Black residents lose lawsuit against Ocean Springs over ‘slum’ label. What the judge said

The city of Ocean Springs has prevailed in a federal lawsuit filed by Black property owners downtown who claimed their rights were violated when the city included their neighborhood in an urban renewal area with blighted properties.

The Railroad District, a historic area of downtown settled by Black residents, was one of six areas the Board of Aldermen included in urban renewal districts that the city declared “slum or blighted” so the areas would qualify for federal funds for redevelopment. The lawsuit, filed in U.S. District Court in Gulfport, contended the city should have notified each property owner before taking the action

U.S. District Judge Taylor McNeel ruled Friday that the action was legislative and required no individual notice. He also noted the residents prevailed in the end. Because of the uproar, the city rescinded its action and drastically shrunk the urban renewal area, removing the Railroad District and most other acreage included.

“In a way, the Plaintiffs have already won,” McNeel wrote in his 46-page opinion. “This case is dismissed.”

Ocean Springs shrinks urban renewal area

While the city displayed an urban renewal map for 273 days before the Board of Aldermen approved the slum or blight designation in April 2023, residents claimed in the lawsuit that they should have been individually notified of the plan. The urban renewal map included 131 parcels spanning 320 acres in different parts of the city.

Railroad District residents said they were blindsided and unable to protect their property rights before the city declared their properties slum or blighted. They feared the city would use the blighted designation to take their properties through eminent domain for redevelopment. Downtown Ocean Springs, where a mix of businesses and homes have long co-existed, has been undergoing rapid growth and reconstruction.

When Railroad District property owners learned about the urban renewal plan and slum designation after the vote, they mobilized opposition. They filed their lawsuit in October 2023. They were joined by a a commercial property owner on Bienville Boulevard.

In November 2023, the city rescinded its vote on slum and blight designations for urban renewal.

Aldermen shrunk the urban renewal area to two downtown properties, one owned by the city, and the other a neighboring private property that was once home to an optics manufacturing plant. The city wants to see a hotel developed on the property but contamination from the manufacturing plant has complicated development prospects.

The city also asked for sanctions against the plaintiffs, claiming their lawsuit was frivolous. But McNeel denied the request, saying in his opinion, “In fact, while the plaintiffs did not ultimately prevail, these legal arguments were challenging, and some were quite strong.”