Government “Renting Out” Power of Eminent Domain?

By Carmen McKeehan

During arguments before the Ohio Supreme Court, Justice Judith Ann Lanzinger asked, “Does it make any difference that it appears that the private developer was the one that started this ball rolling? Should it be of concern when we’re talking about whether this is truly public use, or if it’s private use with public incidental benefit?”. That leaves the question - did the city simply “rent out” its power of eminent domain to the developer?

When this project was first introduced, the City of Norwood had no plans for change to the neighborhood in question. There had been no discussion on council floor about the neighborhood being a slum, blighted or deteriorated and no plan had been adopted or discussed. The plan adopted by Council was a direct product of the developer’s wishes, not in response to a master plan by the city.

In order to use eminent domain, the City needed to show the property in question was “a slum, blighted or deteriorated”. A study was approved by the City and funded by the developer. The standards used in the study were vague and could be applied to any neighborhood in Norwood. Eventually, the criteria in the study was declared by all courts to be standardless.

The City of Norwood has an elected Law Director and a full time Assistant Law Director. But the city was represented by Tim Burke whose legal fees were also paid by the developer through the city.

But what about the “economic” argument that the city needed the development for the increased revenue? The City granted the developer a TIF which effectively means no new property tax revenue for 20 to 30 years on that property. The only “public use” is a parking garage that services the development. The possible additional earnings tax revenue seems to be the only benefit to the city. Since the developer is the one providing the value figure for the benefit, without consideration for increased services, we are left to wonder how much it is truly worth.

With the developer picking up the tab and calling the shots while the City was going along for the ride, this project was nothing more than private use with public incidental benefit. Was Norwood renting out its powers of eminent domain, or as one now famous local yard sign put it, was the “City for Sale by Council"?