Eminent Domain Reform Arrives in Ohio
July 16, 2007
Ohio has comprehensively revised its eminent domain law through the June passage of Sub S. B. 7. Effective October 10, 2007, authorities with eminent domain powers (“taking authorities”), may not use eminent domain solely for the purpose of generating greater tax revenue; may not determine “blight” by emergency ordinance; and may take unblighted private property that is in a blighted area only if at least 70% of the area’s parcels meet a new, objectivized definition of “blight.” The legislation largely reflects the August 2006 recommendations of a statewide blue ribbon task force for changes to eminent domain law in the wake of the U.S. Supreme Court’s Kelo decision and the later Ohio Supreme Court decision in Norwood.
The bill requires a public agency to adopt a comprehensive development plan prior to appropriating property for a private use based on a finding that the area is blighted. It imposes on the taking authority the burden of proving that the area is blighted, and grants affected landowners the right to appeal a finding of public use/public necessity prior to the jury’s determination of the compensation that is due. “Blight” may be proven by demonstrating either (a) one of three specified conditions affecting the habitability or public health/safety of the property; or (b) two or more of sixteen specified conditions which, collectively considered, adversely affect property values or entail land use relationships that cannot be reasonably be corrected through existing zoning or land use regulations.
The new law expands the damages awardable to property owners in several ways. Attorney fees may be awarded when the final jury award exceeds 125% of the taking authority’s initial good faith offer (150% in “quick take cases”, such as road appropriations, where farmland is taken). Property owners may recover lost profits, lost goodwill, relocation expenses, and relocation search expenses, subject to monetary caps.
Enactment of the bill prompted grumbling from both proponents and opponents of eminent domain. The Institute for Justice, a leading challenger to eminent domain in Ohio and elsewhere, belittled the new law as too weakly protective of private property rights. The Ohio Municipal League, a leading defender of broad eminent domain rights, criticized the bill as creating new obstacles to municipal redevelopment.
While the new law is intended to apply to all taking authorities in Ohio, the General Assembly narrowly failed to muster sufficient votes to place before voters a constitutional amendment that would, if passed, specifically mandate that the state law apply to “home rule” cities. Without this amendment, it is debatable whether cities will voluntarily follow the new state law, or instead, contend that they may adopt their own policies for eminent domain use pursuant to the “home rule” provisions of the Ohio Constitution.
It is expected that Ohio will witness a short-term rise in eminent-domain cases before the new law takes effect, as taking authorities will try to grandfather their cases under the existing law, which is more favorable to taking authorities.
For more information about the new Ohio eminent domain law, please contact Bill Seitz*, Majeed Makhlouf** or any attorney at the firm with whom you have regular contact.
*Bill Seitz is a partner at Taft Stettinius & Hollister LLP and serves as Majority Whip in the Ohio House of Representatives. He co-chaired the statewide eminent domain task force.
**Majeed Makhlouf is a litigator with Taft Stettinius & Hollister LLP. He has been involved in numerous eminent domain cases, most recently including the contentious proceedings involving the proposed redevelopment of the Cleveland “Flats” area.
The bill requires a public agency to adopt a comprehensive development plan prior to appropriating property for a private use based on a finding that the area is blighted. It imposes on the taking authority the burden of proving that the area is blighted, and grants affected landowners the right to appeal a finding of public use/public necessity prior to the jury’s determination of the compensation that is due. “Blight” may be proven by demonstrating either (a) one of three specified conditions affecting the habitability or public health/safety of the property; or (b) two or more of sixteen specified conditions which, collectively considered, adversely affect property values or entail land use relationships that cannot be reasonably be corrected through existing zoning or land use regulations.
The new law expands the damages awardable to property owners in several ways. Attorney fees may be awarded when the final jury award exceeds 125% of the taking authority’s initial good faith offer (150% in “quick take cases”, such as road appropriations, where farmland is taken). Property owners may recover lost profits, lost goodwill, relocation expenses, and relocation search expenses, subject to monetary caps.
Enactment of the bill prompted grumbling from both proponents and opponents of eminent domain. The Institute for Justice, a leading challenger to eminent domain in Ohio and elsewhere, belittled the new law as too weakly protective of private property rights. The Ohio Municipal League, a leading defender of broad eminent domain rights, criticized the bill as creating new obstacles to municipal redevelopment.
While the new law is intended to apply to all taking authorities in Ohio, the General Assembly narrowly failed to muster sufficient votes to place before voters a constitutional amendment that would, if passed, specifically mandate that the state law apply to “home rule” cities. Without this amendment, it is debatable whether cities will voluntarily follow the new state law, or instead, contend that they may adopt their own policies for eminent domain use pursuant to the “home rule” provisions of the Ohio Constitution.
It is expected that Ohio will witness a short-term rise in eminent-domain cases before the new law takes effect, as taking authorities will try to grandfather their cases under the existing law, which is more favorable to taking authorities.
For more information about the new Ohio eminent domain law, please contact Bill Seitz*, Majeed Makhlouf** or any attorney at the firm with whom you have regular contact.
*Bill Seitz is a partner at Taft Stettinius & Hollister LLP and serves as Majority Whip in the Ohio House of Representatives. He co-chaired the statewide eminent domain task force.
**Majeed Makhlouf is a litigator with Taft Stettinius & Hollister LLP. He has been involved in numerous eminent domain cases, most recently including the contentious proceedings involving the proposed redevelopment of the Cleveland “Flats” area.
