The urban renewal authority entered into an agreement that required it to acquire five parcels, by eminent domain if necessary, and sell them to the developer for construction of a Walgreen’s store. When the authority failed to obtain needed financing, it entered into a second agreement, under which the developer would finance the acquisition. The agreement obligated the authority to initiate condemnation by a certain date and provided for specific performance. The authority failed to acquire the property or initiate condemnation and the developer sent a notice of default. The authority subsequently began condemnation, but later abandoned the proceedings. The developer filed suit and the trial court ordered the authority to retain assets and funds for the project, but concluded that it could not order the authority to exercise its power of eminent domain.
The appeals court remanded for consideration of whether the authority should be estopped from abandoning its condemnation proceedings. The highest court reversed, holding that the doctrine of equitable estoppel cannot be used to force acquisition of property by eminent domain. While the contract provision requiring condemnation is not a “surrender” of a fundamental power and is automatically void, the court lacks authority to order specific performance of that provision.
Wheat Ridge Urban Renewal Authority v. Cornerstone Group XXII, L.L.C2007 WL 4225821(12/3/2007).
The opinion can be accessed at: http://www.courts.state.co.us/supct/opinions/2006/06SC591.pdf
Special thanks to Lora Lucero, Esq. editor of Planning and Environmental Law (PEL) for bringing this case to my attention and for allowing me to use the abstract from the March 2008 PEL. For more information about PEL see, http://www.planning.org/PEL/index.htm
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