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Eminent Domain and Brownfields: What the future holds.

In Uncategorized on June 19, 2012 at 1:02 AM

I just watched the local channel 9 news and saw a bureaucracy run amuck! I just saw Cleveland Mayor Tom Rowland threaten federal or other charges against the citizens of Cleveland and Bradley County for someone informing the community via “flyers” for exercising their right to inform the people of the governments plans for their future.

He also asked that if anyone happens to know who is passing out these “flyers” to notify the police! Wow! I thought we were a few years from being a police state, but I think it is now upon us!

The Mayor of Cleveland asking all citizens to report those informing the community of his plans via Brownfield redevelopment using TIF and eminent domain as a tool of implementation is such a disservice to our community!

Obviously those reporting on this act of tyranny and those in our local government do not know what brownfield Development is or what implications it has on our community. Eminent domain is a frequently used tool of brownfield development often purchasing the people’s property at fair market value then reselling it to developers for a huge profit thus increasing property value thus increasing their property tax that makes it’s way into our budgets every year. Redevelopment is done this way! Our Mayor cannot do all he wants to do downtown without someone losing their property. A huge Tom Rowland Convention center cannot be without someone losing their property.

Many within the machine will argue with you that if someone wants to sell their property then that is their prerogative, I agree! The part that makes my blood boil is that person that was living in that house last year would still be there if not for the Mayors lofty plans to “save the city!” with his tyrannical government.

Assume that same person refuses to sell their property and wants to hang onto it as the mayor suggests they have a right to do. That person will face new land use regs, zoning regs, huge property tax rate increases and God knows whatever else them and the EPA wants to place on them. You did know that brownfield development is a direct project of the EPA, never mind, guess that small fact is being left out of the equation and will require further education to our elected bodies on a different day.

But that person, perhaps of limited income would have great difficulty paying for this newly appraised property and would perhaps lose their property anyway! A vicious circle has started and the fittest and wealthiest survive. This is the plan that the mayor forgets to unveil while wanting to charge you with federal charges!

Often when our elected leaders make decisions that will affect many negatively, they frown upon those civilians that stand against the tyrannical government that is trying to impose these dastardly deeds upon it’s contingent base. Often times it only takes a simple google search to find out what they are up to and they may not even know the content of what they are proposing.

When the public has to inform our elected leaders of the decisions they are making then we are in trouble. At this point and it has been proven time and again, any attempt by a citizen to explain their side, the bureaucrat steps up to the plate and calls it a lie or a conspiracy! This is the simple thing to do and it works in the short time but with time it often doesn’t hold water and the elected official offering his or her version of free spin often looks like the devil incarnate holding a pitch fork that is frequently buried within a citizens chest, sweat on the brow of the bureaucrat holding the forked instrument and shouting “its a lie.”

What is illegal about putting information out to the public. Let’s just assume that it is off base, which I’m pretty sure it is not because it is sitting squarely on the mayors phrenic nerve or he would not be reacting so strongly.

There is nothing illegal about passing information out in public regardless of it’s harmless content. What TCA code is anyone violating? What code or regulation is being broken? What grounds does a sworn officer, upholding the Costitution, have to arrest anyone? NONE! so please stop using scare tactics to disperse the freedom loving people of this county.

I have not a clue who is placing these “flyers” that have so inflamed our elected body but I can tell you, at present there is not a court in the land that would tell him or her that legally they cannot do that! Not a one! You know why? Because the Constitution of the US states we have freedom of speech and can file grievance with our government at any time we the people feel that it is necessary! Period! End of sentence!

If someone wanted to pass out literature saying the sky is made of mashed potatoes and it’s gonna rain gravy. They have the Constitutional right to say it. Would I like it? Not necessarily! Is it illegal? No? Distasteful or against someones opposing view, perhaps, but not illegal!

Mr Mayor, please attempt to constrain your self from overreacting like a king beheading it’s citizens, it’s highly unecesary to threaten your constituency with federal or other charges for speaking out against your policy! It’s not a flattering road for you to travel!

