AUSTIN – When the city of Rowlett condemned a private driveway in 2015 to allow easier public access between two shopping centers, city officials said the project was necessary for traffic safety and emergency responders.
The landowner, KMS Retail Rowlett, said the condemnation was done solely to promote economic development in violation of a Texas law enacted in response to the U.S. Supreme Court’s controversial 2005 ruling in Kelo v. City of New London.
The 5-4 decision in Kelo – that economic development was a public use under the Fifth Amendment to the U.S. Constitution – sparked Texas and a majority of states to adopt laws restricting the use of eminent domain for economic development.
The Rowlett dispute is a test of the Texas law, Government Code Sec. 2206.001. The Texas Supreme Court last week heard arguments amid a flurry of amicus briefs from property rights advocates, business groups and municipal planners.
Art Anderson, who represents KMS, called the city’s action “condemnation for hire,” arguing that the city’s action conferred a private benefit to a developer whose tenant was demanding the access.
In 2017, the Fifth Court of Appeals in Dallas affirmed the trial court’s summary judgment for the city, holding the taking was for a public use and was not fraudulent, in bad faith or arbitrary. Anderson said the court of appeals “wholly deferred to the city’s self-serving statements and labels of private use.”
“It ignored the fact that a private party requested the condemnation, a private party actively participated in the condemnation process, and a private party reaped a significant reward,” said Anderson, a Winstead shareholder.
Rowlett’s lawyer, David Berman, said the Texas statute banning condemnation for private development contains an exception for transportation projects. He said the private road easement had always been used for public access to the shopping area but needed to be wider to accommodate increased traffic.
“In all condemnations there will be some benefit to private persons,” said Berman, a partner in Nichols, Jackson, Dillard, Hager & Smith.
KMS, which received $31,662 for the condemned land, relies on evidence that a Sprouts grocery store and shopping center developer Briarwood had agreed to a lease termination or reduction in the grocery store’s rent if Rowlett had not approved condemnation of the private road easement before June 2015.
“The city strongly wanted Sprouts in the city limits. Without condemnation the economic development would not occur,” said Anderson.
Berman said there was no guise in taking the property to facilitate cross access between the Sprouts development and another anchored by a Walmart. The objective was to alleviate increasing traffic from the developments from spilling onto an already heavily traveled street.
Rowlett received support from the Texas Municipal League, which invoked Davy Crockett’s famous “You may go to hell and I will go to Texas.” The league’s General Counsel Scott Houston said in an amicus letter that cities need to plan for growth and “a limitation on using eminent domain projects for streets would increase congestion and have a negative effect on public safety.”
The majority of amicus briefs support the landowner, including filings from the Texas Association of Builders, the Texas Farm Bureau and the Texas Public Policy Foundation. Writing for the Institute for Justice, which litigated Kelo, Arif Panju said a decision upholding the court of appeals “would make Texas an outlier among the states, uniquely hostile to private property rights.”
Watch the arguments in KMS Rowlett v. City of Rowlett here.