On June 23, 2005, the U.S. Supreme Court upheld the city of New London's use of eminent domain to condemn several properties the city claimed stood in the way of additional tax revenues and new jobs. However, Justice Stevens, author of the majority opinion in Kelo, explained that nothing precludes states from restricting their takings power. Doing so is a first step toward assuring homeowners that they can keep what they own. Nationwide, states have accepted Justice Stevens' invitation and proposed statutory amendments restricting eminent domain authority. Now, Arizona should take the opportunity to reexamine its slum clearance and redevelopment statutes to help ensure the security of private property.
The Arizona Constitution promises Arizonans strong private property protection. Yet, municipalities use slum and blight statutes to circumvent this safeguard. Reforming the slum and redevelopment statutes addresses the major instrument of eminent domain abuse in Arizona.
Through slum clearance and redevelopment statutes, Arizona law allows municipalities to exercise eminent domain. Cities and towns often claim that their ability to use eminent domain is essential to the success of redevelopment projects. However, as this study illustrates, the need for broad eminent domain power is unfounded. Instead, successful redevelopment projects regularly occur without eminent domain. What's more, the threat of eminent domain often produces the very blight and slum that redevelopment statutes aim to address.
Scottsdale provides a vivid example of statutory abuse that hindered redevelopment. In 1993 city officials declared the downtown a slum and blighted area under the redevelopment statutes, immediately bringing the threat of eminent domain. As rumors persisted about redevelopment projects, property owners refused to invest more capital and signing long-term leases proved very difficult. Since repealing the Downtown Redevelopment Area in 2002, private investors have poured $2 billion into downtown.