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.

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Posted by at 06:09 | Posted in Measure 37 | 18 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jack Bogdanski of Jack Bogs Blog just came out urging a yes vote on measure 39. He’s had it with the Portland Development Commission’s larceny, as have most of us.

  • Captain An-on

    I struggle with this measure. I support so much of it, but there is a nagging voice that also says, this may not be wise and have some unintended consequences.

    I agree with much of what Mr. Ross says here. however, i do see some problems. He argues that the government should not haggle and not use eminent domain as a tool to get property owners to sell, that the gov should pay just compensation, and i interpret that as fair market value. however, it is NOT uncommon for a single property owner, or small group of property owners, to hold a key piece of land needed for a project and hold out. they ask for a price that is not fair market value and use it as extortion to get way above fair market value – and in turn rip off the tax payer. i think eminent domain is then an appropriate tool to get those property owners to play ball fairly. The court system is set up to help handle disputes in the fair market value, and it is used, and works. But let’s face it, most everyone seems to think thier property is worth more than it really is. we’ve seen this very clearly with Measure 37 – people claiming thier properties are worth 2, 3, 4 times what the fair market value is worth (which is one reason they refuse to get appraisals done by professionals).

    I think i agree with the oregonian that eminent doman hasn’t been overused. yes, it has been used, but if someone is of the attitude that if it is *EVER* used then it is overused, there really isn’t much point in debating that point with them. Mr. Day lists three occurances of the threat of eminent domain. and we don’t have all the facts, just his opinion, which is obviously biased by his job, and ideology. that aside, three times in a state of 3.5 million or so people doesn’t seem like a lot. and that’s not even in one year. so, i’m not convinved government is abusing eminent domain in Oregon.

    lastly, i think the initiative is very flawed. we have the lowest bar/standard to get a measure on the ballot. and as a result, we get a lot of BAD measures to vote on. or measures that are good in theory, but poorly written with good intentions. I have a feeling this may be one of them. good intentions, but poorly written. My personal belief is that the legislators that we elect, should write laws that pertain to such important issues. we elect them, so they represent us. also, they have bi-partisan oversight to ensure laws are appropriate. and they are the professionals. they write laws for a living and so know what will most likely pass muster and be constitutional or won’t be tied up in courts forever.

    I’m not decided on this measure, but my gut says it’s a good idea, but may not be written well. So, i think i’m leaning towards a no vote, and having the legislature take a stab at writing a law regarding eminent domain.

  • Marvin McConoughey

    I believe that eminent domain can be both underused, in some cases, and overused in others. It is the latter that concerns me most. Rather insulting, injurious actions against individual Oregonians have occurred in the past, some very highly publicized. That is why I will be rejected the advice of the League of Women Voters, and voting YES on Measure 39.

  • Chris McMullen

    Measure 39 seems very clear to me: property can’t be condemned if it’s to be then sold to another private party. With Kelo, the local government condemned property with the expectation it would produce higher tax revenues when developed. How nice.

    How does increased tax revenues equate to a common good? The Metro area has really done a bang-up job managing their budgets.

    • $31 million on a de-icing system that pollutes the Columbia
    • $300 million on Wapato Jail — no money to operate it
    • Closing in on $1 billion spent on SoWa.
    • Capping the reservoirs
    • The Round in Beaverton?
    • The water billing fiasco?
    • Free wifi?

    Increased gummint spending money is not a common good, it’s a license for more waste.

  • Steven Plunk

    Captain An-on makes a good point regarding unintended consequences. All laws carry that risk. I usually try to judge if that risk is borne by the citizens individually or the society at large.

    However, it is a mistake to confuse fair market value with average or usual value. Merely asking to buy property will raise it’s price. If something is needed by someone, whether it’s the government or a private citizen, that need increases demand and according to the basic laws of supply and demand that would increase price. In many cases that creates a windfall for the seller but our economy creates windfalls all the time for people. The ability to hold out for a better price is part of our economic freedom.

    What if the owner does not want to sell at all? Property may carry sentimental value that courts would not recognize or quantify.

    Fair market value can only be determined by fair negotiations. The power of eminent domain makes those negotiations unfair. What the property would have sold for a year ago or a year from now is immaterial. If the seller gets a windfall it’s immaterial. If the seller kills the deal by not selling it is immaterial.

  • Dave Hunnicutt

    Captain An-on:

    I appreciate your comments, although I certainly disagree with your opinion on whether the use of eminent domain to take from one citizen to give to another is overused.

    On your argument that a few key property owners hold out on a key piece of property that’s needed for a project, understand that Measure 39 does not apply to condemnations for public uses, like schools, roads, parks, libraries, police/fire stations, etc. So if M39 passes, government can continue to use condemnation for all phases of a public project, provided the project is truly a public one.

    On the other hand, if government is using condemnation in the context of a private project, as a hammer to force one private citizen to sell to the developer of a private project, eminent domain should not be used as a tool to get property owners to “play ball fairly.” Why should a property owner be forced to “play ball” with another private citizen at all, especially when “playing ball” means that the property owner will be evicted from his home, lose his farm, or give up his business? I have yet to travel to a city in Oregon (or anywhere else in the United States) where there aren’t property owners who would happily sell their land for development, so why find the one guy who doesn’t want to sell and make him “play ball?” If the governing body thinks a project (i.e. a Target store, Lowe’s, natural foods store, convention center hotel) is so important that it must be built, surely the governing body can find a willing seller in the area.

