Timothy B. Lee

 

Last November, Clayton business owner Dan Sheehan learned from the newspaper that his property suffered from "age, deteriorated condition, and outmoded design." That was a surprise to him because the property is located in one of the most prosperous neighborhoods in St. Louis and is home to four thriving small businesses, including his own. If the buildings were "deteriorated" and "outmoded," their customers didn't seem to notice. Yet the city of Clayton has begun making plans to seize Sheehan's property — and four others on the 7700 block of Forsyth — using eminent domain.

The redevelopment project is ostensibly part of Centene Corporation's plan to build a new corporate headquarters at the corner of Hanley and Forsyth. But strangely, Centene doesn't need Sheehan's property to build its proposed office towers. Rather, his property has been vaguely slated for use as new retail and office space.


Business owner Dan Sheehan in front of his "blighted" office in Clayton.

Sheehan believes that Centene included his properties in the proposal at the behest of the Clayton Board of Aldermen. In early 2005, the city issued a request for proposals as a way to "encourage the highest and best use of commercial properties in the central business district." The city has marked the properties on the 7700 block of Forsyth as blighted because the area is "economically underutilized."

Sheehan is the president of Dolan Realtors, which has been in its current location since 1977 and has owned the property since 1982. He says he does not oppose the Centene project overall, he would just prefer to be a part of the project instead of a casualty of it. Sheehan does not believe that Centene has negotiated fairly and in good faith. Centene sent its initial letter seeking to purchase the property in October.

He did not respond to the offer because his property is not for sale. Clayton held its first public hearing on the Centene redevelopment project the following month. Many business owners and citizens, including Sheehan, spoke against the use of eminent domain to take their property. But on December 13, the Board of Aldermen passed a pair of ordinances approving Centene's redevelopment plan and its use of eminent domain.

Clayton
The headquarters of Centene Corp, which has sought eminent domain authority from the city of Clayton.

Citizens and business owners responded by creating the Clayton Committee to Stop Abuse of Eminent Domain. It took them just a few days to collect more than 250 signatures — five times the number needed — on referendum petitions to request the Board of Aldermen to rescind the ordinances.

A referendum would haven given Clayton voters the opportunity to decide whether the use of eminent domain was appropriate. But the city prevented that using a procedural tactic: they passed the ordinances as "emergency" measures, which protected it from the referendum process.

On February 27, Sheehan received a contract saying that he had 45 days to respond to either waive or accept mediation. Sheehan has reluctantly accepted mediation, which is scheduled to begin shortly.


Some of the businesses being condemned to make space for new retail space.

Sheehan argues that it is possible to proceed with the planned Centene project and leave the businesses that do not wish to sell. Clayton's redevelopment agreement with Centene provides that if requested by Centene, the board of aldermen would give reasonable consideration to eliminating the requirement to acquire all property within the redevelopment area. Essentially, Centene could exempt the two owner-occupied properties from being redeveloped and use the remaining three properties to build new retail space and above ground parking. A similar exemption of active businesses from seizure occurred recently in the Frenchtown redevelopment project in St. Charles.

Sheehan says that as a commercial realtor he has assembled large properties for clients on several occasions, and he has never found it necessary to use eminent domain. He assembled 55 acres for a client in the 1960s, and then assembled 200 acres for the same client in the 1980s. Neither project required the use of eminent domain. "Nobody can defend the use of eminent domain unless it is for a hospital, highway, or other purpose for which it was originally intended," he says. "Everybody tip toes around that and they talk about the jobs that will be created and the taxes that will be increased, but that's no reason to kick somebody out on the street."

Timothy B. Lee is a policy analyst at the Show-Me Institute. Shaida Dezfuli is pursuing a master's degree in public policy at the University of Missouri, St. Louis.

 

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