Friday, January 1, 2021

Misuse of Eminent Domain in McKinney?

It looks like the city of McKinney initiated eminent domain proceedings against a private property owner so a brewery moving to the area could have a parking lot. Yes, the land to be eminent domained is a trailer park that might make the redevelopment of the east side look "incomplete." However, the eminent domain resolution doesn't use blight or redevelopment as reasons for the city's action. 

eminent domain

The resolution claims that the property is subject to eminent domain action to make room for an "East Louisiana Public Parking Lot." This is another example of the city missing the opportunity to look more above board while also risking more city money loss in potential lawsuits (remember the $10 M+ settlement the city had to pay out to JND because the city used eminent domain wrongly to favor one developer over another during the failed gateway debacle?). This looks like another messy rush job. Sure, the property owner will probably sell to the city and we can avoid further court action. But, the landowner would only be selling because of the threat of eminent domain action. Threatening property owners is not a good look for McKinney.

The site plans for the new brewery complex do not include a parking lot. The brewery will be relocated as part of a $11.3 M grant from the McKinney Community Development Corporation (MCDC) that would allow for the renovation of McKinney's historic grain site. The agreement between Tupps and the MCDC includes a long-term lease of the space with an option to own. It also includes a 2% revenue share with the city. The city of McKinney will have to sell the grainery site to the MCDC. See more details in the article herePlease continue reading for the documentation below.

Back on September 1st, 2020, the city council passed this resolution:

WHEREAS, the City Council of the City of McKinney, Texas, has determined that a public need and necessity exists for the East Louisiana Public Parking Project (“Project”), generally located to the East of Highway 5 between East Louisiana Street and Anthony Street. The properties associated with the Project are generally set forth on the map attached hereto as Exhibit A; and 

WHEREAS, the City Council has considered this Project and has determined that a public necessity exists for the acquisition of the properties (in fee simple), as described on Exhibit B, attached hereto and incorporated herein for all purposes (“Property”). 

See above for the picture of the property (trailer park) subject to the eminent domain action with Tupps added for clarity. 

Here's the site plan submitted to the MCDC on June 25th, 2020 with the trailer park/parking lot added.

No one is saying the TUPPS deal is not a good idea. But, a city pulling out the eminent domain card (when this is clearly a brewery parking lot pretty far away from the future new city hall) because it does not want to take the time to use other methods (health code violations for the trailer park and taking the time to work with the property owner) is wrong. Or, TUPPS could have simply scaled down their mega complex to add parking spots. 

Here is the Texas Government code on proper uses of eminent domain:



Sec. 2206.001. LIMITATION ON EMINENT DOMAIN FOR PRIVATE PARTIES OR ECONOMIC DEVELOPMENT PURPOSES. (a) This section applies to the use of eminent domain under the laws of this state, including a local or special law, by any governmental or private entity, including:

(1) a state agency, including an institution of higher education as defined by Section 61.003, Education Code;

(2) a political subdivision of this state; or

(3) a corporation created by a governmental entity to act on behalf of the entity.

(b) A governmental or private entity may not take private property through the use of eminent domain if the taking:

(1) confers a private benefit on a particular private party through the use of the property;

(2) is for a public use that is merely a pretext to confer a private benefit on a particular private party;

(3) is for economic development purposes, unless the economic development is a secondary purpose resulting from municipal community development or municipal urban renewal activities to eliminate an existing affirmative harm on society from slum or blighted areas under:

(A) Chapter 373 or 374, Local Government Code, other than an activity described by Section 373.002(b)(5), Local Government Code; or

(B) Section 311.005(a)(1)(I), Tax Code; or

(4) is not for a public use.

(c) This section does not affect the authority of an entity authorized by law to take private property through the use of eminent domain for:

(1) transportation projects, including, but not limited to, railroads, airports, or public roads or highways;

(2) entities authorized under Section 59, Article XVI, Texas Constitution, including:

(A) port authorities;

(B) navigation districts; and

(C) any other conservation or reclamation districts that act as ports;

(3) water supply, wastewater, flood control, and drainage projects;

(4) public buildings, hospitals, and parks;

(5) the provision of utility services;

(6) a sports and community venue project approved by voters at an election held on or before December 1, 2005, under Chapter 334 or 335, Local Government Code;

(7) the operations of:

(A) a common carrier pipeline; or

(B) an energy transporter, as that term is defined by Section 186.051, Utilities Code;

(8) a purpose authorized by Chapter 181, Utilities Code;

(9) underground storage operations subject to Chapter 91, Natural Resources Code;

(10) a waste disposal project; or

(11) a library, museum, or related facility and any infrastructure related to the facility.

(d) This section does not affect the authority of a governmental entity to condemn a leasehold estate on property owned by the governmental entity.

(e) The determination by the governmental or private entity proposing to take the property that the taking does not involve an act or circumstance prohibited by Subsection (b) does not create a presumption with respect to whether the taking involves that act or circumstance.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 1 (S.B. 7), Sec. 1, eff. November 18, 2005.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 81 (S.B. 18), Sec. 2, eff. September 1, 2011.

Acts 2011, 82nd Leg., R.S., Ch. 693 (H.B. 364), Sec. 1, eff. September 1, 2011.

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