    As far as M39 being poorly written, take a look at House Bill 3505 (2005) from the last legislative session. The language in M39 that you are concerned about is nearly identical to the language in HB 3505, which was fully vetted in the Oregon House of Representatives, and passed with a bipartisan vote. We would have enjoyed fully vetting HB 3505 in the Oregon Senate, but the City of Portland killed the bill before we could get a hearing on it. No one can make the legislature debate a bill they aren’t interested in talking about, and that applies to ideas from the left, right, or center. We tried (not just me, but R’s and D’s in both caucuses) damn it, we tried.

    The exceptions that you see in subsection (2) of M39 were prepared by representatives of the League of Oregon Cities, Association of Oregon Counties, and the State of Oregon, and were inserted into M39 at their request. But I can tell you with near complete certainty that HB 3505 (or M39) will never pass in the Oregon legislature, as the City of Portland killed it in the last legislative session, and will do so in every legislative session going forward, if they have the muscle. If you can point to a specific provision in the measure that you believe is poorly worded, I will be happy to explain it to you, tell you who drafted it, and at whose request it was inserted into the measure.

  • Jerry Man

    Don’t blame the editorialists for lacking evidence. Blame the Yes on 39 campaign for failing to provide clear evidence.

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

    Hogan was found to be a liar, liar, liar in his voter’s pamphlet statement.

    Your problems are your own creation, Ross.

  • Dave Hunnicutt

    Jerry Man:

    Got a source for that bold assertion? It sure isn’t the Portland Tribune, who first reported about Commissioner Leonard’s efforts and talked to Mr. Hogan here:

    From the article, entitled “Leonard takes up Lents hot potato”:

    James “Bob” Hogan owns Hogan’s Electric, an electrician supply store at the corner of Southeast 91st Avenue and Foster Road that used to be a county library. He said the city wanted him to make an offer, but “we don’t want to sell; we like the building, that’s why we restored” it.

    I don’t think the Trib would try to pull anyone’s leg.

  • Jerry Man

    From OPB.ORG: Hogan doesn’t own the property. Nor does he use it as a store. He’s leasing it out.

    On this cloudy morning, Jim Hogan is doing electrical work on a home in Portland’s west hills. He says his family is not interested in selling the building at Southeast 91st and Foster.

    Jim Hogan: “We’ve had the building — it’s been almost three generations, we’ve had — of electrical contractors. We have a fourth generation coming up that’s going to be running Hogan’s Electric. We like the location, freeway access, neighborhood’s good.”

    In their voters’ pamphlet statement, the Hogan accuses Randy Leonard and the city of Portland of trying to force them to sell. Hogan says he could see selling, eventually.

    Jim Hogan: “We’re not beyond, you know, selling it some day, but like I said before, we don’t need to move.”

    In the Voters’ Guide, Hogan writes that he “doesn’t want to move his business.” But, in fact, Hogan has already moved. The building is up for lease, and, according to the owner’s attorney, it has already had at least one tenant before. Hogan says his move is temporary. But the leasing agent is offering three-year leases, and he says he knows of no plans for the electric business to return. On top of that, Hogan doesn’t own the property — it belongs to his father, who lives in Nevada. Regardless, Hogan says Measure 39 would help families hold onto their property — or negotiate on a more equal basis.

    Jim Hogan. “It’s like if you buy a residence, you have an offer, another offer, it’s the way it works. It shouldn’t be that someone comes along and says ‘we want your land’ and they take it away from you, or give you nothing for it.”

    (Sound cross-fades.)

    Back on Foster Road at the Hogan Electric building, City Commissioner Randy Leonard is fuming. He emphasizes Hogan’s misleading statements.

    Randy Leonard: “The things that he said in the voters’ pamphlet are false. He doesn’t occupy the property. It’s vacant, he has a ‘for lease’ sign out front. As opposed to him trying to characterize this as why Measure 39 should pass, his behavior, his attempt to basically blackmail the Lents neighborhood, are an example of why Measure 39 should fail.”

    Leonard says because of the renewal area’s tax structure, the cost of the Hogan property would be paid by Lents residents.

    Currently, the use of eminent domain is restricted in Lents, under an urban renewal agreement. That could change but as it stands now, this property would not be affected by the measure.

    And regardless, Hogan insists that the city can continue to develop around him.

    (Sound from Lents fades out.)

  • The threat of eminent domain is usually a stong enough bargaining tool to allow government to get its will without lawyers getting hauled into court. Remember, without M39 it costs a property owner tens of thousands of dollars (assuming Ross doesn’t represent them pro-bono) to defend their property rights. A large reason for popular support of M37 was high cost of development as you had to fight many decisions through LUBA to use your property reasonably.

    Also, It doesn’t matter if under an agreement put together under the Lents plan if eminent domain is restricted. The plan can be varried from by the city council just like zoning. In fact it can be varied from much easier than zoning.

    (sound from Jerry Man fades out)

  • Jerry

    DarePDX, taking a lower gov. body decision to LUBA usually never gives a property owner the ability to uses ones “property reasonably”. Very few LUBA cases in the past has resulted in reasonable use. But I know what you met, and you are right that this is one reason that M37 was successful.

    (sound from Jerry Man fades out)

  • Jerry

    The government should never be allowed to take private property from one citizen and then give or sell it to another private citizen no matter what the reason. It really is that simple.

    • Anonymous

      What about taking property from drug lords and auctioning it off the the highest bidder?

  • Jerry

    That example has nothing to do with Kelo…or this conversation.

    • Anonymous

      it is taking property from a private citizen by the government and giving it to another private citizen. seemed relevant since you said it should never be allowed no matter what the reason.

  • Jerry

    May have seemed relevant to you but it was not.

  • Jerry Man

    Dave’s been proved to be campaigning using a lie to pass a measure. He asked for a source, he was given one, and now neither hide nor hair of him is seen.

    • Anonymous

      Which Dave?

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