By Brenda Fullick

There was the strangest anonymous tip. Cheryl Lundgren, secretary-treasurer of a residents' group fighting a proposed lake project near Shenandoah, answered her ringing phone and heard a mysterious voice telling her, "Find the test well, and nobody has to lose their homes."

What test well? What was the secret caller talking about?

Lundgren had been active in Citizens for Responsible Choices, a rural taxpayers' group opposed to the West Tarkio Lake project. It's a project that has bitterly divided neighbors and friends in Page County, an area of fairly flat farm country that sits two and a half hours southwest of Des Moines.

In early 2001, the city of Shenandoah began its public pitch for a manmade lake that could supply both public recreation and a reliable source of water for that part of southern Iowa, a region that traditionally has been plagued by the threat of drought. The concept was that the city could take some farms and homes by eminent domain, paying people fair market value for their losses, to create a public project that would serve the common good.

However, members of the Citizens for Responsible Choices weren't convinced that the city of Shenandoah truly needed to put their properties underwater to supply the community with water. They suspected that the city leaders had some other unnamed reason for wanting that lake, some other cards they weren't showing - though the skeptics had no evidence that anyone would profit from the publicly financed lake, and they had nothing more than theories about why the city was pushing so hard.

Then Lundgren got the anonymous call about the test well. She decided to check it out.

"I started calling all the well diggers in the area," Lundgren recalls. Eventually, she says, she found a well-digging company that acknowledged it had been hired by the city of Shenandoah to dig a test well in a certain spot to see whether that location could provide additional water to the community.

The city's copy of the company's report on the test well is a matter of public record. But when the Citizens for Responsible Choices tried to get a copy of that report from the city of Shenandoah, Lundgren says, the city staff claimed that no such report existed.

So Lundgren says she called the company, which insisted that yes, in fact, the work had been done - and the city surely had received those test results, because the city paid up once the work was completed.

The citizens' group responded by sending in a lawyer, who was able to get copies of two pertinent public documents. One was a report from that well-digging company, including a hand-written note by one of the employees mentioning that the underground site had "a lot of water." The other was a report from the Hygienic Laboratory at the University of Iowa, which states that the water sample was "bacterially safe," with little or no evidence of nitrates or fecal coliform.

The reports are dated May of 2000, several months before city officials began meetings with the public to promote the idea of a West Tarkio Reservoir.

As far as members of the citizens' group are concerned, Shenandoah city leaders concealed information about the test well so the public would believe that a new lake is necessary. But the group members are convinced that the test-well results prove that the taxpayers don't really need to build Shenandoah a lake, after all. They think it means that they shouldn't have to lose their homes and farms.

"It means," Lundgren argues, "that there are other options."

The fact that the citizens had to push so hard to get public documents makes them even more convinced that something about this project stinks.

Fueling the fire is the fact that there is talk of allowing private development within the West Tarkio project. Current plans call for an 1,870-acre lake, sitting on 6,198 acres of land. Should private, for-profit companies be allowed to build on publicly developed land after it's taken from its original owners by eminent domain?

Some people - notably Republicans Doug Gross and Congressman Steve King - have argued that it just makes sense for private developers to beef up local tax bases by building a certain amount of upscale real estate on this and other taxpayer-financed lakes that are proposed across rural Iowa.

Brian Walker of rural Essex, president of the Citizens for Responsible Choices, figures that if developers want to buy up farm ground for private lakes and upscale development, that's fine - after all, the manmade Sun Valley Lake, with its high-end lakefront housing, has been a veritable Viagra for the tax base in Ringgold County.

But Walker points out that Sun Valley became a money-maker without taxpayer subsidies to build that lake. And the developer didn't need eminent domain to make it happen.

Brian's wife, Christy Walker, remembers reading a People magazine story back in December 2004 about a woman, Susette Kelo, who stood to lose her home because the city of New London, Conn., wanted to condemn the houses in her middle-class neighborhood for upscale waterfront housing. The city wanted to take her rehabbed pink Victorian by eminent domain. Kelo was fighting the city with a lawsuit, and the story said the case was going all the way to the U.S. Supreme Court.

Christy Walker felt sympathy for Susette Kelo, but she really didn't think the Supreme Court would let this woman lose her home.

"I just didn't really believe the Supreme Court would do that," Christy Walker says. "Taking somebody's property and giving it to somebody else to make a profit just didn't seem right to me."

The great debate

The Iowa Legislature, like the legislatures of about 30 other states across the country, is scrambling to adopt new local rules regulating the government's use of eminent domain.

