Without using eminent domain, a large chunk of the possible future value goes to surrounding land-owners who may have done little or nothing to create that value. It does not seem economically possible to build a city that is cheap to live in without locking the price of land down in some way, at some point. It is not obvious how to do this well, but eminent domain seems to be a necessary component of it. If even fairly rural land starts out pre-speculated, there is no hope, there is a value/livability value that cities cannot ever rise above.
Apparently, the Charter Cities Institute for all their dreams, does not dream of transcending that limit any time soon. They seem to disagree with the use of eminent domain completely
From their FAQ
How do you minimize the risk of charter city developers using eminent domain to secure land?
The Charter Cities Institute will never become involved with a project that takes land from its rightful [weasel words?] owners. Generally, charter cities are decades long projects. As such, we encourage developers to take long term perspectives. While eminent domain might save money in the short run, it delegitimizes the charter city and sets up a host of problems later on.
Does anyone know what they're talking about? A search of their site didn't turn up anything.