By Shawna M. Bligh
The Session Law Firm
Kansas City, MO

Eminent domain is often an essential development tool utilized by local governments to acquire contaminated sites and pursue bold Brownfields redevelopment strategies that can be a catalyst for community revitalization. Brownfields are abandoned, idle or under‑used real property where expansion or redevelopment is complicated by the presence or potential presence of environmental contamination. However, using eminent domain for private projects, such as Brownfields redevelopment, is always a divisive issue. This is even more the case since the Supreme Court’s decision in Kelo v. City of New London.

In Kelo, the Supreme Court addressed the question of whether a city violates the Fifth Amendment’s takings clause if it takes private property, through its powers of eminent domain, and sells it for private development to further the local government’s overall economic growth plan. On June 23, 2005, the court held that local governments could use their powers of eminent domain to take property for private, economic development. The Kelo opinion has prompted an avalanche of legislation at both the federal and state level.

At the federal level, the U.S. House of Representatives passed legislation, which would withhold, for two years, federal money from state and local governments, which use their powers of eminent domain to take property intended for private, economic development. This legislation, H.R. 4128, the Private Property Rights Protection Act of 2005, is a direct response to the Kelo decision. H.R. 4128 defines “economic development” as taking private property for commercial, for-profit projects intended to increase tax revenues, the tax base, employment or improve general economic health. H.R. 4128 passed the House on November 3, 2005 by a vote of 376-38, and is currently before the Senate Committee on the Judiciary. While hearings have been held on the bill, no legislative action has been scheduled.

Fortunately, a bipartisan amendment, H.AMDT. 612, to H.R. 4128 added an exemption, from the definition of “economic development” for the redevelopment of brownfield sites, as defined in the Small Business Liability Relief and Brownfield Revitalization Act of 2002 (Pub. L. No. 107-118). The amendment, introduced by Congressman Gary Miller (R-CA) and Eddie Bernice Johnson (D-TX), would allow cities to responsibly use eminent domain to redevelop brownfield sites. On the House floor, Congressman Miller stated “owners of brownfield sites are frequently unwilling to sell them for fear of cleanup and cost of contamination. Eminent domain can often help break through legal and procedural barriers to the sale of land.”

The United States has more than 450,000 vacant or underused industrial sites as a result of environmental contamination. While not only improving and protecting the environment, cleanup of Brownfields restores the sites to productive use, facilitates job growth, and substantially increases tax revenues for local governments. Additionally, cleanup revitalizes otherwise dormant urban core areas, thus promoting smart growth by taking development pressures off undeveloped, open land. Without eminent domain for redevelopment purposes, local governments would be less likely to redevelop Brownfields because of the liability for all costs and cleanup of the polluted land as the owner and operator of the site. Therefore, it is imperative that eminent domain legislation, at both the state and federal level, include exemptions for Brownfields redevelopment. Without such exemptions, Brownfields redevelopment would be significantly impaired and contaminated lands would sit idle.

At the state level, the Missouri House and Senate have proposed various limitations on the use of eminent domain, and, unfortunately, none of the proposed legislation provides an express Brownfield exemption. Examples of presently proposed limitations include prohibiting the state or local governments from exercising its powers of eminent domain to acquire property for the purpose of economic development; limiting the definition of “blighted areas” under Missouri eminent domain laws; requiring businesses in areas taken by eminent domain to reimburse persons displaced from that area; and even placing a moratorium on the use of eminent domain until 2007.

