Written By: Bryan R. Beene
Welts may have put some of that speculation to rest, with his statements during an interview at The Wall Street Journal’s Future of Everything event. The team, he said, intends to build a “new arena and entertainment district in Dallas” by the 2031 NBA season. But the team’s selection of a site—which would require thirty to fifty acres—is “by no means close.” And on the twentieth anniversary of the landmark Supreme Court holding in Kelo v. City of New London, it could be that Texas lawmakers’ reaction to Kelo will have implications for the location of a new arena, whether within Dallas city limits, somewhere else in the larger Dallas-Fort Worth Metroplex, or beyond.
Kelo and the Backlash
In Kelo, the Supreme Court established that a government (whether national, state, or local), after using eminent domain to force a private homeowner to sell property to that government, may then turn the property over to a private interest. The city of New London, Connecticut had compelled a number of homeowners to relinquish their property, in order to make way for construction of a shopping center by a private company. A group of homeowners challenged this forced sale as a violation of the “Takings Clause” of the Fifth Amendment to the U.S. Constitution.
The Takings Clause does not prohibit the government’s use of eminent domain, but constrains it in two ways. First, the government must offer “just compensation” for the property. Second, and at issue in Kelo, is that the taking must be for a “public use.” The homeowners argued that the city government’s plan for the property was not a public use, since the property would be transferred to a private shopping center developer.
Traditional examples of “public use” have included government operations such as constructing a road or a military base. But in June 2005, the Kelo Court held 5–4 that a goal of economic development fits within the meaning of public use, even when it involves immediate transfer of the property to a private interest. The projected job creation and tax revenues are a sufficient public purpose.
The holding led to widespread bipartisan backlash, with Susette Kelo and her little pink house becoming symbols of what many saw as powerful government and business interests invading the property rights of working-class homeowners. According to the Institute for Justice, which represented the homeowners in litigating Kelo, forty-seven states have since shored up their protections of private property against eminent domain, with Texas among them.
Reaction by the Texas Legislature and Implications for the New Mavericks Arena
Five months after Kelo, Texas Government Code Section 2206.001 took effect. The statute prohibits eminent domain takings of land, when the primary purpose is economic development or some other private benefit. Notably, this statute exempted “a sports and community venue project approved by voters at an election held on or before December 1, 2005.” (This date was significant, as voters in Arlington, Texas had, in November 2004, approved partial city government financing for the construction of what is now AT&T Stadium, home of the Dallas Cowboys. That project required extensive eminent domain takings of small business and homeowner property.)
Section 2206.001 makes it questionable that the Dallas government would be able to use eminent domain to facilitate the Mavericks’ acquisition of the acreage required for a new facility. In 2009, an appeals court in Texas held that the takings for the Cowboys’ stadium were in pursuit of a “public purpose” and so allowable under the Texas Constitution. However, Section 2206.001, in its larger ban on using eminent domain for purposes that primarily benefit private entities, carves out a specific exception for sports venues approved as of 2005. This creates a strong argument that the statute does not provide such an exception for projects after 2005, and makes it difficult to argue that a future NBA arena would somehow fall outside of the statute’s prohibitions. Even if the Supreme Court and the Texas Constitution would allow it, the Texas legislature seems to have forbidden using eminent domain to make way for privately owned sports venues.
This means that the Mavericks, in selecting an arena site, might find it unworkable to assemble thirty to fifty acres in any area owned by multiple small landowners. Without forced sale via eminent domain, a single landowner could frustrate the project by holding out for an excessive price, or by refusing to sell entirely. This might prompt the team to limit their search to acreage in Dallas with a single owner, or even (despite Welts’ recent statements) to look beyond Dallas city limits to other areas of DFW—the Dallas Cowboys, after all, play their home games in the city of Arlington.
And the cynical Mavericks fan, perhaps jaded by the February trade of star player Luka Dončić, might be interested to know that in 2008 Nevada voters amended their state constitution to prevent Kelo-style transfers of private property. However, the language of this amendment, unlike the Texas statute, does not make specific mention of sports venue projects. Indeed, the Nevada legislature has since declared that the “development of large-scale and one-of-a-kind convention, entertainment and sports venues . . . within the Las Vegas area” is “in the public interest.” Might Nevada property law be more amenable to a casino-owning family’s construction of a future Mavericks arena?
Sources:
Austin Veazey, NBA Commissioner Adam Silver Shuts Down Mavericks Rumor, Sports Illustrated (Apr. 17, 2025), https://www.si.com/nba/mavericks/news/nba-commissioner-adam-silver-shuts-down-dallas-mavericks-rumor-relocation.
Cascott, L.L.C. v. City of Arlington, 278 S.W.3d 523 (Tex. App. 2009).
Francesca Fontana, An NBA Legend on How to Get Through a Mess, Wall St. J. (May 30, 2025, 8:00 AM), https://www.wsj.com/sports/basketball/an-nba-legend-on-how-to-get-through-a-mess-d21dacea?gaa_at=eafs&gaa_n=ASWzDAhaEtkM3PbaJEEddOsOUEusUg5Ra315nXFTPH9OPcl-VQfMwBpDvTfF1alF4fw%3D&gaa_ts=6845a4bd&gaa_sig=mfss4tpsEhjGkk8Cpff34XqCaSbjw4iOAdNDGIHZSB3ud74ymQYYVPpDC4ed5qKQoTUlZ_P_ZxiYidlaLxqMAA%3D%3D.
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Kelo Eminent Domain, Inst. for Just. https://ij.org/case/kelo/.
Kelo v. City of New London, 545 U.S. 469 (2005).
Kermitt L. Waters et al., PISTOL: 10 Years and the Sky Has Not Fallen, Nev. Law. 23 (Feb. 2018). https://nvbar.org/wp-content/uploads/NevadaLawyer_Nov2017_PISTOL.pdf.
Lauren Trimble, Comment, Eminent Domain a Decade After Kelo: Are Takings to Build Professional and College Sports Stadiums in Texas a Valid Public Use?, Tex. A&M J. of Prop. L. 1101 (2018).
Nick Wooten, Mavs CEO Holds Firm on New Arena, Entertainment District in Dallas, Dall. Morning News (May 28, 2025, 8:00 PM), https://www.dallasnews.com/business/real-estate/2025/05/28/mavs-ceo-holds-firm-on-new-arena-entertainment-district-in-dallas/.
S.B. 1, 82d Leg., 35th Spec. Sess. (Nev. 2023).
Stadium Land Costs Additional $20 Million, NBCDFW (May 11, 2009, 9:15 AM), https://www.nbcdfw.com/news/local/stadium-land-costs-additional-20-million/1875946/#:~:text=Offers%20to%20buy%20land%20for,’t%20%22lowball%22%20anyone.
Tex. Gov’t Code Ann. § 2206.001.