Fight over eminent domain ends when final home in developer's path is sold

9/5/2008

NORWOOD, Ohio - A man's decision to sell the last house standing in the way of a $125 million business project marks the end of a landmark legal saga about property rights and private development.

The six-year battle challenged a U.S. Supreme Court decision and ultimately led Ohio to make it more difficult for local governments to seize private property under the legal provision of eminent domain.

Joe Horney, the last holdout, said he's glad the litigation is over.

His house sits on an 11-acre site near Cincinnati where the Rookwood Partners development group wants to build offices, shops, and condos.

Rookwood Partners and the city of Norwood threatened to seize properties from homeowners who refused to sell their houses. A few residents took the case to the Ohio Supreme Court, which ruled in 2006 that eminent domain cannot be used for economic development. Still, most residents ended up selling to Rookwood.

Mr. Horney said he finally agreed last week to sell his rental house to the developer for $1.25 million.

Norwood Mayor Thomas Williams said the city lost in court but still ended with a win from an economic development perspective.

"For us, it's over," Mayor Williams said yesterday. "We're going to be, in the long run, the fortunate ones on this."

The Ohio case was the first challenge of property-rights laws to reach a state high court after a 2005 U.S. Supreme Court ruling paved the way for municipalities to seize homes for private development.

The federal court noted that states are able to pass stronger protections on homeowner's rights, and many did. At least 40 states, including Ohio, have passed some sort of property-rights legislation since the federal decision, said Bert Gall, a senior attorney for the Institute for Justice, a Washington-based property-rights group that represented the Norwood home-

owners.

"What's wrong is when a private developer tries to use the government to bully a homeowner into selling his home," Mr. Gall said.

Mayor Williams said the case was about the need for adjustments to Ohio's property regulations, not about the city acting illegally.

Norwood city officials strongly support the project because it offers the potential for new jobs, increased tax revenue, and a chance to work with a developer that has other successful projects in the area.

Mr. Williams said he is especially relieved that the city and the developer now can focus on figuring out what to do with the mostly empty lot amid a different economic climate than the one they faced six years ago.

For Rookwood Partners, the end of the legal line is a new beginning.

"We're in the starting gate," said Tracy Nemenz, marketing director for Jeffrey R. Anderson Real Estate, which created Rookwood Partners with the Miller-Valentine Group.

The original idea of a multi-use development still frames the discussion, but no plans have been set.

For now, the house Mr. Horney bought in 1991 for about $64,000 sits boarded up on an otherwise demolished parcel of land, and Mayor Williams waits for the transformation he has envisioned for years.

"Did I think it would take this long? No," he said. "Did I think this would be the outcome? Yes. I thought eventually that property would sell."