Nonprofits and Eminent Domain
Increasingly, property owned or leased by nonprofits is becoming a target of eminent domain. Governmental agencies seeking to acquire land for public use gravitate toward what they perceive to be the path of least resistance. They look for what they hope will be the weakest opponents, what they hope will be the cheapest property and what they hope will be the easiest property to acquire with the least political opposition. However, nonprofits have rights in eminent domain, and the law and the courts are slowly beginning to recognize and protect those rights. For example:
- In April 2011, a judge in San Diego County held that a City did not have the right to take property devoted by a nonprofit to keeping at risk youths off the street and out of gangs. The court held that the City lacked evidence that the property was “blighted.”
- Under California law, special valuation rules are applied to property owned by nonprofits when there is no other market for such property.
- Courts are increasingly recognizing that eminent domain may also destroy or damage the business goodwill value of nonprofits when the eminent domain power is used to force them to relocate into more expensive business quarters.
If your nonprofit owns or leases property threatened by eminent domain, contact us for a free consultation.