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Trouble down-river

| Sunday, May 26, 2002

WHEELING, W.VA. This old, weary, but still charming Ohio River town already has too much in common with Pittsburgh for its own good.

Her aging population has fallen by half since 1950. The basic manufacturing industries she grew rich and powerful on – steel, iron and glass – are virtually extinct. Her central downtown — once a bustling regional capital of commerce and culture – is sleepy by day and nearly dead by night.

Now it looks as if Wheeling might soon have something else it would rather not have in common with her bigger, upstream industrial sister – a national reputation for eminent domain abuse.

The city powers in Wheeling – backed by $70 million in special state economic redevelopment funds they received May 8 – have big plans for turning their two main downtown shopping streets into a $159 million Victorian outlet mall that would affect 230 parcels of property and 90 property owners.

The mall is being billed by its boosters as the development that will save downtown Wheeling. But streets full of Brooks Brothers, Ann Taylor and Nike outlets are a long way off.

Nothing official has happened. Finals plans have not been made public. Developers are now seeking big-name retail tenants and trying to raise the $89 million in private money they still need. And Wheeling City Manager Robert Herron says eminent domain will be used only as "a last resort" and that the city's goal is "to make sure all property owners are treated fairly and according to the law."

But already there's trouble brewing here that has echoes of Pittsburgh's continuing struggle to redevelop Fifth and Forbes avenues Downtown. Owners of certain buildings in Wheeling with businesses that don't fit the outlet mall concept have been told if they don't sell willingly, they'll face eminent domain proceedings.

It's not just strip bars that are being told they'll have to move. It's family-values places like Ty Blice's Maytag appliance store and Ben Schneider's photography studio.

Leaders of a dissident property-owners group known as Wheeling Renaissance, they repeatedly have said that while they are dubious about its success, they are not trying to stop the outlet mall project. They merely want to be a part of it – and to not be pushed around by its creators and owners.

Both Blice and Schneider are archetypal victims of eminent domain abuse. Years ago they put their own money and sweat equity into vacant buildings no one else wanted.

But instead of being rewarded for taking risks and creating glimmers of commercial life in a blighted area, both men — like unwanted property owners in downtown Pittsburgh — have been living in fear of having their property taken by their own city.

<*C*p($,0,$,$,$,$,g)> ——— <#13> <*J*p($,10,$,$,$,$,g)> <*(use drop cap here) Wheeling will never match the ugly record of Pittsburgh, unofficial "Birthplace of Eminent Domain Abuse.” That's not a boast you'll find on Pittsburgh Visitors & Convention Bureau's Web site, but it's true.

When the city redeveloped Gateway Center in the 1950s, it virtually pioneered the modern misuse of the government's power to take private property from its citizens.

Generations of Pittsburgh's public and private power brokers, abetted by state courts, have used eminent domain as a tool to eradicate "blight" and spur economic development. They also have baldly used eminent domain as a means to transfer property from one private party to another private party – invariably a politically powerful individual or corporation.

Pittsburgh has had no monopoly when it comes to abusing eminent domain. Thanks to courts that have stretched the Founders' definition of “public use” beyond all meaning, violating the “takings clause” of the Fifth Amendment has become a national pastime.

According to the Institute for Justice, the libertarian public interest law firm that defends the constitutional rights of property owners around the country for free, there are at least 100 cases of eminent domain abuse in America today.

In Las Vegas, for example, an elderly widow's building is being taken for a casino parking lot under the pretext that it is blighted. In Riviera Beach, Fla., nearly 2,000 buildings are being condemned and 5,000 people are being displaced to make way for a $1.25 billion private development.

Despite these and many other egregious examples of abuse, Scott Bullock of the Institute for Justice says he thinks the pendulum is swinging back the other way — the correct way. Even the biggest supporters of using eminent domain as a tool of economic development have recognized that times have changed, he says.

When Bullock was in Pittsburgh several years ago standing up for property owners threatened by Mayor Tom Murphy's redevelopment plan for Fifth and Forbes avenues, everywhere he looked the fight against eminent domain abuse was up hill.

But today Bullock sees a fundamental shift taking place across the country both in the law and in the court of public opinion – a shift toward greater protection and sympathy for property owners.

“There's a serious grass-roots rebellion under way,” he said, citing cases where eminent domain abuse was thwarted in the last few years in Pittsburgh, Baltimore County and New Rochelle, N.Y. “People see it as fundamentally unfair and un-American to take a home and give it to Costco. It truly is corporate welfare and should be roundly condemned.”

Bullock says the Institute for Justice has been working closely with threatened property owners in Wheeling. The Institute has offered them advice, but wouldn't legally represent them until eminent domain proceedings were initiated. "Hopefully," he said, "we won't have to represent them."

