Thursday, June 23, 2005

Supreme Court ruling may affect Downtown development

Memphis Business Journal

A U.S. Supreme Court decision handed down Thursday on the taking of private property for redevelopment will likely reverberate throughout Downtown Memphis.

The case before the High Court involved a settled residential neighborhood in New London, Conn., which the city wants to condemn to make way for an office complex. Homeowners have fought the city over the principle of private property; they've argued that condemnation laws are intended for blighted areas in need of renewal, and for public projects.

New London's argument for bulldozing the middle class neighborhood is that office space would generate lots more in taxes, plus jobs, and that's good for the entire community.

The Supreme Court agreed, saying that local leaders know what's best.

In Memphis the first immediate implication is a proposal to redevelop a huge swath of the bluffs facing the Mississippi River; tearing down public and private buildings and creating a grand promenade park.

The plan was developed by the Riverfront Development Corp., and approved by the Memphis City Council. The Supreme Court ruling now gives the city attorney another tool in dealing with those opposed to the promenade, says Benny Lendermon.

"It's incredibly important nationwide," says Lendermon, president of the RDC. "Many large metropolitan areas are going through financial crises right now. This gives them more flexibility to pursue economic development. We developed a plan for the best use of the property."

Others do not agree.

Friends For Our Riverfront, a group of concerned residents and heirs to the promenade land, has opposed the RDC's plans to use private development, such as tall office towers, to pay for public improvements to the promenade.

FFOR members have long suspected that the RDC would use eminent domain to acquire the land if the heirs could not reach a consensus.

"Why pay when you can just take it?" says John Gary of FFOR.

In 2003, the RDC hired the law firm of Shaw-Pittman, which specializes in legal disputes over development rites and eminent domain, to design the legal strategy for acquiring the promenade land.

Beyond the riverfront, the High Court ruling also has implications south of Downtown, in an area peppered with old industrial buildings, some dating to the Civil War.

The neighborhood has numerous small businesses, such as welding shops and metal fabricators, but the renaissance of Downtown is knocking. The area is slowly being taken over for condo developments: renovations when possible and new construction when not.

Many property owners have resented pressure to sell. A common complaint is that when an owner doesn't sell they get harassed by building and safety inspectors. The Supreme Court may have made the process easier for developers.

© 2005 American City Business Journals Inc.

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