Earlier this year, the City of Orlando filed a Petition in Eminent Domain to take property owned by a small community church in downtown Orlando, Faith Deliverance Temple. The public purpose alleged by the City of Orlando is “a unique mid-sized forum for sports, recreational, educational, and entertainment activities.”
More particularly, and without a specific detailed description appearing in the Petition itself, the project is a proposed $110 million stadium to be the home of the Orlando City Soccer Club, also known as the Orlando City Lions. The stadium is purportedly designed and constructed to enhance the “soccer fan experience” complete with what is described as a sunken, street level field and a massive lion statute that will “face entering fans and then rotate to watch the game.”
If knowing more about the project’s history, it’s apparent that the development of a stadium was an essential, or necessary, part of the bid to have Major League Soccer (“MLS”) award a new team in Orlando. Said otherwise, the stadium is planned to be comparable in scope and quality, to other recently constructed first-class soccer facilities, which meet or exceed “Major League Soccer Venue Design Requirements,” having a minimum seating of approximately 18,000 (which could be increased in size if deemed necessary by the Orlando City Soccer Club and/or MLS). In fact, most media outlets refer to the City’s project as a “soccer-specific stadium.”
The private entity that will benefit most from these eminent domain proceedings is the Orlando City Soccer Club, also known as the Orlando City Lions. The Orlando City Soccer Club is a new Major League Soccer expansion franchise. Orlando Sports Holdings, LLC, is the entity which either owns or is closely related to the Orlando City Soccer Club.
The City of Orlando, and the Orlando Sports Holdings, LLC, entered into a Memorandum of Understanding (“MOU”) on October 7, 2013, which contemplated that the two entities would further enter into two subsequent agreements: an “Orlando Soccer Stadium Use Agreement” and an “Orlando Soccer Stadium Project Construction Agreement.”
Under the terms of an “Orlando Soccer Stadium Use Agreement” dated February 24, 2014, it was contemplated that:
a. Orlando Sports Holdings, LLC, (in addition to its MLS franchise fee of approximately $70 million) will pay approximately $30 million of up-front capital to the Petitioner, City of Orlando, together with future annual payments of $675,000 for the next 25 years with a 5-year option to extend. The annual payment stream will be monetized to contribute an additional $10 million as up-front capital for stadium construction. This would equate to a total up-front capital contribution by the private entity, Orlando Sports Holdings, LLC, of $40 million.
b. Such payments will entitle Orlando Sports Holdings, LLC the right to use the stadium for “TEAM Home Games” (all home regular pre-season, regular season, and playoff MLS games) as well as all other “TEAM Events” (which includes all other professional soccer events held at the stadium, such as professional club friendlies or international competitions).
c. The revenues earned from ticket sales for both “TEAM Home Games” and “TEAM Events,” including concessions, advertising, and naming rights to the stadium, will be 100% dedicated to Orlando Sports Holdings, LLC, and go nowhere else in terms of any alleged public use or benefit.
Under the terms of an “Orlando Soccer Stadium Project Construction Agreement” dated March 31, 2014, it was contemplated that:
a. Orlando Sports Holdings, LLC will act as the Project’s developer, not Petitioner, City of Orlando.
b. Orlando Sports Holdings, LLC will have private control of the design and construction for the $110 million stadium.
c. Orlando Sports Holdings, LLC will have all rights to select the sports architecture firm, project manager, and third-party suppliers of goods and services for the stadium.
d. Orlando Sports Holdings, LLC, likewise, will bear the responsibility for all cost overruns of the stadium.
Neither the “Orlando Soccer Stadium Use Agreement” nor the “Orlando Soccer Stadium Construction Agreement” were referenced in the Petition.
What can the church do to defend against the taking?
One needs to look back at what happened in Florida in 2006 following the announced decision of the United States Supreme Court in Kelo v. City of New London, Conn., 545 U.S. 469, 125 S.Ct. 2655 (2005) (“Kelo”). The majority opinion (Justice Stevens) of Supreme Court in Kelo affirmed economic development as a public purpose for which the eminent domain power could be exercised although resulting in the transfer of ownership or control of private property from one private entity to another. Id. at 484 – 490. The dissenting opinions vehemently opposed such holding. Id. (Justice O’Connor) at 494 – 505; (Justice Thomas) at 505 – 523.
