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Looming decision gives cities pause

Top court to rule on how property is condemned

Utah leaders may find their hands tied when it comes to condemning land, depending on the outcome of a U.S. Supreme Court case.

The high court will decide when city governments can use the power of eminent domain to seize private land for new developments, retailers or anything considered a public good. That decision could come as early as January, University of Denver law professor Jan Laitos told a group of Utah city leaders at a land-use conference this past week in Salt Lake City.

"The bets are that they are going to alter the laws of condemnation," Laitos said. "It will restrain the ability of local government from condemning land."

Laitos said the possibility of reining in the power of city governments surfaced because more cities have been accused of abusing their authority in recent years. While condemnation power was previously used to rid cities of blighted areas, local leaders are now using the power to enhance retail markets and increase sales tax revenues, he said.

"We've stretched condemning powers in the last 200 years to where we never thought it was possible," Laitos said.

The decision by the Supreme Court will decide whether cities have the authority to employ eminent domain to gain future economic advantages. Craig Call, Utah's private property ombudsman, said that decision will have serious repercussions in Utah where city leaders regularly use condemnation powers to recruit big-box retailers.

"That's where this issue hits the road in Utah — replacing existing retail and residential with bigger commercial development," Call said. "Bottom line, if government has the authority to condemn land to raise tax revenue, there's no end to that."

Cities such as Bountiful, South Jordan and Ogden are several of the Utah sites currently wrestling with condemnation issues to bring in retail, Call said.

Even before the Supreme Court makes its decision, Call expects the case to have an immediate impact in Utah. Cities will not want to bond to fund development on condemned land when the court's decision may eventually block the land use.

"It may chill the financing on these projects," Call said. "Everything will just have to stop and take a breath."

Utah State Sen. Greg Bell, R-Farmington, said the Supreme Court's decision is critical in Utah because city leaders are trying to grasp the abstract concept of a public use. But to citizens whose homes are being condemned to make way for Wal-Marts, the government seems to be misusing its power, he said.

"Our redevelopment law has now essentially been used for retail purposes and we're asking, how much is enough?" Bell said. "Are we really advancing public purposes by stealing the Costco from the next town?"