As part of a railroad realignment project, Salt Lake City needed B’s land. But B wouldn’t sell, and since B’s land was already committed to public use as a power substation, the city had doubts whether it could condemn it. So the city and B agreed that B would voluntarily give the city the land, as long as it could move the power substation elsewhere.
The city identified nine potential sites for the relocated power plant. At least one of these sites was privately owned by “A.” Let’s call “A” Evans. That’s the parcel the city settled on, and it instituted condemnation proceedings to take it by eminent domain. Evans objected, but the trial court agreed with the city, and allowed the taking. In Salt Lake City Corp. v. Evans Dev. Group, LLC, No. 20130741 (Mar. 24, 2016), the Utah Supreme Court reversed.
Even though both railroads and power plants are public uses of property, the court concluded that the Utah statute which limits takings to those for “public use” didn’t cover this situation:
We disagree with the City’s reading of the statute and conclude that it does not contemplate this type of property use. It is not enough to accomplish a public use on some property; the condemnor must satisfy the public use requirement on the property subject to the condemnation. See id. § 78B-6-504(1) (“Before property can be taken it must appear that . . . the use to which it is to be applied is a use authorized by law.” (emphasis added)). Therefore, while section 501(4) might provide authority for the City to condemn Rocky Mountain Power’s property, it does not authorize the City to condemn the Evans property.
Slip op. at 4.
Even though the ultimate use of Evans’ property would be a public use (the relocated power substation), “a third party — Rocky Mountain Power [“B”] — would own the property and be in charge of the public use.” Slip op. at 5. The statute, the court held, requires that the condemnor must own the property taken, and “be in charge of the public use.”
The statute requires that the complaint contain the name of the entity which will be in charge of the public use, and that this party must be the plaintiff. Here, it was the power company, not the city, which would be in charge of the power plant. “The City exceeded its powers by condemning the Evans property not for its own use but solely for the ownership and use of Rocky Mountain Power.” Slip op. at 6. And it must be the condemnor which starts and completes construction of the public use:
The statute contemplates that it is the condemnor that will oversee the construction on the property. The statute does not require the condemnor to physically commence construction itself. The condemnor could enter into a contract with a construction company or other third party to complete the construction, but, importantly, the condemnor must remain “in charge of” the property and must ultimately be responsible for construction of the public use.
Slip op. at 6. Here, the power company, and not the city would be the entity constructing the power station.
Finally, the court concluded that the statute requires that the condemnor must retain ownership of the taken property for a reasonable time.This is to allow the property owner to file an action against the condemnor to set aside the taking. All is not lost for these type of deals, however, because the court suggested “hypothetically” that the city could take the Evans property and lease it for 100 years to the power company.
Salt Lake City Corp. v. Evans Dev. Group, LLC, No. 20130741 (Utah, Mar. 24, 2016)