EDITORIAL: Property rights in the sewer

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Property owners in Brooklyn continued protesting Tuesday as the New Jersey Nets officially broke ground for a new arena on land the owners never wanted to sell. Washington-area residents should take heed: Governmental abuse of property rights isn’t just a New York problem. The latest local assault on private property is occurring in Alexandria and is set to go to trial May 24.

The case involves the Alexandria Sanitation Authority’s seizure of private land off Eisenhower Avenue owned for four decades by Alexandria real estate maven Charles R. Hooff III. The claimed abuse of government power here isn’t quite like the New York one and the infamous case a few years back called Kelo v. New London. Those other cases involved government trampling on the constitutional requirement that the power of eminent domain be applied only where “public use” requires it. The Hooff case instead joins a growing trend whereby governments undermine a property’s usefulness or deliberately undervalue the property so they can pay far less to unwilling sellers.

In the case of 480.00 Acres of Land vs. United States, Florida recently avoided Supreme Court review of a scheme whereby it used regulations to force down a land’s value. In New Orleans, government denied rebuilding permits after Hurricane Katrina to just one neighborhood - again undermining the property value so the land could be seized more cheaply for a controversial new medical complex for Louisiana State University.

The Alexandria Sanitation Authority apparently figured it didn’t need to go to such diversionary lengths. Instead, it merely hired its own appraiser to estimate the Hooff property’s value at well under half what Mr. Hooff says it is worth.

Let’s stipulate that the authority does need to expand its wastewater treatment plant. Even so, the Constitution requires “just compensation” for land seized for such public projects. On Dec. 21, 2005, the authority made a formal offer to buy the land for $30 million. Mr. Hooff declined. On Nov. 30, 2006, after considering a number of bids, Mr. Hooff agreed to sell his land to a group called Penzance Properties LLC for $45 million. On Dec. 14 of that year, after two months of study, the national firm of CB Richard Ellis appraised the land at a value of $51.5 million. That amounted to a price per acre of $4,863,078, which is very similar to the $4,686,907 price per acre of a comparable property in Herndon - and less than half of the $10,193,476 per acre for a comparable property on Mill Road in Alexandria.

Only after that, though, did the sanitation authority make clear that it wouldn’t cease fighting. In April 2007, it formally asserted its intention to use eminent domain to “take” Mr. Hooff’s land. The Penzance deal evaporated. Mr. Hooff tried to fight back. Finally, in December 2008, the authority actually seized the land - for a purchase price of just $20 million. Not only was that less than half of the Penzance agreement, it was $10 million less than what the authority itself once offered. Naturally, Mr. Hooff filed suit.

“They have abused the power of government,” Mr. Hooff told The Washington Times on Wednesday. “It’s just like they are walking around here with an AK-47, saying ‘We’re gonna take it from you.’ They’re sticking me up like a burglar.”

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