Mention "eminent domain," and most people think of the government obtaining land to build such public works as roads or bridges. But authorities in New Jersey have moved well beyond the boundaries set in the U.S. Constitution–"nor shall private property be taken for public use, without just compensation"–to establish a process that lets the owners of gambling casinos scarf up land adjacent to their properties at fire-sale prices.
Soon after casino gambling was legalized there in 1979, New Jersey established the Casino Reinvestment Development Authority and gave it the power of eminent domain to help casino investors buy private property. Once a developer finds the land he wants to acquire and a city planning board approves the project, the CRDA simply makes a purchase offer and, if the owner demurs, asks a state court to condemn the property.
Arguing that the CRDA's actions violate the U.S. and New Jersey constitutions, the Washington, D.C.-based Institute for Justice is representing Vera Coking, a widow who owns a boarding house in Atlantic City that has attracted the attention of millionaire developer Donald Trump. Trump wants to buy the property, raze the house, and use the land as a staging area for limousines at his adjacent Trump Plaza hotel and casino.
Back in 1983, Coking rejected a $1 million offer by Penthouse publisher Bob Guccione, who wanted to build a casino. But after Trump Plaza was approved in 1994, the CRDA notified her that the "appraised" value of her land was a mere $251,250. It gave her 30 days to accept that amount or face condemnation proceedings. She fought the condemnation and won in Atlantic County Superior Court, only to have the ruling overturned on appeal.
The institute is representing Coking before the New Jersey Supreme Court, arguing in part that the CRDA would be taking private property for private use because Trump, not Atlantic City, would own the land. It also contends that the law establishing the CRDA gives the agency eminent domain powers only when acquiring a plot of land is essential to complete a project. Yet Trump Plaza has been operating for more than a year. If left unchecked, the taking has troubling ramifications: A CRDA victory could establish a precedent giving governments unlimited ability to appraise, condemn, and confiscate private property for the benefit of well-heeled private parties.
The U.S. Supreme Court has upheld such "private" takings since the 1954 Berman v. Parker decision, which transfered property from one department store owner to another. If this case reaches the U.S. Supreme Court, the institute hopes the Court would again place some limits on "public use."
Two of Coking's neighbors, restaurateur Vincent Sabatini and jeweler Peter Banin, are separately suing the CRDA and Trump. Sabatini's plight was chronicled in Doonesbury the weeks of February 24 and March 10, marking the second time in recent months (an earlier series concerned medical marijuana) the strip has taken libertarian stands.