Hands off: North Kansas City loses eminent domain case

By John K. Ross | for Missouri Watchdog

Score one for the little guy.

A Missouri appeals court has issued a unanimous ruling prohibiting North Kansas City from seizing a Burger King via eminent domain.

City officials in the municipality of 4,200, which is surrounded by Kansas City, want a private developer to build a pedestrian-friendly, mixed-use project on the site, which sits east of Interstate 35 along the city’s main commercial thoroughfare.

But property co-owner Perry Beaton refused to sell. “I have a great location, a successful business and a well-maintained building,” said Beaton in a statement. “I simply did not want to go.”

The city acquired the rest of the 57-acre redevelopment area, a now-demolished mill and several storefronts, through negotiation.

According to Beaton’s attorney, Robert Denlow, officials should either build around the restaurant, which sits on a one-acre parcel, or allow Beaton to work with the eventual developers.

“They tried to remove a business that was very profitable for the city in terms of generating jobs and providing tax revenue,” Denlow said in an interview with Missouri Watchdog. “The game plan should be to work with Burger King to incorporate them into any future development plan to make it a win-win. Or they should just carve them out. They have 56 acres left.”

Officials signed a $100 million predevelopment agreement in 2011, but the developer dropped out of the project later that year after declaring bankruptcy.

Several months later, officials filed a condemnation action against Burger King even without a committed developer or a redevelopment plan in place.

Developers are more attracted to project areas that cities control outright, city counselor Thomas Barzee told Watchdog. “Every developer we’ve talked with so far has wanted an entire clean site so to speak.”

Officials declared the redevelopment area blighted in 2010, but the Burger King property itself was in good condition, according to two studies the city commissioned.

Missouri law allows cities to seize non-blighted property in redevelopment areas “even if the individual parcel does not meet the statutory criteria of blight,” wrote Chief Judge James Edward Welsh.

But the three-judge panel found last week that the city had not followed the proper statute.

“We find nothing within Section 88.497 which expressly gives third-class cities the power of eminent domain to eliminate blight,” wrote Welsh in the 12-page ruling.

To condemn property for redevelopment projects, Missouri cities must follow procedures that are meant to provide safeguards for property owners and taxpayers. North Kansas City ignored those rules, which require ample public notice and public hearings before condemnation, Denlow said.

Additionally, redevelopment law requires non-appointed city officials to review plans. Public school districts, whose budgets are affected when cities create tax-increment financing districts, have the right to weigh in, for instance.

Officials tried to “avoid all of that and go straight to condemnation by going through this little known statute that they tried,” Denlow said. ”No other city to my knowledge has ever tried to do this. And I’ve been doing this for more than 30 years.”

Barzee said the city hasn’t decided whether it will appeal the ruling to the Missouri Supreme Court.

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