Friday, July 15, 2005

Herenton says recent Supreme Court decision could help Memphis

WMCTV Action News 5
By Darrell Phillips
Link to original

The mayor's words may anger some, especially those who have been fighting to protect a four block swatch of riverfront property from redevelopment.

Memphis Mayor Willie Herenton was straightforward about an issue that is anything but cut and dry.

"I will admit a bias," said Herenton. "I do have a strong bias. I'm very supportive of the Supreme Court decision."

The U.S. Supreme Court ruling in the Kelo vs. New London, Connecticut case found that local governments can condemn private property for commercial use, as long as it benefits the public in some way.

Herenton agrees.

"Cities should not quite frankly be inhibited to grow the economy, to grow its infrastructure and its needs because of existing buildings and structures," he said.

The mayor's position may play into a heated battle over the future of the Memphis riverfront.

"I think it has a brighter future given this Supreme Court decision," he said.

Opponents like Virginia McLean with Friends of Our Riverfront are disappointed. She says Kelo doesn't apply because the riverfront is already public land.

"The Kelo decision is something that I think the country has really felt outrage about, and it's surprising to me that at this time an elected official would want to use eminent domain to take land away from the people of Memphis," she said.

Herenton hinted the debate won't stop at the water's edge.

"There are some other areas within the city of Memphis that we think should provide greater opportunities for growth and development and eminent domain may be the way to make this land available," said Herenton.

He wouldn't elaborate, but says Memphis should be a balance of greenspace and city living.

"The Supreme Court decision will allow cities to get an urban environment that I think will bring about an urban quality of life that a lot of people will enjoy," he said.

The mayor was quick to point out that any new use of eminent domain and the Supreme Court ruling has to be done cautiously and that city planners should be fair reasonable as they move forward.

Tuesday, July 12, 2005

Editorial: Try to negotiate riverfront plans

Commercial Appeal

THERE'S STILL TIME to refine plans for developing the Downtown riverfront in ways that could significantly reduce public opposition.

That was perhaps the most promising bit of information that came out of a two-hour debate Sunday afternoon between representatives from the Riverfront Development Corp. and the Friends for Our Riverfront citizens group.

Oh, it wouldn't be easy. On some issues, the gap between the groups' positions is as wide as the Mississippi River itself.

Yet near the end of Sunday's forum at the Central Library, both sides said they were willing to talk about potential areas of compromise. It would be in everyone's best interests for those discussions to take place.

The most likely source of common ground might be on the so-called Promenade project, a four-block area of Front Street between Union and Adams.

The RDC, a nonprofit organization created by city government to manage riverfront property, envisions a high-rise development of some sort -- condominiums, offices or whatever -- that would provide limited public access along outdoor promenade decks facing the river.

Friends for Our Riverfront would prefer to see the area converted into parkland.

Sunday's forum exposed some weaknesses in each of those approaches.

For example, a high-rise development, no matter whether it's residential or commercial, would require a lot of parking. The RDC's plans call for two existing parking garages within the four-block area to be rebuilt as underground structures.

That might take care of the current needs for parking spaces. But a high-rise development would logically seem to require much more parking than the area currently has. And given the property's proximity to the river, there are limits on how far underground it's practical to put a garage.

RDC officials didn't make a clear and compelling case for the demand for new residential or office space, either. They say market conditions will determine what's best for the site. But if RDC officials are focused strictly on some type of high-rise, they're likely to overlook other possibilities that could be more practical and acceptable to the public.

On the other hand, RDC officials raised some very valid concerns about the idea of converting those four blocks into parkland. Rick Masson, an RDC board member, noted that Confederate Park and the Mud Island River Park are seldom used by citizens. That being the case, simply adding more unimproved park space doesn't seem like a good solution.

Virginia McLean, president of Friends, countered that parks don't have to be just empty patches of grass. She cited Overton Park as an example with multiple civic uses.

McLean said Friends wouldn't be opposed to some development on the Promenade, such as restaurants, sidewalk cafes and the like. It seems like there's still an opportunity to redesign the Promenade, perhaps using the same basic design with less-intensive retail uses.

That might prevent a court fight over use of the land. And it could produce one of those "win-win" situations that would make everybody feel better about the finished product.

Friday, July 01, 2005

Crystal Ball: Five predictions for Memphis, based on recent headlines.

Memphis Flyer
By John Branston
Link to original

John Ford will beat the rap by wrapping himself in TennCare. The more the media, state investigators, plaintiff's attorneys, and rival politicians bore in on him, the greater Ford's chances of being acquitted on federal criminal charges of extortion. The investigations will blur in the public mind and look like piling on.

