Peter Blake, Uncategorized

‘Blight’ – The new name of eminent domain

Blight, like beauty, is in the eyes of the beholder.

When a city wants to seize someone’s property in order to turn it over to a developer who might provide more tax revenue, it can always hire someone who can find the “blight” needed to justify eminent domain.

Longmont’s city council, doing double duty as the urban renewal authority, is trying to drive Dillard’s department store out of the Twin Peaks Mall, just south of downtown. A local development firm has persuaded the authority to condemn the mall and provide it with tax increment financing for a new project.

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You might think of blight as what you see in the stock pictures coming out of bankrupt Detroit: gutted, skeletal factories with all windows broken; abandoned, rotting homes with weed-choked yards; rubble, rusting cars and lots of graffiti.

That can’t be found at Twin Peaks, which includes a shuttered building next to Dillard’s but otherwise looks like many a metro shopping center. There are trees around, no broken glass, no trash, plenty of parking.

In the eyes of the law, however, blight can be much more subtle — so subtle, in fact, only a lawyer could find it. Blight studies of Twin Peaks were made in 2007, 2009 and 2012. according to testimony. The most recent updated study, 24 pages submitted last September, lists the vague definitions of blight:

— Slum, deteriorated or deteriorating structures;

— Predominance of defective or inadequate street layout;

— Faulty lot layout in relation to size, adequacy etc.;

— Unsanitary or unsafe conditions;

— Unusual topography or inadequate public improvements.

There’s more but you can see that the definitions invite highly subjective interpretation. The City of Longmont Economic Development Department came up with what it knew it was supposed to come up with: “A sufficient number of factors necessary to fulfill the criteria established in the Colorado Urban Renewal Law to be declared a ‘blighted area’.”

But it is Dillard’s strategy to buy the land upon which it builds its stores rather than lease it from the mall owner, and it has chosen not to go quietly. It has a contract giving it the right to veto rebuilding. According to the Longmont Times-Call, negotiations to buy the store, or include it in the new project, fell through earlier this year.

The urban renewal authority offered $3.6 million. Dillard’s, which has operated the store since 1997, said it wanted $5 million, the same amount it had asked from the developer, NewMark Merrill Mountain States.

The developer has said it wants immediate possession so it can start on its $80 million project, which is supposed to include a Sam’s Club, a Whole Foods store and a 12-screen theater by Regal Entertainment Group. It hopes to open in 2015.

Dillard’s wants the blight designation canceled but if it is to be seized, it demands that a jury determine the value rather than a judge or a commission.

Boulder District Judge D.D. Mallard held an all-day hearing last week on these issues but has yet to rule.

The current Colorado urban renewal law was passed in 2006, in reaction to the highly unpopular Kelo decision by the U.S. Supreme Court in 2004. The high court held, 5-4, that it wasn’t unconstitutional for local governments to seize property, even private homes, and sell it to private developers in the interest of economic development.

Two years later, the Colorado legislature passed House Bill 1411, which forbid the taking of private land in order to transfer it to another private entity for the purpose of economic development. It said only “blight” justified the government exercising eminent domain.

It is no secret that department stores are having a rough go these days. A visitor to Dillard’s last Sunday found signs advertising “Entire Store 20% to 65% off.” It was reasonably crowded. Thoughtless shoppers clawing through the racks left clothes lying on the floor that had not yet been picked up by clerks. Rumors abound that Dillard’s intends to close the store, but no signs proclaim it. “We want to remain in Longmont and continue to serve our retail customers,” insists Dillard’s attorney, Leslie Fields.

She dismissed the “blight” claims as “a crack on the sidewalk, and a pool of water they think should be draining faster than it is.”

Would Sam’s Club and Whole Foods produce more taxes for Longmont than Dillard’s — after, of course, the developer gets to keep those taxes for years in order to subsidize his construction costs? Possibly. But that’s not the point. It is not the role of government to pick winners and losers. It’s not even allowed to do that under Colorado’s eminent domain law.

If NewMark Merrill wants to obtain the Dillard’s store, it should just keep negotiating until it can reach a deal. Its efforts to use the city’s takings power in order to cut its costs and obtain tax increment financing amounts to crony capitalism — — though crony socialism would be just as accurate a term.

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