Insights

How to Handle Eminent Domain Cases in Arizona

William E. Lally, Shaine T. Alleman,  |  December 13, 2017

In 1875, the case Kohl v. United States made its way to the Supreme Court. It was the first challenge to the eminent domain clause of the Fifth Amendment of the Constitution, but not the last. Since then, the Court has often met with eminent domain challenges. While the judgments vary, most center on what justifies actual “public use” of land seized under eminent domain. States have had their share of eminent domain challenges, including Arizona. The 2003 Arizona case Bailey v. Mesa  is a seminal case that tested the limits of the public use clause for redevelopment.

Using Eminent Domain to Obtain Properties for Development

The portion of the Fifth Amendment in question reads, “No person shall … be deprived of … property, without due process of law; nor shall private property be taken for public use, without just compensation.” The point of this part of the Constitution was to provide the means by which the government could rightly seize property for public use.

In 1875, the need arose in Cincinnati to build a post office and other government buildings. The owner of the property refused to sell it to the city, so the city council voted to force a purchase in Kohl v. United States.

The United States Supreme Court agreed with the city, holding that the ability of the government to take property for public use is necessary when the owner is unwilling to surrender rights to the land.

How Bailey v. Mesa Affected Property Rights

Bailey v. Mesa is important to property developers because the Arizona Court of Appeals ruled that the city had overreached its authority. The reason was simple: The city had taken property from one private citizen in order to provide it to another for development purposes. Taking property for public use is not the same as taking property for private use—even for private commercial use from which the city receives some benefit.

Because Mesa failed to secure the rights to the Bailey property, it put a 10-year stop to redevelopment efforts on the property. After this decade ended in 2010, the city of Mesa invited Mr. Bailey to be on its Planning Advisory Committee for the creation of the Central Main Development Plan, which included his properties. Bailey gladly joined the efforts to revitalize downtown Mesa.

In 2015, the city announced its plans to develop the downtown area for modern urbanization. By 2016, the plans were moving forward. Bailey felt that this inclusion allowed him to have a voice in the redevelopment efforts that directly affected his property. Mesa also provided Bailey and other property owners with incentives such as assistance with property demolition and cleanup, site preparation, tax relief, infrastructure improvements, and reduction in city permitting fees. This example demonstrates that using the legal power of the government to secure properties may not the best approach for working with private property owner to achieve redevelopment success.

If You Have Questions About Eminent Domain in Arizona

While eminent domain may play an important role in the scheme of real estate development, the Bailey case is a great example of how alternatives to eminent domain, such as creative redevelopment options and forming strong public-private relationships, can be used as a way to overcome the many challenges of development.

At Tiffany & Bosco, the Land Use and Zoning team is poised and experienced to create success in real estate development cases where the intricacies of future redevelopment, including eminent domain, may create roadblocks for development.

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