It's not quite a fair comparison as these two businesses can simply move next door and continue to operate shop. It would be more similar to Microsoft buying land that included the BCC offices and you had to accept it and then move down the block. Depending on the offer it ranges from a really good deal to outright theft.

It's not a really good deal, because if it was a really good deal they would try to persuade you directly rather than asking the legislatosaurus to do it for them.

For a single isolated transaction that may well be fine; when (for whatever reason) there is only one possible vendor - the last parcel of land blocking a scheme for example - that vendor is using the law (of private propoerty in that case) to exploit the other party quite as much if they choose to hold out for an unreasonable sum. The whole purpose of this system is to determine a fair means for the transaction as a whole to proceed without either party being able to unreasonably exploit the other.

It is not reasonable to compare the "fair market value" of a small business with the fair market value of Manhattan real estate, which is far more liquid and easily valued.

If the property sold in an arms length transaction, then I would agree, it would be very easy to determine its fair market value: the mutually acceptable price at which the sale occurred. However, if the parties were able to come up with a mutually acceptable number, then one party wouldn't have had to call in a favor and have the state seize the property for them.

"A house kinda like your house just sold for $500k, so here is $500k, now give me your keys" is just as unfair as "A business kinda like your business just sold for $50k, so here is $50k, now give me your passwords."

First let me concede up front that we are descending into handwavery here.

Second let me acknowledge that on the merits of this case divorced from the issues we're discussing here, I agree, Columbia shouldn't be the beneficiary of eminent domain.

But your logic doesn't hold. Just because there is a fair market value for an asset doesn't mean one party will be reasonable about selling it. It's not even likely that they'll be reasonable. The unreasonableness of a seller can indeed inflict economic harm on the overall market and on the public good. We recognize this, which is why we can build interstate highways without being held hostage by 2-bit real estate wildcatters.

A friend of mine is dealing with this right now in the real estate market; she owns several properties but rents her own property. Her landlord is being foreclosed on. She's made an offer above fair-market value for the house in a fashion that spares the owner from the (dreadful) cost of real estate agency. But the seller won't budge, believing that any offer from my friend must be the market floor value, else it wouldn't have been offered. And so my friend may have to move and the seller will end up receiving less money as a result.

This kind of micro-tragedy happens every other minute in a free market and I generally agree that we should suck it up and be happy for all the benefits the free market offers in return, but it's not fair to pretend there's no trade-off.

And, come on, it's totally unfair to compare a real estate transaction to the valuation of a small business.

I disagree. If Eminent Domain is used for public good, it could be justified. Here, they forcefully took the property for a private organization [It does not matter whether it's profit or non-profit]. I completely understand the need for Eminent Domain but it's clearly being abused here.

Also, how does your friend's example make any sense? If the seller doesn't want to sell at a particular price, it's seller's choice.

Let me take another example. I bought my first car (a used 2001 Altima) in 2004 from some guy. As it was my first car, it has a special emotional value to me. In 2010, the value of the car is around 2000$ [I don't even drive it anymore]. Let's say tomorrow Nissan finds out that it's their 1 millionth car sold and they want it back to put it in Nissan Museum. They offer me the 2000$, the market value of the car. I refuse because the car more than 2000$ to me. They offer me 10,000$ and I still refuse. What if there is no price at which I am willing to sell the car? Should US Government deposit 2000$ in my bank account and give the car to Nissan by force?

[On a side note, I believe that their is price for everything. But seller should be able to decide the price, not buyer.]

Looking at the actual case: There were two businesses involved. Tuck It Away and a gas station owned by Gurnam Singh and Parminder Kaur. From their names, I can tell you that they are from state of 'Punjab'. Most likely they are immigrants to America and they would have worked hard to set up their gas station. Don't you think it's morally wrong to seize their business property just because another private organization can benefit? What if US Government forced you to hand over your company (which you built it from blood and sweat) to McAfee for 3x multiple of your revenue? Would that be okie to you?

Please do not get distracted by 'small business' example of Patrick. We are talking about 'private property' (either small business, real estate, car or what have you) and using (or rather abusing) eminent domain to seize that private property and giving it to another private organization.

The real estate is part of the business. A large part of the value of the business comes from customers knowing that those businesses were where they were. By stealing the land, Columbia is stealing the business as well.

I don't really understand this point, but I don't think I need to. It is objectively true that some assets are more liquid and easier to value than others; one of the hardest assets to value is a going business concern, and one of the easier assets to value is Manhattan real estate.

Similarly, a (fictitious and nonsensical) eminent domain claim on a portfolio of treasury bills would be inherently fairer than a (fictitious and only slightly less nonsensical) eminent domain claim on Bingo Card Creator; the holder of the bills can easily calculate the fair value of his assets, and Patrick can't.

On a spectrum running:

<-- small business --------------------- treasuries -->

where is a gas station in Manhattan? It's not right next to Bingo Card Creator.

Perhaps I'm biased because my father is a real estate broker and I've heard his stories, but there is a (probably overpaid) profession of people whose only job is to sit down together and dicker over how much commercial real estate should actually sell for. It isn't a T-bill, where you can just ask the computer, or a stock, where you can just look at the transaction for a fungible unit which sold 5 seconds ago, or even a pork belly, which for an agreed upon quality of delicious piggy goodness can be treated as "implements IPorkBelly" and sold quite easily. (Hiring questions: what methods does IPorkBelly offer...)

I agree that CRE isn't t-bills; I point out only that there is a spectrum of liquidity, and that on it, small businesses are to the left of antique furniture and the works of second-tier postminimalist painters. I originally wrote "commercial bonds" instead of treasuries, but realized quickly that someone on HN would write 6 grafs on how the bond markets are opaque, unfair, and intensely susceptible to gamesmanship.

Thomas, you keep focusing on the 'type of private property' where as Patrick, me and others are talking about the benefiting party. The 'type of private property' being seized is IMMATERIAL.

If NYC wanted to build a subway and needed to acquire the gas station, I would be completely on-board with the use of Eminent Domain but that's not what is happening here.

The type of property is not immaterial. A very straightforward bit of intellectual wankery gets you to that point: you own Bingo Card Creator; there is a national Bingo emergency; eminent domain is employed; the US Government pays you $15MM USD. Patrick's a principled guy but I say this as one of his friends that principle is for sale for $15MM.

So now we're just haggling over the price.

Given that we are, it is inherently less fair for seize something for a which a real market value can't be determined.

When you evoke seizure of a software company, you're evoking the image in your mind of a government attempting to value your company. But the market famously doesn't know how to value small businesses. You know you're not getting anything resembling what it's worth.

When you seize a piece of commercial real estate in Manhattan, you can tell me all you want about how shady the NYC CRE market is, but there is a relatively liquid market for NYC CRE. It is less unfair to seize commercial real estate, corporate bonds, t-bills, or proven mineral deposits than it is to seize a business.

But. And please read this next sentence carefully. I agree with you about Columbia. I think this is an abuse of eminent domain.

(Why - oh - why is Thomas talking about this then? Because it's so - f'ing - much - more - interesting than yet another long rant about how the government is evil and I'm ashamed of my country and the weather in December is awful and God really needs to get on top of fixing that).

?? The current discussion is about the abuse of eminent domain, not about the type of property which fall under eminent domain. IMHO, you are not adding much to discussion by bringing up NYC CRE.