Commercial real estate developer KMS lost its recent battle with the City of Rowlett over the condemnation of a private drive built to allow access to its 9-Acre property sites. Tensions began to rise after KMS refused to come to terms on a deal to allow the creation of an easement between their private drive and a project being developed by neighboring land developers, Briarwood. The project in question, the building of a Sprouts Grocery Store; which had heavy investment from the City in the form of $225,000 worth of incentives. The amount would be guaranteed, provided that Briarwood could create access to the grocery store via the easement in question. The City had been attempting to draw in a high end grocery store project for nearly a decade. When KMS refused to sell, the city filed condemnation proceedings in order to acquire the land for the project themselves.
KMS took the city all the way to the Texas Supreme Court claiming the condemnation of the land was not for “public use”. The real estate developer believed that eminent domain could not be applied to the land the government was taking, because they intended to turn it over to Briarwood for fraudulent economic benefit, and to see the completion of the Sprouts project. This argument relies heavily on Section 2206 of the Texas Government Code, which limits the use of Eminent Domain for economic development and private benefit.
The Supreme Court ultimately, in a 6-3 decision, agreed with the city and its argument for condemnation. The City of Rowlett insisted that because the easement was for a road that provided public access to and from Sprouts, it met the requirements for public use. The court upheld that just because it did provide an economic benefit to Sprouts, Briarwood, and potentially even KMS by drawing more people into the area, didn’t mean that it also couldn’t meet the requirements laid out in the Texas State Constitution.
This case highlights the difficult journey land owners face in challenging eminent domain and the taking of their property. The case reaffirms that the burden of proof falls entirely on the land owners losing their property, and in order to defend misuse of Eminent Domain, they must somehow prove the project is being done exclusively for private benefit.