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Salvage yard wins condemnation case

Richmond Times-Dispatch
June 2006
By Greg Edwards

The Virginia Supreme Court has upheld a junkyard owner's circuit-court victory over the Norfolk Redevelopment and Housing Authority, which had tried to take the business through condemnation.

Opinions differ, however, on whether the court's ruling was a precedent-setting victory for all Virginia property owners. One legal scholar said the court had shot down the most significant part of the junkyard owner's case.

In a unanimous decision, written by Justice Elizabeth B. Lacy, the court found that the housing authority had failed to follow state law in developing the plan by which it condemned the junkyard.

The court also ruled that the authority had not given the property owner, C&C Real Estate Inc., the required one year's notice and a chance to correct problems with the property.

Norfolk lawyer Joseph T. Waldo, who represented C&C, said the court's most significant ruling was that a plan for condemnation cannot go beyond what state law allows.

"It is very rare that a housing authority when challenged is not allowed to take what they try to condemn," Waldo said.

However, Eric Kades, director of the property rights project at the William and Mary School of Law, said the ruling is basically a victory for government. Although C&C won the appeal on technical grounds, it lost a more significant constitutional due-process challenge that it had won in Norfolk Circuit Court, he said.

The high court didn't agree with C&C's due-process argument, and it accorded incredible deference to the government in determining what properties are blighted, Kades said. "There doesn't look like much hope for the future as the Virginia Supreme Court is presently constituted."

C&C bought the auto salvage yard in 1997 and leases it to Downtown Used Auto Parts, which had rented it from the original owner.

The housing authority had included the property in a 1987 conservation plan intended to eliminate blighted and deteriorating property in Norfolk's North Church Street area.

According to the court's opinion, the authority did not notify C&C that it intended to acquire its property until December 1999. The local Coca-Cola Bottling Co., which had plans to expand, suggested to the authority that the junkyard be converted into a parking lot for Coke employees.

Between August 2000 and October 2003, when the authority authorized condemnation, the authority made offers of $400,000 and $560,000 for the property but C&C refused to sell. After a Norfolk circuit judge ruled against the authority last May, it appealed to the Supreme Court.

Though it upheld the circuit court overall, the high court struck down the ruling that a 15-year delay from the time the authority declared the conservation area blighted until it filed for condemnation had violated C&C's rights to due process.

Kades noted that C&C had, neverthe- less, won a small constitutional victory, as the court ruled the housing authority must base condemnation for blight on a property's condition at the time legal proceedings begin. Still, the court put a heavy burden on landowners to prove the property is not blighted, he said.

Waldo strongly disagreed with Kades. Though C&C failed to prove that its property is no longer blighted, the ruling on when blight must be determined is a major victory for Virginia property owners, he said.

Spokesman Ed Ware said the Norfolk authority has not had a chance to review the court's opinion in any detail and will not comment until it has.

Waldo said the authority could try to condemn again but would have to give C&C a list of what is wrong with the property and a year to fix it. C&C will seek to recover legal fees from the authority, he said.