66.1331 Blighted area law.
(1) Short title. This section shall be known and may be cited and referred to as the “blighted area law."
(2) Findings and declaration of necessity. It is found and declared that there have existed and continue to exist in cities within the state, substandard, insanitary, deteriorated, slum and blighted areas which constitute a serious and growing menace, injurious and inimical to the public health, safety, morals and welfare of the residents of the state. The existence of these areas contributes substantially and increasingly to the spread of disease and crime (necessitating excessive and disproportionate expenditures of public funds for the preservation of the public health and safety, for crime prevention, correction, prosecution, punishment, and the treatment of juvenile delinquency and for the maintenance of adequate police, fire and accident protection, and other public services and facilities), constitutes an economic and social liability, substantially impairs or arrests the sound growth of cities, and retards the provision of housing accommodations. This menace is beyond remedy and control solely by regulatory process in the exercise of the police power and cannot be dealt with effectively by the ordinary operations of private enterprise without the aids provided in this section. The acquisition of property for the purpose of eliminating substandard, insanitary, deteriorated, slum or blighted conditions or preventing recurrence of these conditions in the area, the removal of structures and improvement of sites, the disposition of the property for redevelopment incidental to these activities, and any assistance which may be given by cities or any other public bodies, are public uses and purposes for which public money may be expended and the power of eminent domain exercised. The necessity in the public interest for the provisions of this section is declared as a matter of legislative determination.
(2m) Discrimination. Persons otherwise entitled to any right, benefit, facility, or privilege under this section may not be denied the right, benefit, facility, or privilege in any manner for any purpose nor be discriminated against because of sex, race, color, creed, sexual orientation, status as a victim of domestic abuse, sexual assault, or stalking, as defined in s. 106.50 (1m) (u), or national origin.
(3) Definitions. In this section, unless a different intent clearly appears from the context:
(a) “Blighted area" means any area, including a slum area, in which a majority of the structures are residential or in which there is a predominance of buildings or improvements, whether residential or nonresidential, and which, by reason of dilapidation, deterioration, age or obsolescence, inadequate provision for ventilation, light, air, sanitation, or open spaces, high density of population and overcrowding, or the existence of conditions which endanger life or property by fire and other causes, or any combination of these factors, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency and crime, and is detrimental to the public health, safety, morals or welfare.
(c) “Housing" includes housing, dwelling, habitation and residence.
(d) “Land" includes bare or vacant land, the land under buildings, structures or other improvements, and water and land under water. When employed in connection with “use", for instance, “use of land" or “land use", “land" includes buildings, structures and improvements existing or to be placed on land.
(e) “Lessee" includes the successors or assigns and successors in title of the lessee.
(f) “Local legislative body" means the board of alderpersons, common council, council, commission or other board or body vested by the charter of the city or other law with jurisdiction to enact ordinances or local laws.
(g) “Planning commission" means the board, commission or agency of the city authorized to prepare, adopt or amend or modify a master plan of the city.
(h) “Project area" means a blighted area or portion of a blighted area of such extent and location as adopted by the planning commission and approved by the local legislative body as an appropriate unit of redevelopment planning for a redevelopment project, separate from the redevelopment projects in other parts of the city. In the provisions of this section relating to leasing or sale by the city, for abbreviation “project area" is used for the remainder of the project area after taking out those pieces of property which have been or are to be transferred for public uses.
(i) “Public body" means the state or any city, county, town, village, board, commission, authority, district or any other subdivision or public body of the state.
(j) “Purchaser" includes the successors or assigns and successors in title of the purchaser.
(k) “Real property" includes land; land together with the buildings, structures, fixtures and other improvements on the land; liens, estates, easements and other interests in the land; and restrictions or limitations upon the use of land, buildings or structures, other than those imposed by exercise of the police power.
(L) “Redevelopment company" means a private or public corporation or body corporate, including a public housing authority, carrying out a plan under this section.
