Eminent Domain

North Carolina Using Eminent Domain To Seize Homes and a Church for Electric Car Factory

Under the Kelo v. New London Supreme Court decision, a state can take private land to give to a private developer for almost any reason it wants.


VinFast is the first company to develop electric vehicles in its native Vietnam, and it's now making inroads into the American market. Last year, it announced it would build a factory in North Carolina that would manufacture both electric cars and batteries. Then, last week, the company said it would not be able to begin production at the facility until 2025, rather than the initial summer 2024 target.

An upstart company needing extra time to fulfill its promises is hardly news. But in this case, a lot hangs in the balance, as the North Carolina government has pledged to use eminent domain to evict multiple homeowners, businesses, and a church.

When Gov. Roy Cooper announced the deal in March 2022, he called the project "transformative" and said it would "bring many good jobs to our state." CNBC cited the project when it named North Carolina America's Top State for Business, marveling that Cooper, a Democrat, was able to strike such business-friendly deals with a General Assembly dominated by Republicans.

While it was only founded in 2017, VinFast has the backing of Vietnam's wealthiest citizen and has been valued somewhere between $20 billion and $60 billion. For the North Carolina factory, the company pledged to spend $4 billion and create 7,500 jobs within five years. In exchange, the state promised incentives totaling $1.2 billion, including $450 million toward site preparation; $400 million from Chatham County, where the facility would be located; and a $316 million grant over 32 years in which the company is reimbursed for the state income tax money its employees pay.

But taxpayer money isn't the only thing the state is giving away. As part of its site preparation process, the North Carolina Department of Transportation (NCDOT) also planned roadway improvements to accommodate the traffic a new factory would create. Those plans would require displacing a total of 27 homes, five businesses, and Merry Oaks Baptist Church, which has stood on its spot since 1888.

Local residents raised concerns during the NCDOT's public comments meetings. While the department ultimately agreed to alter its plans slightly, a spokesperson told the local Chatham News + Record that while "multiple concepts were considered for the transportation improvements needed for the VinFast site," none would be "able to avoid the relocation of Merry Oaks Baptist Church."

The state is nominally authorized under the Takings Clause of the Fifth Amendment to the Constitution to take private land for "public use," but only with "just compensation." In 2005, the Supreme Court decided in Kelo v. New London that a state could seize private land to give to another private owner for the purposes of economic development. North Carolina's use of eminent domain for roadway improvements rather than the factory itself could be enough to circumvent the "public use" aspect of the takings clause, but under the Kelo decision, it could have taken the properties for either reason.

Notably, the Kelo decision was sparked by the city of New London, Connecticut, seizing homes for the construction of a Pfizer facility that was ultimately never even built. This was cold comfort to the people who lost their homes. Similarly, a pause in VinFast's production schedule will mean little to the homeowners and churchgoers whose properties are in danger of being seized in order to benefit a billion-dollar company.