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In two recent decisions on condemnation powers, Connecticut courts have either blocked or delayed local government takings of private property for economic development. While some commentators have heralded these as landmark victories for property owners and as evidence of an erosion of the eminent domain rule, a closer reading reveals that in both cases the courts have in fact rejected the most wide-sweeping arguments against governmental condemnation of private property and have reaffirmed the principle of eminent domain.

The rulings send a clear message that, in order to exercise their powers of eminent domain, local governments must act reasonably and must articulate a specific plan for the condemned property.

In the first case, Pequonnock Yacht Club, Inc. v. City of Bridgeport, the Connecticut Supreme Court affirmed the trial court finding that the Bridgeport redevelopment agency overstepped its bounds when condemning certain waterfront property owned by Pequonnock Yacht Club on Steel Point, and ordered the property reconveyed to the club. The property in question is part of a larger site known as Steel Point, which in 1998 became part of an Urban Renewal Plan adopted by the city. The plan called for the acquisition and permitted the taking by eminent domain of fifty acres of Steel Point, including six water-dependent properties, with water-dependent users which were not in blighted condition.

While the court agreed that under the redevelopment act the agency has the requisite authority to include in the redevelopment area certain property that is not substandard, it held that such property must be essential to the redevelopment plan in order for an agency to justify its taking. It is important to note that the court did not question the agency’s authority to determine what property needs to be taken, nor did it rule that the property was improperly taken for private rather than public use. The taking was blocked instead on the grounds that the agency failed to consider the integration of Pequonnock Yacht Club into the redevelopment plan in light of the fact that such plan included a marina.

STATE GUIDELINES

Under the Redevelopment Act (§§ 8-124 to 8-169 of the Connecticut General Statutes), the area must be essential to the redevelopment plan in order for an agency to justify its taking. The agency must provide specific reasons why the present condition and use of the property is detrimental to the redevelopment plan and why its acquisition is essential for its success. Enhanced investment value alone will not suffice. The condition and use of the property and, most importantly, whether or not it can be integrated into the plan are factors an agency must consider when determining whether a property that is not substandard is essential to the redevelopment plan. Moreover, an agency must make reasonable efforts to consider integration of the property into the redevelopment plan. Refusal to negotiate or even hear the plaintiff’s arguments was a key reason behind the court’s ruling.

Local authorities’ condemnation powers came under judicial scrutiny again recently in Susette Kelo, et al. v.. City of New London, et al. in which Judge Thomas J. Corradino of the Superior Court in New London blocked the condemnation of 11 homes and businesses in the Fort Trumbull area. Again, Judge Corradino rejected the plaintiffs’ sweeping arguments against eminent domain and reaffirmed the longstanding principle that after an area is taken for development, some or even all of the land taken may be sold or leased to private individuals, even if they are not the original owners. As in Pequonnock, the taking was blocked on narrower grounds that could be easily remedied by the taker.

In this case, the city of New London had approved a development plan for a 90-acre parcel of land known as the Fort Trumbull area about the same time it conveyed an adjacent property, the New London Mills site, to Pfizer Corporation for the development of a research facility. Acting under the authority of the plan and using the condemnation power delegated to it by the city, the New London Development Corporation (NLDC) had taken various properties in the area with the goal of developing them for retail, parking and a marina-training facility. The plaintiffs, who own homes and property in the Fort Trumbull area, sought injunctive relief to prevent the taking. They argued that the delegation of power to the agency was illegal and that a taking cannot be for public use if it is motivated by a private entity-here the Pfizer Corp.-and if, ultimately, a private entity is to determine “the fate of the property owners.”

PUBLIC BENEFIT

The wide-ranging, 249-page ruling reaffirmed the long held view that a legislature can delegate the determination of necessity to an independent board or even a corporation empowered by the legislature to condemn. Judicial review of such decisions is limited only to the issue of whether the agency has acted unreasonably or in bad faith. The test is not whether the use is public, but whether the exercise of eminent domain power is rationally related to a conceivable public purpose. In other words, if the economic development is to be carried out by private parties or if private parties will benefit from it, the court looks to whether the taking’s primary objective is to benefit the public. Creating or retaining jobs, creating additional industrial land in the city and increasing the tax base all serve the public good even if they also present a private benefit. Moreover, if the taking is justified in the first place, the public use continues even though the property is later transferred to private persons.

In the end, the taking was blocked because the city’s plans for the condemned land were not specific enough to determine whether the taking was necessary for public use. The court, however, rejected the argument that it was based on a speculative public purpose: A redevelopment plan for a distressed community is, the court reasoned, somewhat speculative by nature and hard to implement, and the purpose of the redevelopment plan would be crippled if only immediately feasible plans were accepted. Under the ruling, the four owners will keep the land, but the city and NLDC are free to reword the plan on which a future condemnation case could be based.

Whether the rulings amount to the beginnings of a backlash against the powers of eminent domain remains to be seen, but at the very least the courts are starting to set some limits to the exercise of this power. Development plans must be drawn more carefully to fully ensure that any eminent domain issues will not arise out of planning technicalities.

Monika D. Cornell is an associate in the New Haven office of Wiggin & Dana.