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Urban renewal, property rights collide in city; Business owners fear condemnation plans


For 15 years, Korea native Young Cho paid up to $5,300 per month to rent downtown Baltimore shops, before breaking out of the economic bondage and buying her own Lexington Street building.

Now, four years after opening a successful beauty salon at 112 W. Lexington St., Cho stands to become the victim of an economic trend rolling across America: city governments taking one business and handing the property to another.

Cho's Wig House Beauty Salon is one of 127 properties slated to be condemned by the city to revitalize a decomposing 18-square-block area on the west side of downtown.

Although she will be compensated -- Cho's property will valued by independent appraisers -- her plight suggests the urban renewal movement forged nearly 45 years ago is gaining new momentum nationally. Experts attribute it to the collision of three circumstances: rock-bottom downtown property values, developers with money to spend from an economic boom and cities desperate to reignite downtowns.

The land grab is evident most recently in New York City, which plans to take over newly renovated buildings and move the New York StockExchange across the street. From Home Depots slated for East Harlem to motor speedways being built in East St. Louis, the movement is aggravating property rights advocates and business owners who call the process immoral.

"All my life, I work toward the American dream of having my own property," said Cho, 55. "Finally, I get my own building and the city wants to takeit. They kick out the small businesses, but somebody is going to make a lot of money."

City proponents of taking property through eminent domain say they have little choice. With city budgets stagnating and open space for development nonexistent, the only way to bring new tax dollars and life into cities is to knock down the weak parts and start over.

"If this area was in terrific shape and all the merchants were doing well, we wouldn't have to be here," said M.J. "Jay" Brodie, president of the Baltimore Development Corporation, the city's non-profit business recruiting arm, which is pushing the redevelopment plan. "Is the city supposed to sit by and do nothing?"

The taking of private property for public use in America dates to Colonial times, when courts allowed farmers to build roads across private land to establish a national road system. Takings expanded to other purposes, such as building dams, with government arguing the welfare of the whole supersedes the rights of the property owner.

But the law took on new power in 1954 when the U.S. Supreme Court let Washington condemn a department store in the city's southwest section as part of "slum clearance." The store owner, Sam Berman, argued that his business shouldn't be cannibalized to improve the deteriorating neighborhood.

Berman's personal nightmare turned into a long-standing national horror for small business owners in deteriorating urban areas.

"The language was absolutely breathtaking in its scope," said Gideon Kanner, professor emeritus at Loyola Law School in Los Angeles. "What they said was 'The end justifies the means.' They in fact set in motion an army of bulldozers."

Baltimore became one of the nation's first cities to capitalize on the ruling, condemning 33 acres of downtown property in 1959 to create Charles Center. Five years later, the city unveiled the Inner Harbor Plan to redevelop 230 acres of warehouses, sheds and docks into a tourist mecca.

Now, the city has its sights on the west side of downtown, announcing last year a $350 million plan that will include the $50 million renovation of the Hippodrome Theater at 12 N. Eutaw St. The project would tie the Inner Harbor to Charles Center and the expanding University of Maryland, Baltimore, in effect creating a new city core.

The price? Possible economic extinction for small mom-and-pop businesses like Cho's.

"It has become morally acceptable," said Kanner, who has studied the process for 45 years. "It's morally outrageous for the government to take this property, to under compensate these people and turn it over to a private developer."

City leaders understand the frustration. (BDC president Brodie served as city community development director during the harbor resurgence.) But they view the condemnation as benefiting the citizenry as a whole by providing new tax dollars and jobs, and attracting new residents to a city losing 1,000 people per month.

Among the downtown properties slated for redevelopment under the plan, one out of four is vacant.

"There are some good buildings and some good businesses," Brodie said. "There are also a lot of vacancies."

One entity expected to profit from the renovations is one of its chief proponents, the Weinberg Foundation. The $1.2 billion philanthropic group has announced plans to build a $70 million call center at the former Stewart's Department Store it owns at Lexington and Howard streets.

But the foundation also proposes building apartments and new shops around the center, requiring the city to take properties such as Cho's. Joel Winegarden, a foundation spokesman, said taking the surrounding properties is necessary to make the project economically viable.

Shop owners like Cho welcome redevelopment but do not understand why viable businesses such as theirs must be sacrificed. Surveys show that 85 percent of the businesses taken in condemnation will not survive, Kanner said.

City leaders are discussing an option that would give strong businesses first option in buying or leasing new shops. Jeffrey Finkle, head of the Council for Urban Economic Development in Washington, welcomes such steps.

Finkle, whose agency serves as an association of city redevelopment boards, contends the condemnation process is fair because property owners are compensated. But he believes cities have erred in the process by not allowing shop owners like Cho to become part of the plan.

"We don't look at these clearly viable businesses and do a good job of helping them move to a new location," Finkle said.

For now, Baltimore and shop owners like Cho who feel threatened by condemnation are digging in their heels for battle. "I am not going to move out," Cho said. "I am going to fight with all my strength."

But until someone takes another condemnation case to the Supreme Court, Kanner said, cities will continue to have the upper hand. Brodie has been meeting with affected property owners over the last two months, much like an economic undertaker trying to brace them for the process.

"This is the difficulty of the situation; there is no getting around it," he said. "If we didn't have to take any of these properties, we'd be the happiest people in town."

Pub Date: 1/12/99

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