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Section 5 – Eminent Domain

Section 5 – Eminent Domain

In Colorado, urban renewal authorities like DURA have the ability to acquire private property through eminent domain (condemnation) and resell it to another private party for redevelopment. This tool is used to assemble private property for the sole purpose of accomplishing a public purpose—the elimination of blight through redevelopment. If condemnation is used, a private property owner must be justly compensated for their property, meaning they must be paid fair market value for the property.

What is eminent domain?

Eminent domain is a tool used by urban renewal authorities to assemble private property for the purpose of accomplishing a redevelopment project. While eminent domain also is used by other state and local entities for various purposes, this section deals only with eminent domain as an urban renewal tool.

When is eminent domain used?

Colorado state statute requires that unless a property has been abandoned or the landowner agrees to the use of eminent domain, the landowner must be given the opportunity to participate in the development of a property that has been found blighted and in need of redevelopment by the city and urban renewal authority.  In cases where agreement is not reached with the landowner to participate, DURA works to reach a fair and equitable purchase price for the property.  However, in those cases where the parties cannot agree on the fair market price, eminent domain may be used by DURA.  If eminent domain is used and DURA intends to transfer the property to a private party to achieve the public purpose, DURA must:

  • seek Denver City Council’s determination that the property is blighted (finding that at least five factors of blight are present);
  • issue a public request for proposals for rehabilitation or redevelopment from all property owners, residents and businesses located on the property, as well as other interested parties;
  • and determine that the redevelopment of the remaining property within the urban renewal area is not viable without the parcel to be condemned.

Does an area have to be blighted before eminent domain can be used by DURA?

Yes. An urban renewal authority may only use eminent domain to acquire property after an area has been declared blighted. State law spells out 11 factors of blight, and requires that five of those factors must be found in cases in which eminent domain is used—one more factor than must be found if eminent domain is not used.

What relocation assistance is available for business owners and tenants when a property is condemned?

State statute requires urban renewal authorities like DURA to provide relocation assistance to residence or businesses who are displaced by redevelopment activities. DURA's relocation policy compensates residences, business owners, and tenants for many of the costs involved in relocating their residence or business. Reasonable moving and re-establishment expenses also are provided.

If your business is condemned, you are eligible to receive relocation and moving expenses. DURA has adopted a relocation assistance policy patterned after federal rules that covers the following:

  • Relocation planning,
  • Notices,
  • Advisory services,
  • Relocation assistance payments, and
  • Appeals.

 Are owner-occupied or rental homes ever condemned?

Yes. It may be necessary at times to use eminent domain to acquire homes, but the law also protects homeowners displaced in this manner. A homeowner must be compensated for the fair market value of his or her property. In addition, DURA and other redevelopment agencies must provide relocation benefits.

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Acknowledgement:
The information presented here is loosely based on a publication originally created by the California Redevelopment Association. The content was changed to reflect Colorado law and DURA’s practice. We want to thank the association for allowing us to borrow their concept.

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