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Holdout (real estate)

Nail house
Chongqing yangjiaping 2007.jpg
Nail house in Chongqing
Traditional Chinese 釘子戶
Simplified Chinese 钉子户

A holdout is a piece of property that did not become part of a larger real estate development because the owner either refused to sell or wanted more than the developer would pay. There are many examples of hold-outs in the United States, the United Kingdom, Germany, China, Japan, and other countries.

Macy's department store in New York City, for example, does not cover the whole block because of a holdout named the Million Dollar Corner on the corner of Broadway and W 34th Street. Now decorated as a Macy's shopping bag, the building is a holdout from the construction of Macy's Herald Square, and received its name from the fact that it sold for a million dollars in 1911, an unprecedented sum at the time.

Similarly, 30 Rockefeller Center, also in New York, has slight setbacks at its corners of 49th and 50th streets on 6th Avenue due to two buildings at those corners. The owner of 1258 6th Avenue, John F. Maxwell, grandson of the original owner, outright refused to sell to John D. Rockefeller during his land grab for construction of the complex, whereas, while Rockefeller was successful in purchasing the townhouse at 1240 6th Avenue, the lessees, who had signed a long-term lease, refused to vacate unless they were bought out to their asking sum of $250 million (equivalent to $3.9 billion in 2017).

In Whitechapel, in the East End of London, the construction of the department store Wickhams, completed in 1927, on the north side of the Mile End Road was obstructed by the Spiegelhalter brothers who owned and ran a jewellers at no. 81. The store building was completed around the jewellers shop.

The construction of new runway capacity at Narita International Airport in Japan starting in the 1990s was met with significant local protest; in one example, families refused to move even as the original and subsequent runway construction projects began around them.

In the United States, private property is protected by the Fifth Amendment to the Constitution from seizure by the government without "just compensation". Under the concept of eminent domain, local and national government agencies are entitled to take private property for purposes in the public interest, but must offer owners compensation amounting to the value of the property. The United Kingdom, New Zealand, and the Republic of Ireland have a comparable process called compulsory purchase, and there are equivalent laws in Australia and South Africa. In Kelo v. City of New London, the United States Supreme Court held that the government is entitled to take land from private parties for any reason, including to give to private developers. The decision was widely unpopular, and spurred various states to enact laws prohibiting the practice, restricting eminent domain seizures to public works projects. However, the practice is common in other states. The efforts generally begin with an offer by the private group or government agency to purchase the land, and only become a question of eminent domain if the parties cannot negotiate a purchase price.


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