Novel Law or Bay Area Idiocy?

Last night the town of Hercules voted to use its eminent domain powers to buy a 17 acre parcel from Walmart who had planned to build a shopping center there. For those of you not from California, you need to know that Hercules was founded in the 1880s as a place make black powder. My grandfather worked there briefly - he was an expert on explosives. When the powder business became ended the city switched to be a center for making fertilizer. Until that company folded Hercules was a fertilizer center. Evidently there is still some residue of the former business in the council chambers.

This would be a unique use of eminent domain. Generally, with the exception of the Kelo decision, the power is used to acquire land for a public purpose. Kelo, which was arguably one of the worst Supreme Court decisions of the last decade, allowed the power to be used for private purposes using the power of the state to enforce their desires against owners of property. This does not seem like a good use of taxpayer money. In the end, the city should be forced to compensate Walmart at the fair market value of the property - which should include the incurred costs of the company in the development process. Thus, the taxpayers in this small city will be forced to buy back a piece of property at above market value. The land is now vacant. A city the size of Hercules is not likely to be a very sophisticated developer of the property.

The Hercules council argued that a Walmart did not fit the designs of the city. The city is about 20,000 residents with a good mix of people. Average income in the city is a bit below the rest of the Bay Area. The arguments against Walmart were familiar. The big center (which was downsized from the original plan) would chase smaller merchants out of business and would create "traffic problems" - a good number of cities have used the same arguments in stopping Walmart developments. From my perspective Walmart is a pretty good employer. The council wanted to hold out for a "higher end" shopping center - so evidently the traffic beefs were really a smoke screen.

One local resident commented "We are setting an example for the rest of the country," - indeed they are. I am not sure whether being the fertilizer and buffoon capital of the country is one I would seek to be an example for.