Downtown Salisbury, Inc. Eyes Historic Hotel

A developer with a history of renovating old hotels has big plans for the venerable Empire Hotel in the downtown area.

In September 2020, the developer originally rolled out plans for a mixed-use development. The developer plans to renovate the original ballroom and use it as convention space. Whitney Wallace Williams, Chair of the Empire Redevelopment Task Force, stated, “This was not an easy process or decision for DSI or our Task Force. The Empire is a beast of a project but one that has the potential and capacity to transform our downtown and the Rowan County experience for decades to come. I express my gratitude to all developers for their excellent submissions, particularly developers local to our community. I commend the Empire Redevelopment Task Force members for their objectivity, expertise, collaboration, and passion devoted to this critical piece of Salisbury’s downtown and future.”

Construction should be completed by 2023.

The Supreme Court’s landmark decision in Kelo v. New London enabled cities and other governments to seize private property and turn it over to private developers. Dodger Stadium in Los Angeles is probably one of the most famous examples of this power. In the late 1950s, team owner Walter O’Malley wanted to build a stadium in Chavez Ravine. So, Los Angeles County used its eminent domain power to evict the current residents, most of whom were Mexican-American. Some people moved voluntarily, but law enforcement officers had to forcibly remove others.

In response to such incidents, North Carolina and most other states passed laws limiting eminent domain takings to seizures that have a public benefit. A baseball stadium might arguably be a public benefit, but it is certainly not a road, public building, or similar structure everyone can use.

Nevertheless, private eminent domain seizures persist. Downtown revitalizations, like the project in Salisbury, are a good example. For various reasons, owners often hesitate to redevelop their aging downtown properties. So, to hasten the process, a downtown development corporation tries to seize the property under the authority granted by Kelo.

Private companies have limited eminent domain powers. Usually, the state legislature must grant these powers, and the powers are limited to certain situations.

In a nutshell, eminent domain is the Constitutional authority to take private property for public use, if the condemnor (public or authorized private entity seizing property) pays the current owner just compensation.

Many people use “eminent domain” and “land condemnation” interchangeably. Sometimes that is accurate. But there are two different kinds of land condemnation proceedings, and a Charlotte land use attorney can help in both of them.

Cities, counties, and states may use their police powers to condemn hazardous property. Usually, the hazard is either criminal activity or a danger to safety. This power belongs to the state. Typically, the state cannot delegate it to a private company under any circumstances.

Police power land condemnation proceedings require notice and hearing, per the Fourteenth Amendment to the United States Constitution. Both notice and hearing must meet certain requirements.

The notice must state with particularity what the state intends to do. Sometimes, the condemnor is only concerned with part of the property. On a related note, the notice cannot understate the intentions. In other words, the state cannot ask owners to clean up their property when they actually intend to seize it.

The hearing must be before a neutral arbiter and in a public forum. Additionally, a Charlotte land use attorney must have sufficient time to prepare a response.

That response often leads to an out-of-court settlement. Usually, no one can stop land condemnation proceedings, except the condemnors themselves. If the current owner agrees to make some changes or transfer title, the condemnor often backs off.

Eminent domain proceedings are much the same. After the condemnor delivers notice, the condemnor usually evaluates the property and makes a purchase offer. If the current owner accepts this offer, there may be no need for a hearing.

However, the first offer is often a “low ball” offer which does not represent FMV or HBU. Fair Market Value is a current calculation. FMV usually hinges on the tax appraisal value as well as current market conditions. Buyers’ markets depress FMV and sellers’ markets inflate it. Highest and Best Use is the land’s optimal, near-future use. Blackacre might be a nearly-worthless vacant lot now, but if a new highway is coming through, its value will quickly skyrocket.

North Carolina eminent domain seizures have an interesting twist. The current owner can obtain a second valuation opinion without rejecting the first offer. So, an owner has nothing to lose by working with a Charlotte land use attorney, at least until s/he gets more information about the property’s value.

The government cannot take private property for any purpose without paying just compensation. For a confidential consultation with an experienced land condemnation attorney in Charlotte, contact Arnold & Smith, PLLC.