After Kelo, substantial reforms followed in state jurisdictions, including Florida, concerning private property rights. These reforms focused primarily on instances where the exercise of eminent domain ultimately resulted in the transfer of ownership or control of private property from one private entity to another private entity. Where states may not diminish federal constitutional protections for property rights, states may provide greater protections under their respective state constitutions or general law. Such protections would apply to, not takings under federal law, but takings under color of state law.
The day after Kelo was decided, the then Speaker of the Florida House of Representatives, Alan Bense, announced the formation of a Select Committee to Protect Private Property Rights. The bipartisan committee was chaired by Representative Marco Rubio and was composed of many respected leaders who studied and heard testimony for a period of eight months culminating in HJR 1569 and HB 1567. Substantial efforts were also undertaken by the Florida Senate’s Judicial Committee led by Senator Daniel Webster. Public comment was made by many aggrieved property owners whose properties were taken under the auspices of community redevelopment or other takings wherein the public purpose asserted was economic development. The progress on both measures was also closely followed by then Governor Jeb Bush.
HJR 1569, known as Amendment 8, passed by the requisite 60% in both the Florida House and Senate for a legislatively-referred constitutional amendment, was subsequently signed by Governor Bush, and then proceeded to the November 6, 2006 election ballot, passing by 69% polling statewide. Applicable to all eminent domain lawsuits filed after January 2, 2007, the amended Article X, Sec. 6 of the Florida Constitution as follows (underlined portion below):
Constitution of the State of Florida (2006 Amendment)
ARTICLE X, §6. Eminent domain.—
(a) No private property shall be taken except for a public purpose and with full compensation therefor paid to each owner or secured by deposit in the registry of the court and available to the owner.
(b) Provision may be made by law for the taking of easements, by like proceedings, for the drainage of the land of one person over or through the land of another.
(c) Private property taken by eminent domain pursuant to a petition to initiate condemnation proceedings filed on or after January 2, 2007, may not be conveyed to a natural person or private entity except as provided by general law passed by a three fifths vote of the membership of each house of the Legislature.
History.—Am. H.J.R. 1569, 2006; adopted 2006.
Additionally, because the Florida Constitution, Florida Statutes, and Florida Supreme Court decisions did not explicitly prohibit takings for economic development – including, but not limited to, creating jobs or enhancing the tax-base – the Florida Legislature passed HB 1567 to specifically remove the eminent domain power from Chapter 163, Florida Statutes, (the “Community Redevelopment Act”), and explicitly identify, by exception, the only valid public purposes for which private property may be taken and result in the transfer to another private entity in Chapters 73 and 74, Florida Statutes (the “Florida Eminent Domain Code”). Governor Bush subsequently signed the legislation into law, which is now codified in §73.013 and §73.014, Florida Statutes, which applies to all eminent domain petitions filed under Chapter 73 or 74, Florida Statutes, on or after May 11, 2006.
With the legislative changes, §73.013, Florida Statute now reads as follows:
Chapter 73, Florida Statutes (2006 Amendments)
§73.013 Conveyance of property taken by eminent domain; preservation of government entity communications services eminent domain limitation; exception to restrictions on power of eminent domain. —
(1) Notwithstanding any other provision of law, including any charter provision, ordinance, statute, or special law, if the state, any political subdivision as defined in s. 1.01(8), or any other entity to which the power of eminent domain is delegated files a petition of condemnation on or after the effective date of this section regarding a parcel of real property in this state, ownership or control of property acquired pursuant to such petition may not be conveyed by the condemning authority or any other entity to a natural person or private entity, by lease or otherwise, except that ownership or control of property acquired pursuant to such petition may be conveyed, by lease or otherwise, to a natural person or private entity:
(a) For use in providing common carrier services or systems;
(b) 1. use as a road or other right-of-way or means that is open to the public for transportation, whether at no charge or by toll;
2. for use in the provision of transportation-related services, business opportunities, and products pursuant to s. 338.234, on a toll road;
(c) That is a public or private utility for use in providing electricity services or systems, natural or manufactured gas services or systems, water and wastewater services or systems, stormwater or runoff services or systems, sewer services or systems, pipeline facilities, telephone services or systems, or similar services or systems;
(d) For use in providing public infrastructure;
(e) That occupies, pursuant to a lease, an incidental part of a public property or a public facility for the purpose of providing goods or services to the public;
(f) Without restriction, after public notice and competitive bidding unless otherwise provided by general law, if less than 10 years have elapsed since the condemning authority acquired title to the property and the following conditions are met:
1. The condemning authority or governmental entity holding title to the purpose for which it was acquired by the condemning authority or for which it was transferred to the current titleholder; and
2. The owner from whom the property was taken by eminent domain is given the opportunity to repurchase the property at the price that he or she received from the condemning authority;
(g) After public notice and competitive bidding unless otherwise provided by general law, if the property was owned and controlled by the condemning authority or a governmental entity for at least 10 years after the condemning authority acquired title to the property; or
(h) In accordance with subsection (2).
