Clearing the “Editorial” Record on Measure 39

As Election Day draws near, the editorial boards for the various newspapers across the state of Oregon are beginning their biennial campaigns of misinformation masquerading as “editorial recommendations”.

One of the victims of editorial spin is Measure 39, the measure that will protect property owners from eminent domain abuse. Not surprisingly, editorial boards from The Oregonian, the Eugene Register-Guard and others misrepresent to their readers the effect of Measure 39, in order to justify their opposition to the measure. The following are a few of the most egregious editorial errors.

From The Oregonian (10/4/06)

“Measure 39 would prevent governments under most circumstances from condemning private property, if it is to wind up in the hands of a private developer. That may sound appealing, but approval of the measure could dramatically restrict the use and utility of public-private partnerships in Oregon — and thereby inhibit economic development in our state. “

This statement is false. Nothing in Measure 39 prevents a private property owner from entering into a public-private partnership voluntarily. Is the government simply unable to find property owners to be their “partners”?

Moreover, the thought that property owners somehow need government “partners” to spur economic development demonstrates a primary flaw in the O’s thinking. There are plenty of property owners who would gladly engage in economic development of their property without the need for a “partner,” but regulations created by their “partner” prohibit use of the land. Here’s an idea that the O probably hasn’t considered — economic development does not need to involve public agencies.

What the O really objects to is the notion that Measure 39 will make it more difficult for a cash-hungry local government to form an unholy alliance (aka a “public/private partnershiip”) with a private development company who covets another private citizens home or business to strip the owner of that land and hand it to the “partnership.”

From The Medford Mail-Tribune (9/24/06)

“In fact, no one has yet to point to a single condemnation in Oregon history that resembles the Kelo case. Eminent domain is used sparingly, usually as a last resort, for obvious reasons. There is no reason to expect that to change.”

This statement is just wrong. I can see the editorial board sitting in their offices in Medford. The conversation goes something like this:

Editor 1: “Hey Bob, have you heard of a single condemnation in Oregon history that resembles the Kelo case?”
Editor 2: “Nope.”
Editor 1: “Well neither have I, so I guess they don’t happen.”

Here’s what the Mail-Tribune would have discovered had they done any homework. In 2004, the City of Keizer began condemnation of Bob and Marilyn Lowery’s property, in order to give the property to a developer for the Keizer Station development. While it may be true that the condemnation never went all the way to trial, the fact remains that the city of Keizer did, in fact, use eminent domain abuse as a club to try to force the Lowery’s to sell their family home.

Or how about Coos Bay’s recent efforts to condemn Les Golbek’s property and business and hand it over to Lowe’s for a home improvement warehouse?

Or how about Randy Leonard’s plan to take Hogan’s Electric Supply in Lents and give it to a developer for a supermarket?

Maybe if the Mail-Tribune would have done a little homework (or called the chief petitioners for the Measure), they would have discovered the facts. But that would involve acting like a reporter, so nevermind.

The Medford Mail-Tribune continues (9/24/06)

“Even strictly public projects are complex, often involving many parcels of property that may pass through other private hands before ending up in public use.

The measure exempts road projects, but in some cases government buys more land than is required for right of way, and needs to sell some of it back to the original owner. The measure would not allow that.”

This is absolutely false. Measure 39 only applies when the government intends to condemn property for the purpose of giving the property to another private party. In the example given, if the government condemns property for a right-of-way, and it turns out the government took too much property, it cannot be said that government originally condemned the property with the intent to then give or transfer the property to another private party.

In the alternative, if governments are knowingly condemning more property than the government needs, then the government is not condemning property for a public use, and any such taking violates the federal and state constitutions, and is not permissible in the first instance.

Also from The Oregonian (10/4/06)

“But there’s no evidence that condemnation is abused or overused in Oregon. The evidence shows local governments use this unpopular technique sparingly. Still, it does give them some leverage to negotiate, on behalf of taxpayers, a reasonable purchase price for land.”

The irony of this statement is overwhelming. After all, in an earlier paragraph of the same editorial, the O said “approval of this measure could dramatically restrict the use and utility of public-private partnerships in Oregon — and thereby inhibit economic development in our state.” Hey guys, you can’t have it both ways. If the “unpopular technique” of taking one person’s home and giving it to another is “aparingly used” then the impact of banning that “unpopular technique” will not be “dramatic.” On the other hand, if the impact on public/private partnerships will truly be “dramatic,” then the “unpopular technique” must be used more than “sparingly.” So make up your minds guys, but don’t pull people’s legs.

And what does the O mean by “overused”? Who determines when eminent domain is being “overused”? I’ll bet that Les Golbek, Bob and Marilyn Lowery, and Bob Hogan believe that the eminent domain was “overused” in their cases. Clearly, it is the O who wants to be the arbiter of when eminent domain abuse is “overused”. I would submit that even one instance where the government threatens to take a person’s home and give it to Lowe’s, Target or any other private developer, constitutes “overuse”.

Finally, it is the last sentence that is most troubling. The O sees the threat of eminent domain as a tool to obtain a “reasonable purchase price” for land. The O needs to take a refresher course in constitutional law. The Fifth Amendment, and Article I, Section 18 of the Oregon Constitution, require “just compensation”, not a “reasonable purchase price”. Government is not supposed to haggle with property owners over the purchase price of land, the government is required to pay just compensation. The use of eminent domain is not supposed to be used as “leverage” to force property owners to sell their land to a private developer who wants to pay less than fair market value.

