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Friday, July 27, 2007

Family's Land Confiscated to Create Shopping Center

The City of Hampton, VA condemned a local couple's property for a public road. But after taking the property for a meager amount, the city gave most of it to a private retail shopping center.

Family's Land Confiscated to Create Shopping Center

In September of 1999, city officials in Hampton, Virginia declared their intention to take a three-quarter-acre property owned by Frank and Dana Ottofaro. It was only after the City acquired the land from the Ottofaros that the couple discovered that the majority of the property would be transferred to a $129 million private retail development that would include the entertainment club, "Five," as well as McFadden's Salon and a 105,000 square-foot Bass Pro Shop for hunters and fishermen.

The land officials sought to condemn under the city's power of eminent domain was supposedly needed for the construction of a new public road, which was claimed to "serve a public purpose by improving the City's transportation network and by providing improved access to underutilized property within the city of Hampton." To compensate the Ottofaros for their property, the city proposed paying the couple $164,000. The Ottofaros rejected the offer, claiming that similar properties in Hampton were valued at much higher rates. Then they filed a lawsuit against the city to keep their property. At the time, they didn't even know the city wanted their property for a shopping and entertainment center.

The Ottofaros lost the battle for their land in January 2003, when the Suprerne Court of Virginia ruled in favor of the city, and allowed their property to be condemned. The couple was compensated only $170,000 for their land. It was only after reading the ruling that the Ottofaros learned that in reality only 18 percent of the condemned land would be used for the proposed road. The remaining 82 percent of the Ottofaros' former land that was not needed for the construction of the road would instead be transferred to the Hampton Industrial Development Authority, a governmental body that oversees the city's economic development plans. It then planned to lease the land to a shopping mall.

The court's ruling produced a great deal of confusion over the city's ability to transfer the condemned property. In the opinion, Justice Leroy R. Hassell wrote, "The City asserts that the landowners' property was condemned for public use and that the residue of the property will not be transferred to a private entity for a private purpose." In a subsequent paragraph, however, he continues, "According to the record, the City may transfer the residue of the landowners' former property to the Hampton Industrial Development Authority, a political subdivision of the Commonwealth, which will lease the property to a private developer." In effect, the judge's ruling allowed the taking because the property would be leased for a private developer's use - not sold.

Following the ruling the Development Authority, which had entered into a development agreement with Hampton Roads Associates, LLC in November of 1999, was given the go ahead to create the Power Plant of Hampton Roads retail shopping center. The Bass Pro Shop opened in November 2003, joined by numerous other retail shops, hotels and restaurants.

Hampton officials project that the 18 percent of the Ottofaro property that will beused for the new roadway will serve a public benefit by serving an estimated 25,000 vehicles each day by 2018. However, questions of political patronage are raised by the court's ruling on the remainder of the land. John Taylor, president of the Virginia Institute for Public Policy said, "The Ottofaros' case serves as an instructive example of the potential harm inherent in the condemnation power when political entities use broad discretion in its application and commercial development is in play."

Sources: Defenders of Property Rights, Virginia Institute for Public Policy, Bacon's Rebellion (April 28, 2003), Ottofaro v. City of Hampton: January 10, 2003, Virginia Supreme Court Ruling. Hampton-development.com, Daily Press (April 12, 2004), The ChesapeakeBay.com (October 24, 2003),Virginia Business (October 2004), Coliseum Central

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Posted by Amy Ridenour at 5:18 PM

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