Section 7 Taking Solely for Economic Development Prohibited, Statute of Limitations in Redevelopment Cases, and Other Statutory Restrictions

• Library: Condemnation Practice 2009

In 2005, the United State Supreme Court decided Kelo v. City of New London, Connecticut, 545 U.S. 469 (2005). In Kelo, owners of condemned property, which was not blighted or in poor condition, challenged the city’s exercise of the power of eminent domain on the ground that the takings were not for a public use. The properties were sought in furtherance of a development plan that was designed to revitalize an economically distressed area and to increase the tax and other revenues of the city. The Court held that the city’s decision to take the property solely for the purpose of economic development served a “public purpose” and, therefore, satisfied the “public use” requirement of the Fifth Amendment to the U.S. Constitution.

In 2006, in response to the public outcry against Kelo, the Missouri legislature enacted House Bill 1944, which added a number of new sections to Chapter 523, RSMo, designed to address what was perceived to be an abuse of the use of the power of eminent domain for redevelopment purposes. Among the new provisions are §§ 523.271, 523.274, and 523.286, RSMo Supp. 2008.

Section 523.271.1 prohibits the acquisition of private property through the use of eminent domain for “solely economic development purposes.” “[E]conomic development” is defined to “mean a use of a specific piece of property or properties which would provide an increase in the tax base, tax revenues, employment, and general economic health” but “does not include the elimination of blighted, substandard, or unsanitary conditions, or conditions rendering the property or its surrounding area a conservation area as defined in section 99.805, RSMo.” Section 523.271.2.

Section 523.274.2 provides that an action to acquire property by eminent domain within a redevelopment area must be commenced no “later than five years from the date of the legislative determination . . . that the property is blighted, substandard, contains unsanitary conditions, or is eligible for classification within a conservation area as defined in section 99.805, RSMo.”...