Nation's Fifth Largest Bank Makes a Statement

BB&T based in Winston-Salem, NC is the nations fifth largest bank with more than 1,400 branches. According to the New York Times the Chief Executive Officer of BB&T, John A. Allison, announced that his bank will not provide loans to developers whose project involves property that was taken by eminent domain for private development.

Mr. Allison is quoted in the Times as saying "The idea that a citizen's property can be taken by the government solely for private use is extremely misguided- in fact, it's just plain wrong."

Kudos to Mr. Allison and his unprecedented position. Coming from a real estate broker this may sound satirical, however the truth is I agree with him. If both parties, that is, if both the developer and the homeowner/property owner cannot agree on a price, why should the developer have a trump card (which undoubtedly he has mentioned in initial conversations with the homeowner)? The threat is only the tip of the problem. What about fair market price? Come on, it's no secret what the inside joke is on appraisals (MAI- Made As Instructed). A better way to compensate the homeowner is a nationally approved forumla where the homeowner is paid 5,6,7, or 10 times the most recent comparable transfer, where the comparable has 95% of the same characteristics as the subject property. If the homeowner still doesnt want to sell his property? Right Bauer! He shouldnt have to sell.

Link to Article

Supreme Court Hearing

The Ohio Supreme Court will be the first supreme court to hear oral arguments on the constitutionality of taking private land for private development since the Kelo V. New London, Conn. Supreme Court Decision. The case involves the City of Norwood's desire to take five residential homes and small businesses by eminent domain in order for Jeffrey R. Anderson to expand his very successful Rookwood Commons. The U.S. Supreme Court last summer gave the government broad powers to take land under the U.S. Constitution, even when property is not blighted or deteriorating. In November Gov. Bob Taft signed into law a moratorium that prevents cities from taking unblighted property for economic development. The moratorium lasts until December 31, 2006.

What are your thoughts regarding the taking of private land by local governments for private development?