There is no connection between E-Cycle Management — the bogus company in the F.B.I. Tennessee Waltz sting — and United American HealthCare (UAHC) — the parent of TennCare provider UAHC Health Plan of Tennessee. But Ford has already said he was singled out for indictment by TennCare cutters. If there are criminal indictments stemming from an investigation by the TennCare inspector general's office, which was created by the General Assembly in 2004, or Tennessee Insurance Commissioner Paula Flowers, who put UAHC of Tennessee on administrative supervision in April, Ford will cry dirty politics. And his cry will resonate in Memphis, which has more TennCare recipients who stand to lose their coverage than any other part of the state.

Ford didn't invent the concept of the high-paid consultant, he just refined it as a legislator. This week the Government Accountability Office reported that 34 states used consultants paid on contingency fees to get more Medicaid and Medicare money.

If Ford is tried by a Memphis jury, he will walk.

-- The U.S. Supreme Court's decision on eminent domain in Kelo v. New London will not help the Riverfront Development Corporation in its efforts to develop the downtown Promenade. In fact, it will hurt it by focusing attention on the land bridge, which is the most expensive and controversial part of the RDC plan.

You can read the entire opinion in less than 10 minutes at this Web site: straylight.law.cornell.edu. It is nuanced, balanced, and bears little resemblance to the simplifications and mischaracterizations of it in media accounts. The New London Development Corporation is somewhat similar to the RDC. A small group of private-property owners whose properties were not blighted fought the development plan and lost. The case turned on whether the plan served "public purpose," which is not the same as "public use." See for yourself how economic development serves public purpose.

The RDC wants to take some public land for private use to help finance public improvements. The only way to get the land bridge through is by stealth. When the focus, for whatever reason, shifts to the cost, whether it is $100 million or $250 million, it's a dead duck. Boss Crump recommended a land bridge to Mud Island in a newspaper interview in 1953, the year before he died. The most powerful man in Memphis history couldn't make it happen, and neither will the RDC.

-- The Memphis Grizzlies will wear out their welcome if they don't boost their contributions to the city in a big way. There is no causal connection, but the fact is that public parks and boulevards and golf courses are suffering while the $250 million FedExForum sits idle, the NBA finals get lousy ratings, Grizzlies malcontents making $8 million a year whine and can't get fired up to win a playoff game, and publicists try to get us to care about the 19th pick in this week's draft. Pitiful. How ironic that "surplus" funds from the MLGW water division are helping to pay off the bonds for FedExForum while the city can't water the greens at the Links of Galloway golf course.

-- The Pyramid reuse recommendation — an indoor theme park and a shopping mall — won't happen. It's not that the ideas are bad. It's that they require public subsidies, giving away the building, or both. And this is not the time to be spending public money to promote tourism or economic impact. With the arena, baseball stadium, trolley, Mud Island, and The Pyramid in place and the highest property taxes in the state, the era of big public projects in Memphis is over.

-- Which brings us to this: The next mayor of Memphis will run and win on a program of a better Memphis for Memphians through revitalized neighborhood parks and public spaces. His or her model will be Chicago mayor Richard M. Daley, who has been singing this song for years.

"As schools lost their effectiveness as community anchors, the same thing happened to parks, libraries, and other public spaces," Daley has said. "People stopped using them and the city stopped taking care of them. Or maybe people stopped using them because the city stopped taking care of them. ... The nice thing is, if you improve the quality of life for people in your city, you will end up attracting new people and employers."

Nothing gets the public stirred up like uncut grass or unpicked-up garbage.

Domain ruling gives developers options

Memphis Business Journal [link]
By Rob Robertson and Amos Maki

Opinions are mixed regarding last week's 5-4 decision by the U.S. Supreme Court that effectively expanded the use of eminent domain for private economic development.

In the case of Kelo vs. New London, Conn., the court held that New London could purchase and remove private homes and businesses to make way for a private riverfront development project because of the potential economic benefit the boost in tax revenues would create.

Kevin Walsh of Harris, Shelton, Hanover, Walsh PLLC, calls the court's decision "an unfortunate expansion of public use."

Walsh has an emphasis on eminent domain in his practice and has represented property owners in cases brought by governmental authorities to take private property.

"I found it disappointing that Judge Rehnquist was not able to muster a majority for purposes of protecting private property rights," Walsh says. "This decision essentially allows governmental entities to take property in the name of public use under the 5th Amendment of the Constitution solely for the purpose of generating additional tax revenue."

Still, there are additional levels of scrutiny to consider regarding the application of Tennessee state law, Walsh says. Tennessee has its own clause with regard to the right to take private property.

"I'm not sure it would be interpreted any differently, but you would have to consider not only the Tennessee Constitution but the enabling legislation or statute under which the power of eminent domain has been delegated," he says.

That would include any legislation that allows a government entity to seize private property, including boards like the Riverfront Development Corp., which gained approval from the City Council last year to transform a four-block area of Downtown known as the Promenade.

