By Dave Niinemets
Enquirer contributor

NEWPORT - City officials have decided to take control of the $110 million Newport Promenade project and have the city acquire necessary property.

But not all city leaders think using eminent domain and about $7 million in city funds to buy out a troubled development plan and more than 100 homeowners is a good idea.

City commission voted 3-2 Monday night to go forth with a plan to buy properties in the Cote Brilliante neighborhood. Once the entire area is purchased, a developer could then build the commercial portion of the Newport Promenade project.

The Cote Brilliant homeowners were left stuck when the retail portion of the proposed retail and upscale residential development off I-471 between 10th Street and Carothers Road encountered some difficulty in finding tenants.

Cote Brilliant residents had made plans to sell, some even signing contracts on new homes, when the city and the retail developer parted ways.

The city, basking in the success of the $250 million Newport on the Levee entertainment development has a new development zoning plan and a hot potato on its hands. Some of the residents are paying two mortgages.

City officials recently sent out a questionnaire asking residents if they would be willing to sell and based this plan on the result of those questionnaires.

"Based on that, it looks like a substantial majority want to sell," said City Manager Phil Ciafardini.

But Commissioners Jerry Peluso and Beth Fennell voted against the plan. Both have concerns over whether this is the right move for the city.

"I believe a developer should be responsible to purchase the property that is needed," said Mr. Peluso. "We're mortgaging the city. We're doing something we shouldn't be doing."

Ms. Fennell agrees. She said she feels for homeowners who have been put in a bind but doesn't believe the city should make the acquisitions.

Many homeowners had agreements with the original developer, Neyer Properties of Evendale. But Neyer Properties - which has no connection to Blue Ash developer Al Neyer - claimed it could not gather all of the properties and was withdrawn from the project.

"Whoever the developer is, they should take the risk," said Ms. Fennell. "In the current economy, there are just too many question marks."

Ms. Fennell said the acquisitions would cost the city $7 million. That money would come from bonds, with water sales money being used for the debt service.

Mr. Peluso is also concerned about a lawsuit in which some Newport residents are challenging the state's laws on eminent domain.

He said until that lawsuit is resolved, it could only cause complications to this plan.

"There's a risk there," he said. "In my time on the commission, I've demonstrated being a very conservative person most of the time. I think my position on this reflects that."

Ms. Fennell fears that the lawsuit could drag out over years, leaving the city to pay debt while the matter is hung up in court.

Mr. Ciafardini said acquisitions could begin as early as this month. Newport Housing Development Coordinator Bridget Cassidy will meet with homeowners to negotiate deals on property. Mr. Ciafardini said eminent domain would likely be necessary, especially for properties with hard-to-find owners.

"We expect eminent domain to be used in this process," he said. "Obviously we'd like to be able to negotiate with the owners we do know."

Both Mr. Peluso and Ms. Fennell would prefer to avoid eminent domain if possible.

"Using eminent domain is always a concern," said Ms. Fennell. "I guess I'll just look at it on a case-by-case basis. But my preference is we would not get to eminent domain."

"You give them what they want or build around them," added Mr. Peluso.

Ms. Fennell's family is currently challenging an eminent domain claim made by Campbell County and the Transit Authority of Northern Kentucky upon a tract of land it owns directly across the street from the World Peace Bell in downtown Newport.

The county and TANK want the land for a bus transfer center to serve the public transportation system.

The Fennells and their attorneys are challenging the claim against the industrialized property in their family for generations and located two blocks from Newport on the Levee.

Ms. Fennell, who said at the March 11 Newport Commission meeting that she wanted to be sure that any Cote Brilliant redevelopment plan does not indicate that eminent domain be used, said Tuesday there had been talk of making the Promenade a smaller development and she preferred that idea.

She also said original discussions were to buy only properties of those in dire straits. "It evolved into purchasing as much as we can and those are two separate animals," she said.