# Knoxville Community Development Corporation v. Orchard Entertainment Group, LLC

> Court of Appeals of Tennessee · October 9, 2020

URL: https://www.frixlaw.com/law-library/cases/4575179

## Case

- **Court:** Court of Appeals of Tennessee
- **Decided:** October 9, 2020
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Judge John McClarty
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

10/09/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
August 19, 2020 Session

KNOXVILLE COMMUNITY DEVELOPMENT CORPORATION
v. ORCHARD ENTERTAINMENT GROUP, LLC, ET AL.1

Appeal from the Circuit Court for Knox County
No. 2-27-19 William T. Ailor, Judge
___________________________________

No. E2019-01831-COA-R3-CV
___________________________________

This appeal involves the condemnation of a property within a redevelopment area in
Knoxville, Tennessee, pursuant to Tennessee Code Annotated section 13-20-202. The
plaintiff obtained entry of an order granting it title to the property based upon assertion of
eminent domain. The defendant claims that it did not receive due notice of hearings and
that the plaintiff failed to follow the procedures set forth in the relevant redevelopment plan
prior to initiating the taking. Upon the trial court finding that the plaintiff acted properly,
the defendant timely filed a notice of appeal. We reverse.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Reversed; Case Remanded

JOHN W. MCCLARTY, J., delivered the opinion of the court, in which THOMAS R. FRIERSON,
II, and KRISTI M. DAVIS, JJ., joined.

Benjamin C. Mullins and Matthew A. Grossman, Knoxville, Tennessee, and Richard E.
Graves, Franklin, Tennessee, for the appellant, Orchard Entertainment Group, LLC.

Michael S. Kelly and Rob Quillin, Knoxville, Tennessee, for the appellee, Knoxville
Community Development Corporation.

OPINION

I. BACKGROUND

1
The other listed defendants did not participate in this appeal.
On March 27, 2007, the City of Knoxville (the “City”), by way of resolution number
R-189-07 of Knoxville’s City Council, adopted the Downtown North/I-275 Corridor
Redevelopment & Urban Renewal Plan (the “Plan” or “Redevelopment Plan”). The goal
of the Plan is to eliminate the conditions of blight and inappropriate land uses existing
within the urban core of the City (the “Redevelopment Area”).

The Redevelopment Plan provides for various procedures that must precede any
acquisition of property by the plaintiff, Knoxville’s Community Development Corporation
(“KCDC”). KCDC is a housing authority established by the City and organized under the
Housing Authorities Law codified at Tennessee Code Annotated section 13-20-101, et seq.
Pursuant to the statutory provisions, a housing authority such as KCDC is authorized to
acquire property within a redevelopment area that is blighted, contributes to blight, or
which may be acquired because of the condition of the title or other identified conditions.
Tenn. Code Ann. § 13-20-102. This may be accomplished by the use of eminent domain.
Tenn. Code Ann. § 13-20-104(a)(17).

Section V of City’s Redevelopment Plan provides that “[i]f KCDC identifies a
specific property as blighted,” then “KCDC will request the existing owner of a blighted
property to submit to KCDC a redevelopment proposal[.]” The Plan defines “blight” as
follows:

“Blighted areas” are areas with buildings or improvements,
which by reason of dilapidation, obsolescence, overcrowding,
lack of ventilation, light and sanitary facilities, deleterious land
use, or any combination of these or other factors, are
detrimental to the safety, health, morals or welfare of the
community.

If KCDC determines that it should acquire a property, the Redevelopment Plan
identifies the necessary steps: issuance of a notice of intent to acquire, appraisal of the
value of the property, negotiation with the owner, and acceptance of information from the
owner regarding his/her valuation. The Plan provides that, prior to filing an action to
condemn property, KCDC will attempt to convince the owner to accept the fair market
value of the property. The Plan states:

Before initiating a condemnation proceeding, KCDC shall
make a diligent, conscientious effort to induce the owner to
accept the established fair market value for their property. A
final offer to acquire the property shall be made in writing to
the owner or their representative, and reasonable time allowed
for acceptance.

