The Colorado Supreme Court issued an opinion in a case we’ve been following on public use in eminent domain.
In Carousel Farms v. Woodcrest Homes, No. 2018SC30 (June 10, 2019), the court reversed the court of appeals’ conclusion that a taking lacked a public purpose because even though the public might use the roads and sewers which the utility district (formed for the specific purpose of taking the property which the private-benefitted developer could not acquire by negotiation) said it would install in the future did not outweigh the overwhelming private benefit. In the Court of Appeals’ words, “[w]hen the primary purpose of a condemnation is to advance private interests, even if there will be an eventual public benefit, the condemnation is not for a public purpose.”
The Supreme Court turned that analysis upside down, concluding that a possible future public use of the property taken is enough to make the “essential” purpose of the taking public, overcoming even a lot of private benefit:
Here, the taking is essentially for public benefit. Parcel C will be used for public right of ways, storm drainage, and sewer improvements. It is difficult to argue that those functions don’t essentially benefit the public. It is true that Century will also benefit from the taking, but, as we already explained, that doesn’t somehow change the essential benefit from public to private. If a utility company can condemn a large strip of land to supply power to a private, for-profit corporation because residents might use the power line in the future, then the District may condemn Parcel C for planned improvements that will benefit the community. See Shaklee, 784 P.2d at 318–19.
Slip op. at 16-17.
The Supreme Court viewed it through a long-term lens, to be measured by future possible benefits to the public, not merely the initial use. Rejecting the court of appeals view, the court held:
¶29 The division reasoned that the eventual dedication of the land to a public purpose is insufficient because the “taking itself” wasn’t for a public purpose. Carousel Farms, ¶ 35. That is, the first benefit to be received (even if a minor one) is satisfying the contractual obligations between the District and Parker, which isn’t a public benefit in any sense. Id. at ¶¶ 35–37. Thus, the argument goes, because that first benefit itself isn’t public, the entire taking doesn’t pass constitutional muster. Id.
¶30. This analysis fails for two reasons. First, the test is, and has been since 1906, whether the taking is “essentially for public benefit.” See Tanner, 83 P. at 465; accord Buck v. Dist. Court, 608 P.2d 350, 351 (Colo. 1980). A taking may have some sort of antecedent benefit that isn’t public, so long as the essential benefit is ultimately public. Presumably, developers and towns frequently enter into agreements before land is condemned. How else would towns garner the political support to complete parks or other public works projects? The town likely would need to hire a developer and sign a contract before it exercised its eminent domain power and spent taxpayers’ dollars on the condemnation. But the division’s reasoning would have all agreements of this sort fail, because the first benefit or purpose is to satisfy that contractual obligation, even though the essential benefit is ultimately building parks or other public works for the town.
¶31 Second, it relies on flawed precedent on takings and public benefit. The division cites another division’s opinion in American Family Mutual for the proposition that the taking itself must be for a public purpose, and, in turn, American Family Mutual cites Trinity Broadcasting for the same notion. See Carousel Farms, ¶ 35 (citing Am. Family Mut. Ins. Co. v. Am. Nat’l Prop. and Cas. Co., 2015 COA 135, ¶ 30, 370 P.3d 319, 327); American Family Mutual, ¶ 30, 370 P.3d at 327 (citing Trinity Broad. of Denver, Inc. v. City of Westminster, 848 P.2d 916, 921 (Colo. 1993)). But Trinity Broadcasting made no such declaration.
Slip op. at 17-17 (footnotes omitted).
The court’s bottom line, in our view, was that these guys were holdouts, so of course this was a public use and benefit.
Count us as not convinced.