Eminent Domain

Ohio Eminent Domain Case Ends

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Here's the close to a precedent-setting eminent domain case from Ohio:

The owner of the lone house standing in the middle of the 11-acre site that was the focus of a landmark eminent-domain case has sold his property to Rookwood Partners for $1.25 million.

Joe Horney's sale of his vacant rental house ends a long legal battle that drew national attention, and clears the way for development of the site, located on prime real estate at Edwards and Edmondson roads.

Horney, who bought the house for $63,900 in 1991, was the last of the 71 property owners on the site to sell to Rookwood Partners. The developer spent more than $20 million for the other properties and tore down all the buildings, leaving only Horney's boarded-up home and detached garage….

The [Ohio] high court ruled that it was illegal for Norwood to use eminent domain for private economic development.

As a result, Ohio approved a law last year that places more restrictions on the use of eminent domain.

The court decision also influenced other court rulings and legislation throughout the nation….

The $1.25 million is almost twice what Rookwood Partners paid for the property of Sanae Ichikawa-Burton and Matthew Burton, the second-to-last holdouts to sell.

More here.

reason on the Norwood case. On eminent domain abuse more broadly.

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  1. Good for him. Fair market price is whatever the BUYER is willing to pay and the SELLER willing to take.

  2. Word. Count this as a win.

  3. You gotta know when to hold’em, know when to fold’em, know when to walk away with 1.25 mil…

    I bet his former neighbors are pissed.

  4. Naga,

    Fair market price is whatever the BUYER is willing to pay and the SELLER willing to take.

    Exactly. Ive always wanted to see a judge rule in favor of ED but require the above criteria for setting the purchase price (in effect destroying ED).

  5. The countervailing argument is that each property holder has an incentive to be the last, as the last one (obviously) commands a massive premium. I think its a form of “free rider” problem.

    The solution (although its imperfect) is to make every contract to purchase a group of properties contingent on the entire group closing on the same day, or on all owners of the group of properties accepting their offer. Of course, this pretty much requires that you make simultaneous offers to all the property owners, which doesn’t allow the developer to sneak in and snap up the first handful at a discount. To which I say, tough.

  6. I hope this slows down

  7. Good for him. I hope he gives a nice gratuity to the Institute for Justice.

    I wonder what the developers are going to do with the land, now that interest in pie-in-the-sky real estate ventures has pretty much fizzled out?

  8. I cannot help thinking the Ohio legislature is frantically scheming to “recapture” some of his windfall profits.

  9. We don’t need more development anyway, and no one should be forced to sell. True, it looks like he scammed them, but it’s also a win for the property owner.

  10. “You gotta know when to hold’em, know when to fold’em, know when to walk away with 1.25 mil…”

    Now that’s what I’M talkin’ about.

  11. You guys are crazy.
    A case like this makes me sympathetic to emminent domain use. The greater good has the moral high ground over this guy in this case.

  12. The greater good has the moral high ground over this guy in this case.

    *slaps forehead*

  13. “we don’t need more development anyway”

    Goddammit. Of course we need more development. We may have overbuilt both commercial and retail, and are now oversupplied, but if we halt development, the pendulum will just swing the other way again and we’ll be under supplied before you know it, forcing prices to start skyrocketing all over again. Why don’t you let the market do what it needs and stop telling us what we need.

    This case is awesome. I can’t believe anybody (asldkfj) thinks a property owner shouldn’t have the right to not sell his property. He didn’t want to sell, but everybody has a price, and his was 1.25 million. Good for him.

  14. Why slap the forehead??
    And what if everyone demanded 1.25 mil?? It’s highway robbery that allows a lone crank to grind a major development to a halt!
    And no, fair market price isn’t what buyers and sellers are willing to agree on. That’s the bs line spouted by Realtors.
    Ok, technically, it’s true, but it’s also true that a property has an intrinsic value that can objectively arrived at. This guy only got more, because as the last hold out, his property went from a “normal” house to the final roadblock in a major development, which he milked.
    I find that morally offensive. He should get the normal house price.

  15. And what if everyone demanded 1.25 mil?? It’s highway robbery that allows a lone crank to grind a major development to a halt!