According to KCDC, it had identified the property at issue as a concern when it was
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under the common ownership of Ira Scott Brady and Robin Brady and before Orchard
Entertainment Group, LLC (“OEG”) acquired it. By way of a deed dated October 24, 2012,
OEG purchased from the Bradys 750 and 760 Stone Street (the “Stone Street property” or
“Property”), near the intersection of Central and Broadway, for $234,100. This deed also
appeared to convey rights to a neighboring parcel of land located at 625 North Broadway
(“625 N. Broadway”). The subject properties comprised the site of the former Sanitary
Laundry.2

In 2014, the City received the results of environmental assessments that revealed
the former laundry property contained petroleum hydrocarbons exceeding Tennessee
Department of Environment and Conservation (“TDEC”) cleanup criteria as well as
concentrations of arsenic, lead, benzene, naphthalene, and other hazardous compounds in
the soil and groundwater. Testing indicated some chemical vapors were three times above
the recommended levels for industrial use. Additionally, significant levels of
3
tetrachloroethene, a known carcinogen, were noted. The property was designated a federal
Superfund site.4

In February 2014, the City conducted a tax sale of the 625 N. Broadway property
and was the record purchaser of the property. 625 N. Broadway has a sizeable vacant
storefront. At the time of the purchase, it was years behind on property taxes and in
dilapidated condition with significant structural problems.5

KCDC subsequently issued a request for proposals to develop the 625 N. Broadway
property. However, only one developer submitted a proposal, which did not make
economic sense and was rejected. In the view of KCDC, the lack of available parking for
625 N. Broadway and OEG’s property prevents a proper development of 625 N. Broadway.

OEG’s sole member, Caleb Boyers, designed the Bar Marley restaurant on the Stone
Street property to authentically emulate the appearance of a Caribbean restaurant. Prior to
Bar Marley’s opening, OEG underwent a construction process to get approvals from City’s
Plans Department. A Certificate of Occupancy was awarded in October 2015, which
certified Bar Marley’s structure at 760 Stone Street “was in compliance with the various
ordinances of the City of Knoxville regulating building construction and/or use.”

2
Sanitary Laundry was started about 1923. It was one of the City’s largest dry-cleaning
companies. This location was the main laundry facility. The company closed in 1993.
3
Fluid used in dry cleaning.
4
Although the Stone Street property and the 625 N. Broadway property have separate
deeds, the structures are physically connected by an external, above-ground piping system
wrapped in asbestos.
5
Testimony reflects the City spent “hundreds of thousands of dollars remediating a roof
and remediating environmental conditions on 625 North Broadway.”
-3-
Several years of various back-and-forth communications ensued between KCDC
and OEG, during which KCDC contended the Property was “blighted.”6 KCDC argued
that the Property did not comply with applicable property maintenance codes. For
example, among other communications, KCDC sent OEG letters dated May 31, 2017, and
November 27, 2017, in which KCDC stated that it considered the Property blighted due to
various International Property Maintenance Code violations and that OEG was required to
submit a redevelopment proposal to remedy the blighting conditions.7 In a letter dated
January 10, 2018, Mr. Boyers discussed with David Cook of KCDC his confusion about
KCDC’s alleged code infractions, as the Property already passed inspection by City
officials during the initial building renovation approval process. Mr. Boyers asserted that
the Certificate of Occupancy certified the Bar Marley structure “was in compliance with
the various ordinances of the City of Knoxville regulating building construction and/or
use.” OEG was advised that, if it failed to submit a Redevelopment proposal, KCDC
intended to acquire the Property. On April 26, 2018, pursuant to state law and the
Redevelopment Plan, an offer was made to Mr. Boyers to purchase the Stone Street
property. After negotiations, the final offer by KCDC was $235,000.

