Eminent Domain

When Eminent Domain Is Used for Economic Assassination

Government officials who wield land grabs to pick economic winners and losers now want to use them to kill disfavored businesses.

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In 2005, the United States Supreme Court ruled that it's constitutional for government officials to use eminent domain to steal private property and transfer it to other private parties if they think the change of ownership will further economic development. The Kelo decision proved to be wildly unpopular and sparked legal reforms intended to block the practice. Now, the courts have a fresh opportunity to get ahead of public outrage as a New York town seeks to use eminent domain not to promote economic development, but to block it entirely.

"Southold Town will pursue eminent domain proceedings to turn a vacant Mattituck lot into a park to prevent the location from becoming a hardware store," as Newsday summarized the dispute in September 2020. "The property owner and other critics of the proposal said the town should have moved on the land — which cost the owner $700,000 — before a development plan was in place and that using the condemnation process this way sets a bad precedent."

Southold officials' insistence on seizing the land for a park came after the Brinkmann family, which owns the parcel and plans to use it to expand their hardware chain, won a legal challenge to the town's several-times-extended moratorium on building permits in the area. The moratorium was one of several tactics—including a $30,000 fee for a "Market and Municipal Impact Study" paid the month before the moratorium was imposed—invoked by the town to block development as some members of the community sought to freeze Southold in time as a museum of its current condition.

In response to the proposed land grab, the Brinkmanns have teamed up with the Institute for Justice (IJ) to sue Southold.

"The town says it wants to take the land for a park—not because the town was planning for a park, but because that appears to be the only way to stop the Brinkmanns," IJ announced this week as the Brinkmanns filed a federal lawsuit. The complaint maintains that Southold's intention to build a "passive" (unimproved with no facilities) park on the targeted property is nothing more than a pretext for blocking the family's effort to use the property as a location for a hardware store.

"The Town did not contemplate a park, much less engage in any planning for a park on the Brinkmanns' property, until after they applied for a building permit, and after the Town had exhausted every other regulatory avenue in its attempt to stop the Brinkmanns from obtaining a building permit," according to the complaint. "The Town has made no effort to purchase a larger parcel next door that is for sale and equally suitable for a small park."

Southold did first offer to purchase the parcel—for a sum that would leave the Brinkmanns eating hundreds of thousands of dollars paid to architects, engineers, and the town itself. When rebuffed, officials moved to seize the property.

Needless to say, brandishing eminent domain to prevent economic activity is an even more tendentious interpretation of the Fifth Amendment's "public use" requirement than was the hope that politicians' chums might someday use parcels for more profitable ends than legitimate current owners at the heart of Kelo. As such, even courts accustomed to deferring to vague assurances from government officials might be pushed beyond the limits of their credulity.

"This extreme tactic would not only deprive the Brinkmanns of their property, but could also provide a model for other towns to similarly misuse eminent domain to prevent legal development of property," IJ adds. 

That's a serious warning about the risks of extending the use of eminent domain even beyond its dangerous application in Kelo as a tool of industrial policy. Given the opportunity, politicians are happy to put such power to all sorts of uses that cause more harm than good.

"In the years since Kelo, controversy over eminent domain abuse has expanded from 'economic development' and 'blight' condemnations to include such questions as pipeline takings, and Donald Trump's efforts to use eminent domain to build his border wall," George Mason University Law Professor and Volokh Conspiracy contributor Ilya Somin warned last summer. "While each of these situations raises some unique issues, all involve efforts by the government to seize private property for dubious purposes that are likely to destroy more economic and social value than they create."

All of those applications of eminent domain incidentally destroy more economic and social value than they create; Southold seeks to use the power to deliberately destroy, effectively turning it into a weapon of economic assassination. If causing intentional harm can be interpreted as a "public use" under the Fifth Amendment, it is difficult to imagine any limits to the government's power to seize private property. But malice isn't the only danger; regulatory uncertainty is also a risk.

