Presidential candidate Donald Trump. The man, the legend. As he moves up in the polls of the Republican primaries, more and more news stories about his past and his business dealings are coming to light. One in particular caught the eye of this blog.
Eminent domain may only be used for a “public purpose.” The problem with this requirement is that one man’s public purpose is another man’s economic folly. In 2005, the US Supreme Court decided Kelo v. City of New London. There, the Court held that demolishing un-blighted housing for economic development (in that case, demolishing a neighborhood to install a Pfizer research center) met the public purpose prong required for all takings.
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But a decade before the Kelo decision, that creative entrepreneur behind the Trump Taj Mahal in Atlantic City had his own view of ‘public purpose.’
In 1961, Vera Coking and her husband purchased the property at 127 Columbia Place in Atlantic City as a summertime retreat. In 1993, after thirty years in the home, Trump enterprises approached Ms. Coking offering to buy the property, seeking to use it, along with adjacent properties, as a parking area for limousines. When she refused to sell, Trump approached the New Jersey Casino Reinvestment Development Authority (CRDA) who had the power of eminent domain, and convinced them to initiate proceedings against Ms. Coking’s home. As Trump put it in a Fox News interview decades later:
I happen to agree with it [eminent domain for economic development] 100%. if you have a person living in an area that’s not even necessarily a good area, and … government wants to build a tremendous economic development, where a lot of people are going to be put to work and … create thousands upon thousands of jobs and beautification and lots of other things, I think it happens to be good.
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Paved Paradise . . .
The CRDA offered Ms. Coking $251,000. However, Judge Williams, who presided over the case, rules:
The court considered the consequences and effects of these three condemnation actions and concluded that the primary interest served here is a private rather than a public one and as such the actions cannot be justified under the law.’
However, the Judge made clear that he would have granted the taking if there were express contractual obligations between Trump and the CRDA obligating Trump to use the property for the expressed purpose (i.e used expressly for additional parking and treescaping) and not other purposes. With no guarantee that the property would be put to that use, the Judge denied the condemnation. The Kelo decision set off a firestorm of backlash and legislation against overreach and overuse of eminent domain, especially with a history of abuses like the saga of Trump’s Taj Mahal. Many states, like Florida, amended their statutes to limit the broad reading the Court took in Kelo. The Florida Statutes actually prohibit the transfer of condemned property to a private third party unless the property is first offered back to the former owner, at the price the condemning authority paid for it:
ownership or control of property acquired pursuant to [an eminent domain] petition may not be conveyed by the condemning authority or any other entity to a natural person or private entity, by lease or otherwise, except that ownership or control of property acquired pursuant to such petition may be conveyed, by lease or otherwise, to a natural person or private entity: [the statute then includes numerous accepted public use like roads, utilities, infrastructure and pipelines]
(f)?Without restriction, after public notice and competitive bidding unless otherwise provided by general law, if less than 10 years have elapsed since the condemning authority acquired title to the property and the following conditions are met:
- ?The condemning authority or governmental entity holding title to the property documents that the property is no longer needed for the use or purpose for which it was acquired by the condemning authority or for which it was transferred to the current titleholder; and
- ?The owner from whom the property was taken by eminent domain is given the opportunity to repurchase the property at the price that he or she received from the condemning authority;
So fret not, no “Trumping” here in Florida. In the Coking example, the family would have had the opportunity to purchase back the property at any time in the next ten years if the CRDA attempted to sell it to Trump or one of his businesses.