Governor Napolitano on June 6 vetoed a bill to impose new restrictions on municipalities’ use of eminent domain to compel property sales to clear slum areas, though a supporter of the vetoed bill said he wants the Legislature to bypass Ms. Napolitano and put a referendum on the November ballot.
The bill (H2675) would have terminated all existing slum clearance and redevelopment designations and imposed an array of new restrictions and requirements on new designations.
It would have barred using eminent domain to boost tax revenue if the planned new use doesn’t have an additional public purpose and prohibited condemnation of non-blighted property within a declared slum area. It also set a new legal standard that local governments had to clear before designating areas as blighted.
Additionally, property owners would gain the right to improve conditions to avoid inclusion in designated slum or blighted areas. The bill added new disclosures before local governments could make the designations and shortened the length of the designation to five years from ten.
Ms. Napolitano’s letter explaining her veto defended the use of eminent domain to reduce urban blight, crime and slum conditions and said the bill “went too far” in ways that removed local control and created a “needlessly complex bureaucratic process for redevelopment efforts.”
She also said the legislation was passed before negotiations aimed at producing a compromise measure were complete. She said supporters should “negotiate a more workable bill for next session that does not have so many unintended consequences.”
The Bill’s chief sponsor, Sen. Chuck Gray, R-10, reacted to the veto by saying lawmakers should put the proposal on the ballot so voters can approve it.
“This is the kind of government that our Founding Fathers fought against,” Mr. Gray said of the use of eminent domain.
Mr. Gray said it’s not too late in the current legislative session for lawmakers to put a referendum on the November ballot. It could be based on the vetoed bill, a pending broader measure or a proposed initiative, he said.
“It’s going to be a battle to decide what will go on the ballot,” Mr. Gray said. “One way or another, we’re going to have something on the ballot about property rights that this governor can’t veto.”
The legislation was supported by groups representing property rights advocates, small businesses and home builders and opposed by the League of Arizona Cities and Towns and individual cities and towns as well as groups representing planners and environmentalists.
Local government officials argued that eminent domain is an important tool for community improvement, while property rights advocates contended that power has been abused by local governments to favor developers at the expense of property owners.
State law currently allows municipalities to use eminent domain to acquire slum or blighted private land for redevelopment.
The measure, one of a few surviving legislative proposals intended to crack down on eminent domain, was stalled in the Senate for more than a month before the Legislature completed action on the bill on May 25.
Referendum stalled in House
The Senate on March 22 voted to put a wide-ranging referendum on the November ballot but it has been hung up in the House, where members killed an identical measure.
Introduction of the measures for this year’s legislative session followed a U.S. Supreme Court ruling last year which allowed a Connecticut condemnation for economic development purposes to go forward.
The Arizona Constitution already contains protections for property owners that courts invoked in separate rulings when rejecting proposed condemnations for high-profile redevelopment projects in Mesa and Tempe. In each case, a court ruled that the acquisition for private redevelopment didn’t qualify as an allowed public use.
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