Kelo Economics?

I ran across a post on a law school blog that seemed to argue in favor of the Kelo opinion on the grounds of positive externalities and economic efficiency. I think the analysis I found there is incorrect and I've posted my explanation over at Eminent Domain Institute. Here is my conclusion:

"On efficiency grounds, for the hypothetical being discussed, I conclude that the best efficiency policy is for government to offer a subsidy for preservation to reflect the marginal external benefit associated with option and existence values. I might be willing to accept the idea that the power of eminent domain is also consistent with efficiency, but ONLY IF 'just compensation' is defined to reflect the external benefit not reflected in the market value of the property."