Yet Another Redevelopment Failure


by Timothy Sandefur

The Palm Springs (CA) Desert Sun has an enlightening report on yet another failure in California's sad history of using eminent domain for "redevelopment." Excerpt:

After spending more than $14.5 million to buy land near the Indio Fashion Mall and transform the area into a hip, outdoor shopping and entertainment center, city officials are poised to abandon their plan and sell the property – even at a loss.

The city used eminent domain and negotiated tirelessly to secure 20 acres of land behind the mall – paying 370 percent more than the appraised value for 11 pieces of property alone since July 2005, a Desert Sun analysis of city records found.

However, unless a deal is reached with the mall's owner, City Manager Glenn Southard is under instructions from the City Council to put the property – about the size of six La Quinta Costco stores – up for sale. The city is working on an appraisal, but Southard estimates the land the city bought for $14.5 million could fetch $10 million to $15 million.

(Read the rest…) This should be chalked up alongside the failure of the Poletown redevelopment in the 1980s in Michigan—and the cases discussed in Samuel Staley’s and John Blair’s report, Eminent Domain, Private Property, and Redevelopment: An Economic Analysis.