Reference Number: 

Counties, through the county legislative body, may condemn and take property, including land, buildings, privileges, rights and easements of individuals and private corporations and other private entities for county purposes. T.C.A. § 29-17-201. Property owners must be compensated for damages involved in condemnation. The amount of payment may be agreed upon by the parties or determined by a court of law. T.C.A. § 29-17-701.

Limitations on the use of this power of eminent domain were added in 2006 Public Chapter 863. Private use or the indirect public benefits resulting from private economic development and private commercial enterprise, including increased tax revenue and increased employment opportunity, are generally excluded from the definition of public use for which this power may be used.  However, the following designated purposes are excepted and allowed even if there are private benefits:

--The acquisition of any interest in land for a road, bridge, or other public transportation project.
--The acquisition of any interest in land necessary to the function of a utility.
--The acquisition of property by a housing authority or community development agency for urban renewal or redevelopment under Title 13, Chapters 20 and 21.
--Private use that is incidental to a public use if no land is condemned primarily to convey or permit the incidental private use.
--The acquisition of property by a county or municipality for an industrial park under Title 13, Chapter 16, Part 2.

An appraisal of property sought to be condemned is required. The appraisal must be based upon the highest and best use, its use at the time of the taking, and any other use to which the property is legally adaptable at the time of the taking.  The appraiser must be a Member of the Appraisal Institute or be otherwise licensed and qualified under Title 62, Chapter 39, Tennessee Code Annotated. The condemning authority must deposit with the court the amount determined as the value by the required appraisal.  The deposited amount does not fix the amount to be awarded, and any amount awarded in excess of the deposited amount bears interest from the date of the taking or possession.

The statute provides that under no circumstance may land used predominately in the production of agriculture be considered blighted. T.C.A. § 13-20-201. The county may exercise the power of eminent domain for an industrial park anywhere in the county and within urban growth boundaries and planned growth areas, and a municipality may exercise the power anywhere within its boundaries and urban growth area. A county and municipality, or both, operating a joint park may exercise the power anywhere within the jurisdictional boundaries and within an urban growth boundary or planned growth area. T.C.A. § 13-26-207.

A certificate of public purpose and necessity is required for the exercise of eminent domain for an industrial park even if no funds will be borrowed and the bonded debt limit does not apply.  The issuance of the certificate must be based upon a finding that the local government has been unable, through good faith negotiations, to obtain the property or other property that would be of comparable suitability. Good faith negotiation is established if the local government made an offer to purchase the property for an amount equal to or in excess of at least two appraisals by independent qualified appraisers. T.C.A. § 13-16-207.

Land acquired by eminent domain may be sold, leased, or otherwise transferred to another public entity or to a private person or entity if fair market value is received for the land. T.C.A. § 29-17-1003.  Public Chapter 851, effective July 1, 2014, provides that if a condemning entity determines that property taken by eminent domain is not used for the purpose for which it was condemned, or for some other authorized public use, or if the condemning entity decides to sell the property within 10 years of taking the property, then the condemning entity must first offer the property for sale to the persons from which the property was taken.  Such persons may purchase the property for not less than fair market value plus costs and have 30 days to sign a purchase agreement for the property. If the former owner does not purchase the property within the 30 days, then the property may be sold in any commercially reasonable manner for not less than fair market value plus costs.