(2) (a) If ownership of property is conveyed to a natural person or private entity
pursuant to paragraph (1)(a), paragraph (1)(b), paragraph (1)(c), paragraph (1)(d), or paragraph (1)(e), and at least 10 years have elapsed since the condemning authority acquired title to the property, the property may subsequently be transferred, after public notice and competitive bidding unless otherwise provided by general law, to another natural person or private entity without restriction.
(b) If ownership of property is conveyed to a natural person or private entity pursuant to paragraph(1)(a), paragraph (1)(b), paragraph (1)(c), paragraph (1)(d), or paragraph (1)(e), and less than 10 years have elapsed since the condemning authority acquired title to the property, the property may be transferred, after public notice and competitive bidding unless otherwise provided by general law, to another natural person or private entity without restriction, if the following conditions are met:
1. The current titleholder documents that the property is no longer needed for the use or purpose for which the property was transferred to the current titleholder; and
2. The owner from whom the property was taken by eminent domain is given the opportunity to repurchase the property at the price that he or she received from the condemning authority.
(3) This section does not affect the limitation on a government entity’s powers of eminent domain contained in s. 350.81(2)(j).
(4) The power of eminent domain shall be restricted as provided in this chapter and chapters 127,163, and 166, except when the owner of a property relinquishes the property and concedes to the taking of the property in order to retain the ability to reinvest the proceeds of the sale of the property in replacement property under s.1033 of the Internal Revenue Code.
History.—s. 1, ch. 2006-11.
Given the above 2006 changes to Florida law, Faith Deliverance Temple contends that the City of Orlando is without the authority to condemn or to exercise the power of eminent domain because:
(a) The City seeks to take property by eminent domain from Defendant, Faith Deliverance Temple, Inc., and convey the property to Orlando Sports Holding, LLC, without first obtaining a three fifths vote of each house of the Legislature in violation of Article X, Section 6 (c) of the Constitution of the State of Florida; or
(b) The City seeks to take property by eminent domain from Defendant, Faith Deliverance Temple, Inc. and convey, by lease or otherwise, the ownership or control of the property to Orlando Sports Holding, LLC, without a valid public purpose that is explicitly identified, by exception, in §73.013 (1) (a) – (h), Florida Statutes, exceeding the authorization to use the eminent domain power within Chapters 73 and 74, Florida Statutes.
The 2006 changes to the Constitution of the State of Florida and to Chapters 73 and 74, Florida Statutes, were intended to restrict or prohibit the use of eminent domain which resulted in the conveyance of ownership and control of the property taken to another private entity when the alleged purpose was for public benefits associated with economic development. The City of Orlando does seek to convey ownership or control of the property taken from Defendant, Faith Deliverance Temple, Inc. to Orlando Sports Holdings, LLC, a private entity, following its public acquisition. The purpose alleged in the Petition for the taking is to construct “a unique mid-sized forum for sports, recreational, educational, and entertainment activities” is not explicitly listed, by exception, in in §73.013 (1) (a) – (h), Florida Statutes. (It does not fit within any of the valid public purposes established by the Florida Legislature when intending to prohibit or restrict the use of the eminent domain power which is purported to serve economic development purposes). Likewise, the City, unabashedly asserts in its Petition that the justification for taking the property from Defendant, Faith Deliverance Temple, Inc. and then conveying the property to Orlando Sports Holdings, LLC, to construct a soccer stadium constitutes a public benefit “by providing employment and increasing tourism within the City of Orlando, as well as improving the aesthetics and economic opportunities in the area.”
As this is the first case to test the 2006 changes to Florida law, it remains to be seen how the Florida courts will decide the issue – stay tuned.
To read more about how this case is unfolding, see below links:
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