If the owner of a blighted property does not submit a redevelopment proposal or
fails to redevelop a blighted property in compliance with the terms of a redevelopment
proposal, KCDC may acquire the property “subject to the limitations” in the
Redevelopment Plan. The Plan contains the following procedure for instituting an eminent
domain proceeding:

* First, “[i]f KCDC determines that it is necessary to acquire
any property as provided in [Section V of the Redevelopment
Plan], KCDC shall first attempt to negotiate a voluntary sale of
the property with the owner(s) thereof.”

* Second, “[i]f a negotiated purchase of property is not
achieved, KCDC will not exercise its eminent domain
authority to acquire any property pursuant to this plan, except
as described below, unless such action is approved by KCDC’s
Board of Commissioners and the City Council of [Knoxville],
provided that City Council approval shall only be required if
the property owner requests KCDC to submit the issue to City
Council within thirty (30) days of when KCDC’s Board of
Commissioners approves the acquisition by eminent domain.”

6
OEG claims that from October 2015 to December 2018, KCDC continued to press OEG
to give up the Property.
7
All these letters were sent to an address on Dandridge Avenue in Knoxville. KCDC later
learned that Mr. Boyers resided on Maloney Road, so it sent a letter to the Maloney Road address
on December 15, 2017, which included the November 27, 2017 letter as an enclosure.
-4-
* Third, “[u]pon receipt of a request from a property owner to
submit an acquisition to City Council, KCDC will request that
the City Council consider the matter at its next regularly
scheduled meeting. City Council’s approval may be by
resolution adopted in such manner as City Council typically
considers resolutions.”

Section V provides: “Nothing in this paragraph or elsewhere in this plan shall be construed
to limit KCDC’s authority to acquire property, including acquisitions by eminent domain
if necessary; if the property will be used for public improvements, such as roads, parks or
utilities.”

On January 22, 2019, KCDC’S Board of Commissioners approved initiation of an
eminent domain action for the Property. As a basis for the acquisition, the Board of
Commissioners resolved that the Property was blighted, that the condition of the title and
other conditions prevented its proper development within the Redevelopment Area, and
that its acquisition would help to “remove, prevent, and reduce blight, blighting factors,
and the causes of blight on the Property and in the neighborhood of the Property.”
According to the Board of Commissioners, “acquisition of the Property is necessary to
carry out the Redevelopment Plan.” However, KCDC did not provide Mr. Boyers and
OEG with advance notice that the Board of Commissioners would be meeting on January
22 to consider whether to institute eminent domain. Further, KCDC did not provide notice
that its Board of Commissioners approved the condemnation proceeding on January 22,
2019.

The Redevelopment Plan provides, as noted above:

KCDC will not exercise its eminent domain authority to
acquire any property pursuant to this plan . . . unless such
action is approved by KCDC’s Board of Commissioners and
the City Council . . . . City Council approval shall only be
required if the property owner requests KCDC to submit
the issue to City Council within thirty (30) days of when
KCDC’s Board of Commissioners approves the acquisition
by eminent domain.

Instead of allowing Mr. Boyers and OEG 30 days in which to request City Council review
and approval, KCDC filed its complaint on January 23, 2019. No mention is made in the
complaint of the KCDC Board of Commissioners’ January 22 approval of condemnation
proceeding.

On February 15, 2019, OEG filed an answer, arguing that KCDC desired to obtain
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the Property to assist with anticipated private development and to provide parking spaces
for 625 N. Broadway.8 KCDC contended that it had not settled on a final use for the
Property, but admitted that its long-term idea is to (1) combine the Stone Street property
with 625 N. Broadway, so that 625 N. Broadway has adequate parking for private
development, and (2) seek private redevelopment proposals for both properties. KCDC
conceded that the lack of parking and the condition of the Stone Street property prevented
the development of the Broadway site.9 According to KCDC, OEG never asked for City
Council review and never asserted that it had been denied due process based upon the lack
of opportunity to have the taking decision reviewed by City Council.