The Medford Mail-Tribune continues in its editorial (9/24/06)

“The measure also amends existing law by adding a provision that would cost government, and therefore taxpayers, more money. It says that, in cases of condemnation for public use, if the sale price determined by the court is greater than the government’s initial offer, the government must pay the seller’s attorney’s fees and other costs. Current law provides for such payments, but only if the price set by the court is greater than the government’s highest offer, or if the court determines that the initial offer was not a good-faith offer.

This means that, even in the case of a public project, a government would feel pressure to make a high initial offer to avoid paying fees and costs later, or might decide not to pursue the project at all.”

The spin used by the Mail-Tribune is incredible. Under the current condemnation process, the condemning authority makes an offer. The property owner then has 40 days to accept or reject the offer. Say you have a piece of property worth $100,000. The government’s offer is usually below market value, in this case the offer may be $75,000 – below market value. The property owner has 40 days to accept or reject the government’s offer – which is obviously below fair market value- i.e. is not just compensation (which is what the federal and state constitutions require).

At this point in the process, the property owner is stuck between a rock and a hard place. She knows the government’s offer is well below market value, but if the property owner rejects the offer, the property owner has to hire attorneys and appraisers who are going to cost a lot of money, say approximately $25,000. In the meantime, 30 days out from trial, the government makes an offer of $100,000, the fair market value of the property.

The property owner is then forced either accept the government’s last, best offer (and net $75,000 – the government’s initial offer), or go to trial and run the risk of incurring more attorney fees and expert fees (say an additional $10,000), only to end up with a judgment of $100,000. If the property owner doesn’t beat the government’s last, best offer, the property owner is not entitled to recover her fees and costs. Which means, in this example, the property owner (if the case goes to trial), will net only $65,000 – well below the government’s initial (albeit below market value) offer.

In the end, under the current condemnation system, the government has an incentive to lowball property owners, and force a property owner to haggle for the sale price of her home, much the same way one might haggle with a used car dealer, all for the right to sell her home at a price that is less than what would equal just compensation.

The Mail-Tribune apparently believes that the just compensation requirements of the Fifth Amendment and Article I, Section 18 of the Oregon Constitution are mere technicalities on the government’s trek towards economic development. The “pressure” the government will feel is the pressure to make a good-faith offer to a property owner that represents just compensation, which is what a property owner is entitled to. Damn it, it must be painful to be “pressured” into complying with the Constitution.

And then, the Mail-Tribune really goes off the deep end (9/24/06):

“Here’s another small detail: If your property is condemned through eminent domain, you can take up to two years to reinvest your profits without owing capital-gains tax. If the government has to buy you out without condemnation proceedings, you don’t have that grace period.”

Huh? This makes no sense. If a property owner is concerned about capital gains implications of the sale of her property, there is nothing in Measure 39 that prevents voluntary condemnations. In other words, if a property owner voluntarily agrees to condemnation – even if the local government is going to turn around and give the property to another private party – Measure 39 does not prevent government from taking such an action.

And finally, The Mail-Tribune’s real objection to Measure 39 becomes apparent (9/24/06):

“Our final objection to Measure 39 is a familiar one. This measure is just one of several around the country being pushed by national property-rights groups. In other states, the eminent domain issue is being used to convince voters to pass much more sweeping rollbacks in land-use laws of all kinds. That isn’t the case in Oregon, of course, because Measure 37 already passed here in 2004.

Some Oregonians who voted for Measure 37 believing they were helping beleaguered homeowners bequeath some land to their children are now wondering what they were thinking.”

The Mail-Tribune insinuates that Measure 39 is a measure pushed for by “national property-rights groups.” The fact is that Measure 39 is authored by Oregonians In Action, not some “national property-rights group.” Measure 39 was drafted and filed well before “national property-rights groups” began pushing anti-Kelo measures in other states. What’s more, the claim that Measure 39 is being funded mostly by out-of-state interests has been directly refuted in recently published newspaper reports.

It is the last paragraph that is most telling. Clearly The Mail-Tribune’s objection to Measure 39 has nothing to do with the merits of Measure 39. Instead, The Mail-Tribune’s objection is to Measure 37, not Measure 39, and the paper’s editorial board has not gotten over the fact that Measure 37 is now the law of the state of Oregon.

The Bend Bulletin decries the anti-lowballing provisions of Measure 39 (10/4/06):

“This looks to us like an incentive for property owners to drag the process out, not to mention a huge money loser for governments attempting to build crucial infrastructure”

Unbelievable! Since when is requiring the government to bargain in good faith and comply with the Constitution considered a “huge money-loser”?

Without question, the editorial boards of the various newspapers simply do not understand — or accept — that property owners (like newspapers) enjoy certain rights that are protected by the U.S. and Oregon Constitutions. Just like the free speech protections of both the federal and state constitutions are oftentimes inconvenient and expensive for the government to comply with, it is disingenuous for the newspapers to now complain the Measure 39 is inconvenient or expensive for governments. Especially when Measure 39 is anything but.

Oregon Catalyst