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Next big test of power to seize property?

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"The 'public use' clause may encompass a lot of public purposes after [the high court's decision in] Kelo, but it does not mean that eminent domain can be used to make the most money possible for one particular person," says Dana Berliner, an attorney with the Institute for Justice, which is asking the high court to take up Didden's case.

Lawyers for G&S and the Village of Port Chester hold a different perspective.

For taking the risk, a reward

For decades Port Chester tried to persuade various developers to launch urban renewal projects in the village. None did. Then in 1999, G&S agreed to undertake the challenge – and risk. The company proposed a 27-acre, $100 million project to replace run-down buildings with new retail stores, new roads, utilities, and a multiplex movie theater.

In exchange, the village agreed to give the developer exclusive power to decide which properties within the redevelopment zone would be acquired through negotiation and which would be seized by eminent domain. It also gave the developer the exclusive right to build – and profit from – the project.

"The thing that got [G&S] to spend over $100 million in the village is that at the end of the day he is going to make money," says Mark Tulis, a lawyer for the village. "He is going to make money by building a Costco and renting a Costco, building a Stop & Shop and renting a Stop & Shop, and building a Walgreens."

In effect, there is an economic value to the G&S agreement with the village. It equals the potential amount of profit G&S might extract by developing the property.

From this perspective, Didden's proposal to build a CVS on a portion of the redevelopment site cut into G&S's anticipated profit from its plan to develop a Walgreens in the same area.

Mr. Tulis says control over the redevelopment zone and the resulting profit is the benefit of the bargain struck between G&S and the village in 1999. "It would be inappropriate for the village to change the bargain after G&S has been successful," says Tulis. "A contract is a contract."

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