Back to top Jump to featured resources
Article filed under Independent Business

Small Businesses Fight Abuse of Eminent Domain

| Written by Stacy Mitchell | No Comments | Updated on Aug 1, 2002 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/small-businesses-fight-abuse-eminent-domain/

Denver’s Asian stores are not alone in facing condemnation for a national chain. In a growing number of court cases around the country, small business owners are challenging attempts by local and state governments to seize their property for chain store development.

Traditionally, eminent domain—the power of government to take private property for public use, provided that the owner receive market value—has been used for schools, roads, and other public infrastructure. In recent years, however, state and local governments have increasingly used eminent domain to seize homes or small businesses for chain retail development.

In Pemberton, Pennsylvania, for example, officials want to seize an obstetrician’s office and a small clothing store to make way for a CVS pharmacy. In Wheeling, West Virginia, city officials plan to condemn several downtown buildings, oust the current businesses, and open dozens of outlet stores in the same buildings. In New York, the state redevelopment authority has moved to seize a 75-year-old Harlem woodworking shop to create room for Home Depot and Costco.

The government officials behind these projects claim that economic development is a “public use” that justifies seizing property.

“By that logic, anything goes,” contends Scott Bullock, senior attorney for the Institute for Justice, a libertarian public interest law firm that is representing small businesses in several lawsuits challenging the constitutionality of condemning property for private development. “Any business will create more jobs and tax revenue than any home, and a large business will create more than a small business. So there’s no end to it.”

Bullock says the tide is beginning to shift; courts are increasingly siding with small businesses and setting limits on the use of eminent domain for private development.

In the New York case, Bill Minnich, owner of Minic Custom Woodwork, lost in a federal district court on a procedural issue but has appealed the decision. In California, a federal court concluded that the city of Lancaster’s attempt to seize a 99 Cent Store for a Costco expansion was unconstitutional. The city has appealed. In Illinois, the state Supreme Court recently blocked a state agency’s attempt to seize property for a race track expansion. That decision could derail another eminent domain action initiated by the same agency for a Home Depot development.

Similar cases have been brought in Connecticut, Michigan, Minnesota, and New Jersey.

Tags: / / / /

About Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Community-Scaled Economy Initiative, which produces research and analysis, and partners with a range of allies to design and implement policies that curb economic consolidation and strengthen community-rooted enterprise.  She is the author of Big-Box Swindle and also produces a popular monthly newsletter, the Hometown Advantage Bulletin.  Connect with her on twitter and catch her TEDx Talk: Why We Can’t Shop Our Way to a Better Economy. More

Contact Stacy   |   View all articles by Stacy Mitchell