(Lm) “Redevelopment plan" means a plan for the acquisition, clearance, reconstruction, rehabilitation or future use of a redevelopment project area.
(m) “Redevelopment project" means any work or undertaking to acquire blighted areas or portions of blighted areas, and lands, structures, or improvements, the acquisition of which is necessary or incidental to the proper clearance or redevelopment of the areas or to the prevention of the spread or recurrence of slum conditions or conditions of blight in the areas; to clear blighted areas by demolition or removal of existing buildings, structures, streets, utilities, or other improvements; to install, construct, or reconstruct streets, utilities, and site improvements essential to the preparation of sites for uses in accordance with a redevelopment plan; or to sell, lease or otherwise make available land in blighted areas for residential, recreational, commercial, industrial or other use or for public use, or to retain the land for public use, in accordance with a redevelopment plan. “Redevelopment project" includes the preparation of a redevelopment plan, the planning, surveying, and other work incident to a redevelopment project, and the preparation of all plans and arrangements for carrying out a redevelopment project.
(n) “Rentals" means rents specified in a lease to be paid by the lessee to the city.
(4) Power of cities.
(a) A city may exercise all powers necessary or convenient to carry out and effectuate the purposes and provisions of this section, including all of the following:
1. Prepare redevelopment plans and undertake and carry out redevelopment projects within its corporate limits.
2. Enter into any contracts determined by the local legislative body to be necessary to effectuate the purposes of this section.
3. Within its boundaries, acquire by purchase, eminent domain or otherwise, any real or personal property or any interest in that property, together with any improvements, necessary or incidental to a redevelopment project; hold, improve, clear or prepare for redevelopment any such property; sell, lease, subdivide, retain for its own use, mortgage, or otherwise encumber or dispose of any such property or any interest in that property; enter into contracts with redevelopers of property containing covenants, restrictions, and conditions regarding the use of the property in accordance with a redevelopment plan and other covenants, restrictions and conditions that it deems necessary to prevent a recurrence of blighted areas or to effectuate the purposes of this section; and make any covenants, restrictions, conditions or covenants running with the land and provide appropriate remedies for their breach.
4. Borrow money and issue bonds, and apply for and accept advances, loans, grants, contributions, and any other form of financial assistance from the federal, state or county government, or other public body or from any sources, for the purpose of this section; and give security as may be required and enter into and carry out contracts in connection with the security.
(b) Condemnation proceedings for the acquisition of real property necessary or incidental to a redevelopment project shall be conducted in accordance with ch. 32 or any other laws applicable to the city.
(c) Notwithstanding any other provision of law, the local legislative body may designate, by ordinance or resolution, any local housing authority existing under ss. 66.1201 to 66.1211, any local redevelopment authority existing under s. 66.1333, or both jointly, or any local community development authority existing under s. 66.1335, as the agent of the city to perform any act, except the development of the general plan of the city, which may otherwise be performed by the planning commission under this section.
(5) General and project area redevelopment plans.
(a) The planning commission shall make and develop a comprehensive or general plan of the city, including the appropriate maps, charts, tables and descriptive, interpretive and analytical matter. The plan shall serve as a general framework or guide of development within which the various area and redevelopment projects under this section may be more precisely planned and calculated. The plan shall include at least a land use plan which designates the proposed general distribution and general locations and extents of the uses of the land for housing, business, industry, recreation, education, public buildings, public reservations and other general categories of public and private uses of the land.
(b) For the exercise of the powers granted and for the acquisition and disposition of real property for the redevelopment of a project area, the following steps and plans are required:
1. Designation by the planning commission of the boundaries of the project area proposed by it for redevelopment, submission of the boundaries to the local legislative body and the adoption of a resolution by the local legislative body declaring the area to be a blighted area in need of redevelopment.