"The town hasn't been able to find a legal way to stop our hardware store, so now they want to just take our land," Hank Brinkmann maintains. "From the beginning we've tried to fit into the community and follow the rules, but the rules keep shifting under our feet."

That's another reason to reject Southold's attempt to wield eminent domain as a barrier to private enterprise. Even if government officials aren't being overtly malicious, it becomes difficult to make plans and investments when the regulatory environment is an ever-morphing maze of rules that change based on personal whims and public pressure. If officials want a parcel for a specific use, or no use, they should purchase it when it is available. Otherwise, they need to respect the property rights that provide certainty for what people can and can't do with what belongs to them.

"It's very, very concerning," Paul Pawlowski, a local developer, told a public hearing when Southold officials floated the idea of eminent domain. "When you buy property or sell property, we all have to live by a playbook and that playbook is our town code." He added that the moratorium and use of eminent domain effectively "threw the playbook out."

Deliberately or incidentally, eminent domain does a lot of damage to people's property rights and their ability to plan for the future. It's long past time to place tighter limits on government land grabs, and to prevent them from becoming weapons for killing businesses that politicians don't like.

NEXT: It's Too Bad We Can't Fire More Governors

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51 responses to “When Eminent Domain Is Used for Economic Assassination

  1. The complaint maintains that Southold’s intention to build a “passive” (unimproved with no facilities) park on the targeted property

    So exactly how do you ‘build’ a “passive park”? Newspeak was the true terror in 1984.

    1. You simply let the lot lie abandoned until it’s full of weeds and trash.

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  2. You didn’t build that.

    1. And you’re not going to.

    2. Buh Trump

      1. …would have kick these losers to the curb for limo parking.

  3. I am shocked! Shocked I tell you! I can’t believe that the same group of people that developed operation choke point would use the government to go after people they dissagree with

    1. A town council vs the Federal bureaucracy is the same group of people?

      1. Yep it’s called government. It was a town council that stole kelos land too. The feds had a bunch of hearings saying it was okay.

        1. RBG herself being the final say so, I believe.

          1. Buh Trump

  4. The few times projects came up where eminent domain was discussed, the client ultimately said no. Thankfully. They weren’t worried about having their tires slashed and more worried about not making it down to breakfast.

  5. That’s why most potential entrepreneurs don’t bother trying. It’s easier to kick back and collect other people’s money than to waste time dealing with bullshit.

  6. The complaint maintains that Southold’s intention to build a “passive” (unimproved with no facilities) park on the targeted property

    So they’re going to just leave it as an empty lot? In what universe is that a park? Only in clown world.

    1. Green space, Greenpeace, Green New Deal…it’s all green.

      1. Whatabout Trump

      2. Envy is green too.

  7. Why is a hardware store a disfavored business? Or is it disfavored owners (which would be even more nefarious)?

    1. or is there another hardware store in town that doesn’t want the competition and controls the town council. sounds like an idea for a movie, Roadhouse III.

  8. Was it ever explained anywhere what the government has against these people? Did they just not pay some political squeeze at the appropriate time?

    1. Looking at the map, Southhold is out on the east end of Long Island, surrounded by wineries and vineyards. They probably don’t see hardware stores as the “right” business.

      And they don’t need a park. The whole town is open space.

      1. “The whole town is open space.”

        And they apparently intend to keep it that way.

  9. Sounds like a typical democrat, tax and spend and steal what they can.

    Also can you people get through one article without your TDS?

    1. in this case it is pertinent to the story

    2. Trump supports private entities using eminent domain!! And George Wu Bush successfully got the state to employ eminent domain to acquire land for his time build an obsolete MLB ballpark!?!

  10. Looks like someone forgot to grease the skids.

    “Nice building site you got there. Be a shame if somethin’ happened to it.”

  11. The best part is that even if they win the lawsuit it is the citizens of the town who will pay for any award (and are on the hook for the town’s legal activities regardless).

