing.

Alexander told AL.com last week that he does not support using eminent domain to take their property, but residents there are still concerned that the city will exercise the power if they do not voluntarily sell their homes.

Still, Evans said that though the use of eminent domain was on the wane for much of the past several years across Alabama, it is seeing something of a resurgence as the economy rebounds and governments are increasingly able to fund new infrastructure projects.

"Eminent domain is a bit on the upswing because of a couple of projects, the northern Beltline being one, and the I-20/59 downtown diversion," he said.  "I think that construction of a roadway is something that by and large has been considered to be in public use and there's not very much way around the taking in those cases."