Missouri has several state Brownfields including the Kansas City Riverfront Development and the St. Louis Arena. The state of Missouri benefits greatly from Brownfields redevelopment and eminent domain is an important tool in these redevelopment areas. Eminent domain was an essential component in the redevelopment of Kansas City’s Central Industrial District. This is the oldest industrial area of the bi-state Kansas City region where the Kansas and Missouri Rivers meet. Blight and fear of contamination threatened to drive away remaining businesses and private investment in the late 1990’s. Efforts to retain a leading business were frustrated by a private owner’s refusal to maintain the site in violation of City codes, which later led to a catastrophic fire that devastated the West 8th Street area. The owner refused to cooperate with City officials who planned to use local, state and federal funds to acquire the ruins and prepare the area for redevelopment. Ultimately, what came to be known as the Lewis & Clark Redevelopment Area Project succeeded, in large part because of the City’s eminent domain powers. Improvements in the area led to over $100 million in private investment, the creation of 421 jobs and retention of more than 1,100 jobs. Without the City’s powers of eminent domain, the many benefits of this Brownfield redevelopment project would have been lost.

The Missouri Brownfield Redevelopment Program is administered by the Department of Economic Development and the Department of Natural Resources. The program’s purpose is to oversee cleanup and provide various financial incentives for the redevelopment of contaminated properties. If the legislature is concerned about the potential misuse of eminent domain powers by municipalities, serious consideration should be given to conferring with the Department to address these concerns while at the same time furthering the goals of this Program.

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Conservation Easements (CE’s): Read the fine print before you sign

In Uncategorized on January 13, 2012 at 7:58 AM

Bradley Countians beware of the latest tool to grab your land by Conservation Easement! A plan that at any given time could turn on you and rip your property rights away from you in a minute! Sure, as they say it is all voluntary and its all up to the property owner to do what they want with their own property! The individual should have the right! Right?

Just as the property owner does indeed have the right, the trickery is in the vagueness in the wording of the contract that can come back and bite that person in the backside a few years down the road!

Think about it? Why do you need a Land Trust to have control of your property? Why is their this big push by these private entities acting as government officials to claim the rights to your land? Can’t the owner simply keep his or her property rights and simply tell his heirs what they want to do with their land by deed! After all you can’t touch my land anyway without my approval! Its the money and the small tax break you may get! Isn’t it funny that so little money can make you give up the farm for a false security which is man made and can never be regained once lost! Read on and let me know what you think! Pleasure me with some good conversation about this! Enjoy!

The PPJ Gazette
by W.R. McAfee, Sr.
________________________________________________

”A normal easement by a landowner usually grants a right to someone to do something on the landowner’s property; but a conservation easement gives away the landowner’s rights to do something on his or her own property.
Land trusts and environmental groups regularly use conservation easements to take control of private property.”
_________________________________________________
Read the fine print before you sign

A basic Constitutional tenet of private property ownership in America is the landowner’s right to determine the use and disposition of his or her land. This ownership gives the property owner the right to occupy, use, lease, sell, develop, and deny public access to his or her land.

Today, landowners can lose these rights simply by signing a ‘standard’ or ‘model’ conservation easement (CE) offered by ‘nonprofit-environmental-friendly’ land trusts, NGO environmental organizations, or government agencies unless the easement has been worded to protect the landowner’s rights.

The growing number of land trusts

In the early 1950s, there were some 50 land trusts in the U.S.  Today, there are more than 1,700.  Among the largest are the:
Nature Conservancy (TNC),
American Farmland Trust (AFT),
Conservation Fund, and
Trust for Public Land.

Land trusts exist to remove private property from production
They do this by acquiring ranch, farm, forest, or other private land either through donation, purchase, or by acquiring CEs to property as well as water.  They act as unofficial arms of government agencies—third party intermediaries or ‘land agents’—and routinely flip (sell) donated as well as purchased land and CEs to these government agencies.  When they do, they’re paid with tax dollars which, in turn, are used to purchase more private property.

In 1994, the Government Accounting Office reported approximately 61 percent of the Trust for Public Land’s operating revenue was gained from the sale of donated land.

In 2001, the U.S. Forest Service and TNC signed a five-year ‘memorandum of understanding’ to ‘protect the land’ from things like ‘invasive species’ which, according to some eastern congressmen, includes cattle that graze federal land even though their owners pay the government a per unit (head) fee to graze it.

