Interpreting eminent domain in Missouri: elimination of blight is Allright.

• Author: Patel, Anita J.

1. INTRODUCTION

   The power of eminent domain is viewed as a quintessential component of a sovereign's power. (2) It allows the government to utilize private land for public good in exchange for just compensation as provided by the Takings Clause of the Fifth Amendment of the United States Constitution. (3) The meaning of "public use" has evolved over the centuries from taking land to build public roads, to taking land for use by private railroad companies, and, most recently, to taking land to build private businesses to spur economic growth. (4) With this progression comes a great backlash from private citizens, sometimes resulting in legislative reforms. Now, many states like Missouri are attempting to find the proper balance between private property rights and the desire and need of many cities to eliminate blight conditions and spur economic growth.

   In 2006, Missouri reformed its eminent domain laws in order to protect private land from being taken solely for economic development purposes. (5) This legislation was a reaction to the United States Supreme Court decision in Kelo v. City of New London, which allowed private, non-blighted land to be taken so that the city could achieve economic growth. (6) The new Missouri statute continued to allow condemnation of private property in order to remove blight, but the condemning authority cannot condemn private property for solely economic development purposes. (7) The blight statute states:

   [w]here eminent domain authority is based upon a determination that a defined area is blighted, the condemning authority shall individually consider each parcel of property in the defined area with regard to whether the property meets the relevant statutory definition of blight. If the condemning authority finds a preponderance of the defined redevelopment area is blighted, it may proceed with condemnation of any parcels in such area. (8) In Missouri, blight is property which "constitutes an economic or social liability or a menace to the public health, safety, morals, or welfare in its present condition and use." (9) In Allright Properties, Inc. v. Tax Increment Financing Commission of Kansas City, the Missouri Court of Appeals for the Western District interpreted the statute for the first time. (10) Under the court's reading of this new law, the condemning authority must meet a two-prong test before it can properly condemn an area of redevelopment. (11) The court found that the condemning authority must assess each individual parcel to determine whether it is blighted, but it does not have to make a specific finding as to whether each parcel is blighted. (12) In addition, the predominance requirement is satisfied if a larger share of the total square footage of the redevelopment area is blighted. (13)

   This Note argues that the court in Allright improperly interpreted the statute's requirement of a specific finding of blight for each parcel but it properly applied the predominance requirement. It also examines the impact of the new eminent domain legislation in Missouri and argues that the legislation does not provide as much protection to private property owners as the legislature claims.

2. FACTS AND HOLDING

   Allright Properties owned two parcels of land located at the corner of Cherry Street and East 11th Street in Kansas City, Missouri. (14) In April 2006, pursuant to the Missouri Real Property Tax Increment Allocation Redevelopment Act, Kansas City's Tax Increment Financing Commission (TIFC) created a redevelopment plan determining that an area encompassing Allright's property was blighted. (15) TIFC, therefore, attempted to purchase Allright's property, but Allright refused to sell. (16) As a result, TIFC petitioned the Circuit Court of Jackson County to have the property condemned. (17) On July 2, 2007, the circuit court granted TIFC's petition and condemned the property. (18) Allright appealed the judgment to the Missouri Court of Appeals, Western District, claiming that the circuit court erred by failing to require "TIFC to prove ... that the city council as the condemning authority individually considered its two parcels or determine that a preponderance of the individual parcels were blighted" as required by section 523.274(1). (19)

   The appellate court determined that section 523.274(1) was ambiguous and, therefore, turned to the statute's legislative history in order to interpret its meaning. (20) The original language of the statute was designed to prevent the government from condemning property unless "'each parcel of [the] property' was blighted." (21) Therefore, the property could not be condemned unless each parcel satisfied the condemning authority's definition of blight. (22) According to the appellate court, the legislature later changed the statutory language and allowed redevelopment areas to be condemned despite the fact that not every parcel within the area was blighted. (23) In light of this change, the appellate court found that TIFC was not required to make a finding of blight on each individual parcel. (24) It reasoned that the new statute did not provide any stipulation as to what occurs when a parcel is not deemed to be blighted, but rather requires that a preponderance of the redevelopment area be blighted. (25)

   The appellate court concluded that this change in the statutory language allows an area to be condemned if a preponderance of the square footage of the redevelopment area is blighted. (26) In light of the evolution of the statute, the appellate court affirmed the trial court's interpretation of section 523.274(1) and created a new test designed to determine whether eminent domain can be used to take land that is deemed blighted. (27) Under this new test, in order for TIFC to condemn the redevelopment area, including Allright's two parcels, it must complete this two-prong test: (1) evaluate each parcel, but need not make a specific finding as to blight, and (2) determine whether a preponderance of the square footage of the area is blighted. (28)

3. LEGAL BACKGROUND

   1. History of Eminent Domain

      For centuries, eminent domain has been used by the government to acquire private property for the public good. (29) The modern approach to what constitutes "public use" expands the potential recipients of the private land beyond common carriers to other private entities that will use the property to benefit the public. (30) In many cases, this means transferring land ownership in order to allow a private developer to erect shopping malls and other private businesses in order to bolster the economy.

      Missouri courts have also utilized a broad definition of public use. For example, in Phillips Pipe Line Co. v. Brandstetter, the St. Louis Court of Appeals found that the pipeline company could condemn a portion of the defendant's farmland in order to lay a pipeline because it was a public use. (31) The court stated that a "public use means [a] public benefit," and that "'[i]t is not essential that the entire community, nor even any considerable portion, should directly enjoy or participate in an improvement in order to constitute a public use.'" (32)

      Missouri, like many other states, authorizes the use of eminent domain to condemn blighted areas for redevelopment purposes. (33) The process of condemning private property in order to redevelop an area has been occurring for a long time but was recently brought to the forefront by the United States Supreme Court decision in Kelo v. City of New London. (34)

   2. The Kelo Decision

      In Kelo, the plaintiff challenged the city of New London's use of eminent domain to take her property as part of a development plan to economically revitalize the city. (35) New London's unemployment rate was almost double the rate in New Jersey and the town's population was diminishing. In response, the city decided to implement a redevelopment plan to spur the economy. (36) The redevelopment plan included building new restaurants, shopping areas, residential neighborhoods, a marina with commercial and recreational uses, and office buildings. (37) Kelo argued that the government was taking her property in violation of the Takings Clause of the Fifth Amendment because they were not taking it for a "public use." (38) The United States Supreme Court ruled that the city's use of the property constituted "public use" under the takings clause. (39) In coming to this decision, the Court looked at two prior Supreme Court cases.

      First, the Court examined Berman v. Parker, which involved a statute passed by Congress that allowed Washington D.C. to condemn a portion of the city that the legislature deemed blighted. (40) The city was authorized to use the land for public purposes such as for schools and roads, but it allowed the remainder of the property to be sold to private parties. (41) The plaintiff in the case was an owner of a department store in the redevelopment area, and claimed that the city violated the Takings Clause of the United States Constitution. (42) He argued that his property was not blighted and that after condemnation his property would be sold to a private entity which does not constitute a public use. (43) More importantly, the plaintiff argued that taking "for the purpose of ridding the area of slums is one...