Mr. Merrill is Charles Keller Beekman Professor at the Columbia University School of Law. He spoke at a Noon luncheon at the at the Milwaukee Athletic Club, presented by the chapter.
Some consider it an abuse when the power of eminent domain is used to take property from one private party if it ultimately ends up in the hands of another private party. Mr. Merrill found three factors common to cases which would fit a narrower standard for abuse. First, the property is taken by an unelected body, typically an economic development corporation. Second, the purchase is off-budget, the purchase price effectively provided by the private party which will ultimately acquire the property. Third, the particular condemning government is in a zero sum game against other governments. The condemnation does not produce development that would not otherwise occur. Rather, it makes a location in one place, often an already developed area, attractive relative to an alternative undeveloped "greenfield" site.
He saw three approaches to protecting the interests of those whose property would be acquired. One is an stricter public use standard to justify takings. While some state courts might be persuaded of this, he did not see a majority on the U.S. Supreme Court. Such majorities usually require what he called a Baptist/bootlegger coalition, which would arrive at the same result (e.g. prohibition) from very different premises. There are also practical problems in application. For example, why should it matter if a municipality condemns land for a stadium to be built by a sports team rather than the municipality building the stadium to lease to that same team.
A second approach is to compensate for losses beyond the fair market value of the property, such as relocation expenses, or the cost of improvements which are not reflected in the market value. This approach can have the inherent difficulty of measuring non-market values, and has been susceptible to abuses.
He proposed a third approach in which compensation to individual owners includes some or all of the increase in value of the larger assembled parcel compared to the smaller parcels which made it up.
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