That same year, government officials at Fort Huachuca, Arizona, made available to the TNC several million dollars to acquire water rights from private property owners around the base through the use of conservation easements.
Primary recipients of land trust acquisitions are the Fish and Wildlife Service, the National Park Service, and the U.S. Forest Service.

Government already owns almost half the land in America.
Why land trusts are used to acquire land for the government
Government agencies are prohibited by the Constitution from buying land within a state unless the sale is approved by that state’s legislature—a pesky, time-consuming process that usually has to withstand legislative scrutiny and public debate as the Founders intended. Article I, §8, 01.07 of the Constitution states that:
[Congress is authorized] “…To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of Particular States (emphasis added), and the Acceptance of Congress, become the Seat of Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be (emphasis added), for the Erection of Forts, Magazines, Arsenals, dock-Yards and other needful Buildings…”

Once fed agencies gain control of private property, they have difficulty maintaining it.  The reason being the money to purchase the land comes to them unearned in the form of tax dollars.  In April 2002, the Department of the Interior’s Inspector General estimated the agency had an $8-11 billion dollar maintenance backlog affecting land and facilities it already owned.

Lester Thurow gave a good explanation why this happens in 1986 when he wrote:
“… government ownership of production fails because it cannot answer the   question:  Who should stay up all night with a sick cow?

“In America, it’s the owner. In a socialist country, the answer isn’t clear and is often—no one.”
Land trusts operate with few restrictions
Land trusts are under few restrictions when it comes to landowner transactions. They:
Buy targeted land (a ranch, farm, or private property location) for federal agencies when it becomes available; then hold the land until the agency that wants it has the tax dollars to buy it.
Provide what appears to sellers an alternative to having to deal directly with government agencies.
Are not required to buy a real estate license or provide full disclosure of their transactions.

Can be less than forthcoming about their agenda when signing up  ‘willing sellers’; often conducting their ‘real estate transactions’ in a manner that best suits their causes and goals.
Are generally accountable only to their boards.
Mostly are immune from civil and criminal litigation due to hold harmless clauses in their ‘standard’ or ‘model’ CE agreements.
Congress won’t check these land trusts.

Conservation Easements take private property rights away from landowners

A normal easement by a landowner usually grants a right to someone to do something on the landowner’s property; but a conservation easement gives away the landowner’s rights to do something on his or her own property.

Land trusts and environmental groups regularly use conservation easements to take control of private property.

Read the fine print before you sign a CE

If a landowner is seeking a CE to reduce taxes on a part of his or her property, then he or she must make sure the easement agreement meets the required IRS codes.
To meet IRS requirements for a tax deduction, the CE must include the following:
Be granted in perpetuity (forever) to a government agency or ‘nonprofit’ land trust or organization,
Prohibit all surface mining on the easement, including oil and gas exploration, and
Allow public access onto the easement if the leaseholder—the party with whom the landowner signs the easement agreement—so specifies.

Beware the ‘standard’ or ‘model’ CE

‘Standard’ or ‘model’ CEs offered by government agencies, land trusts, and environmental organizations to landowners as a means to reduce taxes can later lead to problems if landowners sign the agreement without fully understanding its contents. For example:

Their children and their heirs are bound forever by what’s written into the CE.
They can’t build, drill, or put a road on the CE without the leaseholder’s permission.
They can’t lease or sell the CE to another party.
They can’t develop the CE.
They’re still responsible for taxes on the CE.
They’re still responsible for the upkeep, maintenance, improvement, and financial support for the CE.
Leaseholders can enforce CE requirements
Many landowners don’t realize the recipient of their CE—their leaseholder—becomes the fulltime landlord and dominant partner over their easement land after a ‘standard’ or ‘model’ CE is signed.  Plus, the leaseholder can enforce the requirements of the CE on the landowner and has the authority to:
Review and approve the landowner’s activities on the CE,
Monitor the landowner’s ongoing use of the CE and visit the property any time to ensure all CE restrictions are being met, and
Legally enforce the CE’s restrictions on the landowner if the leaseholder feels they aren’t being met.
CEs affect the value of private land
The value of CE land—other than that realized through a reduced tax rate on the CE property—drops dramatically once the CE is signed.
It becomes difficult—if not impossible—to borrow against CE land because avenues for foreclosure are extremely limited for the lender if there’s a default on the loan.
Title insurance on CE land becomes difficult to obtain.
Developers are hesitant to buy land attached or adjacent to a CE
A landowner’s CE can be conveyed
The easement holder—the party or organization with whom a ‘standard’ or ‘model’ CE is signed—can convey a landowner’s easement to a third party without the landowner’s permission.
The landowner has no control over the boards that govern either the actions of his or her easement holder, or the third party group to whom the CE is conveyed by the assignee.
Vague terms in a CE can be costly

Lease holder boards can and often do interpret vague, general terms and wording in  ‘standard’ or ‘model’ CE agreements in ways that help their (environmental) organizations meet goals and agendas; thus putting the landowner at the mercy of the officials who govern his or her CE.

An example of a vague, general term is the phrase “…no use inconsistent with the conservation purpose of this easement…”
This harmless-sounding statement purposely leaves the door open for leaseholder boards to change the interpretation of what’s allowable on a landowner’s CE, and can put his or her heirs in court with the leaseholder.

Litigation can be expensive

Litigation resulting from ‘standard’ or ‘model’ CEs can be costly for landowners in face-offs with organizations like the Trust for Public Land or TNC who stay flush with tax dollars from:
Land sold to government agencies,
Tax deductible donations from multi-national and Fortune 500 corporations, and
Donations from wealthy individuals and endowed charitable trusts friendly to environmentalists.
Extensive litigation usually follows, but if the CE wasn’t worded to protect the landowner to begin with—and it has been signed—then he or she usually is out of luck.
Other situations can arise after a ‘standard’ or ‘model’ CE is signed.
For example, a state highway department may want to condemn a portion of the CE for a new road right-of-way.  When they do, they normally pay the lower value of the land that resulted after the CE was signed.

Then, once the road is in, the landowner cannot—unless it’s written into his or her CE—put in a business, franchise, or gas station alongside the new road because the standard easement rules will still apply to the remaining land.

Advice for landowners considering CEs

Get good, solid legal advice from an experienced real estate transaction lawyer.
Draft the CE in specific, limited terms that will protect your rights.
List the terms and length of the easement.
Draft the easement so that you are the dominant estate partner in the agreement.
Write into your CE a no assignment provision.  In other words, the organization with which you’re signing the CE must have your permission before they assign your easement to a third party.
Strike any hold harmless language or clauses in the CE that the organization wanting the CE seeks. For example, The Nature Conservancy and other land trusts often want you to indemnify them in the CE with language or clauses. Don’t!

Get good accounting advice as well.

If a landowner feels it is in his or her best interest to sign land over to an organization, then the landowner should:
Get good accounting advice and make sure the CE meets the required IRS codes and regulations for a tax deduction before the agreement is signed.  The landowner—not the recipient of the CE—is responsible for this.
Pick a good organization with whom to sign a CE.  Environmental groups and land trusts are not landowner friendly.
There are other ways to reduce your property and estate taxes. Find a good, experienced, estate tax attorney, sit down with him or her, and explore your alternatives.
Finally, a landowner needs to look at two layers within his or her CE.
Will your CE partner accept your terms for the easement?
Will the IRS accept your CE and allow you the deductions if reduced taxes on your property is one of your goals?
If the answer to either of these questions is no, then a landowner needs to re-examine the CE he or she is about to sign.
References
* Information compiled from notes taken at a 2004 presentation on Conservation Easements by attorney Paul M. Terrill, III, of Hazen & Terrill, P.C., Austin, Texas, at the Stewards of the Range annual conference and meeting, Reno, Nevada, and from GAO

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