Virginia legislators eliminated some of the worst abuses of eminent domain following the U.S. Supreme Court’s controversial 2005 Kelo decision, but the reforms didn’t go far enough. As a property dispute in Alexandria demonstrates, landowners can still be denied the “just compensation” required under the Fifth Amendment when their property is seized by the government.
Consider the case of Charles Hooff, who with his business partners signed a $42.5 million contract in 2006 to sell a 10.6-acre tract they owned adjacent to the Capital Beltway to a D.C.-based development company. The buyer planned to build an upscale high-rise in accordance with the city’s master plan.
But then the Alexandria Sanitation Authority threatened to seize the parcel to expand the city’s sewerage treatment plant, and Hooff’s deal fell through. It’s now impossible for them to sell the land to anybody but the Sanitation Authority, which is offering only $20 million — or less than half of its appraised value.
That’s not unusual, says Gideon Kanner, professor emeritus of law at Loyola Law School in Los Angeles and a national expert on eminent domain. “The cloud of uncertainty renders the property largely useless, and the owner never recovers the fair market value ordered by the court,” Kanner told The Examiner. Hooff told us he has already spent more than $400,000 to defend his interests, which is not recoverable under current law, on a now unusable parcel. Taxes on the land have also jumped more than 1,000 percent.
Hooff, whose family has lived in Alexandria since Colonial times, points out that the Sanitation Authority is $130 million in debt and does not have the financial wherewithal to pay him a fair market price for his land, let alone finance an expansion without a major increase in sewer rates. Still, Hooff is all but helpless now because unelected Sanitation Authority board members, who are appointed by the City Council, can steamroll other Alexandria residents just as they’re now doing to Hooff and his partners.
Unfortunately, Hooff and his partners are unlikely to find justice in Alexandria’s Circuit Court, where the condemnation trial will be heard in July. As city employees, the judge and jury stand to benefit if the landowners receive less than fair-market value. And while the Sanitation Authority has the option of walking away if the court awards a higher price than it is willing to pay, Hooff has no such luxury if the court-ordered price is lower than he is willing to accept. It may have the cover of a judicial proceeding, but this is nevertheless property theft, pure and simple. There ought to be a law against it.
