The Colorado Supreme Court recently issued its decision in the important property rights case of Wheat Ridge Urban Renewal Authority v. Cornerstone Group. The litigation in question arose because a city had committed to condemning some private property in order to transfer it to a developer. The planned condemnation was similar to that which the US Supreme Court upheld under the federal Constitution in Kelo v. City of New London; both were undertaken to promote "development" in the area. In the Colorado case, however, the city decided to cancel the project, and the developer thereupon sued to compel the city to go through with the condemnation and transfer against its will. The state supreme court has now ruled for the city.
As Tim Sandefur of the Pacific Legal Foundation explains, the decision is a victory for property owners of sorts, but its reasoning is likely to undermine property rights in the long run. The Court's reasoning was not based on any potential violation of constitutional property rights inherent in transferring private property to another private party for purposes of "economic development," but rather on the theory that private parties such as the developer generally have no right constrain the government's ability to exercise its power of eminent domain as it sees fit. The Court emphasized that state and local governments retain broad authority to condemn property, and that the state "remains empowered to take...property...and redistribute it in any manner that future circumstances and the public welfare demand."
Well-informed VC readers might wonder why such Kelo-style takings are still occurring Colorado, given that the state recently enacted legislation that was supposedly intended to curb them. The answer is that Colorado is one of numerous states that have enacted flawed post-Kelo "reform" legislation that allows "economic development" takings to continue under other guises even as it purports to ban them. The Colorado law is briefly discussed on pp. 16-17 of my paper on post-Kelo reform.
UPDATE: Just to be completely clear, the reason why the state supreme court's decision undermines property rights more than it protects them is that it holds that the City had the right to cancel the taking because of its broad power to use (or not use) eminent domain anytime it believes doing so may promote "the public welfare." This implies nearly unlimited authority to initiate condemnations as well as to cancel them. In this case, under the Court's reasoning, the property owners won only because the City ultimately decided that it didn't want to condemn their land. In cases where a local government actually does want to take the property in question, this decision will actually hurt property owners by giving the government a virtual blank check to condemn property as they see fit.
Do you see anything in that sentence about "public use?" No. The Colorado Supremes said the state can take property for the "public welfare." In other words the state can take private property for just about anything it wants.
Kelo said the City of New London could take private property for "public benefit." Benefit or welfare, it's the same thing. But the 5th Amendment says "public use." That's different. The Colorado Constitution, Article V, Sections 14 and 15, says:
Section 14. Taking private property for private use. Private property shall not be taken for private use unless by consent of the owner, except for private ways of necessity, and except for reservoirs, drains, flumes or ditches on or across the lands of others, for agricultural, mining, milling, domestic or sanitary purposes.
Section 15. Taking property for public use compensation, how ascertained. Private property shall not be taken or damaged, for public or private use, without just compensation. Such compensation shall be ascertained by a board of commissioners, of not less than three freeholders, or by a jury, when required by the owner of the property, in such manner as may be prescribed by law, and until the same shall be paid to the owner, or into court for the owner, the property shall not be needlessly disturbed, or the proprietary rights of the owner therein divested; and whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such without regard to any legislative assertion that the use is public.
The Supremes, Both in Washington D.C. and in Denver, apparently don't need no stinking Constitution telling them what to do, so they ignore it.
It looks like Kelo is alive and well in Colorado, at least if this case signals the direction the Colorado Supremes will go if squarely presented with the issue. Since Colorado is now firmly in the control of Democrats we can expect no help from the legislature, not that anything the legislature can do would matter anyway.
I don't disagree that the City (at least as a general rule) should have the power to cancel a condemnation. However, the Court's reasoning goes beyond this and holds that the reason why it has this power is that it has very broad discretion to control eminent domain (including initiating nearly any takings it wants).
Why do you believe this to be the case? I just checked the online records of the Colorado General Assembly. It doesn't appear that the Colorado legislature considers this to be as partisan an issue as you make it out to be. Colorado's attempt at post-Kelo reform (HB 06-1411), if perhaps not entirely effective, was co-sponsored by members of both the Republican and Democratic party and passed overwhelmingly in the House (60-5) and Senate (35-0).
Castle Coalition.
The only thing that matters in this debate is people getting mad as hell and throwing a tantrum by initiative, or throwing the bastards out (either the judges or the legislature).
Maybe an initiative that requires paying 200% of fair market value for expropriated land would be a good compromise. Then takings wouldn't be forbidden, but the public benefit would have to be at level that would justify a much higher price.