Header graphic for print
Sports Law Scoreboard An Inside Look Into The Legal and Business Side of Sports

The Public Purpose of Stadiums under Kelo

Posted in Sports Business and the Law

 

By John W. Polonis

Villanova University School of Law

Editor-in-Chief, Jeffrey S. Moorad Sports Law Journal

 

Stadiums are common carriers for the public, and therefore, states’ use of eminent domain for their construction should be justified. While the use of eminent domain may not be ideal, the long term community and economic benefits of stadiums will likely outweigh any costs of condemnation.

The eminent domain power of the state should not be absolute, but in cases like the one involving the Barclays Center and other similarly situated stadiums, it is necessary to spur economic and community development. Under the 5th Amendment of the United States Constitution, the government can only “take” private property from one citizen and transfer it to another if the property is put to a “public use.” See Kelo v. City of New London, 545 U.S. 469, 498 (2005). Under Kelo, the government may permit condemnation of privately owned, non-blighted land so long as the land is part of a comprehensive plan for economic development. See Carol L. Zeiner, Article: Eminent Domain Wolves in Sheep’s Clothing: Private Benefit Masquerading as Classic Public Use, 28 Va. Envtl. L.J. 1, 2 (2010). In response to Kelo, a majority of states have passed legislation limiting their eminent domain powers, but New York was not one of them.

The New York Court of Appeals reaffirmed its rule, allowing the condemnation of businesses, public property, and private homes for private economic development projects like the Atlantic Yards, the current home of the Barclays Center. See Goldstein v. New York State Development Corp., 13 N.Y.3d 511 (2009).Post-Kelo, most state and Federal courts give broad deference to state legislatures and their views on exercising or curtailing the state power of eminent domain. For Federal courts, commentators describe the judge’s task as “patrolling the borders” of the condemnation decision, examining it objectively, and not searching for some illicit governmental motive for exercising the taking. See Michael A. Rosenhouse, To “Public Use” Restrictions in Federal and State Constitutions Takings Clauses and Eminent Domain Statutes, 21 A.L.R.6th 261. Both state and Federal courts will often defer to state legislatures to define what constitutes a public use or purpose.

In Goldstein v. Pataki, 516 F.3d 50 (2d Cir. 2008), the Second Circuit found a rational relation between public use and a private developer’s construction of a new stadium for the NBA’s Nets franchise in a public open space, along with the construction of affordable housing units, and the redevelopment of an area of downtown Brooklyn. See id. The area had been afflicted for decades with substantial blight that one person described as “a scar that divided the neighborhood.” The Court deferred to New York’s legislative judgment even though it involved a private developer implementing his own private development plan. The court explained that the stadium was a municipal use in the interest and for the public benefit of the citizens. Given the scope of the state’s police powers, the legislature had the authority to make this public use determination.

Similarly, the court in Southeast Land Development Associates v. District of Columbia, 2005 WL 3211458 (D.D.C. 2005), rejected a public use challenge to the District of Columbia’s use of eminent domain to build a baseball stadium and refused to adopt a test to project the magnitude of the anticipated public benefit. Deferring to municipal legislative judgment, the district court for the District of Columbia found that the Public Use Clause requires only that a taking be “rationally related to the broad concept of public use or public interest and does not imply a means-ends test.” See id. Therefore, it’s only the purpose of the taking, and the not the means employed, that must pass rational basis scrutiny.

Although the evidence suggests that most state legislatures outside of New York disapprove of permitting the broad use of eminent domain to build stadiums, Federal and state courts are inclined to permit such takings so long as they are rationally related to a public use or purpose. Given the low rational-basis bar for “public use,” people and their representatives must pass legislation to limit the courts’ broad interpretation of public use. A broad interpretation of the Public Use Clause particularly benefits private developers in states like New York where the legislature has not acted to limit eminent domain, thereby allowing takings of private lands like the Atlantic Yards. Development of these blighted areas is rationally related to public benefits of more jobs, affordable housing, and retail and office space.See Kelo, 545 U.S. at 501; see also Goldstein, 516 F.3d at 50. The argument that a sports franchise can unite people and create economic growth usually suffices to justify a taking in the courts, unless the state legislature says otherwise beforehand.

In an ideal world, developers like Chris Hansen in Seattle will not need the assistance of eminent domain laws to acquire land to build a stadium, but sometimes they must. The prospects of more jobs, housing, and retail space, along with a sports franchise to enhance the community spirit of a city, serve as great incentives for state legislatures to loosen the restrictions on eminent domain.  While the New York model may not be the one to emulate, if more states permit the use of eminent domain for the construction of common carriers like stadiums, then previously underdeveloped and struggling areas could experience prosperous economic growth. Justice O’Connor, dissenting in Kelo, concluded that the Public Use Clause includes common carriers “such as . . . a railroad, a public utility, or a stadium.” 545 U.S. at 498. This conclusion serves to distinguish widely unpopular takings in favor of corporations of the sort in Kelo with sports stadiums, where the general public has an actual opportunity to use and enjoy them.