In a Jan. 4, 2002, editorial headlined, “Mississippi Churning,” The Wall Street Journal scolded the state for its handling of the eminent domain process related to the Nissan auto manufacturing facility in Madison County.
Its lopsided cast of characters include: Landowner Lonzo Archie; Stephanie Parker-Weaver, director of the Mississippi chapter of the Southern Christian Leadership Conference; and Richard Epstein, a University of Chicago law professor.
Epstein’s contribution: “You get frequent corruption as people pressure city halls to seize land on the cheap.” The implication that state officials and economic developers may be categorized as such raised ire among the business community.
In the editorial, the Mississippi Development Authority was painted as a bulldozing unrelenting force, former executive director J.C. Burns was vilified as inept, and the Mississippi Supreme Court was viewed as sympathetic after it “halted seizure proceedings in every eminent domain case connected to the Nissan project while (considering) the constitutional issues.”
The editorial said that the 30 acres owned by three families are located at the southern tip of the 1,400-acre project and indicated that Burns said the land wasn’t needed to ensure the factory was built. He was quoted as saying in September: “It’s not that Nissan is going to leave if we don’t get that land. What’s important is the message it would send to other companies if we are unable to do what we said we would do.”
“The spin on it is that we were being unfair,” said Burns, now president of Strategic-e-Media, an economic development consulting group in Ridgeland. “The truth is that what was agreed to with other landowners was completely in line. It appears to me that Stephanie (Parker-Weaver) was instrumental in seeing the state get negative national publicity.”
MDA spokesperson Sherry Vance called it “one of the most inaccurate, unfair depictions of the State of Mississippi that I’ve read in a while.”
“Once again, Mississippi was characterized negatively at the same time we brought one of the largest developments in the world to the state,” she said.
Robert J. Rohrlack Jr., who took over as MDA executive director in December, fired off a rebuttal letter to The Wall Street Journal, pointing out that the writer was “factually deficient regarding the land issues surrounding the Nissan automobile plant in Canton, Mississippi, and uninformed as to Mississippi law on the subject.”
The letter read, “For background purposes, in November of 2000, Nissan announced plans to build a $930-million automotive manufacturing plant, creating 4,000 direct jobs and upwards of 26,000 spin off jobs. Additionally, other supplier companies have announced another $250 million in investment and 2,000 new jobs since November bringing the total investment to almost $1.2 billion and the ultimate creation of 6,000 direct jobs.
“As part of the state’s commitment to Nissan, we agreed to acquire the necessary acreage to build the plant and related infrastructure projects. To date, only 29 acres, located on three parcels, remain to be acquired. Over 60 landowners have willingly sold their properties and the state has acquired 1,400 acres over the last 14 months. Please note that the vast majority of Mississippians, including those who sold their land for the development of the Nissan project, warmly welcome Nissan to Mississippi and applaud the state’s efforts in this regard.
“The ‘public use’ and benefit of such an enormous project should be self-evident, especially for a state striving to expand opportunities for its citizens. Certainly our Legislature, through the adoption of several acts in support of this major development thought so.
Additionally, the engineering schools at our universities will benefit directly from collaborative programs and research that will be developed at a newly formed center for automotive engineering excellence. The decision of what is ‘public use’ is for the Mississippi legislative and judicial branches to determine, and not the editorial board of The Wall Street Journal.”
Rohrlack was incensed at the mention of “unjust compensation” and “Mississippi’s efforts to uproot homeowners from their land.”
“You should know that while the state was able to acquire these 1,400 acres, none was acquired through eminent domain proceedings,” he wrote. “All of these landowners were paid far more than the appraised value of their farmland and twice the appraised value of any improvements on the property. The characterization of Mississippi’s efforts to unjustly compensate these property owners including the few who have resorted to eminent domain court is wrong and unjust.”
Rohrlack said the assertion of “the state’s willingness to bring out the bulldozers for no good reason” was also untrue.
“The state has formulated plans to meet the project’s needs with little disruption to property owners,” he wrote. “And the term ‘quick take’ is certainly a misnomer since we have been in negotiation for over 14 months with the three landowners for their 29 acres of land. Your article unfairly depicts the process that has occurred.”
Burns said Nissan initially told the state that 700 to 750 acres was needed for the project, which initially called for 1,500 employees. The Madison County Economic Development Association (MCEDA) optioned the initial acreage. Two months later, Nissan expanded the project to 1,400 acres to accommodate 4,000 employees and the state began appraising the additional land, most of which appraised for $2,300 to $2,500 per acre before the announcement. The state filed an eminent domain suit against Richard Hixon, who purchased 347 acres at $2,300 an acre a month and a half before the official announcement.
“Here’s what we were left with: one tract of land of 205 acres, an option that MCEDA acquired for $10,304 an acre,” Burns said. “Then there was another tract (439 acres) with an option price of $7,500 an acre and a 75-acre tract, which unfortunately was in the center of where the building was going to be and was optioned at $60,000 an acre. The trust department at Trustmark National Bank had 530 acres in one of their accounts and the option on that was $24,500 per acre. Again, the company didn’t require us to, and we didn’t feel we needed to at that time, go out and get the smaller tracts under control before the announcement because so many people were involved in those tracts and we had to keep the project confidential.”
When the project was announced, Burns said MDA went through a process of trying to find a fair way to pay the people for the land in the smaller tracts.
“We took an average of what we’d paid for all other tracts, which was between $18,000 or $18,500 an acre,” he said. “When we looked at the map, we saw that every one of the pieces of smaller property touched on the property that Trustmark had in its trust account. Instead of paying the average price per acre, we offered each one of these landowners the $24,500 per acre that the bank had exacted from the state. In addition to that, we had any building on each property appraised, whether it was a residence, barn or whatever, and we offered them two times the appraised value of the building. Plus, if they lived on the property, we paid their relocation expenses.
“That is not an insignificant amount of money for any landowner. It’s about 10 times the appraised value of the property. The state did not try to lowball them, steal it or anything else. The state tried to be fair to everybody in the situation.”
Burns said the 4,000 jobs at Nissan paying an average of at lea
40,000 a year, and the 2,000 tier one supplier jobs paying an average of $25,000 a year, resulted in a $210-million annual payroll for direct Nissan jobs.
“How much is the additional property worth to Nissan? In my view, that company doe