Eminent Domain Abuse in Fort Collins, Colorado

Fort Collins, Colorado officials are threatening to use eminent domain to help a private developer acquire a Sears department store in the aging Foothills Mall. Sears owns its building and has rejected a purchase offer from developers Alberta Development Partners and Walton Street Capital, who bought the mall in July.

Via the Coloradoan:

City Manager Darin Atteberry … [says] … the city is "doing everything it can to minimize the possibility" of having to use eminent domain but said the probability that it will be necessary is relatively high. "We knew going in that (eminent domain) was something we might have to consider and it looks (like) the probability is high that we will have to consider it, but we also have a lot of work to do before we get to that point."

The city is, in fact, already using eminent domain. Officials decided the mall is "a menace to the public health, safety, and welfare of the community" and approved an urban renewal plan for the area in 2007. Whether the city eventually files for condemnation or not, negotiations between Sears and the developers are clearly influenced by the fact that the city can seize the property.

Just how menacing is the mall? The blight study cites "elevation changes" that could lead to "hazardous slip and fall situations," inadequate sidewalks, drainage problems, poor lighting and loading zones that extend into sidewalks and roadways. Click here for shocking picures of UPS trucks parked on curbs, empty parking lots, and other menacing menaces.

Despite the great threat Foothills has posed to the citizenry over the last 37 years, the study provides precisely zero examples of anyone getting hurt ever.

In addition to using eminent domain, the city is offering tax-increment financing to redevelop the mall, which is bringing in half the $4 million in sales tax revenue it has produced in years past. Now half empty, the mall's decline can be traced, at least in part, to competition from newer shopping centers in Fort Collins and nearby Loveland, both of which received public subsidies as well.

In 2006, the Colorado legislature passed weak eminent domain reform barring private-to-private transfers purely for economic development. However, municipalities can still seize "blighted" property for private use—and Colorado's blight statutes are so vague they could apply to virtually any neighborhood.

Click here and here for more Reason coverage of recent Colorado eminent domain abuses.