## Facts

- The City of Lafayette, a home-rule municipality, enacted an ordinance to condemn about 22 acres of land owned by the Town of Erie Urban Renewal Authority located within Lafayette’s boundaries.
- Lafayette declared the taking necessary to preserve an open-space “community buffer” and to avoid commercial sprawl.
- Erie had acquired the parcel for an urban renewal commercial development that included a grocery store and other retail uses intended to generate sales-tax revenue.
- Erie asserted the condemnation was a pretext and that Lafayette’s actual goal was to prevent the grocery store and related sales-tax base from moving from Lafayette to Erie.
- Evidence presented included Lafayette officials’ concerns about losing a grocery store and tax revenue, the timing of the condemnation relative to Erie’s development progress, and the emergence of the open-space justification after Erie’s commercial plans were underway.

## Issues

1. Whether a home-rule city has authority to condemn real property owned by a neighboring statutory town (or its urban renewal authority) for an open-space community buffer.
2. Whether a municipality’s ordinance findings of public purpose and necessity are subject to judicial review upon a sufficient showing of bad faith or pretext.
3. Whether condemning property primarily to prevent economic competition and preserve municipal sales-tax revenue satisfies the constitutional public-purpose requirement.

## Decision

- The Court of Appeals affirmed the district court’s dismissal of Lafayette’s condemnation action for lack of subject-matter jurisdiction.
- The court held Lafayette had the power, in general, to condemn another municipality’s property, and open-space preservation can be a valid public purpose.
- The court held that municipal findings of necessity and public purpose may be reviewed when the condemnee presents sufficient evidence of bad faith or improper purpose.
- The court upheld findings that Lafayette acted in bad faith and that its ultimate purpose was to prevent relocation of a grocery store and associated tax revenue, which is not a valid public purpose.

## Legal Principles

- Eminent domain requires a genuine public use or public purpose; a stated public purpose may be rejected if the actual purpose is impermissible.
- A municipality may condemn property owned by another municipality for a legitimate public purpose, including open-space preservation, if undertaken in good faith.
- Legislative determinations of necessity and public purpose ordinarily receive substantial deference, but courts may examine evidence of motive where bad faith or pretext is credibly alleged.
- Using condemnation primarily to block competition or protect a municipality’s tax base is not, by itself, a constitutionally sufficient public purpose.

## Conclusion

Although open-space preservation may justify condemnation and a municipality can condemn land owned by another local government, a taking motivated chiefly by tax-revenue protection and obstruction of another municipality’s development is invalid and may be dismissed after judicial review for bad faith.


City of Lafayette v. Town of Erie Urban Renewal Auth., 434 P.3d 746 (Colo. App. 2018)