Posted by: Patricia Salkin | July 1, 2008

Missouri Joins States that Recognize Inverse Condemnation Actions for Condemnation Blight

The city declared a retail shopping center blighted in May 2003 and entered into a redevelopment agreement with a developer in May 2004. By August 2005, the city had cancelled the agreement, and started to solicit tax increment financing (TIF) proposals for the property. In October 2005, the city re-designated the property as blighted under the TIF statute and approved a TIF plan which called for the use of eminent domain for economic development. To date, the city has never approved a TIF project nor completed condemnation proceedings against the property. As a result of the city’s actions, the owners claim their tenants have not been renewing their leases. They also claim that the city has been harassing them with inspections and code violations and interfered with their ability to attract new tenants. The property owners brought an inverse condemnation claim against the city based on the state constitution. They alleged that the city’s actions caused significant diminution of value and also increased their operating costs. The Circuit Court granted the city’s motion for summary judgment. The Missouri Supreme Court reversed, holding that actions for condemnation blight are inverse condemnation claims that property owners may advance in order to recover consequential pre-condemnation damages, abrogating State ex rel. Washington University Medical  Center Redevelopment Corp. v. Gaertner, 626 S.W.2d 373 (Mo. 1982). Further, the court held that the property owners’ claim was ripe even though their property had not been condemned.

                  

Clay County Realty Company v.  City of Gladstone, 2008 WL 2346213 (Mo. 6/10/2008).  

 

The opinion can be accessed at: http://www.courts.mo.gov/Courts/PubOpinions.nsf/0f87ea4ac0ad4c0186256405005d3b8e/81d7d669a4359e4c86257460006a5583?OpenDocument

 

Thanks to Lora Lucero, Esq., co-editor of the Zoning and Planning Law Report for sharing this abstract. For more information about ZPLR, visit:   http://west.thomson.com/productdetail/2051/14004868/productdetail.aspx

 

 


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