The Norwood Case Settles

The Cincinnati Enquirer (Cincinnati.com) of September 4, 2008, reports that the Norwood v. Horney case has settled. You may recall that the town of Norwood tried to condemn Horney’s home in order to include it in the site of a shopping center, but the Ohio Supreme Court ruled that this wouls be a violation of the “public use” clause of the Ohio state constitution. See Norwood v. Horney, 835 N.E.2d 1115 (Ohio 2006). By now, most of Horney’s neighbors had settled and sold their properties to the redeveloper, so Horney’s  house wound up sitting in the middle of the proverbial nowhere — an 11-acre parcel surrounded by razed, vacant land. The settlement figure was $1.25 million. The article does not report what Norwood’s original offer was, but it indicates that the $1.25 million price was about twice what the developer, Rockwood Partners, paid for comparable, nearby parcels.

So is there a moral to this story? It would so appear. Given that the redeveloper means to build a $125 million office-condo project, and has spent some $20 million for the other properties required for this project, the $1.25 million it paid to Horney seems like a bargain, especially when you consider that the city of Norwood expects to collect some $2 million in tax revenue per year from the project. Of course, it remains to be seen if the city will actually get to collect all of those tax revenues, or whether some of them will go to the redeveloper or to pay off any TIF bonds that may have been issued for this project — as has been the case in some of these deals. So stay tuned on that one. Also, it remains to be seen whether the proposed project will actually proceed, given the deepening recession.

All of which brings to mind Justice Kennedy’s inquiry during the oral argument of Kelo v. New London, whether the compensation to condemnees in redevelopment cases should include a share of the property’s increase in value brought about by its devotion to a higher and better use upon condemnation and reuse by the redeveloper. Evidently, it can be done.

Last but not least , the redeveloper is reported as saying that it “has no specific development plans for the site yet.”  So those plans were evidently good enough to institute a condemnation action, but not good enough to tell the world what they are. Oh, we almost forgot. Didn’t the Supreme Court say in Kelo that the presence of carefully considered municipal redevelopment plans is an important element in the Court’s decision whether or not to approve the condemnation?

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