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Proposed Senate Bill 83 Would Adversely Impact Activities of RDAs and CDAs by Changing Standards for Blight Findings

Public Finance Law Update Rebecca A. Speckhard

2011 Senate Bill 83, which is currently pending in the Wisconsin legislature, would make a number of changes to the laws regarding condemnation and eminent domain, particularly of blighted property. However, by changing the definitions of "blighted area" and "blighted property" in the statutes governing redevelopment authorities, Senate Bill 83 would also have a significant adverse impact on substantially all activities of redevelopment authorities ("RDAs") and community development authorities ("CDAs") created by Wisconsin municipalities, even those unrelated to eminent domain. Senate Bill 83 would limit the definition of "blighted property" in the statutes governing RDAs and CDAs to non-agricultural property, which has been cited for certain specified code violations, which have not been remedied despite two notices to the property owner, and where the cost of remedying the violations exceeds 50 percent of the value of the improvements on the property.[1]

Since a blight finding is necessary for most RDA and CDA activities, the new restrictive blight standard would shut down substantially all activities of RDAs and CDAs, including, for example, lease revenue bond financings for tax increment projects, revolving loan and grant programs, the negotiated purchase of private property on a voluntary basis, providing assistance to private redevelopment of property, and making available conduit double tax-exempt financing to private development projects.

The lawyers in our land use and public finance groups are available to discuss the provisions of Senate Bill 83 with you.

The League of Wisconsin Municipalities is actively opposing Senate Bill 83. Here is a link to the League's May 9th Legislative Bulletin, which contains its memo in opposition and the email addresses of the Senate Judiciary Committee who will likely vote on Senate Bill 83 this week:

[1] Senate Bill 83 would change the definition of blighted property in Section 66.1333 of the Wisconsin Statutes to read as follows:

66.1333 (2m) (bm) "Blighted property" means any property within a city, other than land zoned or used for agricultural purposes, that by reason of abandonment, dilapidation, deterioration, unsafe conditions, or the existence of conditions that endanger life or property by fire or other causes, or any combination of such factors, is detrimental to the public health, safety, or welfare, and to which all of the following apply:

  1. The property has been cited for one or more violations of applicable state or local building codes involving the roof and roof framing elements; support walls, beams, and headers; the foundation, footings, and subgrade conditions; light and ventilation; plumbing; fire protection; public utilities; flooring; or walls, insulation, and exterior envelope.
  2. The code violations under subd. 1. have not been remedied despite the issuance by the local governmental unit that issued the citations of at least 2 notices to do so.
  3. The cost of remedying the code violations under subd. 1. would exceed an amount equal to 50 percent of the most recent appraised value of the property, excluding the value of the land.
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