South-Western Legal Studies in Business

Eminent Domain Power May Be Used for Private Development Purposes

Supreme Court held that a city has the right to use its powers of eminent domain to take property to be used for private economic development. So long as the city has participated in the planning and believes that it is in the public good for creating jobs and tax revenues, the action is constitutional.

Topic Constitutional Law
Key Words

Eminent Domain; Public Use; Economic Development; Taking

C A S E   S U M M A R Y

The City of New London approved an economic development plan to gain control of some land to be used in a new private development. Some property owners were not willing to sell their houses to the developer, so the city condemned their property. The owners sued, contending that the use of eminent domain by the city for a private developer was unconstitutional because it was not for public use. The Connecticut supreme court approved the taking; the property owners appealed.


Affirmed. The city’s determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to deference. The city has developed the plan to help create new jobs and increase tax revenue. There will be a variety of commercial, residential, and recreational uses. The whole will be greater than the sum of the parts. Connecticut has a state statute that allows the use of eminent domain for such purposes. The state has determined that the private development plan has a public purpose, so it is not an unconstitutional taking. The court will not adopt a bright-line rule for such cases, as they must be reviewed case-by-case.


Kelo v. City of New London, Conn., --- U.S.--- (2005 WL 1459118, Sup. Ct., 2005)

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