For Subscribers

Eminent Danger

Cash-strapped cities use entrepreneurs' property to lure big businesses.

By Joshua Kurlantzick

Opinions expressed by Entrepreneur contributors are their own.

Dino Paspalakis was sure his business was secure. For 17 years,as co-owner of Joyland Amusement Center, a popular arcade inDaytona Beach, Florida, he's been pouring his money intoupgrades, drawing a consistent clientele, and carrying on thefamily business. His father opened the arcade in the 1960s,"after working every snack bar on the Daytona Beach boardwalkto make money to buy it," Paspalakis, 40, says. But now hefaces a threat. The city of Daytona Beach, using a legal doctrinecalled eminent domain, is trying to take the property and give itto developers to build high-rise condos and hotels. "InFebruary [2004], they told me they'll be seizing the land.Developers are pushing out [independent] shops," he says.

Paspalakis' story is hardly unique. Historically, city andstate governments used eminent domain to take over property forpublic infrastructure, such as highways and schools. But in recentyears, as cities have assumed more responsibility for encouragingeconomic development, they have extended the power of eminentdomain and started repossessing property to give to developers andother large companies. Eminent domain "has increasingly beenused as a redevelopment tool to transfer private property from oneowner to another," argues Mark Brnovich of the GoldwaterInstitute, a Phoenix think tank. And more often than not, theprivate property lost belongs to small companies.

Continue reading this article — and all of our other premium content with Entrepreneur+

For just $5, you can get unlimited access to all Entrepreneur’s premium content. You’ll find:

  • Digestible insight on how to be a better entrepreneur and leader
  • Lessons for starting and growing a business from our expert network of CEOs and founders
  • Meaningful content to help you make sharper decisions
  • Business and life hacks to help you stay ahead of the curve

Related Topics

Editor's Pick

Have More Responsibilities at Work, But No Pay Bump? Use This Script to Get the Raise You Deserve.
Black and Asian Founders Face Opposition at All Levels — Here's Why That Has to Change
Business News

'This Made Me Physically Recoil From My Phone': Lingerie Brand Apologizes For 'Creepy' Ad Referencing Ryan Reynolds and Bras

Online lingerie retailer Harper Wilde is under fire for a bizarre sponsored post it has since pulled from Instagram.

Business News

Frontier Airlines Just Announced Its All-You-Can-Fly Summer Pass for $399. What's the Catch?

As travel begins to pick up, the airline hopes unlimited travel will jumpstart its business.

Business News

The Scam Artist Who Robbed Backstreet Boys and NSYNC Blind. 'Some of the Guys Couldn't Pay Their Car Payment.'

In the 1990s, Lou Pearlman made millions creating the Backstreet Boys and NSYNC. It was all a giant Ponzi scheme.

Living

Invest in Yourself: 10 Things Every Working Woman Should Do This Year

When striving for success, it is easy to forget about your mental and physical health. But without health, you cannot fully succeed. Follow these ten lifestyle strategies for success in your personal and professional life.