When Eminent Domain Isn’t Really for ‘Public Use’

For the longest time, there’s been a notable imbalance between the attention and credit given to the demand side of the economy, and that given to the supply side.  Part of remedying this is highlighting the risk taken in creating the supply and bringing it to market. 

Recent events near the Alamo have brought into sharp focus the lack of respect entrepreneurs and small businesses face in doing so.

After years of unsuccessful attempts by the conservative Texas General Land office and the Alamo Trust to persuade Vince Cantu to sell his Moses Roses Hideout, the liberal San Antonio city council (acting on their behalf) voted 9-2 to authorize eminent domain on his bar to make way for their Alamo Museum and Visitor Center.

The two sides have been far apart in negotiations, with the Alamo Trust’s last offer being $3.5 million versus the “ridiculous” $17 million Mr. Cantu is asking.  One casualty in this whole saga is a basic understanding of opportunity cost.

Part of Mr. Cantu’s figure factors in how much he thinks he’d be losing given the “expected economic success” from the impending renovation of the Alamo grounds.  But there’s also the matter of all the work he’s put into it to make it successful.

Folks like Mr. Cantu are a rare breed given their high threshold for risk.  They give up a steady paycheck, commit substantial savings and/or incur untold levels of debt, put in endless hours to see an idea to fruition.  A business is essentially another child in the family.

Though some in the media dismissively feel his is “just” another one of “50” bars downtown, it’s employing people, feeding their families, putting students through school, etc.

One party that does seem to understand this is the Alamo Trust.  They have stated that “without the ticket revenue from the 4D theater, the entire project becomes unviable.” 

This calls into question the propriety of invoking eminent domain.

The U.S. Constitution permits such seizures in the interests of “public use,” though not “without just compensation.”  This could be an opportunity for the Supreme Court to revisit the controversial Kelo vs. the City of New London case of almost two decades ago. 

A 5-4 court justified that taking on the grounds that the beneficiary would promote “economic development,” which in turn qualified as “public use.” 

Public goods are generally understood to be those from which the public as a whole directly benefits, that no single individual pays for.  Roads, rail, flood control, etc.  In other words, core government functions. 

Providing “retail and private event space” is not that. 

To then claim that without it “city/state support” would be required is a misdirection and an insult to taxpayers.  But then the taxpayer has already been trotted out as a strawman here. 

The concern about the “greedy … extortion of the taxpayer” is curious.  If that, and “economic development,” are genuine worries, why not decry the shakedown of them on the front-end in the property tax assessment process? 

In fact, the only reason the taxpayer was introduced into this was because of the heavy-handed actions of the city and state. 

Alas, Mr. Cantu is merely an “unwanted tenant” to be “rid” of.  If that’s what they think about him, what must they think about anyone else who protests in defense of their property and forcible taking of their livelihood?