Business Owners Prepare for Eminent Domain


(posted July 20)


Despite Speedway Redevelopment Commission President Scott Harris' repeated message that the SRC would not use eminent domain to acquire properties, Main Street business owners' minds are not at ease since the majority of them have seen their properties placed on an acquisition list. Their hopes for any chance of removal were dashed at the June 11 public hearing when the SRC voted to accept the acquisition list.

As a result of this brief encounter with the SRC, Main Street business owners, along with Susan Luebbert of Speedway Monogramming, created the Speedway Merchants Association. The group invited Attorney Greg Zubeck to explain the redevelopment process so they can better prepare for future dealings with the SRC, which can include eminent domain . Zubeck lectured to a group of about 50 people at the Speedway Public Library July 17.

A redevelopment commission can take property for public purpose or a public use such as a road, library, school, park, or  town hall. A public purpose charges an admission, like a museum or Eagle Creek Park. He said the redevelopment commission analyzes the reallocation area to determine if it is blighted. Buildings do not actually have to be blighted to be in the area or on the acquisition list.

He noted the reallocation area has to be for redevelopment and not economic development, which left the audience with a blurred state of understanding. Charles Hunt thinks that some redevelopment commissions start with the intent of redevelopment but it crosses over to economic development.

Hunt, an American Family Insurance agent, noted that he would suffer more from an income loss if the SRC purchased his property since he is a service oriented business and would be forced to relocate.

Zubeck said there are no law provisions to cover profit and income losses. Eminent domain laws cover damages to real property, attorney fees and relocation. He stated that property owners can claim residual damages when only part of their property is taken. Sometimes they are left with barely a portion of the original lot size. He also noted that property cannot be taken by eminent domain to benefit another private owner.

Zubeck explained that the Indiana State Legislators amended the eminent domain law that would support the property owners after the 2005 Supreme Court ruling that allowed takings for the benefit of developers and economic development.

He contended the redevelopment commission has to say what the purpose is when making an acquisition. The SRC has never formally announced specific purposes when buying Main Street properties other than saying they do not want to be in the real estate business and will eventually sell to a developer that would adhere to the master plan. The master plan has not been adopted.

Zubeck explained that property owners cannot benefit from the redevelopment project or so called buoy up effect when seeking monetary amounts. He noted that property around the Lucas Oil Stadium is increasing, but property owners do not receive compensation for the benefit of being located in the project area. The owner can only be compensated for the highest and best use of the property if eminent domain were to be used in that area, or if the redevelopment commission wants to negotiate to buy the property. Conversely, property owners should not receive a tainted market value when redevelopment announcements keep property owners from moving their properties because of the uncertainty that looms in the area about the future development.

The next meeting is August 9 at 6 p.m. at the Speedway Public Library. The guest speaker will be Ron Carter, who served on the Carmel Redevelopment Commission and now is president of Greenways Foundation.