By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Eminent domain, the principle that allows government to force a landowner to sell, is usually thought of as serving public purposes, like building new highways. But in the last two years Dallas County's public hospital district has been adventuring in a new version — eminent domain for profit.
Acting on a 2008 consultant's proposal, Parkland Memorial Hospital has been acquiring far more land than it requires for its new $1.3 billion hospital building and campus, some of it as far as half a mile from the construction site, which sits two and a half miles northeast of downtown on Harry Hines Boulevard.
Why? So when the value of the land goes up, Parkland can make money.
None of this is clandestine. When I asked about it, Parkland was candid. The hospital's leaders hope their own new campus and a nearby DART station will drive up the value of some of the land they have acquired, including land taken by eminent domain, creating an opportunity for the hospital to get some needed income — the basic idea behind the 2008 consultant's recommendation.
For example, Walter Jones, a senior vice president of Parkland in charge of the hospital's building campaign, says some of that land could possibly be used for retail development, though "not necessarily being developed by Parkland in the sense that we would pay to build retail.
"But we would certainly encourage a compatible retail development," Jones adds, "if it would help to support the hospital campus."
He calls the idea a way of "looking at our property holdings and expanding or encouraging the new campus development and then in some way, shape or form being able to accommodate the draw we would have, as well as DART, of the community to this location."
Location, location, location. On the one hand, if Parkland is creating a more valuable location all around its own new campus, the reasoning goes, why shouldn't Parkland get some of the gravy? On the other hand, seizing property by eminent domain as part of a sheer real estate play does stretch the concept, some experts say.
Lynn E. Blais, a professor of real property law at the University of Texas, tells me she thinks the concept of condemning land with a specific strategic aim of profiting from enhanced value later may go too far.
"To think of this another way," she writes in an email, "if the hospital had the power to acquire 'surplus land' during an expansion project, why would that power be limited to land around the hospital or to the time frame surrounding the expansion project?
"Why wouldn't the power extend to the hospital's desire to simply condemn land for speculation anywhere in Dallas (or anywhere in Texas for that matter)? There is nothing in the text of the code that would offer a limiting principle."
But that's exactly what is happening. Jimmy Swift, a retired high school shop teacher, owns a small lot on Redfield Street that wasn't included in early maps of the proposed new campus but is now. In fact, Parkland has bought his entire block.
Swift says he told Jones in a meeting, "Why don't you stick to your subject and build your damn hospital? Don't be going out here in the weeds and buying all this stuff."
Jones insists the hospital must acquire Swift's land and the entire block around it, but he's a little vague on why: "In the long-range planning, basically it's surface parking and an expansion base. What we're using it for now, it has become a very vital piece for staging and storage and the like. Whatever."
Matthew Festa, an associate law professor at South Texas College of Law in Houston and an expert on eminent domain, says Parkland's eminent-domain-for-profit idea probably has some law going for it, especially in the federal courts, but may also have some law going against it in Texas.
In its last two sessions, Festa says, the Texas Legislature has enacted reforms seeking to firewall Texas landowners from a 2005 U.S. Supreme Court decision that greatly expanded the ability of government to force the sale of land for nongovernmental purposes. But he says those reforms have been "largely a failure" and are mainly "toothless."
Maybe the Parkland plan will give Texas the court case it needs, he says, to settle where we stand. "Texas could use a good test case to see what the limits of eminent domain are going to be in the future and whether the recent reforms really have much of a bite," Festa says.
Stephen I. Adler, an eminent domain defense lawyer in Austin, says the basic underlying idea — taking land for the purpose of a pure real estate play — is dicey. He cites a number of circumstances under which Parkland could get away with it — if it were part of an effort to eliminate "urban blight," for example — but I had already asked Parkland people about that, and that is not what they are doing.
What they are doing goes back to what Jones of Parkland told me about "being able to accommodate the draw."
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