---

Condemnation should be
used with restraint

THE ISSUE The U.S. Supreme Court has ruled that fostering economic development is a valid use of government's power of eminent domain.

LOCAL governments have gained more power to condemn private property for fostering economic development because of a U.S. Supreme Court decision. The power of eminent domain, once confined to taking a property for "public use," now is extended to "public purpose" beyond correcting harmful situations. Hawaii's Legislature and counties will need to practice restraint to avoid abuse of their authority.

In a 5-4 decision, the high court on Thursday allowed the city of New London, Conn., to condemn private homes to make way for office buildings, a hotel and new homes to generate more tax revenue. "Promoting economic development is a traditional and long accepted function of government," Justice John Paul Stevens wrote in the majority opinion.

The Supreme Court had ruled in 1954 that the District of Columbia could condemn a blighted neighborhood for urban renewal, and several states have since restricted condemnation to such areas. In 1984, the court allowed Hawaii to require the Bishop Estate -- at threat of condemnation -- to sell land at just compensation to homeowners who were leasing their house lots.

Justice Sandra Day O'Connor, who wrote the majority opinion in the Bishop Estate ruling, cast a scathing dissent in the New London case. She asserted that the decision gives government "license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result."

O'Connor explained that the New London case differed from the two previous rulings, where "precondemnation use of the targeted property inflicted affirmative harm on society" -- "through blight resulting from extreme poverty" in the D.C. case and, in the Bishop Estate case, "through oligopoly resulting from extreme wealth."

The court's upholding of Hawaii's Land Reform Act corrected the state's extreme concentration of land ownership. However, much of the state remains unusually distributed among those who own parcels of land and those who own what sets on those parcels.

For example, the City Council used the threat of condemnation three years ago to force a settlement between Outrigger Enterprises and four landowners so the company could proceed with plans to renovate and replace old buildings in Waikiki. The disagreement had put at risk a plan regarded as important to Waikiki's future vitality.

The condemnation threat was consistent with the New London ruling. The four owned about 7 percent of the area planned for redevelopment, most of it leased to Outrigger since 1954. Before the condemnation threat, they had demanded two to three times the fair market value from Outrigger for their land.

At the time, then-Gov. Ben Cayetano called for the Legislature to strip the city of the power to condemn property for private use. Such a restriction could hinder the City Council's flexibility to serve the public good. Instead, the state and counties should exercise caution in their future use of the power of eminent domain.

---

---

---