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Columbia City Council considers using eminent domain for museum

Thursday, March 19, 2009 | 12:01 a.m. CDT

COLUMBIA — Even as representatives of the State Historical Society negotiate buying the property that is home to Bengal’s Bar and Grill and surrounding land, the Columbia City Council is considering whether to use eminent domain.

At its Monday night meeting, the council introduced an ordinance authorizing the use of eminent domain to acquire the property if necessary. The city and society have identified the site as the best place to build a new $40 million historical society museum.

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The museum is one of several components of a plan developed by the Sasaki consulting firm in 2006 for redeveloping the southern half of downtown Columbia. The plan also calls for mixed-use developments, the elimination of surface parking lots, a garden district along Elm Street and other amenities it said would help Columbia reach its potential as an “inviting campus town.”

The historical society, which is currently housed in the basement of MU’s Ellis Library, has a vast collection of Missouri art and historical artifacts, but lacks enough space to display it all.

“We currently occupy approximately 33,000 square feet of space,” said Gary Kremer, executive director of the society. “We need in excess of four times that space. We have a huge art collection that at any one time we can show less than one-half of 1 percent of the material.”

But space is not the only problem.

“We're in a building that was built in 1915. We have a lot of concerns about the security, the environmental controls,” Kremer said. “When I say security, I mean not just security in terms of theft, but security in terms of proper environmental controls and then also accessibility.”

Kremer also said the museum’s current location in the midst of a primarily pedestrian campus makes it difficult for older patrons to get to it.

The society has been negotiating with owners of the properties in the half-block bounded by Elm Street, Lancaster Drive, Fifth and Sixth streets. Jack and Julie Rader own Bengal's Bar and Grill, plus the lot housing the U.S. Cleaners building. Fifth Street Investments owns a house on the block, and MU owns a surface parking lot on the north half of the block.

Although the city is not a party to the negotiations, the council is considering whether to use eminent domain if the talks don't produce a deal between the society and the Raders.

Some council members are opposed to the idea, while others appear willing to use it as a last resort.

“Let me stress one point. I want to see a successful negotiation,” Third Ward Councilman Karl Skala said. “I don't want to see eminent domain used. I think that would be in many ways awful. I want to encourage these guys to get their act together and come up with some settlements before the next meeting because I don't really want to have to vote on that.”

The ordinance authorizing the use of eminent domain will be up for a public hearing and a final vote by the council at its April 6 meeting.

The Raders renovated the Bengal’s building a year ago and say business is good. But the threat of condemnation, they said, made them unable to renew the lease for U.S. Cleaners next door.

The Raders also say they are confused about why their property has been chosen for the project. The Sasaki plan actually shows the museum one block east, on the surface parking lot immediately south of MU’s Heinkel Building.

Both the Raders and Kremer declined to comment specifically on the negotiations. They plan to talk with each other again Friday.

Kremer said the historical society tried to move to MU’s McKee Gymnasium on Hitt Street a decade ago, but a lack of funding caused the project to fall through. Kremer said it wouldn’t have worked out anyway.

“That building would have not been nearly large enough, and again we would have been faced with the same problem of access of parking,” he said. “What's prompted the most recent need to try to speed up the process is the possibility of obtaining federal stimulus money.”

The historical society needs to secure the site for the museum before the state legislature can direct $40 million of federal stimulus money toward the project. A report from City Manager Bill Watkins to the council stated that it's an opportunity the city and society shouldn’t pass up. That’s one reason he’s recommending the council move forward with authorizing eminent domain; doing so would demonstrate to the legislature that one way or another, the society will gain control of the property.

"If the community will not make these assurance, funding will go elsewhere, a tremendous economic development opportunity lost and worst case, the society and its resources moved," according to a report made by Watkins and city staffers.


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Comments

terry bura March 19, 2009 | 2:49 a.m.

progress is important and so our tax dollars. stimulus money used, do we really need this project done. how about droping some of that stimulus money in our pot holes in the streets in town.

(Report Comment)
Charles Dudley Jr March 19, 2009 | 4:26 a.m.

Terry Bura how about sinking that money into our police department,child education and community health programs.

