Eminent domain cases are happening every day, in cities that are both large and small. Over the past few weeks we’ve taken a look at what is going in in New York City and the surrounding suburbs; and today we are going to be discussing a case that recently hit the press. In Utica, New York, the nonprofit Mohawk Valley Health System (MVHS) wants to build a new $480 million hospital; and it is negotiating with property owners in the downtown area who have not yet sold their land.
The official word is that no one wants to take the properties through the use of eminent domain, but if it is necessary, MVHS will do it. As is usually the case, some of the property owners are trying to stop the project and are looking for ways to stop the proceedings from starting.
One such example is a row house at 442 Lafayette Street. It is there that a group of residents who are opposed to the MVHS hospital have started the “No Hospital Downtown” effort to make its final stand. Brett Truett, one of the founders of the project’s opposition group, actually bought a property that lies within the footprint of the hospital to fight his property’s acquisition in court.
Legal scholars and those interested in eminent domain are probably thinking if a private entity can use eminent domain to take another private property in New York State. Jim Brock, the other founder of the No Hospital Downtown group, thinks not. Thomas Merrill, a property law scholar at Columbia Law School disagrees. Merrill said, “There’s no requirement that the person that’s going to get the property after the condemnation is completed has to be public. New York does not draw that line at all. In fact, there’s some language in the statute that encourages the use of private enterprise in these projects.”
Technically, in New York, property can be taken be for a “civic project” and that can be private or public. A “civic project” is defined as something intended for an educational, cultural, recreational, community, municipal, public service or other civic purpose. Both MVHS and local government officials have said the new hospital meets that definition because it provides access to quality health care for the region. They also say that the new project will assists with economic development in downtown Utica.
Scott Perra, MVHS’ president and CEO said, “the question is how much do we pay for the properties. I think there’s some misunderstanding from people about what eminent domain actually is. It’s not people going to court arguing we ought to move or we don’t think the hospital should be built downtown at that point in time. Those decisions have already been made. So it’s really a discussion over what’s the fair value of the property.”
Merrill, the Columbia law school professor notes that “health care” and “economic development” are technically not listed under the state’s definition of a civic project. Therefore, the property owners could challenge it in court. But, he says, it’s unlikely that they would win based on recent rulings on eminent domain. “At least in New York, the tradition has been that the courts have been very deferential to the arguments that these are public uses, so it would be a very long shot that they would prevail in the New York courts,” he said.
Although New York state law is very government friendly when it comes to eminent domain (almost everything is considered public use), property owners and business tenants have the right to go to court to contest the amount of compensation paid to them for their seized property. The Constitution requires that the compensation paid by the government be “just.”
Governments rarely pay more than the minimum unless they are sued for additional compensation by condemnees. This is why a property owner or business tenant who seeks to be made whole should always hire lawyers who are experienced in the complex area of eminent domain law.