<*C*p($,0,$,$,$,$,g)> ——— <#13> <*J*p($,10,$,$,$,$,g)> <*(use drop cap here) Like downtown Pittsburgh, downtown Wheeling has been officially designated as "blighted" by its own city council, which, according to West Virginia state law, allows the city to use eminent domain as a redevelopment tool. Conveniently, the council members also serve as the members of Wheeling's Urban Renewal Authority – the public body that makes final eminent domain decisions.

City Manager Herron says that the mall developer has been authorized to negotiate sale prices with property owners. Unsettled impasses over price will ultimately be settled according to the law by the city or a judge, he says, as will any decision about using eminent domain to take a property.

That specter haunts Ty Blice and Ben Schneider. Blice, who lives in Upper St. Clair, bought his solid six-story building on Market Street two years ago for $100,000 as a long-term investment. He restored the first floor as a combination Maytag appliance showroom and a year-round Christmas gift shop run by his wife, Jan.

He says he's been offered $150,000 for the building, which he says would result in a net loss after capital gains taxes. Blice is concerned people think he's only holding out for more money, but money's not the issue.

"The bottom line," he says, "is that the building was not for sale, is not for sale and will not be up for sale in the future." It may be hard for pro-mall forces to understand, but it's the principle: he doesn't want to sell his building at any price and doesn't think it's right that the city is trying to force him to do so.

Schneider's property on Main Street was literally falling down when he bought the 1895 structure for $50,000 15 years ago. He and his school-teacher wife, Carolyn, have since refurbished the three-story building to exacting historical standards, doing much of the work themselves, and estimate they have nearly $200,000 sunk into it.

A plaque on the wall from then-Gov. Gaston Caperton says Schneider's building was the state's best restoration in 1989. But Schneider says he was offered $50,000 by the real estate broker assembling the property for the mall developers – and was threatened with eminent domain if he didn't take it.

“It's the usual story,” says Blice, who has followed the Fifth-Forbes struggle in Pittsburgh and attended at a winter conference on eminent domain abuse put on by the Institute for Justice in Washington.

“I've been told I'm standing in the way or progress. And that a Maytag repair place is not suitable. But it makes no difference what I sell. Basically, I'm not in the clique.”CONFLICTS OF INTEREST

<*Blice, 51, said that until recently the local media – TV, radio and The Intelligencer, Wheeling's morning newspaper – were either deaf to the cries of potential victims of eminent domain, in total support of the development or in league with the developer.

He said it took the Charleston Daily Mail – 130 miles away – to first publish the fact that Wheeling Mayor Nick Sparachane and several others involved with the outlet mall project own property on the two streets that will be used for it.

The Charleston paper also pointed out that the lead developer who studied and prepared the outlet mall plan, Danny Aderholt of Century Equities Inc., also owns land bordering on the redevelopment district.

In early March, Aderholt sent a hand-delivered letter to Schneider. It said he could keep his photography studio where it was and have complete control over his own property. And he would not have to abide by outlet mall maintenance fees or hours of operation, which would keep him open seven days a week and late into the evening.

After months of worry and threats of takings, Schneider apparently got a reprieve. “The letter essentially grandfathers us in,” Carolyn Schneider said. “We have what we wanted. If everyone in our group got the same letter, and it was legally binding, all of them would be happy.”

Because it is not legally binding, however, Schneider continues his role as a pesky activist who writes letters, gives interviews to reporters, files Freedom of Information requests and goes on local radio talk shows.

He, Blice and the other dissidents are suspicious that the outlet mall – an idea retailing experts they've talked to say is coming 10 years too late — is really a stalking horse for a new gambling center. As evidence, they cite local Donald Trump sightings in Wheeling and point to the big pilings sticking out of the Ohio River down by the public wharf as future berths for gambling barges.

But John Culler, a spokesman for the mall project, says the outlet mall is no Trojan Horse for gambling. “There is no secret Plan B,” he said, pointing out that there already is a thriving local gambling industry at Wheeling Downs across the river and in the casinos upstream at Mountaineer Racetrack & Gaming Resort.

Except for Blice, Schneider and few others, Culler said, “The vast, vast majority of people in the region would be for the project. The city is not throwing its weight around.”

Culler said the idea is to re-do downtown Wheeling and disrupt as few existing businesses as possible. “We're all in this together and we want to make it work.” He was not happy about having to use eminent domain, he said, but it would only be used as “a last resort.”

Culler knows Blice is the main dissenter. “We like him,” Culler said of the Maytag man. “We don't want him to be hurt. He's a good businessman.”

Another dissident, Don Bence, said he will be happy to lease his parking lot and building on Main Street to the mall developers – as long as he gets a fair price and is guaranteed he'll be able to renegotiate the price if gambling does come to town some day.

“If eminent domain was not involved,” Bence said.” We wouldn't be talking about this issue now. If eminent domain is off the table, we have a great project.”

Blice agrees.

“I'm not arguing about whether downtown redevelopment is a good or bad idea. We all know dressing up the town is a good idea. The argument is about the means by which you are doing it. Why should Ty Blice or Ben Schneider have to give up their stuff to make it work?”

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