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Eminent domain and private gain

A report claims that 10,000 properties have been seized by cities for private developers.

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Bill Brody thought he was set for life.

He'd bought and renovated four buildings on South Main Street in this struggling New York suburb and was successfully renting them out.

Then he was informed the village was taking his property - all of it. And because he missed a small, legal notice in the paper, he even lost the right to fight the decision.

The village had simply declared eminent domain, so that another private developer could build part of a Stop & Shop and parking lot where Mr. Brody's commercial buildings sat.

"It's ludicrous," says Brody. "If it was for a road or a school or a highway I wouldn't bother."

But since the village was taking his property only to give it to another private developer, Brody decided to take it to court.

The Constitution does give local governments the right to condemn property through eminent domain for "public use" if the owner is compensated. But in the past five years, both state and local governments have taken or threatened to take more than 10,000 homes and small businesses such as Brody's to turn them over to private developers, according to a report compiled by the Institute for Justice, a nonprofit advocacy law firm in Washington.

The local governments contend they're creating bigger tax bases and more jobs to help the local economy. That's the "public use." But to critics it's an unconstitutional abuse.

"Practically every house in the entire country would produce more jobs and taxes as an office building, and everybody's small business would produce more jobs and taxes if it were removed and turned into a Costco," says Dana Berliner, a senior attorney at the Institute for Justice. "If that's all it takes, then your house or business can be up for grabs as soon as a some private business interest takes a fancy to it."

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