Mississippians cheered the arrival of big league economic development this decade with Nissan’s arrival in Canton and Toyota pending move into Blue Springs.
But a property rights movement is working to blunt the enthusiasm for more economic bonanzas — at least if state incentives include offering the mega employers private property the state would seize through eminent domain.
The Mississippi rift has its origins in legislation that goes back to the start of the decade and the state’s bid to land Nissan. A high-profile legal battle to take one family’s 24-acre homestead in Canton brought significant attention to eminent domain issues. Though the property owner successfully repelled the state’s bid to take his land, anxiety over property rights grew.
Then came the U.S. Supreme Court’s 2005 ruling in Kelo v. the City of New London that deemed New London acted within the Constitution when it took private property on behalf of private enterprise. States across the nation, and especially in the South, acted to change either their statutes or constitutions to prohibit such takings.
Now it’s Mississippi’s turn. More than 119,000 Mississippians signed a petition seeking statewide voter approval for a constitutional amendment to outlaw the taking of private property for private purposes. The citizens’ initiative came after Gov. Haley Barbour vetoed a bid by legislators to restrict future taking of private property for private development.
Barbour, who leaves office at the end of the year, calls the constitutional amendment a sure-fire way to gut economic development in the state and to ensure no more Nissan or Toyota-type deals comes its way again.
Barbour’s departure leaves 78-year-old real estate investor Leland Speed as the lone combatant against the amendment. Speed is running the Mississippi Development Authority until a new governor takes office, having been put there by Barbour after the departure of Gray Swope for a top economic development post in Florida.
But Speed stressed he is acting as a private citizen — not the MDA chief — in suing to stop the referendum (which he expects would result in a landslide win for the amendment).
“I just can’t sit still as a citizen” and watch Mississippi get knocked out of any serious competition for economic development projects, said Speed, who in private life is chairman emeritus of Parkway Properties, a national real estate investment trust based in Jackson.
Speed acknowledges he is contesting the issue on a “technical violation” that argues the Mississippi Legislature should also have approved placement of the amendment on the ballot. “The constitution (of the State of Mississippi) spells out how you do it and this ain’t how you do it.”
Nothing to fix
“Here we are trying to fix a problem we do not have,” Speed says.
Mississippi brought two auto plants to the state and condemned only two acres — both for the Blue Springs Toyota plant — and failed in a bid to take 24 acres from the Lonzo Archie family in Madison County as part of the Nissan project.
One of the acres taken in Blue Springs belonged to a Baptist Church whose congregation disbanded in 1927. Now, says Speed, “$333,00 is sitting up there in cash in a trust account waiting for somebody to come and claim it in the name of the church.”
Without eminent domain, Toyota could not have built on the site since no one was around with whom to negotiate a land purchase, Speed says.
Deal or no deal
Fast forward to a future in which Mississippi has firm limits on eminent domain. In that scenario, Mississippi does not get Toyota to the bargaining table, Speed says.
As someone accustomed to looking at deals and the tradeoffs involved, Speed says he can’t square eliminating a key economic development tool in exchange for the opportunity to invoke a rarely used property right.
Eminent domain’s key value is its power to help the state assemble various tracts that meet the special needs of a mega-industrial prospect; for instance, two points of access to keep supplies and product moving in and out of the plant in case one of the roads is blocked. Rail access, which has become limited in the state with the loss of more than 1,000 miles of track in recent years, is also vital, as is access to potable water and natural gas.
Then there are the environmental suitability aspects such as wetlands displacement.
“It goes on and on,” Speed says of the needs of the big prospects.
Assembling a mega site takes a lot of time, but often the state that gets the deal is the one that has a deal ready to go with no hitches, Speed notes. “When the time comes and you have to make a deal with one of these operators, you have to be able to deliver now with no qualifications,” he adds.
It can come down to whether Mississippi can deliver a clear title “today,” Speed says. You can’t tell the prospect, “We’re going to go see this farmer and see if he is in a good mood.”
Although once in motion the deal moves rapidly, Speed emphasizes that any taking of private property undergoes scrutiny from the local city hall up to the governor’s office.
The first approval must come from the governing board of the city or county in which the property is located, followed by approvals from the Mississippi Development Authority, both houses of the Legislature and the governor.
The courts are a final recourse, and can be receptive to property owners’ arguments, as Canton’s Archie family found earlier in the decade. “I think that case really puts a big fat dot at the end of the sentence. The system works,” Speed says.
“Show me a victim of something that has been working for 100 years,” he says. “We have a system that allows us to protect private property rights and assemble large blocks of land.
“We’ve got a great system in Mississippi. Sometimes we get things right. And this is something we got it right.”