Insurance Not Part of Study
Eminent Domain A Critical Tool for Redevelopment

Insurance Not Part of Study

Ken Cornell’s comment in the August issue on the study Kris Wernstedt and I wrote about in the June issue needs to be clarified, since it gives an impression about the incentives we studied that could lead to policy or practice errors.

I agree fully with his concluding observation that “recommendations on how legislative and regulatory changes can improve private sector response to brownfield development should take priority over recommendations to replace private sector capabilities that already exist.” That is precisely what we did in our study.

Third-party liability protection certainly is available from insurance companies. However, that is not what was tested. What we examined was the value of 100 percent protection from any possible losses from a third-party claim. This protection can only be assured through legislation barring such suits over post-remediation damage from sites with government-approved mitigations, under consideration in a number of states. 

For insurance to provide comparable protection, there would have to be assurance that no claim is ever rejected, and the policies issued would have to have no dollar limits on the claims. No such product is available. Such assurance requires public sector action. The protection might be more cost-effective for a state to offer than subsidies to site mitigation or redevelopment costs. That is why we studied such protections as alternatives to the common financial incentives currently offered.

Peter B. Meyer, University of Louisville

Eminent Domain A Critical Tool for Redevelopment

In my view, the Kelo decision carefully balanced the pros and cons of government intervention in private property issues and came out on the side of recognizing important public benefits that can stem from the responsible use of eminent domain for public purposes, such as remedying blight caused by underutilized sites, including brownfields.

Unless states elect to use their legislative powers to turn the tide, Kelo should continue to support the growth of brownfield redevelopment (including environmentally friendly preservation projects) to create neighborhoods, help stabilize local tax bases and create jobs and a better way of life.          

This holding has highlighted for the nation how critical a tool condemnation can be to the successful reuse of land, if handled responsibly. Federal and state legislators and the courts will continue to opine on the issue, and on the applicability of this case to a variety of scenarios, as all levels of government continue to balance the important policies behind eminent domain. BFN

Phyllis E. Bross, Esquire, Parker McCay