The Iowa House passed a bill with stricter guidelines in February, and now the Senate is preparing to tackle the issue, probably sometime this month. The Senate's finance committee was scheduled to hear testimony this week from Kelo's lawyer, Scott Bullock, from the libertarian Institute for Justice.

The debate over eminent domain exploded on the national scene last summer, when the U.S. Supreme Court ruled that the city of New London did, in fact, have a right to take Kelo's property for economic development. Residents in Iowa and elsewhere expressed outrage that such a thing could happen. But people who've watched eminent domain closely through the years knew that the Kelo decision wasn't an anomaly. For years, governments have been using eminent domain to confiscate land on behalf of private developers. The only difference in the Kelo case was the glare of the national spotlight.

Historically in the United States, eminent domain has been used to collect land for roads, public parks, schools, libraries, and other projects serving the interests of the whole community. If individual landowners opted not to sell, governments had a right to condemn their property and use it for the greater common good.

The legal justification for eminent domain was found in the Fifth Amendment of the Constitution, which states in part, "nor shall private property be taken for public use, without just compensation." Courts have taken that to mean governments have the right to condemn and take land as long as the landowners are paid fairly for their losses.

But the scene shifted in 1981 with the landmark Poletown case in Michigan.
"General Motors had not intended to stay in Detroit anymore," explains Sterling Burnett, a senior fellow at the National Center for Policy Analysis, a conservative think tank on public policy issues.

GM execs wanted to build a new automobile plant on the cheapest available land, and they were looking at properties 10 to 20 miles outside of Detroit. To keep the big automaker inside the city, Detroit city officials offered to condemn Poletown, an old Polish neighborhood of churches and homes.

The city of Detroit argued that condemning Poletown served the common good, that it boosted the tax base and provided jobs for inner city workers.

"They got the federal government to finance the whole thing," Burnett says.
Since then, Burnett explains, businesses in the United States have been increasingly likely to demand certain pieces of land for their private development projects, and local politicians have frequently complied, condemning neighborhoods as "blighted" to give developers what they want.

"A lot of cities are declaring neighborhoods 'blighted' that aren't blighted in the traditional sense," Burnett maintains. A neighborhood can be condemned because it has 50-year-old homes, where middle-class residents sit on their porches, he says. "They're just not as nice as the multi-million-dollar McMansions that [developers would] like to build there."

Property-rights advocates have long recognized the relevance of Poletown as a precedent-setting case, Burnett says. "We have been debating it and writing about it, and no one listened."

But in New London, there was something about the story of the city
condemning people's rowhouses so Pfizer employees could have nice waterfront condos that finally captured the nation's attention.

"Kelo was a shot across the bow," Burnett says. "Kelo has shined a light on a problem. It was not a new problem. But it shined it in a way and at a time that legislators were forced to take notice."

Here in Iowa, legislators are definitely taking notice. Jeff Kaufmann, floor manager for the eminent domain bill in the House, has been flooded with letters and e-mails since last summer. Most of the outcry has come from rural Iowa, he says, where people tend to be more emotionally attached to their land than urban property owners. Some of the calls came from people who stand to lose farms in the lake projects being proposed across the state. But Kaufmann says most of his comments came from people who weren't in any imminent danger of losing their land. The anxiety was more free-floating.

"For the average person," he says, "it's primarily the fear of your own property being taken."

Kaufmann was one of 51 co-sponsors on a bipartisan bill to limit the use of eminent domain. After extensive negotiating and deal-making to satisfy various special interests, the House voted Feb. 15 to pass the bill 85-15.

"There were some strange coalitions that built up around this," Kaufmann says. "For Republicans, quite frankly, it was a little tricky." Legislators had to weigh what they were hearing from their constituents, Kaufmann says, against some traditional Republican alliances.

In the version of the bill that passed out of the House, "we made it essentially illegal for government to condemn land for private economic development," Kaufmann says. The bill would allow "reasonable attorney fees and costs" for people whose properties are being considered for condemnation. Another politically hot provision, added by Republican Jodi Tymeson of Winterset, would prohibit governments from condemning land for lake projects unless they could prove there was no other feasible water source.

Kaufmann says the Representatives were lobbied hard on this issue, and he predicts that the evenly divided Senate will be lobbied even harder. "They're going to come under immense pressure over there."

Former Republican gubernatorial candidate Gross is leading a lobby effort to protect the use of eminent domain in public lake projects, and he is arguing that it's fiscally smart to allow some private development on public lakes.