A hearing was scheduled for April 5, 2019, “concerning the right of [KCDC] to
acquire the Property owned which is the subject of this case.” However, an agreed order
was entered to continue the matter from April 5 to May 13. On April 24, OEG’s original
trial counsel moved to withdraw. A hearing was held on May 3, 2019, at which time the
motion to withdraw was granted and OEG was given until June 3 to secure counsel. Mr.
Boyers was present at the hearing.

The record reveals that the trial court initially ordered a status conference to be held
on June 28, 2019, but it then entered an amended order rescheduling “the status conference
… set for June 28, 2019” to “June 21, 2019.” On June 21, OEG did not appear and no
attorney entered an appearance. The trial court conducted a hearing, and its order provided
in part:10

This cause was originally set for a hearing on Plaintiff’s
request for possession on April 5, 2019.

***

Prior to entry of the Amended Order Allowing Withdrawal of
Counsel . . . , Caleb Boyers informed the court’s judicial
assistant that OEG would be represented by Attorney Joseph J.
Levitt, Jr. The Amended Order Allowing Withdrawal of
Counsel . . . that was mailed by the Clerk to OEG (to Caleb
8
Because 625 N. Broadway does not have available dedicated parking, it is not attractive
to private developers.
9
According to KCDC, the difficulty in assembling parcels for resale as part of a larger
development project in an urban renewal plan is a legitimate basis for a taking when there is diverse
ownership of the parcels. See MDHA v. Eaton, 216 S.W.3d 327, 342 (Tenn. Ct. App. 2007). Thus,
according to KCDC, even if OEG were able to remove all of the blighting conditions, it would still
be necessary for KCDC to acquire the Property in conjunction with the efforts to remedy blight on
the 625 N. Broadway property. The Stone Street property is not one that can be redeveloped by
itself without affecting the objectives of the Redevelopment Plan as to the adjoining properties.
10
No transcript of the hearing was prepared.
-6-
Boyers’ attention) advised that this matter would be heard on
June 21, 2019 at 10:30 AM. In addition to serving a copy of
the Amended Order Allowing Withdrawal of Counsel . . . on
all parties, the Clerk also mailed a separate notice via a
postcard to all parties informing them of the June 21, 2019
hearing at 10:30 AM. Furthermore, Caleb Boyers contacted
the Court’s judicial assistant on several occasions and he was
verbally advised that this matter would be going forward on
June 21, 2019. Additionally, Plaintiff’s Counsel informed the
Court that he was contacted by another attorney who was
investigating the possibility of representing OEG and that
counsel specifically discussed the hearing that was set for June
21, 2019.

Despite the foregoing, when this case was called on June 21,
2019 at 10:30 AM, neither Caleb Boyers nor anyone else on
behalf of OEG appeared at the hearing and no lawyer has
entered an appearance. . . .

OEG has failed to retain counsel as required by the Amended
Order Allowing Withdrawal of Counsel entered June 5, 2019
and failed to appear at the June 21, 2019 hearing. . . . The Court
finds that OEG has violated the Amended Order Allowing
Withdrawal of Counsel . . . and has not taken the steps
necessary to defend against the Plaintiff’s request for
possession.

At the June 21, 2019 hearing, Plaintiff and the City . . .
presented testimony and evidence through the City[’s] Fire
Marshal, Donald Partin, through the City[’s] Manager of
Neighborhood Codes Inspection, Robert Moyers, and through
photographs and exhibits that were entered into the record
demonstrating that the property is dilapidated, is vacant and
has not been actively used as an operating restaurant or bar for
several months, and is a blighted area as defined in TCA 13-
20-201, and constitutes a fire hazard to itself and to
neighboring properties and to any fire personnel that might be
called to the property. The Court finds that the Plaintiff has
established that it is entitled to take the property by
condemnation pursuant to TCA 13-20-202(a)(1), (2), & (3).

