I’ve written a number of times now about the ongoing eminent domain case in Longmont, Colorado, just up the street from my house in Boulder. The quick summary: Dillard’s department store is the “last man standing” in the almost completely abandoned Twin Peaks Mall in a prime location south of town. The City of Longmont has a developer who is ready to tear it down and rebuild something newer with more modern shops. Every merchant is ready for the change – and doubtless excited at the chance to be part of something new and growing, rather than moribund – except Dillard’s.
The City has offered Dillard’s $2 million for the building and 7+ acres that the company owns, but in response they’ve not only rejected the offer but turned their department store into a clearance center, so that it looks like there’s a perpetual fire sale going on and is definitely not attracting customers who would be interested in other stores in a shopping mall anyway, let alone the few businesses barely hanging on in a shopping center that looks more like a set for an upcoming zombie horror film than a commerce center for a growing city.
The City of Longmont has tried various remedies, has claimed eminent domain on the land, and most recently, operating as the Longmont Urban Renewal Authority, has hired an outside land assessor who has come back with a valuation of $3.03 million for the store (which will have to be destroyed) and accompanying land. And Dillard’s corporate? No go.
The company is now claiming that their minimum acceptable offer is $6.3 million for the building and land.
Which leads to the same question that I’ve posed here before: where to go from here? If Dillard’s insists on a valuation that’s far beyond the actual value of its holdings, are we going to see the City give up and the mall gradually just slide into being completely abandoned, a blight on the otherwise booming south Longmont area? Or is there a court that can rule “tough luck, Dillard’s” and send in the bulldozers?
Stay tuned. It’s a slow, but fascinating battle of wills. And the loser? All the people of Longmont who could be seeing a new, better shopping area rise and considerably higher tax revenues leading to better city services and a higher quality of life. And for the other merchants in the mall? They can’t but be clear what Dillard’s thinks of their struggles as this argument drags out for years…
I’ve seen these eminent domain plays going on in other parts of the country as well. From Dillard’s point of view there is the asset value of the property and the opportunity value of the business operating on the site. Regardless of the property value, Dillards is deriving value from the location and that needs to be realistically evaluated in the City’s offer. There is no doubt that if Dillards was forced off the site, they would suffer a loss of business as a result of the emiment domain play. One solution would be for the City to off some kind of tax incentive to Dillards against future revenue if they are forced to move to a new location, or be put off until the site is redeveloped.