Can Ohio businesses be involved in eminent domain?

On Behalf of | Jan 18, 2024 | Eminent Domain |

Eminent domain empowers federal, state and local governments to acquire private property for projects of public benefit. This can include creating space for roads, utilities, schools, parks, airports and other public goods.
Both the United States Constitution’s Fifth Amendment and Ohio Constitution’s Article I, Section 19, mandate the provision of just compensation (fair market value) to property owners whose property is taken under eminent domain. Partial takings also necessitate compensation for the resulting loss in property value.

However, this power is not without limitations. The government must prove the necessity and public purpose of the taking, emphasizing accessibility or utility for the general public. It is expressly prohibited to take private property solely for the benefit of private interests. The public must stand to benefit from the action.

Can private parties be involved?

In Ohio, the Ohio General Assembly grants the power of eminent domain to specific entities, including counties, townships, municipalities, school districts and public utilities. These entities can wield eminent domain for their projects or delegate it to other entities aligned with public purposes.

For instance, a county might employ eminent domain for a renewal project, like a park or library.

Alternatively, a county could delegate this power to a private developer engaged in a mixed-use project combining affordable housing, retail and office space. In both cases, the government must demonstrate the necessity and public purpose of the project.

However, private businesses not classified as public utilities are barred from leveraging eminent domain for their exclusive gain. This was emphasized in a 2006 ruling by the Ohio Supreme Court when it rejected the city of Norwood’s attempt to seize property for a private developer’s shopping mall and office complex, deeming it a financial benefit, rather than a public use.

Eminent domain can lead to complex and contentious issues, pitting public and private interests against each other. While certain private businesses can sometimes benefit from eminent domain om projects aligned with public purposes, stringent conditions must be met. The law mandates necessity, public purpose, just compensation and due process in any eminent domain action.

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