In a long-awaited decision that may boost the fortunes of the troubled new baseball stadium for the Washington Nationals in Southeast, the Supreme Court today ruled that local governments may expropriate homes and businesses to accommodate private development. Stemming from a case in which the local government of the city of New London, Conn., exercised their power of eminent domain over an economically-depressed area and replaced homes with a riverfront hotel and office buildings aimed at increasing the local tax base, the outcome of the case has been central to the ability of local officials to forcefully take homes and businesses on the site where the stadium is to be built.

While the area is primarily industrial, several gay nightclubs and homeowners may face eviction in the near future, one of whom has filed a lawsuit against the District for undervaluing his land. A recent controversy erupted between Council-member David Catania (I-At Large) and District CFO Natwar Gandhi, with Catania claiming that Gandhi knowingly underestimated the costs to acquiring the needed lands to come in under the $165 million price-cap imposed by the City Council in legislation passed last December. Land values in the area have shot up an estimated $30 to $50 per square foot since the stadium site was identified, but the Supreme Court’s ruling may encourage property owners of the 63 parcels needed to negotiate with the District rather than face a court-arbitrated settlement.

Justices John Paul Stevens, Anthony Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer wrote the majority opinion, while Sandra Day O’Connor was joined in a scathing dissent by Justices William H. Rehnquist, Antonin Scalia and Clarence Thomas. She wrote:

Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.

This decision follows the lead of a 1954 Supreme Court decision, Berman v. Parker, which gave the go-ahead to a Congressional-mandated slum-clearing plan in Southwest and established a long-lasting precedent concerning the use of eminent domain by local governments.