What Can I Do If the City Wants to Buy My Property to Rezone as Commercial?

Full Question:

our busines has been located at same same parcel since 1936 which is zoned light industrial now in the last 6 years ,the city has been been rezoning the the parcels all around us to commercial , so the the big box stores could locate there which they have (HOME DEPOTE , WALMART..) NOW THE CITY WANTS TO CHANGE OUR ZONING FROM LIGHT INDUSTRIAL TO COMMERCIAL !THEY SAID THE CITY WOULD BUY OUR PARCEL AT THE CURRENT MARKET VALUE , WHICH IS ALMOST 40% LOWER DUE TO THE DROP IN PROPERTY VALUES THE LAST 1.5 YEARS . OUR BUSINESS HAS STILL BEEN VERY BUSY ALL THESE YEARS AND FOR US TO MOVE TO A NEW LOCATION IT WOULD COST US ABOUT 10 MILLION DOLLARS AND THEY SAID THEY COULD BUY US OUT FOR 1.5 MILLION.? WHAT ARE OUR OPTIONS ?
05/26/2011   |   Category: Zoning   |   State: Washington   |   #24905

Answer:

It is possible the city may proceed to acquire the property under power of eminient domain. Eminent domain is the government's right to acquire private property for public use. The governmental entity may be a federal, state, county or city government, school district, hospital district or other agencies. A public entity, rather than a private party, may pursue eminent domain, and it must be for a public, rather than a private use. The taking of property may be with or without the permission of the owner. The Fifth Amendment to the Constitution provides that "private property [may not] be taken for public use without just compensation." The Fourteenth Amendment added the requirement of just compensation to state and local government takings.

There are eminent domain laws which provide who can exercise the right of eminent domain and for what purpose. If the easement or property cannot be purchased, either the utility, city or county or state, can condemn property if it is for an approved purpose. Utilities generally have eminent domain rights sometime in cooperation with a governmental agency. To use the power of eminent domain, the condemnor must be authorized, by statute or ordinance, to take the property for a specific public purpose. The condemnor must also try to buy the property from the property owner by good faith negotiation.

Early uses of eminent domain were primarily for public works, such as the utilities of the Tennessee Valley Authority or the grand highway schemes of the years after World War II. In 1954, the Supreme Court ruled in Berman v Parker that private projects meet the definition if they have a "public purpose". This rationale was used by the court to approve a slum-clearance plan of the government of Washington, DC. It continued to be used to clear "blighted" areas of American cities for redevelopment . Debate in eminent domain cases, like Kelo v. New London, decided in 2005 by the Supreme Court, has centered about the definition of "public use." In recent years "public good" has been expanded to include private economic developments which use eminent domain seizures to enable commercial development for the purpose of generating more local tax revenue.

The eminent domain process usually involves passage of a resolution by the acquiring agency to take the property (condemnation), including a declaration of public need, followed by an appraisal, an offer, and then negotiation. The owner who believes that just compensation is not being offered for the taking of their property may bring suit against the governmental agency. However, by depositing the amount of the offer in a trust account, the government becomes owner while a trial is pending. Some of the public uses supporting eminent domain include schools, streets and highways, parks, airports, dams, reservoirs, redevelopment, public housing, hospitals and public buildings.

See also:
http://www.cbsnews.com/stories/2003/09/26/60minutes/main575343.shtml
http://library.findlaw.com/1999/may/25/130971.html

The answer will depend on all the circumstances involved. We suggest you contact a local attorney who can review all the facts and documents involved.