Real Estate & Property Law

The Palm Beach Mall Battle

By Alan Ackerman

The Palm Beach Post article explains the likelihood that an acquisition of the closed Palm Beach Mall would be void as not being a taking for a public use.  This writer is not sure of the validity of a take for 'blight removal', but notes that the issues raise substantial questions for many shopping center owners throughout the country.  The reality is that we now have many shopping centers closed and 'going dark' because there are not enough tenants to utilize the project space available.  Many of these centers will be rehabilitated.  Clearly, Simon Company intended to rehabilitate the Palm Beach Mall three or four years ago, only to face a declining market demand in the area.  This is occurring at centers all over the country.  To simply conclude that a closed center is 'blighted' is to determine that owners have no right to utilize the property which they had purchased.

Palm Beach Post

In the letter, Weaver warned McKenna that any court would block an eminent domain action, recognizing that the real reason for the city's action was to help a private development, which is contrary to state law.

Constitutional law expert James Green agreed with Weaver's conclusion.

In 2005, the U.S. Supreme Court ruled that governments can use eminent domain power to obtain property and transfer it to a private owner for economic development. In outraged response, many states, including Florida, passed laws restricting the use of eminent domain. In 2006, voters passed a constitutional amendment that bans the use of eminent domain to transfer homes or businesses to private developers unless an exemption is approved by three-fifths of both houses of the legislature.

Green, a West Palm Beach lawyer, said Turbo could handily fight an eminent domain action by asserting that West Palm Beach's " 'park and road purposes' … are a pretext" for private redevelopment.

"My bets are on Turbo," Green said.

McKenna responded to Weaver with a letter of her own, sent Tuesday following inquiries by this reporter. In the letter, McKenna began by saying that there was a "respectful disagreement regarding the substance of our recent conversation."

Full post as published by National Eminent Domain Blog on July 09, 2010 (boomark / email).