The United States Supreme Court recently held that the Takings Clause of the Fifth Amendment to the U.S. Constitution allowed a municipality in Connecticut to condemn land owned by private owners for economic development. The decision in Kelo v. New London created a fervor of public and private responses because of what was considered an expansion of the government’s eminent domain authority. What was this decision all about, and how will the State of Illinois respond?

Eminent domain is the power of government entities to take private property (primarily land) for a public use or benefit. The federal constitution and state constitutions allow this taking as long as the private property owner is paid “just compensation” for his or her land. Historically, there have been three categories of takings: public projects such as roads, hospitals, and military bases; public uses such as railroads, public utilities, and sports stadiums; and more controversially, for a public use even though the property is subsequently controlled by a private entity. The levels of government exercising eminent domain include the federal government, states, cities, and even quasi-municipal entities such as housing authorities and sanitary districts.

The Kelo Case
The city of New London, Conn., suffered from years of economic decline. In 1990, the city was designated a “distressed municipality” by a state agency. In 1996, the federal government struck another blow to the town when it closed the Naval Undersea Warfare Center at Fort Trumbull. By 1998, the city’s unemployment rate was nearly double that of the state, and its population fell to its lowest levels since 1920.

The city, along with a private developer, set out to revitalize the Fort Trumbull area. The developer proposed a development plan that included a waterfront conference center with restaurants and shopping, a marina, retail and office space, new neighborhood residences, a state park, and a new U.S. Coast Guard Museum. The city council adopted the developer’s plan in January 2000 and authorized the developer to purchase or acquire the targeted property. Not all private landowners wanted to sell, so the city allowed the developer to exercise condemnation proceedings to take those properties from the owners for “just compensation” as required by the Constitution. None of the properties were blighted or in poor condition; they just happened to be in the development area.

The city sought to benefit the community by providing new jobs, increased tax revenues, and aesthetic pleasure. The trial court rendered a split decision, allowing the condemnation of some property while prohibiting the taking of other properties. The Connecticut Supreme Court held that all the proposed takings were valid.

In a five to four decision, the United States Supreme Court affirmed, finding that under Connecticut law, the city’s economic development plan, with its anticipated benefits, was constitutional, even when some unblighted, private homes fell within the boundaries of the project.

The Kelo decision doesn’t allow the taking of private property solely for the purpose of conveying a private benefit to another private party, even if just compensation is paid. However, taking private property for a public use, even though the property is eventually transferred or leased to a private party, isn’t unconstitutional. It’s the purpose for which the government is taking the property—not the mechanics of the transaction—that subjects the taking to judicial and constitutional review.
The Illinois Constitution has an eminent domain provision in Article I, Section 15: “Private property shall not be taken or damaged for public use without just compensation as provided by law. Such compensation shall be determined by a jury as provided by law.”

Recent Illinois Supreme Court decisions issued prior to Kelo restricted the use of eminent domain for obtaining title to property for conveyance to a private developer. Therefore, the ability to use eminent domain in Illinois was and is more constrained than allowed under federal constitutional law as set forth in Kelo.

Soon after the Kelo decision, House Bill 4091 was introduced in the Illinois General Assembly that would require all takings under the power of eminent domain to be for a “qualified public use.” A “qualified public use” is defined as “public ownership and control by a unit of government, for a public purpose.” The statute also specifically would prohibit takings for economic development “unless it is specifically authorized by law by the General Assembly.” So, apparently the state could do that which lower government entities would be prohibited from doing. Illinois law has held that “public use” means “public usefulness, utility, advantage, or benefit.”

If you want a definition of the term “public purpose,” you won’t find one easily. The courts continue to hold that the meaning of “public purpose” is “not a static concept, but flexible and capable of expansion to meet changing conditions of a complex society that were not within the contemplation of framers of the Constitution.”

The Kelo decision is a very significant and controversial Supreme Court ruling; however, its impact on Illinois will be limited as a result of existing restrictions on eminent domain, even without additional legislation drafted as a backlash to the Kelo decision. IBI