Indeed, state and local Chambers of Commerce have been notably resistant to the tide of post-Kelo legislation. In Oklahoma, for example, the state Chamber, the Greater Oklahoma City Chamber, the Oklahoma Association of Business and Industry, and the Oklahoma Professional Economic Development Council all urged the state Supreme Court to reject an eminent domain reform initiative. The business lobby fears that many redevelopment schemes could not move forward without the exercise, or at least the credible threat, of eminent domain by city governments.

In that sense, Benoliel was wrong about Costco's adherence to free-market principles. Eminent domain only becomes necessary when market forces are insufficient to compel the sale of property. A true market-driven project would not depend so heavily on government largesse. For that matter, when cities play such a large financial role in acquiring the property, developers have less of a stake in seeing their original projects through to fruition. As Institute for Justice lawyer Dana Berliner observed in a 2003 report on eminent domain abuse,

It is no coincidence that the states where economic development takings are most rampant--such as New York, New Jersey, and California--tend to be littered with densely packed population clusters. Between zoning parameters and the stubborn space crunch, it can be tricky to plunk down a new megastore in such areas. Building a new Home Depot or Target outlet in, say, the North Jersey suburbs often means razing existing homes and businesses. Most retail powerhouses have relied on municipal condemnation powers as a last resort, when negotiations with property owners have failed. Yet few have done so as frequently as Costco. (The 2004 Wall Street Journal article noted that Costco was "the most outspoken of the big retailers in defense of the practice.")

Consider just one example, cited by Watson in her 2001 letter to the Costco CEO. When a Costco store in Lancaster, California, began agitating to expand its warehouse onto land occupied by 99 Cents Only, a smaller retailer, and then threatened to vacate the city if its wishes weren't granted, Lancaster officials chose to use eminent domain to force 99 Cents Only off the property. "It would be derelict and irresponsible to be faced with the loss of Costco and do nothing," Lancaster redevelopment director Stafford Parker told the Los Angeles Times in June 2000. "There would be a loss of jobs, additional business closure, and a substantial loss of sales tax."

In response, 99 Cents Only sued to prevent the condemnation; and, in June 2001, a federal district court ruled in their favor, claiming that Lancaster acted unconstitutionally in order to "appease Costco." As Berliner put it in her 2003 report, the condemnation had been "for the benefit of one of two rival discount stores"--a stunning blend of corporate welfare and corporate favoritism.

More recently, the village of Arlington Heights, Illinois, condemned properties in its International Plaza shopping center to make way for a Target superstore. In May, after local business owners and their allies waged a lengthy public campaign to prevent the bulldozing and reverse the "blight" designation, the village board scrapped its contract with Target, claiming it was a mutual decision. (Village officials did say, however, that they would be seeking alternative development plans for the site.)

Especially since Kelo, eminent domain has tended to produce quirky political bedfellows. (How often does left-wing firebrand Maxine Waters find common cause with right-wing Republicans?) When one considers the benefits reaped by big-box retailers, and the consequences borne by small businesses and the less privileged, it's easy to see why many anti-corporate populists and liberal Democrats have echoed conservative calls for reform.

Duncan Currie is a reporter at THE WEEKLY STANDARD.