Eminent domain puts Moncure properties in crosshairs of NC’s VinFast project

House in New Orleans being bulldozed. Image public domain via USDA.

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  • "This is proof positive that North Carolina politicians and bureaucrats are prepared to trample on the rights of private property owners in order to benefit favored business interests,” said Jon Guze, Senior Fellow for Legal Studies at the John Locke Foundation.

VinFast’s U.S. manufacturing CEO, Van Anh Nguyen, recently joined Gov. Roy Cooper in announcing a partnership with Central Carolina Community College to train potential employees for their proposed Chatham County facility in Moncure, which will use eminent domain to complete the project.

However, the announcement comes just months after the Vietnamese electric vehicle manufacturer made a series of announcements that included layoffs and pushing the Chatham County project out to 2025. They met at what will be known as the college’s Moore Manufacturing and Biotech Solution Center in Sanford, Lee County.

About $50 million is still needed to renovate the building before any training or activity can take place. Reports say officials are hoping that state lawmakers will help foot the bill for the remaining portion. Once the funding is secured, Nguyen said they plan to hire and train people in 2024 before vehicle production starts in 2025.

Everything moving ahead as normal. Or is it?

More than a year ago, the company first announced its plans to build a $4 billion fully automated electric-vehicle assembly and battery-manufacturing plant at Triangle Innovation Point in Moncure. The company said they planned to hire over 7,000 workers. To attract the newly formed company, the state and Chatham County committed to spending nearly $1.2 billion in incentives over the next 32 years.

Using the state’s Transformative Job Development and Investment Grant program (JDIG), VinFast could get up to $316.1 million in reimbursement from the state over three decades if the company meets hiring goals. The state is spending another $450 million on infrastructure around the site. The total state appropriation is estimated at $766 million, with Chatham County giving VinFast another $400 million incentive package.

In January, VinFast announced that it was consolidating its U.S. and Canadian strategic business and management operations into a single unit called VinFast North America, headquartered in Los Angeles.

The next month, the company announced it was cutting 80 jobs in the U.S., including its chief financial officer. Three sales executives also left the company.

In March, VinFast announced that it would push off production at the Moncure site from 2024 to 2025, citing the need for “more time to complete administrative procedures.”

DOT uses eminent domain for Vinfast site

Eminent domain is the right of a government or its agent to take private property for public use with compensation to the owner. However, the original property owners are often left with little choice, and the practice has a questionable history as companies change their plans well after land has been acquired by the government.

In the case of Vinfast, about 27 homes, five businesses, and Merry Oaks Baptist Church will have to forfeit their land to make way for a new highway that economic developers say is needed for access in and out of the Moncure site.

The church has stood on the border between Moncure and New Hill, on the corner of Old U.S. 1 and New Elam Church Road, since 1888.

Reportedly, Phase 1 of the Vinfast project is estimated to relocate three businesses, 11 homes, and Merry Oaks Baptist Church; Phase 2 is estimated to impact an additional two businesses and 16 homes.

Jonathan Rand, public information officer for North Carolina Department of Transportation, told Carolina Journal in an emailed statement on April 12 that, “We are awaiting environmental permits that are necessary before any right-of-way acquisition can begin, possibly this spring. If those plans come through, construction could begin on the first phase of the project by the late summer or as the right of way becomes available. The start of Phase 2 is contingent on VinFast’s creation of jobs and investments.”

So, while awaiting approvals — and given the unpredictable history of the EV manufacturer — residents, business owners, and church members feel uneasy. A profile in the Chatham County Record shows that members of the church felt powerless to oppose the state government’s eminent domain taking of their property because they had limited internet connectivity for the one virtual hearing and limited ability to attend the one in-person hearing in Pittsboro. At this point, they are leaning on their faith.

“His will is not always clear,” Rev. Jim Brady told the paper. “When the time comes, we will graciously give back to God what God gave to us. But in the meantime, the only thing I know how to do is stand.”

Grounded projects

There are a number of cases where, in the end, taking citizens’ land, homes, businesses, and churches ends up being unnecessary. Sometimes, the project that had the properties purchased through eminent domain never gets off the ground.

The site of the failed Durham-Orange Light Rail, where 23 acres were taken by eminent domain, was supposed to provide a link between Chapel Hill and Durham.

Reports say that GoTriangle had spent $3.8 million to take possession of properties between I-40 and Farrington Road. But both transit officials and officials from Durham and Orange counties decided to call it quits on the project in 2019 after several people lost their homes.

The reason? GoTriangle’s board of trustees stopped work on the project after the transit organization failed to secure land donations, private funding, and cooperative agreements from key partners, including Duke University, ahead of a legislative deadline.

It was reported that Duke University refused to give up a piece of land that was needed for the project.

Legislators had set an April 30, 2019, deadline to have private money secured in order for the state to chip in their promised $190 million in funds.

What’s more, the failed project was expected to cost North Carolina taxpayers almost $160 million before the project closed out in 2020. GoTriangle had paid out the money on planning, engineering design, and other costs.

NC is not alone

National cases include Poletown, a neighborhood in Northeast Michigan, which saw 1,500 homes, 144 businesses, and 16 churches demolished to build a General Motors auto plant in 1981, only to have it close in 2018.

The subject of fair compensation for eminent domain use has also been cited in such cases as Kelo v. New London. The city of New London, Connecticut, used eminent domain to seize Susette Kelo and others’ private property. Pfizer had planned to construct a $300 million research facility. Connecticut agreed to provide $78 million for the project. Pfizer received an 80% tax abatement for 10 years.

The property owners argued the city violated the Fifth Amendment’s takings clause, which guaranteed the government will not take private property for public use without just compensation. The Supreme Court, however, ruled in favor of the city in 2005.

They said the phrase “public use” from the Fifth Amendment could be interpreted as “public benefit” and that government can take private property from an individual in order to turn it over to a private developer if the taking will result in “economic development” for the region.

Kelo was originally offered $128,000 for her property but eventually reached a settlement of $442,000.

Just like in the case of Poletown, Pfizer left New London in 2009, just as the tax abatement period had ended.

NC lawmaker files eminent domain reform bill

Rep. Dennis Riddell, R-Alamance, has introduced H.B. 458, which would amend the state constitution to prohibit condemnation of a property except for public use and be properly compensated for it if it was taken for eminent domain.

Jon Guze, senior fellow for legal studies at the John Locke Foundation, agrees with Riddell and said the General Assembly should just “finally pull the trigger” on eminent domain reform this session.

“It’s bad enough that this boondoggle is going to force North Carolina citizens and businesses to pay more than $1 billion to support a foreign corporation,” Guze said. “What makes it worse is the fact that the state is planning to use its power of eminent domain to take dozens of homes, five businesses, and a church for roadway improvements and other infrastructure projects that it will build for VinFast at taxpayer expense. This is proof positive that North Carolina politicians and bureaucrats are prepared to trample on the rights of private property owners in order to benefit favored business interests.”

Moncure residents hope, as in other cases of eminent domain, it won’t be all for naught.