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Reason Foundation

California city uses eminent domain as industrial policy

Samuel Staley
May 8, 2006, 7:32am

Many supporters of Kelo v. New London claimed that eminent domain isn't abused, but what do we call it when a city uses eminent domain to seize property from a private company simply because it doesn't like it or its business plan? That's what appears to be what's happening in Hercules, Calfornia with land owned by Wal Mart. Wal-Mart wanted to build a 142,000 square foot store, but the city balked based on a neighborhood agreement limiting stores sizes to just 64,000 square feet. Wal Mart came back with a 99,000 square foot alternative that was also turned down. So, the city decided to buy the land. When Wal-Mart turned down the city's offer, it started the process for paving the way for eminent domain to seize the land. Once again, we see evidence that property rights are privileges bestowed by the local government. In this case, the public use appears to be little more than the city doesn't like Wal Mart. Whose business is next on the city's list? Cities don't have to worry about the court's protecting private property owners because the judiciary has washed its hands of ruling against cities on substantive issues of what a public use really is.

Samuel Staley is Research Fellow


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