Lowball Watch – Virginia. With Complications

This is one for the books. The Roanoke, Virginia, redevelopment authority is condemning a three-acre parcel for . . .Well, it’s sort of hard to say for what. According to the Roanoke Times, it began as one of those deals where Carilion, a local private hospital, would eventually receive the subject property after its taking. But, in spite of the fact that this was the legal scenario in the right-to-take trial (that ended with a ruling in favor of the condemnor) sometime later Carilion decided that it doesn’t want this property after all. So was the condemnation case abandoned? Don’t be silly. Get this:

“Even though Carilion has no interest in the land, it will likely purchase the property from the housing authority to honor a contract with the city that was part of a plan to redevelop the area, . . .

“Mark Loftis, an attorney for the housing authority, said the land is being taken as part of a master redevelopment plan for the area, which doesn’t necessarily have to involve Carilion. One possibility is that Carilion would acquire the land and then sell it to a developer, as it did with a hotel being built in the area.”

So says the Roanoke Times (http://www.roanoke.com/news/roanoke/wb/228303 ) 

In the meantime, the case has gone to a valuation trial. The redevelopment authority had offered $1,200,000, but at trial it was born again and upped its evidence to $1,530,000. The owners countered with testimony of two appraisers opining to $4,500,000 and $4,830,000 respectively. The jury verdict was $2,200,000, close to twice the agency’s pretrial offer, thus qualifying for inclusion in one of our Lowball Watch dispatches. See http://www.roanoke.com/news/roanoke/wb/240397 ) 

So the bottom line of all this appears to be that the city wanted to get this land for Carilion, but lacking the authority to condemn it, it turned to the redevelopment authority to do the job. So far, so bad. But now that Carilion doesn’t want the property, what’s to be done with it? Joe Waldo, the owners’ lawyer, allows how this property (which was ostensibly taken in order to eliminate blight) will actually create blight by just sitting there. The Roanoke Times quotes the authority’s lawyer as de facto agreeing by saying “It would be fair to say there is no firm plan that’s been approved for what’s to be done with that property.” And here we thought that the U.S. Supreme Court has held in Cincinnati v. Vester, 281 U.S. 439 (1930), that taking property by eminent domain without any plan on how it is to be used is a no-no.

So the bottom line of this caper appears to be that over $2 million in public funds (not counting the cost of litigation and other transactional costs) has been blown on . . . What? Even assuming a valid “elimination of blight” scenario (which appears to be a strech here), it does not appear likely that this property is going to be redeveloped for a while, given the ongoing recession.

The owners plan to appeal the right to take. Rightly so.  We await the eventual ruling of the Virginia Supreme Court, although given the frequent performance of the judiciary in such matters, we aren’t holding our breath. Why? The trial judge who ruled in favor of the right to condemn, has allowed as how, had he known that Carilion was no longer interested in the subject property, it would not have made any difference. Maybe the Virginia Supreme Court can do better that that.

Follow up. For a local newspaper editorial deploring the city’s conduct see Eminent Insanity, Roanoke Times, March 24, 2010 http://www.roanoke.com/editorials/wb/240799

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