On June 26, 2019, new counsel for OEG entered a notice of appearance. Two days
later, OEG filed a Rule 60 motion requesting that the trial court set aside the June 21 order
-7-
of possession, return the property to OEG, and set a hearing concerning the right of KCDC
to acquire the property. OEG argued that the order of possession was void for lack of due
notice of a hearing; it further asserted that KCDC’s filing of a partial summary judgment
motion entitled OEG to the time identified in the Tennessee Rules of Civil Procedure to
respond to the motion prior to a hearing being held on the issue of possession. KCDC
responded that OEG did not present clear and convincing proof requiring the grant of a
Rule 60 motion. The court decided to hold in abeyance its ruling on the Rule 60 motion
and to conduct an evidentiary hearing.

The hearing was conducted on August 8, 9, 12, and 13. During the hearing, KCDC
acknowledged its desire to obtain the OEG property:

Q: And so what did KCDC decide would be the best way to
remedy the blight on 625 North Broadway?

A: The only way to do it, the best way to do it, would be to
buy Bar Marley. . . .

It was probably . . . best to buy it because [Mr. Boyers] had
entertained – he had mentioned that he would be willing to sell
if the price was right.

Q: And since you couldn’t agree on a price, you couldn’t agree
on a purchase with him, was it KCDC’s decision to condemn?

A: Yes, condemn for blight.

After the close of KCDC’s proof, OEG moved for an involuntary dismissal of
KCDC’s condemnation action pursuant to Rule 41 of the Tennessee Rules of Civil
Procedure. OEG argued, inter alia, that the failure of KCDC to first allow OEG 30 days
to request City Council approval before KCDC’s filing of its complaint required dismissal,
and that the Redevelopment Plan violated minimum requirements of due process and is
therefore unconstitutional on its face and as applied to OEG. As part of OEG’s proof, Mr.
Boyers testified, inter alia, that he never received advanced notice from KCDC that its
Board of Commissioners would be meeting on January 22, 2019, and did not receive any
notice of the Board of Commissioners’ January 22 approval of the condemnation action
within 30 days of the action. In KCDC’s response to the motion, it contended, inter alia,
that the Redevelopment Plan’s terms did not require KCDC to give OEG any notice of the
Board of Commissioners’ January 22, 2019, decision to initiate this proceeding. KCDC
stated, “[T]hat provision about city council approval, that’s something that’s just in the
plan; it’s not in the statute. There’s no statutory requirement that KCDC give any kind of
notice pursuant to the statute. . . .”

-8-
The trial court denied the motion for involuntary dismissal, holding that KCDC had
met its burden of proof at that time. In a written order, the court observed as follows:

THE COURT: Well, . . . [w]ith everything the Court has before
it, the Court is of the opinion that notice was properly given
under the statute. The statute doesn’t require that notice be
hand delivered to a respondent and there’s nothing that requires
that specific notice be given. With everything that the Court
has at this point, the Court is of the opinion that the petitioner
has met their burden. . . .

The court’s final ruling read as follows:

Pursuant to Tenn. Code Ann. § 29-17-101, et seq., and 29-17-
501, et seq., KCDC . . . filed a petition to condemn property
owned by Orchard Entertainment Group . . . . The property had
numerous liens for taxes and other title issues when it was
purchased.

***
Prior to the condemnation proceedings, KCDC sent numerous
letters to the defendant, some of those dated … May 31, 2017,
July 19, 2017, November 27, 2017 and December 15, 2017 …
advising the owner of code violations and the Redevelopment
Plan.

. . . Exhibit 7 in the record lists various code violations for the
property owner. Also the fire marshal conducted an inspection
of the exterior of the building on June 20th, 2019 and cited
several code violations which Deputy Fire Marshal[] Donald
“Sonny” Partin testified could be dangerous to patrons and fire
department personnel in the event of a fire.

