The Virginia Supreme Court handed down a ruling this morning in a long-running Norfolk eminent domain case.
In a major loss for Old Dominion University, the state Supreme Court ruled this morning that the Norfolk Redevelopment and Housing Authority did not have the right to use eminent domain to take a 10-unit apartment building near the university.
This case, going back to 1998, pre-dates the 2005 Kelo decision, which brought the issue of eminent domain to the forefront of nearly everyone’s minds. Virginia responded to the Kelo decision first, in 2007, with legislation and then last year with the passage of a constitutional amendment. The acquisition of all the properties by the Norfolk Redevelopment and Housing Authority, which then turned them over to the ODU Real Estate Foundation, took time. The 2007 law had a three-year window for completion of projects that had started prior to its passage, and today the court overturned a Circuit Court ruling that had allowed the process to go beyond that window. It was clear, in 2010, that everyone knew they had to get this done by the end of June of that year. I don’t know how that deadline was missed.
The ruling means that PKO will get back its apartment building. In addition to legal fees, the company could seek damages for the rental income it has lost since the building’s tenants were evicted and its windows boarded up in summer 2012.
I drive past this apartment building as well as the Central Radio building mentioned in the article nearly every day on my way to ODU. In fact, I use this case to explain the tax implications of eminent domain in my taxation classes. Of course now I’ll have to explain whether the damages and legal fees, when received, are income to PKO 😉