    I’m not sure why small business owners fight these sorts of things. You spend years of your blood and life saving’s worth of treasure to take a coin flip on whether you lose it all or simply get to take another step. Even when you win, all you do is make your enemies in city hall madder and more determined to use their infinite citizen-supplied resources to harass you until the end of time. You’re fighting a war of attrition against the wind and the tide. If you encounter a city like this the better answer is to just pack up your shit and leave. Go somewhere else that actually wants a hardware store. The city of Southold will be poorer without them.

    1. Agreed; fuck ’em.

      Personally, I rather like hardware stores. Everybody in mine knows me by name, like Norm in “Cheers.”

  12. This really is stupid. Every classical economist understand how to apply land taxes so there is little micromanagement or cronyism.

    I suspect there’s a bit more to this story that has to do with a town trying to micromanage cronyism through its property tax and zoning and regulation systems. With maybe the current owner also trying to play that game. No surprise it all turns into a clusterf@#^ that enriches lawyers and forces everything into court while screwing people who actually want to improve the value of their surroundings.

  13. 30 years ago Home Depot planned to take over an abandoned store in Tujunga CA. The residents protested, believing that a Home Depot would attract day laborers.
    HD never moved in, and the building is still empty. And day laborers congregate at a rental yard down the street.

  14. Don’t hardware stores enable gentrification? Shouldn’t tools be illegal?

  15. As a pragmatic proposal, what would happen if the law changed such that eminent domain seizures required that governments pay DOUBLE the fair market value for land? Or triple, if that’s not enough?

    Tell the people who insist that vital infrastructure requires some ability to seize land that they have to put their money where their mouths are.

    1. The problem comes when they rezone or declare a home blighted. The value then drops to 0

      1. The actual problem is that the land value drops significantly, but does not drop to absolutely zero. If it dropped to zero, the owners could challenge the rezoning as a taking, but if the land retains some value, this does not legally constitute a taking per the Supreme Court. I believe the current precedent is South Carolina Coastal Resources Council, the worst Scalia opinion ever.

  16. The article treats “the town”, “Southold”, and “The government” as if it is from another galaxy, an alien omnipotence. It’s not: the people of the town elect it. Don’t like the town’s actions? Run for town office (council or commission) and become “the government”. Apparently, Southolders prefer the park to the hardware store. Until the town comes for another landowner. Read “First they came..” by Martin Niemoller.

    1. Don’t read Niemoller The guy was a former fascist trying to atone for his sins. Later he became a communist.

      1. I’m with you! The man admitted he knew who and what the Nazis were and admitted he said and did nothing! I would rather quote Heinrich Heine or Ludwig Von Mises, who knew and did speak up, or the Resistance who knew, spoke, and broke ’em off something!

      2. You mean this guy?

        Martin Niemöller (1892–1984) was a prominent Lutheran pastor in Germany. He emerged as an outspoken public foe of Adolf Hitler and spent the last seven years of Nazi rule in concentration camps. He is perhaps best remembered for his postwar words, “First they came for the socialists, and I did not speak out…”

        “Niemöller [who commanded an early U Boat during WWI, that he reportedly refused to turn over to the British following the Armistice] enthusiastically welcomed the Third Reich. But a turning point in Niemöller’s political sympathies came with a January 1934 meeting of Adolf Hitler, Niemöller, and two prominent Protestant bishops to discuss state pressures on churches. At the meeting it became clear that Niemöller’s phone had been tapped by the Gestapo (German Secret State Police). It was also clear that the Pastors Emergency League (PEL), which Niemöller had helped found, was under close state surveillance. Following the meeting, Niemöller would come to see the Nazi state as a dictatorship, one which he would oppose.”

        “Niemöller’s opposition to the Nazi regime’s rules for churches saw him arrested several times, as he became increasingly critical of the Nazis and Hitler. In July 1937 he was arrested again, held for eight months without trial, and re-arrested immediately after his release by the Gestapo, Germany’s secret police. He was then sent to Sachsenhausen concentration camp. At this point, these camps held political prisoners, in addition to those perceived as ‘threats to society’ such as Jewish people, gay men, Roma and Sinti people, and ‘asocials’ including alcoholics and beggars. In 1941, Niemoller was transferred to Dachau concentration camp, where he would spend most of the rest of the war. Finally, in 1945 he was transferred to another camp in Austria, where he was liberated by American troops in April 1945.”