***

The Plan . . . state[s] that if KCDC identifies a specific property
as blighted within the redevelopment area, KCDC anticipates
issuing a request for a redevelopment proposal from the
existing owner … of that property within 60 days from the date
the determination has been made. KCDC will request the
existing owner of the blighted property to submit to KCDC a
redevelopment proposal specifying the intentions of such
owner for redevelopment of that owner’s property.
-9-
The record shows . . . that KCDC sent such a letter to Orchard
Entertainment on November 27, 2017 demanding a
redevelopment proposal which was ignored by the defendant.

The Plan . . . states the advisory board will examine the
proposal . . . .

Here the defendant complains that KCDC failed to follow their
own policy because they did not give the defendant[] an
opportunity to be heard. However, there is nothing for the
advisory board to do in this instance. There was nothing that
the advisory board could have reviewed because the
defendant[] failed to follow the directions in the letter of
November 27, 2017 by providing a redevelopment proposal, as
was stated in the November 2017 letter. Therefore this
argument is misplaced and must fail.

KCDC gave the landowner numerous opportunities, both in
person and by correspondence, to comply with codes and bring
his property into compliance. However, they were met with no
response by the property owner until this Complaint for
condemnation was filed.

***

Because Mr. Boyers was given numerous opportunities by
KCDC to comply with codes and to try to work with KCDC to
redevelop the property, he cannot now come in and blame
KCDC for his failure to act given the numerous occasions that
he was given.

***

Under Tenn. Code Ann. § 13-20-105, private property taken
by eminent domain is restricted under certain conditions. The
housing authority created under this chapter shall not have the
power to take by eminent domain private property in an urban
renewal area for the purposes of resale if the owner of the same
desires to develop such owner’s own property and if the
designated reuse of the property in the urban renewal plan is
such that the owner’s parcel can be redeveloped by itself
without affecting the objectives of the urban renewal plan as to
- 10 -
the owner’s parcel or adjoining or adjacent property thereto
and the owner signs an agreement with the housing authority
to abide by the urban renewal plan in any development thereof.

In this case, Mr. Boyers has not signed any such plan.

In this case, this Court can find no reason to determine that
KCDC acted arbitrarily or capriciously or unconstitutionally in
any way. In fact, the Court is convinced by clear and
convincing evidence that KCDC tried for several years to work
with Mr. Boyers to try to help him with his property but he
refused to work with KCDC.

Based on everything the Court has before it, the Court affirms
its prior ruling of June of this year.

OEG filed a timely notice of appeal.

II. ISSUES

The issues raised on appeal by OEG are as follows:

a. Whether the trial court erred by giving KCDC possession of
the property without a duly noticed hearing on the issue of
possession and failing to return possession of the property to
OEG prior to a later hearing on the issue of possession because
OEG lost possession of its property prior to notice of a hearing
on the issue of possession.

b. Whether the trial court erred by not dismissing KCDC’s
condemnation action because KCDC did not comply with
KCDC’s own rules and regulations in the Redevelopment Plan
when instituting the instant condemnation proceeding.

c. Whether the trial court erred by not dismissing KCDC’s
condemnation action because KCDC violated OEG’s rights
under the Due Process Clause and Article 1, section 8 of the
Tennessee Constitution by not giving OEG notice of the
KCDC Board of Commissioner’s approval of the instant
condemnation proceeding.

d. Whether OEG is entitled to its reasonable attorney fees and
other expenses incurred in the trial court and during this appeal.
- 11 -
III. STANDARD OF REVIEW

Review of the trial court’s findings of fact is de novo, upon the record accompanied
by a presumption of correctness, unless the preponderance of the evidence is otherwise.
Tenn. R. App. P. 13 (d); Alexander v. Inman, 974 S.W.2d 689, 692 (Tenn. 1998). Review
of the trial court’s conclusions of law is de novo, with no presumption of correctness.
Ganzevoort v. Russell, 949 S.W.2d 293, 296 (Tenn. 1997).

IV. DISCUSSION

A.