2. Adoption by the planning commission and approval by the local legislative body of the redevelopment plan of the project area. The redevelopment plan shall conform to the general plan of the city and shall be sufficiently complete to indicate its relationship to definite local objectives as to appropriate land uses, improved traffic, public transportation, public utilities, recreational and community facilities, and other public improvements in the project area. The plan shall include a statement of the boundaries of the project area; a map showing existing uses and conditions of real property in the area; a land use plan showing proposed uses of the area; information showing the standards of population density, land coverage, and building intensity in the area after redevelopment; a statement of proposed changes, if any, in zoning ordinances or maps and building codes and ordinances; a statement as to the kind and number of site improvements and additional public utilities which will be required to support the new land uses in the area after redevelopment; and a statement of a feasible method proposed for the relocation of families to be displaced from the project area.
3. Approval of a redevelopment plan of a project area by the local legislative body may be given only after a public hearing conducted by it, and a finding by it that the plan is feasible and in conformity with the general plan of the city. Notice of the hearing, describing the time, date, place and purpose of the hearing and generally identifying the project area, shall be published as a class 2 notice, under ch. 985, the last insertion to be at least 10 days prior to the date set for the hearing. All interested parties shall be afforded a reasonable opportunity at the hearing to express their views respecting the proposed plan, but the hearing is only for the purpose of assisting the local legislative body in making its determination.
(c) In relation to the location and extent of public works and utilities, public buildings and other public uses in the general plan or in a project area plan, the planning commission shall confer with those public officials, boards, authorities and agencies under whose administrative jurisdictions the uses respectively fall.
(d) After a project area redevelopment plan of a project area has been adopted by the planning commission and approved by the local legislative body, the planning commission may certify the plan to the local legislative body. The local legislative body shall exercise the powers granted to it in this section for the acquisition and assembly of the real property of the area. Following certification, no new construction may be authorized by any agencies, boards or commissions of the city, in the area, unless as authorized by the local legislative body, including substantial remodeling or conversion or rebuilding, enlargement or extension of major structural improvements on existing buildings, but not including ordinary maintenance or remodeling or changes necessary to continue the occupancy.
(6) Transfer, lease or sale of real property in project areas for public and private uses.
(a) After the real property in the project area has been assembled, the city may lease or sell all or part of the real property, including streets to be closed or vacated in accordance with the plan, to a redevelopment company or to an individual, a limited liability company or a partnership for use in accordance with the redevelopment plan. Real property in the project area shall be leased or sold at its fair value for uses in accordance with the redevelopment plan notwithstanding that the fair value may be less than the cost of acquiring and preparing the property for redevelopment. In determining the property's fair value, a city shall take into account and give consideration to the following:
1. The uses and purposes required by the plan.
2. The restrictions upon and covenants, conditions and obligations assumed by the purchaser or lessee, and the objectives of the redevelopment plan for the prevention of the recurrence of slum or blighted areas.
3. Any other matters that the city considers appropriate.
(b) Any lease or sale under this subsection may be made without public bidding, but only after a public hearing by the planning commission upon the proposed lease or sale and its provisions. Notice of the hearing shall be published as a class 2 notice, under ch. 985.
(c) The terms of a lease or sale under this subsection shall be fixed by the planning commission and approved by the local legislative body. The instrument of lease may provide for renewals upon reappraisals and with rentals and other provisions adjusted to the reappraisals. Every lease or sale shall provide that the lessee or purchaser shall carry out the approved project area redevelopment plan or approved modifications and that no use may be made of any land or real property included in the lease or sale nor any building or structure erected which does not conform to the approved plan or approved modifications. In the instrument of lease or sale, the planning commission, with the approval of the local legislative body, may include other terms, conditions and provisions as in its judgment will provide reasonable assurance of the priority of the obligations of the lease or sale and of conformance to the plan over any other obligations of the lessee or purchaser and assurance of the financial and legal ability of the lessee or purchaser to carry out and conform to the plan and the terms and conditions of the lease or sale; and may include terms, conditions and specifications concerning buildings, improvements, subleases or tenancy, maintenance and management and any other matters as the planning commission, with the approval of the local legislative body, may impose or approve, including provisions whereby the obligations to carry out and conform to the project area plan shall run with the land. If maximum rentals to be charged to tenants of housing are specified, provision may be made for periodic reconsideration of rental bases.
