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Norfolk eminent domain battle may finally reach end

Norfolk eminent domain battle may finally reach end
June 16, 2013
By Corinne Reilly

A forthcoming state Supreme Court decision over eminent domain could finally mean the end of a long-running battle between Old Dominion University and a group of holdout property owners fighting to keep their land.

Virginia's highest court heard arguments early this month in the case between the Norfolk Redevelopment and Housing Authority and PKO Ventures LLC, which owned a 10-unit apartment building at 1069 W. 41st St. near ODU. At issue is whether the housing authority had the right to take the property for ODU's expansion or whether a 2007 change in state law made the move illegal.

The court's ruling, expected in September, also could decide the fate of at least two other properties, including Central Radio, an 80-year-old communications repair firm at 1083 W. 39th St. that employs about 100 people and has been the most vocal opponent in the case.

If the landowners win, the housing authority could be forced to pay them years of legal fees and damages. Such an outcome would be a significant loss for ODU, which has been waiting years to redevelop the properties.

"Whether we win or lose, this has taken so much of my time," said Bob Wilson Jr., Central Radio's vice president and a nephew of the company's founder. "We're hoping there might finally be justice for us."

The conflict dates to 1998, when the City Council approved the Hampton Boulevard Redevelopment Project to help ODU expand eastward. The area marked for redevelopment stretches from 38th to 48th streets, between Hampton Boulevard and Killam Avenue.

Because the land would not be used strictly for educational purposes, ODU hired the housing authority to take the properties. State law at the time allowed redevelopment authorities to use eminent domain for economic development purposes as long as a majority of the plots in a designated area were deemed to be blighted.

Since the plan was approved, the housing authority has condemned and acquired more than 160 properties near ODU. Parcel by parcel, it turned them over to the school's real estate foundation, which paid the authority, compensated the landowners and allowed developers to build. The area is now home to ODU's Ted Constant Convocation Center, the University Village development, apartments, parking garages, an ODU research park, and stores and restaurants that cater to students.

Although a group of property owners fought the process, their numbers have dwindled over the years. Among the most recent to concede was 78-year-old Barbara Pecil, who owned a vacant plot.

PKO, Central Radio and Norva Plastics, a small plastics fabricator that has been in Norfolk for more than 70 years, are the last holdouts.

The housing authority won the right to take their properties in Circuit Court in 2011. PKO, owned by a Richmond attorney, was granted the state Supreme Court appeal earlier this year. Central Radio's case was placed on hold pending PKO's outcome.

One other case unrelated to ODU's expansion could be decided by the PKO ruling - that of Morechell Pryer, who owned a duplex near the Norfolk State University light-rail stop that was taken by the housing authority for economic development using eminent domain.

Less clear is what the PKO decision could mean for Norva Plastics. A lawyer for the company, Joe Waldo, said this week that Norva has not agreed to move but is discussing the possibility with the housing authority.

Lawyers for the landowners have long argued that the housing authority missed a critical 2010 deadline for acquiring the properties.

In 2007, the General Assembly adopted limits on eminent domain that largely banned its use for economic development. The new law also said that condemnations for blight could be made only against specific properties - not entire areas, as was done with the PKO, Central Radio and Norva parcels, as well as the Pryer duplex.

The changes took effect that July but contained a provision allowing agencies in the middle of projects to continue to acquire land until July 2010.

The housing authority says it acted lawfully because proceedings to take the properties began before the deadline. The landowners argue that their parcels weren't formally acquired until far later. "They simply waited too late to file," said Steven Emmert, a lawyer for PKO.

While a circuit court judge sided with the housing authority, lawyers for the landowners said this week they are confident the Supreme Court will disagree

Emmert said it was clear from justices' statements and questions that they were skeptical of the housing authority's argument.

"I'd have to be pretty blind to not be encouraged," Emmert said.

A lawyer for the housing authority declined to comment, as did a spokesman for ODU and a lawyer for the school's real estate foundation.

If the property owners' lawyers are right, PKO will get its land and apartment building back. In addition to legal fees, the company could seek damages for the rental income it has lost since the building's tenants were evicted and its windows boarded up in summer 2012. Pryer likely would get his property back and Central Radio would stay on its land.

If PKO loses, it's improbable that Pryer or Central Radio would be granted appeals. The latter is an outcome for which Central Radio's Wilson said he isn't prepared, as it probably would put his family's company out of business

"I'm counting on winning," Wilson said, "and I'm counting on staying here."