Eminent Domain Report

Under Arizona’s Constitution, as under its federal counterpart, a condemning authority may acquire private property if the use to which the acquired property will be put is a proper public use. From the outset of any contemplated acquisition, it is imperative that a governmental entity determine that the purpose for the acquisition will constitute a public use. This article summarizes some of the law governing public use.

A judge must determine that a proposed use is “really public” once an eminent domain action is filed. Ariz. Const. Art. 2, §17; A.R.S. § 12-1132(A). Though statutes deeming certain uses public are not conclusive, they are “of great weight” in making the determination. Humphrey v. City of Phoenix, 55 Ariz. 374, 384 (1940). Under A.R.S. § 12-1136(5)(a), a public use is one where (A) the public entity or general public actually will possess, occupy, and enjoy the land; (B) the land is used for the creation or functioning of utilities; (C) the purpose is to eliminate a direct threat to public health or safety caused by the acquired property; or (D) the property is abandoned. Other statutes delineate certain uses as public uses. E.g. A.R.S. § 12-1111; A.R.S. § 9-511.

Beyond looking for legislative authorization, Courts review the issue of public use on a “case-by-case” basis and consider the proposed use under “its own facts.” Citizens Utilities Water Co. v. Superior Court In and For Pima County, 108 Ariz. 296, 298–299 (1972). “The test is whether the power, if exercised, will promote the general objects and purposes of the municipality. . . .” Id. (quoting City of Phoenix v. Civil Auditorium & Convention Center Assoc., 99 Ariz. 270, 278 (1965)). This is an expansive view that will find a public use even when the public receives purely incidental benefits. Citizens Utilities, 108 Ariz. at 299.

Most of the time, the question is a no-brainer. “When the government proposes to take a person’s property to build streets, jails, governmental buildings, libraries or public parks that the government will own or operate, the anticipated use is unquestionably public.” Bailey v. Myers, 206 Ariz. 224, 228, ¶ 16 (2003). However, public use does not include the “public benefits of economic development, including an increase in tax base, tax revenues, employment or general economic health[.]” A.R.S. § 12-1136(5)(b). And, when a proposed use “will result in private commercial ownership and operation [of the acquired property], the Arizona Constitution requires that the anticipated public benefits must substantially outweigh the private character of the end use. . . .” Bailey v. Myers, 206 Ariz. 224, 230, ¶ 23 (2003)  

In sum, whether a particular use will be deemed a proper public use is a judicial question that must be decided by the Court. Statutory authority is a good place to start, but each case will be decided on its own facts and circumstances. Arizona’s expansive view on public use requires that the exercise of the power of eminent domain promote the general objects and purposes of the municipality. Finally, where property will be transferred to a private party for private commercial use and operations, the public benefits must substantially outweigh the nature of the private use.