(d) Until the planning commission certifies, with the approval of the local legislative body, that all building constructions and other physical improvements specified to be done and made by the purchaser of the area have been completed, the purchaser may not convey all or part of the area, without the consent of the planning commission and the local legislative body, and no consent may be given unless the grantee of the purchaser is obligated, by written instrument, to the city to carry out that portion of the redevelopment plan which falls within the boundaries of the conveyed property. The grantee, and the heirs, representatives, successors and assigns of the grantee, may not convey, lease or let the conveyed property or any part of the property, or erect or use any building or structure erected on the property free from obligation and requirement to conform to the approved project area redevelopment plan or approved modifications.
(f) The planning commission may, with the approval of the local legislative body, demolish an existing structure or clear the area of any part of the structure, or may specify the demolition and clearance to be performed by a lessee or purchaser and the time schedule for the work. The planning commission, with the approval of the local legislative body, shall specify the time schedule and conditions for the construction of buildings and other improvements.
(g) In order to facilitate the lease or sale of a project area or, if the lease or sale is of parts of an area, the city may include in the cost payable by it the cost of the construction of local streets and sidewalks within the area or of grading and other local public surface or subsurface facilities necessary for shaping the area as the site of the redevelopment of the area. The city may arrange with the appropriate federal, state or county agencies for the reimbursement of outlays from funds or assessments raised or levied for these purposes.
(7) Housing for displaced families. The housing authority shall formulate a feasible method for the temporary relocation of persons living in areas that are designated for clearance and redevelopment. The housing authority and the local legislative body shall assure that decent, safe and sanitary dwellings substantially equal in number to the number of substandard dwellings to be removed in carrying out the redevelopment are available, or will be provided, at rents or prices within the financial reach of the income groups displaced.
(8) Use-value appraisals. After the city has assembled and acquired the real property of the project area, it shall, as an aid in determining the rentals and other terms upon which it will lease or the price at which it will sell all or part of the area, place a use value upon each piece or tract of land within the area which, in accordance with the plan, is to be used for private uses or for low-rent housing. The use value shall be based on the planned use and, for the purposes of this use valuation, the city shall provide a use valuation appraisal prepared by the local commissioner of assessments or assessor. Nothing contained in this section may be construed as requiring the city to base its rentals or selling prices upon the appraisal.
(9) Protection of redevelopment plan.
(a) Before execution and delivery by the city of a lease or conveyance to a redevelopment company, or before consent by the city to an assignment or conveyance by a lessee or purchaser to a redevelopment company, the articles or certificate of incorporation or association or charter or other basic instrument of the company shall contain provisions defining, limiting and regulating the exercise of the powers of the company so that neither the company nor its stockholders, officers, directors, members, beneficiaries, bondholders or other creditors or other persons may amend the terms and conditions of the lease or the terms and conditions of the sale without the consent of the planning commission, together with the approval of the local legislative body, or, in relation to the project area development plan, without the approval of any proposed modification in accordance with sub. (10). No action of stockholders, officers, directors, bondholders, creditors, members, partners or other persons, nor any reorganization, dissolution, receivership, consolidation, foreclosure or any other change in the status or obligation of any redevelopment company, partnership, limited liability company or individual in any litigation or proceeding in any federal or other court may effect any release or any impairment or modification of the lease or terms of sale or of the project area redevelopment plan unless consent or approval is obtained.
(b) A redevelopment corporation may be organized under the general corporation law of the state to be a redevelopment company under this section; may acquire and hold real property for the purposes set forth in this section; and may exercise all other powers granted to redevelopment companies in this section.
