Court rules in favor of property owners in condemnation case

~ The court said the prime property did not meet all the criteria required to qualify as blighted.

ST. LOUIS -- The state appeals court Tuesday sided with small businesses in the St. Louis suburb of Clayton that challenged the taking of their property for redevelopment in an eminent domain case.

The ruling was the first appellate decision in Missouri that has overturned a finding of blight by a legislative body, in this case the Clayton City Council, said Gerard Carmody, attorney for the small business owners.

The Missouri Court of Appeals said the prime property that was set for redevelopment did not meet all the criteria required to qualify as blighted and make it possible for developer Centene Plaza Redevelopment Corp. to take it.

The appeals court said it would reverse the judgment of the trial court, but, citing the case's importance statewide, transferred the case to the Missouri Supreme Court for review.

Thomas Weaver, attorney for Centene, said he could not comment on pending litigation. Clayton city manager Michael Schoedel did not return a call seeking comment. The city was not a party in the suit.

Centene, a managed health care provider based in Clayton, purchased property in the heart of Clayton to expand and relocate its corporate headquarters. The city of Clayton encouraged Centene to expand the development to include a retail component that would have infringed on several smaller businesses' property.

Before property could be condemned for the $210-million twin towers, office and retail complex, the city had to find the area was blighted. Such a designation for private redevelopment must meet two tests: The area must be considered both a social and economic liability.

The city hired an expert who concluded the area was blighted, based on its economic liability, though the consultant did not draw any conclusions about the area's social liability. The lawsuit ensued.

A lower court ruled in favor of Centene Plaza Redevelopment Corp. in finding the area blighted, but the appeals court Tuesday ruled in favor of Mint Properties and the other smaller businesses whose land would have been condemned.

The appeals court said it found no evidence of social liability, such as criminal activity, at the redevelopment site. The court also noted that "the term, social liability, has not been specifically defined by statute or in case law."

The court didn't even consider whether the property was an economic liability.

A 2006 Missouri law says any finding that an area is blighted must be supported by "substantial evidence," an enhancement of an earlier standard.

Centene moved to condemn before passage of the 2006 Missouri law, and it argued the law was not retroactive.

But the appeals court said the city's determination of blight failed to meet either standard.