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An eminent domain case in Oak Creek has reopened the debate over how to protect property owners without handcuffing municipalities trying to promote development.

Watchdog groups that want to change state law to better shield landowners are trying to build off of the public outcry over Oak Creek’s flirtation with acquiring Earl Giefer’s farm to boost development on surrounding land.

Brett Healy, president of the Madison-based John K. MacIver Institute for Public Policy, predicted there will be a bill introduced in 2011 to tighten state eminent domain law.

“For the government to step up and say, for whatever reason, ‘We want your land, and we are going to take your land,’ that should make anyone scared,” he said.

But elected officials are scared to use eminent domain to promote private development because the process stirs up concern among landowners, said Dan Thompson, executive director of the League of Wisconsin Municipalities. When those officials encounter an unwilling seller such as Giefer, they drop eminent domain, just as Oak Creek’s Common Council did in June, he said.

“There’s a lot of sympathy for folks like that,” Thompson said, “so most municipalities, if they want to acquire a property, they offer a lot of money.”

Municipalities only can use eminent domain to clear land for private development if the land is blighted.

The state in 2006 amended and narrowed its definition of blight in eminent domain law, and, since then, no municipality has gone to court to defend condemning a property over its effect on development, said Hugh Braun, a partner in Godfrey, Braun and Frazier LLP, Milwaukee. But the lack of lawsuits leaves an unresolved legal question of how much leeway state law gives municipalities to decide which properties are blighted, he said.

The uncertainty arises because state law offers two definitions of blighted property, one in eminent domain law and one in municipal law. The 2006 eminent domain law amendment reduces the conditions under which governments can declare land blighted and orders courts narrowly interpret the definition of blight, Braun said. The statute orders judges to defer to property owners’ rights when questions arise.

The older definition in the municipal law presents more ways for a property to be declared blighted and orders courts to interpret the definitions liberally, giving government more leeway, he said.

“The only issue here that remains open is,” Braun said, “we place too much discretion in the hands of the municipalities and in the hands of the court to determine if a property is blighted.”

In the Giefer case, a blight report commissioned by Oak Creek claimed his 24.4-acre farm had crumbling buildings and an unpaved driveway, making it physically and visually blighted. The farm is inconsistent with Oak Creek’s economic growth, according to the report.

Giefer said he does not understand why the city wants his land when the property around it remains undeveloped.

“It sure ain’t right,” he said. “Why do I have to suffer just because somebody wants to make money? Money is the root of all evil.”

The Oak Creek blight report shows the city was following the looser definition of blight law, said Jason Adkins, staff attorney with the Minnesota Chapter of the Institute for Justice. He argued the case demonstrates Wisconsin law must set stricter limits for municipalities, and they should not be allowed to use eminent domain to acquire land for private development, regardless of whether the land in question is blighted.

“That’s the best solution to that,” Adkins said. “Remove the spurious, subjective concept of blight.”

State law already provides ample legal protections for landowners by limiting when and how governments can acquire land to promote private development, Thompson said.

“It has not been a thorn in my side,” he said of the calls to tighten state law. “It annoys the devil out of me when I hear folks making up horror stories. This is part of the phenomena that government is evil. That’s what feeds this.”

Braun said he does not support banning all instances of governments using eminent domain to promote development. He instead proposed two changes to state law — first that statutes should state the stricter definition of blight is the standard for municipalities, and second that statutes require municipalities acquiring land for development pay more for the property.

Current law requires municipalities pay fair-market value, which is less than what a private developer will pay for a property crucial to a proposed project, Braun said.

“I think we need to create a set of circumstances where an individual property owner cannot stand in the way of needed economic development,” he said.

In Oak Creek, Giefer’s farm remains in place. He said he has no intention of selling.

“It’s home,” he said. “A man’s home is his castle.”