Chapter 19 - § 19.3 • EMINENT DOMAIN TAKINGS
| Jurisdiction | Colorado |
A governmental entity may exercise the power of eminent domain only when: (1) it serves a public purpose; (2) the taking is necessary; and (3) the government pays just compensation. However, there are specific rare situations in which these general provisions may not apply.72
§ 19.3.1—Power Of Eminent Domain
The classic takings situation is that of a government entity exercising its right of eminent domain; the government entity decides that it needs property for public purpose, takes the land, and justly compensates the property owner. While the State of Colorado derives its eminent domain power from Article II, § 15 of the Colorado Constitution, the general rule is that a subdivision of the state must have "express or necessarily implied statutory authority to exercise the power of eminent domain."73 C.R.S. § 38-1-102 lists the entities that have been expressly granted condemnation power.74 In some circumstances, condemnation power may be implied "from a legislative scheme that clearly evinces a legislative intent to provide for the right."75 For example, in Department of Transportation v. Stapleton,76 the Colorado Supreme Court held that while the Colorado Department of Transportation did not have express authority to condemn land for a parking and transit facility, it had implied authority to do so because such a facility had a "direct and functional relationship" to the highway project for which express condemnation authority had been granted.77 Additionally, to be entitled to just compensation for a taking, there must have been some action by the state or local government.78 For example, the plaintiff could not assert a takings claim against a homeowners association that made amendments to declarations of covenants that had the effect of precluding residents from building guest houses because there was no state or government action.79
After the conclusion of condemnation proceedings, the court enters an order (referred to as a "rule") describing the property condemned and the compensation paid for it.80 This rule is then recorded and indexed with the county clerk and treated as a deed or conveyance.81 The type of interest obtained by the condemning authority is governed by C.R.S. § 38-1-105(4), which provides that the interest seized generally will be whatever interest the condemnor has sought.82 The statute also includes a disclaimer that limits the interest acquired in condemnation in certain situations, except as required for subsurface support.83
In addition to Article II, § 15, of the Colorado Constitution, Article XX grants eminent domain power to "home rule municipalities," which is vested in municipalities through their home rule charters.84 For instance, Telluride's charter gives it "'the right of eminent domain to acquire property both within and without the boundaries of the Town for any purpose deemed by the Town council to be in the town's best interest.'"85 This power allowed Telluride to condemn property outside the Telluride city limits for open space and parks.86
The power of eminent domain is the ability to take private property in the public interest, and not the ability to refrain from such a taking.87 The power of eminent domain is reserved to the sovereign and any attempt to surrender the power of eminent domain through contract is void.88
§ 19.3.2—Public Purpose Must Be Present
Under Colorado law, public purpose does not necessarily mean public ownership.89 Rather, "the property must be used by the public, or the acquisition must serve a public purpose or generate public benefit."90 So long as the taking "essentially" benefits the public, it will withstand constitutional scrutiny even if an incidental private benefit of the taking exists.91
There is no precise definition of public purpose, and courts determine what constitutes public purpose on a case-by-case basis.92 Notably, there are two situations where private entities may end up owning condemned property consistent with the public purpose requirement.
Private Condemnation of Private Land
Article II, § 14 of the Colorado Constitution allows private parties to condemn land in some circumstances: "Private property shall not be taken for private use unless by consent of the owner, except for private ways of necessity, and except for reservoirs, drains, flumes or ditches on or across the lands of others, for agricultural, mining, milling, domestic or sanitary purposes." In addition, "certain private entities have express statutory authority, over and above any rights granted by Article II, §14 to condemn private property."93 The fact that private interests may benefit from the condemnation does not defeat a public purpose.94 Further, a use may be public, though not many people enjoy it; the requirement is that the improvement be open to all.95 An example of this is the right of private utilities to condemn rights-of-way.96 These private utilities satisfy the public use requirement because they generally "serve everyone equally with everyday necessities such as water, electricity, natural gas, or telecommunications services."97 In order to have standing to assert a private condemnation claim, the litigant must hold an interest in the property that is similar to a fee simple interest.98 For instance, an owner of an unpatented mining claim or a federal oil and gas lessee does not have standing to bring a private condemnation claim.99 Failure to establish this type of interest will result in a lack of standing and dismissal of a private condemnation claim.
Public Condemnation Transferred to Private Ownership
A second way in which private ownership and the public use requirement are compatible is a situation where a public entity acquires private property and then re-conveys it to private ownership.100 The most typical example of this is an urban renewal situation. Colorado law differs from other states in regard to this situation.
In 2005, the U.S. Supreme Court decided the much publicized case of Kelo v. City of New London,101 which "found that the public purpose requirement [in Connecticut] was satisfied on the grounds that the taking would provide the community with much needed economic development."102 While Connecticut law states that economic development is a sufficient public purpose to justify a taking (and the Kelo Court held that this did not violate the U.S. Constitution), Colorado law explicitly states that economic development is not sufficient on its own to satisfy the public purpose requirement. Rather, the Colorado Urban Renewal Act mandates that "elimination of slum or blighted conditions is the only statutory basis for the exercise of eminent domain by an urban renewal authority."103 In addition, House Bill 1411, passed and signed in 2006, "attempts to define public use so as not to include a taking of private property for transfer to another private party for purposes of economic development or enhancement of tax revenue."104
C.R.S. § 31-25-103(2) provides eleven factors to be considered when determining if blight exists; meeting four of them will result in a finding of blight. They are:
(a) Slum, deteriorated, or deteriorating structures;
(b) Predominance of defective or inadequate street layout;
(c) Faulty lot layout in relation to size, adequacy, accessibility, or usefulness;
(d) Unsanitary or unsafe conditions;
(e) Deterioration of site or other improvements;
(f) Unusual topography or inadequate public improvements or utilities;
(g) Defective or unusual conditions of title rendering the title nonmarketable;
(h) The existence of conditions that endanger life or property by fire or other causes;
(i) Buildings that are unsafe or unhealthy for persons to live or work in because of building code violations, dilapidation, deterioration, defective design, physical construction, or faulty or inadequate facilities;
(j) Environmental contamination of buildings or property; [and] (k.5) The existence of health, safety, or welfare factors requiring high levels of municipal services or substantial physical underutilization or vacancy of sites, buildings, or other improvements.105
In addition, if the landowner and tenants consent to including the property in an urban renewal area, the power of eminent domain may be exercised upon a finding of any one of the factors listed above.106 When blight "has been eliminated from a parcel that lies within an urban renewal area, an urban renewal authority no longer has any statutory...
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