(Report Comment)
Ray Shapiro March 19, 2009 | 4:45 a.m.

"A report from City Manager Bill Watkins to the council stated that it's an opportunity the city and society shouldn’t pass up. That’s one reason he’s recommending the council move forward with authorizing eminent domain; doing so would demonstrate to the legislature that one way or another, the society will gain control of the property."
--Sounds a little bit of a heavy handed, inappropriate use of eminent domain and a desperate approach to put some more money into the pockets of building contractors.
There's a perfectly sound building sitting in a large parking lot, right behind Walgreens on Providence. Negotiate with the kranky group if you want to get the hysterical society out of the basement, IMHO.
Leave the existing businesses around campus alone.

(Report Comment)
Ayn Rand March 19, 2009 | 6:44 a.m.

To any council member who votes for eminent domain: I will help your opponent in the next election.

(Report Comment)
Mike Martin March 19, 2009 | 8:12 a.m.

Eminent Domain may have Silver Lining made of Gold

COLUMBIA, 3/16/09 (Beat Byte) -- Great news for the two downtown Columbia property owners in the way of the beast nobody likes: eminent domain. For the condemned, condemnation aka eminent domain may have the most enviable silver lining of all: a property sale entirely free of Federal and State income taxes.

"Do you realize that with just the 'threat' of Eminent Domain, the sale becomes tax free? It does not actually have to go through the entire eminent domain process," wrote a Columbia Heart Beat reader who said he was formerly employed by the Missouri Department of Conservation (MDC) Land Acquisition unit.

Iowa City-based CPA Joe Kristan, of Roth & Company, P.C., clarifies the issue on his Tax Update blog.

"Section 1033 of the federal tax code allows sellers to avoid gain on property sold 'under threat or imminence' of condemnation, as long as they re-invest the proceeds no more than two years after the year in which the sale is made," Kristan writes. "It's not necessary for the city to actually institute condemnation proceedings; just a credible threat triggers the tax break."

"A whiff of a threat of condemnation can make a sale tax-free to a buyer who is willing to reinvest in other property," Kristan continues. "A seller and buyer can more or less arrange a condemnation 'threat' with the city to qualify a property for Section 1033."

The former Conservation Dept. employee said his office routinely turned away so-called "arranged condemnations."

"We often had folks that wanted the MDC to 'threaten' eminent domain prior to a sale so they could avoid taxes," he writes. "Although MDC had such powers, they would not do it."

The seller tax break may also be great news for the City of Columbia, which can save the $250,000 it was planning to spend from the Convention and Visitor's Bureau fund to accomodate the museum land sale (maybe spend that on the Blind Boone Home, still languishing after all these years).

Bottom line: Condemnation is a taxpayer's best friend! But knowing this, will everybody now be saying, "I want My Eminent Domain?"

RELATED:
http://www.rothcpa.com/archives/001641.p...
http://straylight.law.cornell.edu/uscode...

(Report Comment)
Tom O'Sullivan March 19, 2009 | 8:13 a.m.

Eminent Domain, as I understand the concept, is for a project with significant community value such as a hospital or certain road improvements. Shutting down a tax paying business and costing people their jobs and livelihood for a museum clearly does not meet this criteria. There are enough empty buildings and lots in this town that the City Council does not have to utilize eminent domain.

(Report Comment)
John Schultz March 19, 2009 | 10:10 a.m.

Ayn, you speak a strong word of caution to council members. Sunset Hills saw a complete removal of their board of aldermen by the voters after their bid for economic development using eminent domain failed miserably.

(Report Comment)
Charles Dudley Jr March 19, 2009 | 11:07 a.m.

Tom O'Sullivan March 19, 2009 | 8:13 a.m.
Eminent Domain, as I understand the concept, is for a project with significant community value such as a hospital or certain road improvements. Shutting down a tax paying business and costing people their jobs and livelihood for a museum clearly does not meet this criteria. There are enough empty buildings and lots in this town that the City Council does not have to utilize eminent domain.

Well said. This is B.S.!

(Report Comment)
Ray Shapiro March 19, 2009 | 11:08 a.m.

