Worse than eminent domain

In the previous post I said that the city’s de facto taking of the “Made in Oregon” sign was “eminent domain by other means.” That’s not quite right. It’s actually worse than that. If the city had taken the sign through eminent domain it would have had to pay Ramsay Signs fair market value for the property, estimated in this Oregonian article at $500,000. Under the new deal Ramsay gets $200,000 to change the sign and a 10 year, 2,000/month contract to maintain it, for a total of just $440,000; with discounting for the present value the actual amount is even less than that. Under eminent domain, Ramsay would have received more money and been free of the sign. With this deal they’re receiving far less and will have to pay for the redesign, electricity, and upkeep for a decade.

For those of you needing a refresher, the Fifth Amendment to the Constitution protects property rights with a clause limiting the power of eminent domain: “nor shall private property be taken for public use, without just compensation.” I think the argument that the sign needed to be protected as a public good was dubious, but even if you disagree you should still want the owners to be fairly compensated for the taking. That so many people are glibly applauding the railroading of a private Portland business is very disappointing.

Comments

  1. Vanessa says:

    This is the first time I’ve seen the actual compensation anywhere remotely close to fair market value. If my memory is correct, when the DOT was building a new bridge on my old street in Connecticut they paid something like $900 an acre. Nowhere near what the land was actually worth.

  2. Jacob Grier says:

    @Vanessa: I have no idea if $500,000 was a good estimate either, but it’s the only one I could find. I wouldn’t be surprised if the company could have received much more on an open market.

  3. MikeB says:

    No one would want to test their theory of “just compensation” under eminent domain by actually experiencing it.

    The threat of eminent domain is a sobering experience. And the notion of “public good” is corrupted in today’s interpretation of eminent domain; plus the fact that there is a lot of play in the “just” of just compensation.

    Many states will see more eminent domain “takings” thanks to the rising interest in natural gas drilling in “shale gas” fields. With more drilling comes more pipelines and more underground gas storage fields — and that (pipelines & storage fields) always means eminent domain.

    What we learned from our experience is that the best sweetheart lease deals go to state or federal government. Private property owners quickly learn that they are not standing on a level playing field legally, economically or politically.

    After filing a right-to-know request with the Pennsylvania Game Commission, I obtained a copy of the lease agreement the state had with the same energy company that seized our property rights under the threat of eminent domain. You can find the lease at this link: http://www.spectraenergywatch.com/blog/?p=511

    But property owners can fight back. Our two-year battle against Houston-based Spectra Energy which seized our property rights for an underground gas storage field led to the development of a website which has begun to attract whistle blowers inside the energy industry. We are collaborating and helping property owners in many states. For info, visit the site: Spectra Energy

    The ripple effects of eminent domain are never over.

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