    You have a really fucked-up version of what highway robbery is. In your world, it’s highway robbery to let the sellers and the buyers work it out. However, it is NOT highway robbery to send police officers and state troopers to a house to force people to leave when they don’t want to.

    What is wrong with you?

  16. I find that morally offensive. He should get the normal house price.

    Who the hell are you to determine what he “should” and “should not” get for something that is his (and not yours?)

  17. My god he’s still at it.
    Grind a major development to a halt? what the fuck gives them the right to develop somebody elses property?

  18. “He should get the normal house price”… are you high?!? The “normal house price became 1.25 mil when the property on which the hose sat became worth 1 mil an acre… It kills me when the developers expect people to give them a their home for $ when the very transaction makes the home worth $$$, and then complains when a few home owners have the sense to figure it out. This also ignores the instances where the is NO amount of money that the owner is willing to accept to give up their property… If you don’t own the land, you don’t get to develop it, period. If you absolutely must build the mini-mall, prepare to pay the cost!!!!!

  19. What if somebody wanted to buy your house and just build another house there? would it be appropriate for them to force you to sell. No it wouldn’t and you know it. So what if they wanted it really really bad? they’d offer more than it was ‘intrinsically’ worth. You would be morally justified in holding out as long as you fucking wanted wouldn’t you?
    what’s different about this?

  20. Besides, the developer can always do what they had to do in a couple of Bugs Bunny cartoons, and just build around the lone holdout… 🙂

  21. R C Dean,
    “The solution (although its imperfect) is to make every contract to purchase a group of properties contingent on the entire group closing on the same day, or on all owners of the group of properties accepting their offer. Of course, this pretty much requires that you make simultaneous offers to all the property owners, which doesn’t allow the developer to sneak in and snap up the first handful at a discount. To which I say, tough.”

    I’m reminded of something I read once, perhaps in Reason. A large group of homeowners got together and decided to sell the entire neighborhood to a developer (They approched him with the idea, IIRC.), and each walked with 2x what their homes were worth individually. He was happy to pay that, because he was guarenteed(sp?) to get the whole area.

    Everyones a winner, babe! That’s no lie…

  22. The greater good has the moral high ground over this guy in this case.

    Dear alsfdjk, We hold these truths to be self-evident. All men are created equal and are endowed by their creator certain unalienable rights, among these are life, liberty, and the pursuit of happiness.

    There is no such thing as the “greater good”. We are a collection of individuals, each with his or her own unalienable rights. We do not belong to the borg, society has no rights greater than our individual rights to life, liberty, and the pursuit of happiness.

  23. kinnath,

    We do not belong to the borg

    The needs of the many outweight the needs of the few, or the one

    Star Trek couldnt make up their fucking minds, could they?

  24. Star Trek couldnt make up their fucking minds, could they?

    Of my friend, I can only say this: of all the souls I have met in my travels, his was the most…human.

    That was a personal sacrifice of Spock’s own choosing. It’s not really collectivism.

  25. I’m sorry… aslfdjk’s just too stupid to live.

  26. Epi,

    The specific sacrifice was Spock’s, but the phrase, especially the “few” part implies collectivism. Of course, since I dont think the Federation has a draft, all the Star Fleet members agreed to join the collective, so a Captain sacrificing some to save others is okay anyway. But, the phrase isnt Star Fleet specific, but seemed to be a general principle.

    I did always like “I dont believe in the no-win scenario.”

  27. I bet his former neighbors are pissed.

    Yeah, and who can blame them? The entire country lives under the pall of a potential ED taking, so when Developer Inc. gives you an offer that seems…decent, you’re going to be nervous about not taking it.

    Think of it this way, Developer Inc. standing on your doorstep, making a ‘reasonable’ offer, with the government officials standing behind you, gold-toothed smiles with their eminent domain hammers at the ready. The mere thread of ‘private transfer’ ED creates an entirely lopsided bargaining environment.

  28. I did always like “I dont believe in the no-win scenario.”

    Kobayashi Maru FTW!

