The Kelo Controversy
Since the Kelo case, the issue of whether the government can condemn one person’s property on behalf of a third-party has been a hot-button legal issue. See Kelo v. City of New London, 545 U.S. 469 (2005). Proponents of the Kelo decision believe that enlarging the eminent power to allow the government to take property and convey that property to a third-party empowers the government to promote the general welfare and development of society. Opponents of the Kelo decision believe that this sort of government taking tramples on individual liberty and functions as a Bizarro-Robin Hood – taking from the poor and giving to the rich.
Utah’s Third-Party Eminent Domain Laws
Several states, including Utah, have weighed in on the issues posed by Kelo with new statutes and case law. Utah passed a new eminent domain bill with specific requirements that must be followed to exercise eminent domain powers. See Utah Code §78B-6-501 et seq. Also, Utah courts have come down on the side of requiring the government to maintain control of any property condemned through eminent domain.
There are two Utah cases that show how much control must be maintained by the condemning entity. In the first case, Provo City wanted to build a road across unincorporated land, but this land was not within Provo (Note: eminent domain powers in regards to condemning boundaries outside of a city’s limits have subsequently been enlarged). After the courts determined that Provo City could not use eminent domain to seize this land, Provo City entered into a deal with Utah County by which Utah County would condemn the property, Provo City would pay for the road’s construction, and Utah County would own the property. The landowner challenged the condemnation with an argument that Utah County cannot use eminent domain on behalf of Provo City. The Utah Supreme Court ruled that neither Utah County nor Provo City acted outside of its authority and that the land was legitimately taken for the public use of building a road. The fact that Provo City wanted and paid for the road was of no importance, so long as Utah County took and maintained control over the condemned property. Utah County v. Ivie, 2006 UT 33 (Utah 2006).
In the second case, Salt Lake City needed to acquire a piece of land owned by Rocky Mountain Power. Salt Lake City was concerned about whether it could condemn a piece of property already set aside for public use, so Salt Lake City entered into a deal in which it would condemn another piece of property and trade the new property to Rocky Mountain Power in exchange for the piece of land currently owned by Rocky Mountain Power. In this case, the Utah Supreme Court determined that Salt Lake City was acting outside of its eminent domain powers. Salt Lake City would not directly own the condemned property, develop the condemned property, and directly have a public use for the property (even though Rocky Mountain Power would provide a public use for the property). In order to exercise eminent domain authority, the condemning government must actually be the party taking and controlling the seized property. See Salt Lake City Corp. v. Evans Development Group, LLC, 2016 UT 15 (Utah 2016).
Potential for Future Eminent Domain Issues
While the recent Evans Development Group decision curtails the ability of the government to take property on behalf of a third-party, the door is still open for creative government officials to try to structure deals within the guidance provided by the court. Though the Kelo decision favors broad government powers under the United State Constitution, Utah’s eminent domain statutes still raise substantial hurdles to overcome before the government can condemn property for a third-party.
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