Friday, June 24, 2005

Big Boxes and Eminent Domain

One thing we didn’t mention in our prior posts on the recent Kelo Supreme Court case was that now it would be much easier for big box stores such as Wal-Mart to exploit eminent domain to obtain sites for their stores. As a CNN Money article points out, because of space shortages, especially on the east coast megaretailers are looking to take private land:

"On the West Coast, land availability takes a back seat to labor union issues and that's why Wal-Mart has consistently run into problems in California," Johnson said.

"On the East Coast, because of population density it's very hard to get big open space and the zoning is more restrictive," Johnson said.

Industry consultant George Whalin said that's one reason that Target, the No. 2 retailer behind Wal-Mart, has resorted to using eminent domain to set up shop in a few East Coast markets.

"Wal-Mart and Target have both been criticized for their eminent domain use," said Burt Flickinger, a consultant with the Strategic Resources Group.
The piece also mentions, as we have pointed out, that the recent Supreme Court ruling is particularly harmful to small business:

Meanwhile, eminent domain opponents called the high court ruling a "big blow for small businesses."

"It's crazy to think about replacing existing successful small businesses with other businesses," said Adrian Moore, vice president of Los Angeles-based Reason Public Policy Institute, a non-profit organization opposed to eminent domain.

"There are many, many instances where we've found that the cities that agreed to eminent domain use not only destroyed local businesses but the tax revenue that the local government had hoped to generate did not come to pass," Moore said.
More on Wal-Mart and Eminent domain can be found here and here.