Other heavy-hitters in this debate are the Chamber Alliance and the Iowa League of Cities, groups arguing that eminent domain should not be curtailed because it serves such a vital public function.

"This is obviously an emotional issue," acknowledges Tom Bredeweg, executive director of the Iowa League of Cities. However, he expresses concern that limits on eminent domain could throw cold water on economic development.

The whole concept of eminent domain hinges on what's best for the public, Bredeweg says. "It goes all the way back to the kings of England. Everything ultimately belonged to the king."

In the United States, the question has been about what serves the greater public good.

"When is economic development a public purpose, and when does it go too far to become a private purpose?" Bredeweg asks, speaking hypothetically. The Iowa League of Cities argues that economic development is generally for the common good, regardless of whether an individual or business profits, because it can be used to eliminate slum and blight while creating something useful for the community. "It creates jobs. It revitalizes the downtown."

Eminent domain does tend to create political fall-out, and cities generally use it only when they believe it is absolutely necessary, Bredeweg argues.

Some city councils in newer cities have taken the stance that they would never use eminent domain, he says. However, "the older cities that are struggling to keep their downtowns going just don't have that luxury."

Bredeweg and his like-minded colleagues worry that in the political backlash against Kelo, Iowa legislators will strip local governments of an important tool to manage their cities and plan public improvements.

He compares eminent domain to a hammer, a tool that can be used to either build things or destroy them. "We are very concerned that they will go too far and make the tool not useful," he says.

For a long time, people have accepted the necessity of eminent domain for projects like schools and roads, even if they didn't really like it, says Bob Brunkhorst, who's managing the eminent domain bill in the Senate.

However, the controversy comes in when government condemns one person's land so someone else can make a profit from it, Brunkhorst says.

"That is upsetting people."

Further complicating matters are the times when people feel like backroom deals are going on.

"I think there's definitely underhanded things happening" with eminent domain projects, says Rep. Ed Fallon (D-Des Moines). When people want economic development financing for a project, they say it's for economic development, Fallon says. "If they wanted clean water money, it was suddenly for drinking water."

The result is that normally mild-mannered Iowans are turning to thoughts of political activism. In Madison County, residents of the Clanton Creek area have been holding meetings where they considered plowing up their pastures so their runoff would muddy any lake in the area. They're talking about preventing government employees from stepping onto their land to do surveys. They talk about losing sleep, worrying about what's going to happen to their farms and homes.

Clanton Creek neighbors say they don't necessarily want to fight, but they're frustrated because they don't feel that the government is on their side.

"If this bill doesn't pass," Kaufmann warns, "there's going to be another Susette Kelo in Iowa."

A public crisis

Gregg Connell tells the story about one day when, as then-mayor of Shenandoah, he got a frantic phone call from the city's water superintendent, who wanted to meet with him as soon as possible.

Fine, Connell told him, they'd get together later in the day.

"He said, 'No, we need to talk right now,' Connell recalls.

So Connell says he immediately left work to meet with the water superintendent, who was worried that Shenandoah was facing a public emergency because its water wells were going dry.

"We had lost about 70 percent of our well capacity in about a 30- to 45-day period of time," Connell says. He says the city had no idea what was going on, or whether the city would lose the rest of its water over the next week.

Shenandoah called in engineers to take a look at the situation. As Connell tells it, the engineers offered three potential options: (1) that the city do nothing; (2) that the city dig additional shallow wells along the Nishnabotna River; or (3) that the city build a lake that would provide "a dependable, clean supply of water for the next 400 years for the residents of southwest Iowa."

Connell, a former Democratic candidate for governor, has led the campaign to build the West Tarkio Reservoir. He argues that southern Iowa can't rely on wells to provide water during the region's frequent droughts, because shallow wells can go dry.
"We don't feel that they're dependable," he says.

The city of Shenandoah spearheaded the West Tarkio Reservoir project, and it was later joined by the city of Clarinda. The project received a $12 million Vision Iowa grant to help build a lake for water and public recreation, but that money has been tied up while the Citizens for Responsible Choices have filed a series of lawsuits to block the project.

"We've been in court for about three and a half years," Connell says.

Meanwhile, the lake commission continued the lake study process with the Natural Resources Conservation Service, with support from Congressman Tom Harkin. The latest $350,000 for NRCS study came from a special earmark that Harkin tacked onto the congressional 2006 Agriculture Appropriations bill.

Normally, the federal government provides 50-50 matching funds for lakes up to 1,000 acres under the PL 566 program. But Harkin created an exemption for the Shenandoah project, so the federal match could go higher.