(c) A redevelopment company, individual, limited liability company or partnership to which all or part of a project area is leased or sold under this section shall keep books of account of its operations of or transactions relating to the area entirely separate and distinct from accounts of and for any other project area or part of the other project area or any other real property or enterprise. No lien or other interest may be placed upon any real property in the area to secure any indebtedness or obligation of the redevelopment company, individual, limited liability company or partnership incurred for or in relation to any property or enterprise outside of the area.
(10) Modification of development plans. An approved project area redevelopment plan may be modified at any time after the lease or sale of all or part of the area if the modification is consented to by the lessee or purchaser, and if the proposed modification is adopted by the planning commission and submitted to the local legislative body and approved by it. Before approval, the local legislative body shall hold a public hearing on the proposed modification, notice of the time and place of which shall be given by mail sent at least 10 days prior to the hearing to the then owners of the real properties in the project area and of the real properties immediately adjoining or across the street from the project area. The local legislative body may refer back to the planning commission any project area redevelopment plan, project area boundaries or modification submitted to it, together with its recommendation for changes in the plan, boundaries or modification and, if recommended changes are adopted by the planning commission and formally approved by the local legislative body, the plan, boundaries or modification as changed becomes the approved plan, boundaries or modification.
(11) Limitation upon tax exemption. Nothing contained in this section may be construed to authorize or require the exemption of any real property from taxation, except real property sold, leased or granted to and acquired by a public housing authority. No real property acquired under this section by a private redevelopment company, individual, limited liability company or partnership either by lease or purchase is exempt from taxation by reason of the acquisition.
(12) Financial assistance. The city may accept grants or other financial assistance from the federal, state and county governments or from other sources to carry out the purposes of this section, and may do all things necessary to comply with the conditions attached to the grants or loans.
(13) Cooperation and use of city funds.
(a) To assist any redevelopment project located in the area in which it may act, a public body may, upon terms that it determines, furnish services or facilities, provide property, lend or contribute funds, and perform any other action of a character which it may perform for other purposes.
(b) A city may appropriate and use its general funds to carry out the purposes of this section and, to obtain funds, may incur indebtedness, and issue bonds in amounts that the local legislative body determines by resolution to be necessary for use in carrying out the purposes of this section. The issuance of bonds by a city under this paragraph shall be in accordance with statutory and other legal requirements that govern the issuance of obligations generally by the city.
(14) Limited obligations.
(a) In this subsection, “municipal obligation" has the meaning specified in s. 67.01 (6).
(b) For the purpose of carrying out or administering a redevelopment plan or other functions authorized under this section, a city may issue municipal obligations payable solely from and secured by a pledge of and lien upon any or all of the income, proceeds, revenues, funds, and property of the city derived from or held by it in connection with redevelopment projects, including the proceeds of grants, loans, advances, or contributions from any public or private source. Municipal obligations issued under this subsection may be registered under s. 67.09 but shall otherwise be in a form, mature at times, bear interest at rates, be issued and sold in a manner, and contain terms, covenants, and conditions that the local legislative body of the city, by resolution, determines. The municipal obligations shall be fully negotiable, shall not require a referendum, and are not subject to the provisions of any other law or charter relating to the issuance or sale of municipal obligations. Obligations under this section sold to the United States government need not be sold at public sale.
(15) Construction. This section shall be construed liberally to effectuate its purposes and the enumeration in this section of specific powers does not restrict the meaning of any general grant of power contained in this section or to exclude other powers comprehended in the general grant.
(16) Liquidation and disposal. Projects held under this section may be liquidated and disposed of under s. 66.1201 (25).
History: 1975 c. 94, 311; 1981 c. 112; 1983 a. 24; 1983 a. 189 ss. 58, 329 (7); 1983 a. 207 s. 95; 1991 a. 156, 316; 1993 a. 112, 184, 213; 1995 a. 225; 1999 a. 150 ss. 297, 434 to 440; Stats. 1999 s. 66.1331; 2001 a. 30, 103; 2009 a. 95.
Blight Prevention: The Use of Eminent Domain to Condemn Underwater Mortgages in Wisconsin. Williams. 2014 WLR 1231.