  29. Epi,

    it had the virtue of never having been tried

  30. Ok, technically, it’s true, but it’s also true that a property has an intrinsic value that can objectively arrived at.

    Oh, please. There’s no such thing as intrinsic value in a commercial transaction. Commercial value is always subjective, always shifting.

  31. All I can say is “Hell yeah”!

    I live right down the street from this, and have been wondering how the case was going.

    Dunno if anyone’s ever seen Rookwood plaza, but it’s the worst designed POS shopping center ever. It’s totally flat, and is divided in half. There is no practical way to get from one side to the other without a car, and from the entrance traffic is directed behind the building. During the holidays it requires a small band of cops to direct it as it’s right next to a major intersection.

    But rather than fix the problems they have, they decided to bully the residential block next door. Norwood is mostly composed of poor to middle-class blue-collar types and is directly adjacent to the upper-class Hyde Park neighborhood of Cincinnati.

    It was really great to see them lose the Ohio Supreme court case. That was the first time I started sending checks to the IJ.

    As a humorous side note, one of the councilmen who decided to use eminent domain had to resign a couple of years ago for stealing a computer from the local Sam’s Club. Sorry, this is the best link I could find.

    Ah, sweet poetic justice.

  32. asldkfj, are you by any chance a (Henry) Georgist?

  33. Listen, I agree with you guys technically, however I’m trying to look at this practically. It seems to me that no major development can get done if one guy can hold out like that and get soo much more for something than his neighbors got.
    And for all the criticisms I got, if we swap out shopping center with hospital or highway, then it’s pretty open and shut under the Constitution(though I’m sure the hard core libs would still argue).
    I don’t know about Georgist; I’m just for development. I’m against enviros stopping Berkeley from building that thing for the sake of a few trees and I’m against this guy stopping a mall (which I consider to be a quasi-public benefit, and certainly a benefit to me if I live nearby) just because he wants whatever it is he wants. I am made slightly poorer by his actions.

  34. All of which ignores the fact that it was his property to do with what he wanted. It wasn’t yours. It wasn’t the developers. It was his. You can go on and on about practicality all you want but you cannot ignore the fact that the property was his.
    I want your car. You won’t sell it to me. I end up paying more for it than it is worth because I want it really badly. I am made poorer by your actions, but it’s only because I wanted it badly enough to eat the higher cost.

  35. Apparently asldkfj owns nothing of any signficant value to himself.

  36. I’m not entirely sure that asldkfj is being serious. If he is serious, may the Lord have mercy on our souls.

  37. No, I’m just practical enough to own my house in a residential neighborhood, not where a frickin mall should be.
    Listen, I’m glad they kicked those people out of Chavez Ravine so that Dodger Stadium could be built. The city of LA has benefitted as a whole far more than the loss those people suffered. And this guy should have gotten the same. All he lost was a house no different than the million others out there. He should have gotten enough money to go buy one of them, so that I can go shop at the Gap.

  38. robc wrote:
    “We do not belong to the borg

    The needs of the many outweight the needs of the few, or the one

    Star Trek couldnt make up their fucking minds, could they?”

    You completely missed your own point.

    The Dickens quote was used to explain why a VOLUNTARY choice was made. The character weighed the options and decided that his life was not as important as those he could save.

    This is the same decision made by Rodger Young.

  39. I’m glad they kicked those people out of Chavez Ravine so that Dodger Stadium could be built. The city of LA has benefitted as a whole far more than the loss those people suffered.

    Fuck

    You

  40. “not where a frickin mall should be”

    SHOULD be means nothing in this context. The homes were there first. A developer has no right to other peoples property, no matter what crappy stores you want to shop at.

    “all he lost was a house”

    Now i know you are either messing with us, or you simply do not own property.

    THE HOUSE WAS HIS. If it were possible, and every single fucking citizen in the country voted to turn his house into a magical spindle that turned straw into gold, and we all got a share, I still would not support it because it is HIS house.

  41. JGR,

    If you read down, you will see I acknowledge it is fine in a voluntary choice. But, that phrase or equivalent is also used to justify state action. asldkfj is arguing that the needs of the many for a mall outweigh property rights.

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