Connell says it was important for Shenandoah to think big, to serve the greater good of the area.

"We felt that it needed to be larger, as a visionary project for water, for as much as the next 400 years," Connell says. Water, he argues, is a crucial resource in an area where droughts are common. "Someday, water is going to be about survival."

Connell says he doesn't understand why the citizens' opposition group needed to hire a lawyer to get the document about Shenandoah's test well when he was mayor.

"Anything in the city is public information," he says. "I can't imagine that they would have to get a lawyer to get information about a well."

Citizens have also been frustrated that certain lake proponents have suggested that Shenandoah needs a lake because their current water supply causes cancer. Neither the citizens' group nor Connell has reason to believe that's actually true.

"I don't think the cancer thing is an issue," he says.
For the record, Connell also says he agrees with the citizens who believe it was a mistake to talk about private economic development near the proposed West Tarkio Lake.

"I'm opposed to it," he says. Certain people are arguing that private development would mean a hefty boost to the tax base. "Steve King is very much for the private development."

However, talk of private development can make some people wonder what's really going on behind closed doors. And Connell, executive vice president of the Shenandoah Chamber and Industry Association, maintains that the real issue is providing a reliable water supply in a drought-prone region, taking care of current residents while enabling agri-business to grow.

"This will allow this area to survive,"he says.

Osceola Mayor Fred Diehl paints a similar picture in his town, where he says the community is down to a three-year supply of water. A drought, he warns, could place Osceola in a pickle, even though the city could hook onto rural water lines in an emergency. He says that's why Osceola is looking to build a second lake, the Coyote Canyon project.

"Our lake is down 51 inches right now," Diehl says. "If we don't get any rain, we're in big doo-doo."

Diehl has been watching the eminent domain debates nervously.

"Our big concern is that one person could theoretically stop the whole project without eminent domain," he says.

Osceola's current lake has a gambling boat, and revenues from that have paid for new water mains, storm sewers, and curb-and-gutter projects in the city. Gambling brings in more than $1 million a year to the city coffers.

But there would be no economic development allowed at the proposed second lake, Diehl says. He says the city was offered the chance to use eminent domain to take people's land for private development.

"We turned it down," Diehl says. "I don't think that's what eminent domain is designed for. Eminent domain is designed for highways, roads, public projects that benefit all taxpayers."

Diehl is concerned that the Kelo decision is casting a shadow over Osceola's proposed Coyote Canyon Lake because skeptics are afraid somebody will make money off the deal. "That Supreme Court decision made it very clear that eminent domain could be used for private gain.

"True, we probably could do that legally," Diehl says. "I just don't think that's right."

But there are Clarke County property owners who fear that Osceola might, in fact, take their land by eminent domain so someone else could profit from it. Especially since the Clarke County lake group is one of the groups that hired Gross to lobby the Iowa Legislature on eminent domain, and his "Committee of 82" report is cited as the rationale for allowing private development on public lakes.

Clarke County residents are watching.

"We've got an e-mail chain, so we kind of let everybody know what's going on," says farmer Doug Robins. He can't help wondering if somebody's going to make a profit from his family's loss of farm ground.

"From the very beginning, they seemed awful secretive about this project," Robins says. It's not that he has any evidence of skulduggery. But he can't help thinking that backroom deals could be going on. "That's just the feeling you get."

Robins doesn't understand why so many communities are talking about building lakes right now.

"This lake thing is starting to be like a virus," he says. "One county has one, so the next county has to have one.

"If they just would have been open with us..."

Over in Page County, lake opponents have the same complaint. As Lundgren puts it, "We have to fight for every piece of information we get."

Several people who regularly work on developing water projects, including Dennis Hilger of the NRCS, worry that the talk of private gain is going to make it more difficult for the government to complete projects for the public good.

"This whole issue's getting clouded with emotion rather than facts," Hilger says. Talk of private lakefront development is unprecedented in this state, and he's worried about the potential fallout as the Legislature reconsiders eminent domain restrictions. "We have never had [private development on public lakes] in Iowa. We're getting pressure from Congressman Steve King. He basically said he wants to see it."

Part of what people find so maddening is that they feel like they don't know what's really going on.

"There's major parts of this [West Tarkio] project that have never been put on this table," Brian Walker charges. "I truly believe that there are."

Playing fair

John Tapken knows just how it feels to have the government come in and take his property by eminent domain.

