Private Development As Public Use: New Michigan Case Raises Questions About Power to Condemn Property for Economic Development (Law and the Appraiser)
Appraisal Journal 2004, Fall, 72, 4
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Publisher Description
More and more, the power of eminent domain is being used to transfer nonblighted land from one private owner to another for redevelopment. The scenario goes like this. A governmental entity focused on economic development identifies property it believes is underutilized by its current owner. In order to attract new businesses or to keep an existing business from moving its operations, the governmental entity seeks to acquire the property and transfer it to a private entity for redevelopment to a more economically productive use. If the present owner does not want to sell, the governmental entity resorts to the exercise of eminent domain to acquire the property in order to immediately sell it to another private entity for the desired development. If such a condemnation is lawful, the current owner has no choice but to undergo the disruption and inconvenience of relocating its business or residence. Generally, private property may be taken by eminent domain only for a "public use." Federal and state constitutions prohibit condemning authorities from taking property solely for the private use or benefit of another owner. While seemingly simple in the abstract, the distinction between a public use and a private use has proved to be quite blurry to courts interpreting the limits of eminent domain.