Even in Kalifornia.  From the Opinion Journal Online comes the story of Anaheim, CA:

Economic redevelopment is a serious, complex issue, but it isn't always done this way; and Anaheim, just north of Garden Grove, is proving it. Although the community faces similar problems, its city council, led by Republican Mayor Curt Pringle, is taking a more freedom-friendly approach to revitalization: protecting property rights, deregulating land uses, promoting competition, loosening business restrictions and lowering taxes.

Anaheim's old downtown was obliterated in the 1970s through past uses of eminent domain and urban renewal. Now, the city (population: 328,000) wants to build a new downtown, and the target location is called the Platinum Triangle, an area of one-story warehouses near Angel Stadium. In the typical world of redevelopment, officials would choose a plan and a developer, offer subsidies and exclusive development rights, and exert pressure on existing property owners to leave the area. Instead, Anaheim created a land-value premium by creating an overlay zone that allowed almost any imaginable use of property. Because current owners could now sell to a wider range of buyers, the Platinum Triangle is booming, with billions in private investment, millions of square feet of office, restaurant and retail space, and more than a dozen new high-rises in the works.

The area is developing quickly, without controversy and without a single piece of property taken by eminent domain. Early signs point to an enormous success. "Too often, I hear my colleagues in local government . . . say that Kelo-type eminent domain and redevelopment policies are their only tools to revitalize cities," Mr. Pringle recently said. "I have a simple message . . . Visit the Platinum Triangle."

Municipal planners in the Washington state I-5 corridor, please take note.