        1. Yep. It took pressure on Niemoller’s precious Lutheran Church to get him to oppose Hitler. And considering that the Nazis admired the Church’s Anti-Jewish founder, Martin Luther, it was only selective pressure against perceived deviants to Luther’s hatred within the Lutheran Church. So yeah, fuck this guy.

    2. So the only way to defend against an unlawful and arbitrary confiscation of property by government is to run for office and get elected? Must be tongue in cheek.
      By that logic, no customer should be able to complain about a bad business practice because he could always get appointed to the company board of directors and change the business practice.

  17. The builders of the Keystone XL Pipeline were attempting to use eminent domain to take land from farmers and other landowners to build their money making pipeline when President Biden stepped in and revoked the permit. Thankfully, these people no longer have to worry about their land being stolen from them.

  18. I hope that “passive park” in Southold Town turns into the biggest damn “active” magnet for drunks, junkies, hookers, railroad bums, “transcients,” outta-work-guys, Occupy Southolders, CHAZ/CHOPpers, Antifa, BLMers, Proud Boys, biker gangs, street gangs of every sort, and and homeless encampers in history! I hope Southold Town becomes the new synonym for Skid Row or Desolation Row! The town fathers and mothers will richly deserve whatever “mostly peaceful” fate comes next.

    1. That may be the plan. Our beautiful park has a drug house nearby and city workers are scared to clean it up for fear of needle sticks. Ten years ago, I can testify first hand that it cost nearly $2000 in ER bills and anti-virals to prevent hepatitis and HIV, for treatment of a needle puncture. And the drug house? One of our motel tenants dimed it out to me after receiving multiple visits from dealers wanting to purchase and resell his (nonexistent) opiate prescriptions. I emailed the law, since the tenant was being harassed. Someone in the department called the drug house manager and he moved his business within eight hours.

      Now they sell out of parked vans and SUVs adjacent to the park.
      Former hardware cashier here says these house-proud he-heifers will be crying for the hardware as lumber and gas/delivery prices increase, even as their taxes rise for keeping that park clean.

      I’m with you, bro-turn it into their worst nightmare.

  19. Don’t read Niemoller The guy was a former fascist trying to atone for his sins. Later he became a communist.
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  20. I’m not sure why small business owners fight these sorts of things. You spend years of your blood and life saving’s worth of treasure to take a coin flip on whether you lose it all or simply get to take another step. Even when you win, all you do is make your enemies in city hall madder and more determined to use their infinite citizen-supplied resources to harass you until the end of time. You’re fighting a war of attrition against the wind and the tide. If you encounter a city like this the better answer is to just pack up your shit and leave. Go somewhere else that actually wants a hardware store. The city of Southold will be
    https://wapexclusive.com , poorer without them.

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  22. “In the years since Kelo, controversy over eminent domain abuse has expanded from ‘economic development’ and ‘blight’ condemnations to include such questions as pipeline takings, and Donald Trump’s efforts to use eminent domain to build his border wall,” George Mason University Law Professor and Volokh Conspiracy contributor Ilya Somin warned last summer. “While each of these situations raises some unique issues, all involve efforts by the government to seize private property for dubious purposes that are likely to destroy more economic and social value than they create.” Imagine what Komrade ???????? Simon believes a better use than a border security wall would be.

  23. “…eminent domain does a lot of damage to people’s rights…” ?? Ah, no, it contradicts rights, denies them, just as taxation does. To claim rights under the constitution is mistaken. The constitution was created legalize the initiation of violence, the ultimate rights negation. It was sold as a right’s protector, even as the language contradicted this promise. After 200 + years the public are starting to wake up and recognize the constitution was a fraudulent document used to undermine “The American Dream” of rights.

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