According to the Castle Coalition:
Missouri has one of the worst records on eminent domain abuse in the country. Cities and towns across the state regularly use eminent domain for the benefit of private parties. There have been at least 20 instances in the past several years. Missouri also allows private redevelopment corporations to condemn property. And Missouri courts, despite an express constitutional admonition that courts should exercise their own judgment on public use, nevertheless approve nearly every condemnation, no matter how private the purpose or how unnecessary the condemnation.
source: http://booneliberty.org/​EminentDomain... ·

Abuses of Eminent Domain
In recent decades there has been growing concern about the manner in which some states and units of government exercise their power of eminent domain. Some governments appear inclined to exercise eminent domain for the benefit of developers or commercial interests, on the basis that anything that increases the value of a given tract of land is a sufficient public use. Critics respond that this is absurd, and that there are few properties, no matter how upscale, which could not be made more valuable if developed in a different manner. They also note that if a developer is unable to purchase the property on the open market, it is unlikely that the landowners will truly be offered the value of the property through condemnation proceedings. The governmental response to that point is that the law of eminent domain arose from the experience that some property owners are unwilling to negotiate a reasonable sale price, and such unreasonableness should not provide a basis to extort an above-market price or to prevent the completion of a public project.

For example, in one case a town wished to exercise eminent domain over a residential neighborhood, so that an upscale condominium development could be built on that land. To advance that goal, they defined any home within the neighborhood as "blighted" if it did not have three bedrooms, two bathrooms, an attached two car garage, and central air conditioning. The hom
eowners challenged the definition in court, and were ultimately successful in fighting the municipality's efforts to take their homes.
source: http://www.expertlaw.com/library/

(Report Comment)
Blake Segafredo March 19, 2009 | 12:45 p.m.

I'm glad to see that the City Council can't even follow the plan that we paid how many of thousands of dollars for (The Sasaki Plan). It is time to stand up to the university and if they want to keep the Historical Society, then they need to cough up some land. It is beyond STUPID for the city to even consider kicking out private businesses and taking their land.
It is time for new leadership, a group of people that look out for the citizens of this town, not throw them out off of property they rightfully own.

(Report Comment)
Ayn Rand March 19, 2009 | 3:41 p.m.

Why can't MU build it next to Ellis, in the green space between it and Brady? There's plenty of room, and the state already owns the land.

If preserving as much of that green space as possible is a must, then build it as an expansion of the current facility, with the new part mostly underground, like the Nelson-Atkins addition.

(Report Comment)
Charles Dudley Jr March 19, 2009 | 4:48 p.m.

Why can't it be built around the Heinkel Building as somebody mentioned about it according to the original Sasaki plan?

Why must City Council enforce Eminent Domain in this case instead of forcing M.U. to go another direction?

What is the hidden agenda here between City Council,Darwin,Watkins,M.U. and which ever contractors will be used on the project?

There is more we are obviously not being told by City Council,M.U. and any other partys involved.

(Report Comment)
John Schultz March 19, 2009 | 5:02 p.m.

The University has the Heinkel parking lot slotted for new Anthropology and Art & Archaeology museums.

(Report Comment)
Ray Shapiro March 20, 2009 | 6:53 p.m.

"The University has the Heinkel parking lot slotted for new Anthropology and Art & Archaeology museums."
Suggestion: Add an extra floor for the Historical Society or let them have the basement in that new building.
Question: Can the city use "eminent domain" on MU owned properties?

(Report Comment)
Charles Dudley Jr March 20, 2009 | 7:11 p.m.

Are the City of Columbia and M.U. in some kind of a back room competition of who can create the most urban sprawl here?

Whatever happen to growing up instead of out?

Ray Shapiro your suggestion is one of the best out there yet.

With City Hall crying about the lack of a taxable base to draw upon how come they are looking at allowing the installment of a non taxable facility in place of one that generates taxes they can draw from?

Something is just not coming out into the light and not being told to the citizens.

>>> Ayn Rand March 19, 2009 | 6:44 a.m.
To any council member who votes for eminent domain: I will help your opponent in the next election. <<<

City Council could all find themselves out on their ear if more citizens take your stand Ayn Rand.

(Report Comment)

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