The Columbian’s Feb. 1 editorial characterized government use of eminent domain for anything other than acquiring public right-of-ways as illegitimate “bullying.” Certainly, there are examples in which eminent domain has been misused.
However, there are hundreds more examples in which the use of eminent domain for community development has been of tremendous benefit to residents, taxpayers and their communities. Many good examples exist in Portland.
The editorial specifically presented the acquisition of the Monterey Hotel in downtown Vancouver as an example in which eminent domain was used to acquire a property without producing tax revenue or jobs. That assertion is incorrect.
The city did not actually acquire the property using eminent domain. It did negotiate the purchase of the property using the threat of eminent domain. While this may seem like a technical distinction, it facilitated a negotiation that provided a fair price to the owner and allowed the owner an additional year in which to reinvest the proceeds without paying capital gains taxes.
Monterey Hotel
While the site of the old hotel is still vacant, the property is fully vested for development and plans for a very handsome building are ready to be submitted as soon as the economy sufficiently recovers to produce a resurgence of demand for office space.
The Monterey Hotel was most notable for its obvious rundown condition and for having more fire, police and ambulance calls than any other address in Southwest Washington. Common sense tells us that the costs to Vancouver taxpayers must have been substantial.
At the same time, the building owners were paying less than $10,000 per year in property taxes. Vancouver taxpayers were subsidizing a private operation that most of us would characterize as “blight.” However, there was no editorial attempt to balance property-owner rights with property-owner maintenance and operation responsibilities.
Also unrecognized in The Columbian’s editorial was that the development of the West Coast Bank building, immediately east of the Monterey Hotel site, was conditioned on the acquisition and demolition of the blighted hotel building.
No business person in their right mind would develop a class A office and residential condominium building with the Monterey Hotel as a next-door neighbor. Now more than 200 people work in the West Coast bank building, about 30 new residents live in the building’s condominiums and a private university holds evening classes in the downtown building.
The West Coast Bank offices and condos had a 2009 assessed value of more than $22 million, which equates to more than $200,000 in 2009 property taxes, not to mention B&O and sales taxes.
A more fair basis on which to judge the city’s actions in this case would be to compare the probable results of doing nothing with the results of the use of eminent domain.
With no eminent domain, there would be:
High costs to taxpayers to provide fire, police and ambulance services to the Monterey Hotel;
Meager tax revenues produced by the old hotel;
Negative visual first impression at the entry to the city;
Negative influence on new downtown investment.
The results of eminent domain are:
Very substantial tax revenues produced by the development of the West Coast Bank building and its tenants;
Approximately 200 family wage jobs;
New downtown residents, some of whom are in citizen leadership roles;
A higher educational institution in the heart of downtown — the University of Phoenix;
A vibrant “welcome to Vancouver” set by the West Coast Bank building and the future 101 (Frontier) building.
On balance, Vancouver residents and taxpayers greatly benefitted from the use of eminent domain.
Stephen M. Burdick was Vancouver’s director of economic development during two periods — 1984-1989 and 1997-2007 — and led the efforts to acquire the Monterey Hotel. He is now the director of development for Killian Pacific, LLC.