His wife's parents lost their farm when the city of Creston decided to condemn it for Twelve Mile Lake. He saw the dread that a family feels when a registered letter arrives in the mail. He knows the anxiety - the emotional uncertainty - people suffer when they suspect that the government is not on their side.

"Condemnation is very traumatic," he says. His wife's family ended up losing the farm that they hoped to pass down through the generations. "It was a terrible loss."

Tapken remembers that the city of Creston didn't talk to the public about what was going on. In the end, the city had to condemn most of the property for Twelve Mile Lake, because most people didn't want to sell. "That shows me a lack of communication," Tapken says. "That shows me there has to be a better way."

Tapken put that personal experience to good use with Three Mile Lake, a public project that's widely regarded as a political and environmental success story.

After the National Guard had to haul water to local communities during the drought of 1988, local leaders revived the long-standing discussions about construction of a lake near Afton. Local leaders felt the community needed an additional water supply.

So Tapken, director of the Union County Conservation Department, took it upon himself to make sure everything went right this time around.

Mostly on his own time, on Saturdays, Tapken went door to door and talked to residents who stood to lose their farms for the Three Mile Lake project. He remembers that people were skeptical at first. But he took his map around with him, and he sat at people's kitchen tables, and he told them as much as he knew.

"I talked to them out of fairness," Tapken says. "They were always kept up on what was going on."

As the project progressed, Tapken handled all of the land negotiations himself. He never sent any letters by registered mail. "I delivered everything by hand, face to face," he says.

In the end, only one property owner lost land through condemnation - 99 percent of the land for Three Mile Lake was purchased from people who sold willingly.

"It's how you treat people," Tapken says. "People don't like surprises. People like to be informed."

The dam for Three Mile Lake was finished in the fall of 1995. Since then, public amenities have been added. Now, no matter how you look at it, Union County has a lake that serves the greater public good.

The 880-acre lake provides a reliable public water supply. It cost $8.8 million - far less than most lake proposals currently on the books.

Although taxpayers ultimately funded that $8.8 million, they didn't feel the pinch because there was no local tax increase. The only local match was $250,000, which Tapken had salted away in his county budget because he saw this project on the horizon.

The DNR estimates Three Mile Lake brings $10 million per year to the local economy with fishermen, picknickers, campers and other visitors.

Three Mile Lake is ranked the fourth-cleanest lake in the state. All of the water draining into it is filtered before it comes in, and there is no risk of sewage contamination from surrounding development.

Most of Iowa's lakes are green with algae blooms from pesticide run-off. But at Three Mile, Tapken says, "you can see 12, 14 feet below the surface of the water. You can actually see the fish bite your bait."

People can go water-skiing, swim on the sand beach, play sand volleyball, fish off a handicapped-accessible pier, sit and watch the eagles.

There are 100 camp sites with electricity for RVs.

Ice fishermen can clean their catches in a heated fish-cleaning station. There's also a heated comfort station with public restrooms and showers.

The lake hosts 52 bass tournaments a year. The lake's stocked with walleyes and muskies.

The public can rent a large log cabin-style lodge for wedding receptions, anniversaries, class reunions, business retreats. The kitchen has a commercial-size refrigerator for holding large trays of food.

There are eight small cabins with individual heat and air-conditioning units, and they rent for just $45 a night on weekends and less during the week. Each cabin has two sets of bunk beds, a sofa sleeper, a microwave and a small refrigerator, so families or friends can camp together cheaply.

When people rent cabins at Three Mile Lake, Union County doesn't bother with charging them security deposits. Tapken trusts them to clean up after themselves. And he says people always leave the cabins clean.

"Treat people like you'd want to be treated yourself," Tapken says.

As far as he's concerned, Union County had to use eminent domain with only one property for this lake because people were treated with a little respect and dignity.

"The tool of eminent domain is not a bad tool if it's not abused," he says. After all, nearly every road, nearly every park, has been built with land that someone had to give up for the common good.

But Tapken says he'd never want to take land from one person so someone else could profit from it.

"I would not be part of a project to condemn someone's land to resell to somebody else," Tapken says. "I won't do it. I don't want any part of that." He says eminent domain wasn't criticized "until private development snuck in the back door."
Citizens need public amenities, like lakes.

"Without a good supply of water, we aren't going to have people living here," Tapken says. However, "we have to be reasonable. That's a big word."

The key to a successful project, as Tapken sees it, is a matter of basic decency.
"I think you have to start out from day one to be open and honest," he says. "I mean each and every one of the landowners should be kept informed." CV

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