Lawsuit challenges Tech Park condemnation authority | Arkansas Blog

Friday, November 20, 2015

Lawsuit challenges Tech Park condemnation authority

Posted By on Fri, Nov 20, 2015 at 7:45 AM

click to enlarge 415 MAIN: Owner isn't giving up land for tech park without a legal fight.
  • 415 MAIN: Owner isn't giving up land for tech park without a legal fight.
Richard Mays, the Little Rock lawyer, has sued the Little Rock Technology Park Authority preemptively over its threat to condemn his law firm's office building at 415 Main Street for the government agency's plan to establish a tech park downtown.

It probably will be viewed by some as a bargaining ploy. The Tech Park opened discussions on buying the building with appraisals as low as $470,000. Most recently, it said it would pay $845,000, the value in an appraisal obtained by Mays. But he says he has an unidentified buyer willing to pay $1.2 million. And he told the Arkansas Democrat-Gazette yesterday that he wasn't much inclined to move after three decades  on Main Street. He also said he was willing to lease the property for the park, which potentially could be even more lucrative for him over time.

The lawsuit's argument are legal, not financial:

(1) that the Research Park Authority Act is invalid to the extent that it violates the right of property holders to have the issue of whether the threatened taking by eminent domain is for a public use judicially determined; (2) that the proposed use is not a public use under the Arkansas Constitution and case law; and (3) that even if the proposed use is found to be a public use, taking in fee simple violates the doctrine of absolute necessity because a lesser interest, such as a leasehold interest, will adequately serve the Authority’s needs. 

The U.S. Supreme Court has upheld the ability of governments to take private property for the purpose of another private venture, as the Tech Park essentially will do in providing low-rate space to private companies. 

But, said Mays

In affirming such heightened protection to the landowner, the Arkansas Supreme Court has declared that “[s]tatutes relating to the exercise of the right of eminent domain, especially where there is an alleged delegation of the power, should be strictly construed in favor of the landowner and against the condemnor, largely because they are in derogation of the common right.”

Arkansas continues to adhere to a true “public use” test in which, to qualify as a public use, “the public [must be able to] enjoy the use of it, not by permission, but of right.”

In the current political climate in Arkansas, you hear a lot of unhappiness among Republican legislators about abusive government and expansive condemnation rights (except for gas and oil pipelines). You'd think Richard Mays would get some sympathizers in this fight. But the chamber of commerce is behind this real estate play (it ran a city sales tax campaign on the condition that it include $24 million as seed money for the tech park) and that alters the dynamics. Nearing control of the Arkansas Supreme Court, the chamber may soon get a court precedent that says a public use is whatever the chamber of commerce says it is.

 Government has no business in the real estate business. An Atlanta tech park developer came to town this week to give guidance on how he's building incubators for new-age businesses in a building he bought and outfitted with his own money. Imagine that. Free enterprise. The Little Rock Regional Chamber of Commerce believes corporate welfare is the preferable business model.

I'm still wondering where the Tech Park is going to get the $100 million required by its building plans, plus broadband charges, plus everything else. So far, the city money and some token amounts from UAMS, UALR and Children's Hospital are all the Tech Park has to work with. It's going to have to generate some fearsome rent revenue to pay off bonds and build still more buildings. I'm waiting for the next shoe — more taxpayer subsidies — to drop.

And here's a hot tip: There could be a LOT more office space available if plans in the wind by the Asa Hutchinson administration to consolidate more state agencies on the state Capitol grounds take shape any time soon. They'd move from other buildings around the city.

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