The $50 million redevelopment plan calls for using private developments, including three proposed new buildings, to pay for projects like a two-level promenade and the relocation of parking garages underground. The buildings would be mixed-use, with restaurants and shops lining the bottom floors. Ground leases would keep the property under the control of the city.

Ultimately, the RDC seeks to revamp a 5-mile stretch of the Memphis waterfront over the next half century. The cost of that development has been estimated at about $300 million.

The property now contains the Cossitt Library, a fire station, the U.S. Post Office and Confederate Park. The land, except for Confederate Park, is virtually inaccessible to most of the public and offers prime views of the river.

The property was donated by the city's founding fathers for use as a public promenade. The heirs of the founders hold title to the land and have been divided on the proposal.

RDC president Benny Lendermon says the High Court's ruling gives the city attorney another tool in dealing with land acquisition for a plan that could produce a significant economic benefit for the city.

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

Barbara Kritchevsky, associate dean of the Cecil C. Humphreys School of Law at the University of Memphis, says the ruling would not directly change any restrictions under the Tennessee Constitution involving eminent domain.

"(The ruling) talks about what is permissible under the federal Constitution," says Kritchevsky. "It means if a state chooses to do what New London did it would not violate the federal Constitution. States could be more restrictive in their own interpretations of eminent domain."

Jim Arthur, an attorney at Armstrong Allen, says Tennessee's eminent domain clause is not more restrictive; it essentially mirrors that of the federal Constitution and has been construed by state courts in lockstep with the U.S. Supreme Court.
The New London case, therefore, may have a particular relevance if a similar situation were to occur here.

"It means if an E-Cycle could convince enough local officials to declare that a particular development project it proposed provides a 'public benefit,' however speculative, private property owners whose property stands in the way are afforded no protection by the Constitution," Arthur says, referring to the fake company the FBI used in its Tennessee Waltz sting operation that netted several local elected officials for allegedly taking bribes.

"According to the Kelo majority, I see nothing to stop the City of Memphis, or some agency to which it might delegate its power of eminent domain, from condemning every square foot of riverfront property in furtherance of some development plan it pronounces to be of 'public benefit'," Authur says.

Virginia McLean, president of Friends for Our Riverfront, a group that opposes the RDC's proposals, says that won't happen.

"The Public Promenade is protected by the Tennessee Supreme Court's prior decisions involving the property and the Tennessee Constitution," McLean wrote on the group's official Web site. "We believe that if the RDC attempts to condemn the Public Promenade, the Tennessee judiciary will reject the U.S. Supreme Court's reasoning in Kelo."

Lendermon says the RDC would use eminent domain as a "last resort."

Another project where eminent domain could come into play is the city's push to redevelop the blighted, 138-acre section of the city south of the $250 million FedExForum. Current conditions in the area, bounded by Mulberry on the west, G.E. Patterson on the south, Danny Thomas on the east and Linden on the north, are bleak, with lots overgrown with weeds and covered in trash.

The Center City Commission, the agency charged with guiding development Downtown, has developed a plan for revitalizing the area that includes the possibility of using eminent domain for land asemblage that would spur development.

"Land assembly will be key in creating development in what is a long forgotten neighborhood of vacant land," says Jeff Sanford, CCC president. "I would hope that eminent domain wouldn't have to be used to assemble property, but in the end it may be an option."

Downtown developer Henry Turley says the Supreme Court ruling is a victory for cities looking to attract economic development opportunities.

"I think a city has to be able to assemble property for economic development within that city," says Turley, principal of Henry Turley Co. "Otherwise, that economic development occurs outside the city. So the city tends to languish while the surrounding areas tend to prosper, putting the city at a great disadvantage."

At the other end of the spectrum is retired attorney Hal Rounds, chairman of the Libertarian Party of Shelby County, who says the Kelo case is fraught with dangers to everyone who intends to work, invest and build something.

"We have gone from being property owners to conditional custodians at the pleasure of our government," Rounds says.

He believes the matter is not settled, in part because as Justice Clarence Thomas noted in his dissent, the entire body of cases cited by the majority rests not on Constitutional law but on other precedents.

Should the next similar case go back to the 5th Amendment it could overturn more than a century of decisions. In the meantime, Rounds believes the Kelo case, while potentially unlawful, strengthens the hand of the city.

The problem with the decision, as Arthur sees it, is that it lowers the standard for governmental exercise of its power of eminent domain to an all but meaningless level.

"The 5th Amendment originally contemplated government taking private property for its own use, for forts, roads or other necessities for the common good, or for use by others who might incidentally reap a benefit to serve the public," Arthur says.

"Now, government can take your property simply because it determines that someone else can use your property more profitably and generate more tax revenue than you have."

CONTACT staff writer Rob Robertson at 259-1726 or rrobertson@bizjournals.com. Contact staff writer Amos Maki at 259-1764 or amaki@bizjournals.com. Staff writer Scott Shepard also contributed to this story.



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