Hotel Conference Center May Trump Private Property in Eminent Domain Case

Would you let the government take your car and give it to someone else? How about your computer, television set, house, or business? What if the government said you would be compensated, yet gave you no other choice?

That's the dilemma in Auburn, New York, where the city is threatening to invoke eminent domain to force the sale of private property for a commercial hotel conference center, saying the public good outweighs the private property rights of some citizens.   And it's legal.

"This is abuse, it’s one case of eminent domain abuse," says Renee Smith-Ward, owner of a dog grooming salon, Wag'In Tail that could be plowed down for the hotel's parking lot.

"I don't believe it’s right to take someone's property away from them for a hotel, for a private developer," says Smith-Ward.

"These people just want to come in and steal it from you," says property owner Michael Kazanivsky, who says he has dreams to build a family amusement center on what is now a grass and rubble filled lot. "They're trying to take it from me," he says bitterly, "it's not right."

Kazanivsky told Fox News that he put his "heart and soul into it," and now "someone just comes and says 'I want that, give it to me or that's it!’ It’s hell."

The plan would put an $11 million, 88-room-hotel on what is now a mixture of an abandoned building and two businesses. The city says the center would be the site of an annual music festival planned for 2012, and that eminent domain would be used only if the developer and property owners cannot agree on a deal.

"Eminent domain, no one likes it," concedes Auburn Mayor Michael Quill, a no-nonsense former Marine and long-time former fire chief of the city, who has a photograph on this desk with former Governor Sarah Palin and her husband Todd.  The Palins visited Auburn last summer during the commemoration of the 1867 purchase of the Alaska territory by U.S. Secretary of State William Seward, whose house is across the street from City Hall.

But it is Auburn's current land dispute that has caused so much controversy here, as Mayor Quill and other officials contend the benefits of the hotel project simply outweigh the concerns of the property owners.

"We have a responsibility to the entire community," Mayor Quill explains, saying "we do not want to hurt an individual property owner or business owner, but we have to look at the long range for the entire community."

The prospect of the government forcing the sale of someone's land against their will has touched a nerve here. There have been protests and calls against the plan.

Click here to watch video.

Two property owners reportedly have reached an agreement, including a Chinese restaurant whose owners emigrated from Communist China and said in public hearings that they never knew there was a law on the books in America that permitted the state to seize their land for private, commercial purposes.

"Do you want to use eminent domain to get those properties?" asks Jim Dacey, the head of the Auburn Industrial Development Agency –the group that will use eminent domain on behalf of Pioneer Companies, the private developer. "I don't think anybody wants to use eminent domain."

But that is the exact threat, the landowners say if they don't cower under the pressure from big business, in partnership with the city.   A hearing has been set for May 5th, to determine if Auburn will resort to using eminent domain. 

Dacey told Fox News that "there has to be a good reason" for eminent domain to be used, "and in this case there is." He says the property owners are "being offered more than a fair price for their property," noting the guidelines call not just for a current appraisal, but a second independent one, and that the offers have been "generous, above current appraisals."

But Smith-Ward blasts the offers as a "very insulting price for our property," and said she was stunned to learn that the city was considering seizing the business she and her husband Doug had sunk their life savings into only to hand their land over to someone else. She told Fox News she always thought eminent domain was "for power lines, roads, schools, hospitals and not for a private developer."

Five years ago the United States Supreme Court ruled that communities could use the power of eminent domain to help private interests, if the result was for the public good. The case centered on New London, Connecticut, where a neighborhood was razed to make way for a private development that never came.

The main plaintiff was resident Susette Kelo, who’s little, pink house was moved to another part of town and now stands as a symbol of regular citizens fighting the government's use of eminent domain. The city's plans fell through and the blocks that were torn down remain largely empty to this day, save for the overgrown weeds and wild cats that roam the desolate area.

"In the wake of Kelo, we have learned about this abuse of power," notes Christina Walsh of the Institute for Justice in Washington, D.C., which has advised the Wards.

"There is nothing that Americans cherish more than property rights. We cannot allow local governments like Auburn to think they can take what you've worked so hard to own --your family home, your small business -- simply to give it to someone else who promises to build something bigger and newer."

Smith-Ward never thought this could happen in America, so she and her husband suddenly were thrust into negotiations with Pioneer Companies, which did not respond to our request for an interview. They hope to keep their business even if the new hotel is built, but their fellow property owner Kazanivfsky remains adamant.

"I don't want to sell," he says defiantly. "It's mine, I bought it," he insisted to Fox News. Standing on the grass of his property, Kazanivfsky started to quietly weep. Through his tears, he also said he did not think that in America, the power of the government could be used against citizens to take what is not theirs.

"I'm going to fight all the way to the end," he vows.

If you have a property rights story for Fox News to investigate, e-mail Senior Correspondent Eric Shawn and Producer Becky Diamond, at: Their reports can also be seen on Sundays, at 11 a.m. ET on the Fox News Channel.