The Due Process Clause of the Fourteenth Amendment to the United States
Constitution provides that no State shall “deprive any person of life, liberty, or property,
without due process of law.” U.S. Const. amend. XIV, § 1. Article 1, section 8 of the
Tennessee Constitution provides similar protections. Lynch v. City of Jellico, 205 S.W.
384, 391 (Tenn. 2006). “Due Process under the state and federal constitutions encompasses
both procedural and substantive due process protections.” Id. “The most basic principle
underpinning procedural due process is that individuals be given an opportunity to have
their legal claims heard at a meaningful time and in a meaningful manner.” Id.

In Rasheed v. Tennessee Dep’t of Safety, No. 01-A-019203-CH-00078 1992 WL
210484 (Tenn. Ct. App. Sept. 2, 1992), we observed that “[n]otice and opportunity to be
heard are the minimal requirements of due process.” Id. at *2. Thus,

Adequate notice is an essential due process ingredient. The
right to a hearing has little reality or worth unless the affected
parties are informed that the matter is pending and can choose
for themselves whether to appear or default, acquiesce or
contest.

Notice that is a mere gesture is no notice at all.

Id. (citations omitted). “‘Confiscations without a judicial hearing, after due notice’ are
void.” Id.

KCDC’s authority under the Redevelopment Plan to condemn property must be
narrowly construed. Tennessee Code Annotated section 29-17-101 explicitly states that
“[i]t is the intent of the general assembly that the power of eminent domain shall be used
sparingly, and that laws permitting the use of eminent domain shall be narrowly construed
so as not to enlarge, by inference or inadvertently, the power of eminent domain.” The
plain language of section 29-17-101 does not simply require a narrow construction of just
- 12 -
statutes “permitting the use of eminent domain;” it requires a narrow construction of all
“laws permitting the use of eminent domain.” Tenn. Code Ann. § 29-17-101. The
Redevelopment Plan before this court, adopted by the City pursuant to resolution R-189-
07, is a “law” authorizing KCDC to use the power of eminent domain. Accordingly, the
Redevelopment Plan must be “narrowly construed so as not to enlarge, by inference or
inadvertently, [KCDC’s] power of eminent domain.” See id.

Our review reveals that KCDC violated the Redevelopment Plan by depriving OEG
of an opportunity to exercise the right to request City Council review prior to KCDC
instituting the condemnation proceeding. The Plan allowed 30 days in which to request
review and approval from the City Council prior to the initiation of an eminent domain
proceeding. OEG’s right accrued upon the January 22, 2019, Board of Commissioners’
approval of the eminent domain action. Instead of allowing OEG 30 days in which to
request City Council review, KCDC filed its complaint in this proceeding on the very next
day, January 23, 2019. OEG received no notice in the ensuing 30-day period that the
KCDC Board of Commissioners had acted on January 22, 2019. We find that KCDC
violated the provisions of the Redevelopment Plan that require City Council review upon
request by a property owner. By not holding KCDC to this requirement of the
Redevelopment Plan, the trial court effectively “enlarged” KCDC’s power of eminent
domain under the Redevelopment Plan by allowing KCDC to ignore procedural
requirements. City Council review is a significant protection the Redevelopment Plan
affords to OEG – it constitutes a check on KCDC’s otherwise unmitigated power under the
Redevelopment Plan.

B.

Pursuant to Tennessee Code Annotated section 29-17-106(b)(2), if the final
judgment is that KCDC cannot acquire the property by condemnation, KCDC shall be
responsible for OEG’s reasonable attorney fees and expenses incurred in this proceeding.
This includes amounts incurred during appeal. Accordingly, we award OEG its reasonable
attorney fees and expenses incurred in this proceeding, including such fees and expenses
incurred on appeal.

- 13 -
V. CONCLUSION

The judgment of the trial court is reversed and this cause is remanded for further
proceedings as may be required, consistent with this opinion. The trial court is directed to
return possession of the Property to OEG prior to any new hearing on KCDC’s right to
acquire the Property. Costs of the appeal are assessed to the appellee, Knoxville
Community Development Corporation.

_________________________________
JOHN W. MCCLARTY, JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4575179. Public record. Not legal advice.