Toll Road Controversy Changes Colorado Law On Private Takings

When a developer proposed building a toll road under an 1891 law that allowed private developers to condemn property needed for a road, land owners protested, and Colorado changed the law.

"Mr. Wells, who has built hundreds of miles of roads in the state, has said the toll road, which he has been planning off and on since the 1980's, will be a speedy alternative to busy Interstate 25 through Denver. It would run north and south across the plains and hills about 25 miles to the east, stretching for 210 miles through seven counties from Fort Collins to Pueblo."

"The developer's original plan relied on an 1891 Colorado mining law that allowed private developers to condemn private property needed for a road. After Mr. Wells strongly lobbied the Colorado legislature last year to pass a bill making it even easier for him to build the toll road, Mr. Thomasson helped rally about 1,200 property owners to march on the Capitol in Denver, carrying signs and shouting slogans opposing the project. The landowners successfully fought to defeat of the measure.

Opponents of the road then achieved passage of two bills to restrict greatly the construction of private toll roads. Gov. Bill Owens, a Republican, vetoed both bills last year, but he signed similarly worded ones into law this summer after they passed again.

The new laws removed the right of private toll road developers to condemn private property and require them to negotiate a more complex and expensive bureaucratic process."

Full Story: Developer Wants Toll Road; Colorado Makes It Difficult

Comments

Comments

Eminent Domain For Private Uses

I posted this article to show that, historically, eminent domain was used for private as well as public uses. An 1891 Colorado law allowed private developers to condemn property for roads.

It would be interesting to see a historical study of this. During the 19th century, railroads were privately owned, and I am sure that eminent domain was often needed to acquire key parts of rights of way.

The theoretical justification of eminent domain has nothing to do with public or private use. Here is a bit of basic economic theory:

For markets to work, there must be many sellers and buyers of a product. The market does not work for certain types of land acquisition because there is only one possible seller of the needed land.

For example, the market works to provide food, because if one farmer refuses to sell, I can buy the same food from another farmer. The market doesn't work to provide rights of way, because there may be only one seller of key parts of the right of way, who can charge monopoly prices or block the project completely.

I am sure that states first passed laws allowing eminent domain when they saw that land-owners on key parts of rights of way could charge monopoly prices far higher than the market price of equivalent land nearby. This is another interesting subject for a historical study.

It is not legitimate to use eminent domain for most public uses. Eg, a police station is publicly owned and is a public good. But because there are many possible locations for it, the city can buy the land for the police station on the market. No land-owners has monopoly power to stop construction of the police station.

Eminent domain has often been abused (probably more often than it has been used legitimately), but this has nothing to do with private use. The worst abuse of eminent domain in history occurred when Robert Moses kicked 250,000 New Yorkers out of their homes to build freeways - a publicly owned use.

Perryair, since you say eminent domain should only be used for public uses, tell me what you would do in this situation:

A private company wants to build a power line or a rail line that would have major economic and environmental benefits for a region. Where the right of way goes through a mountain pass, only one location for it is economically feasible. The owner of that land in the mountain pass refuses to sell at any price (perhaps because he owns a expensive and polluting power plant that the new power line would drive out of business).

Perry, would you let this one land owner stop a project that would benefit the entire region?

Because this is an extreme example, it makes it clear that the need for eminent domain has nothing to do with public ownership and has everything to do with the monopoly power that a land owner can have in certain situations.

Charles Siegel

Well

Charles,

Again, this isnt a conversation that has to do with public ownership, only public use. Infrastructure of all types whether it be roads, parks, police stations, fire stations, hospitals are all things that the public needs in order to have 'public safety and welfare'. And as much as these types of eminent domain for these purposes are abused (and they are abused), we put up with it because we need a civil society.

Fine.

But using eminent domain to create a site for a research park, office park, walmart, a ballpark - these are not things that the government should have right to dip their hands into. It is not up to them to pick economic winners and losers, that is left to us, as individuals and companies in the 'real' world.

And as for your example - it matters much what the exact situation is. If power lines just needed easements for pole placement or if the rail line needed a right of way that would be able to coexist with the plant on site, one could be dedicated even though condemnation without affecting the current business.

If what you are trying to get at is - The government should shut down power plant A and give that same piece of land to power plant B because it is somehow 'preferred' - than no. It shouldn't have the right to pick winners and losers on a whim.

And if someone is lucky enough to hold the rights to a piece of land that is so strategically important, why shouldn't they be able to extract the full value from that piece of land? At some point, it makes economic sense to find a better alternative. If it is truly a regional benefit, there is some other point in that region that this power line or rail line can run through, and that land can be used for negotiation.

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