How about we recognize that when others, like the folks who put in the private school, are wise, plan ahead and generate value from their choices and decisions, it is not a legitimate function of government to point a gun at the wise party in order to steal their assets. The school first there is the school that has a right to be there.
Lester,
I think your characterization is not quite accurate.
Governments don't steal land, they take it by paying fair market value. The land's value is appraised just as it would be in any sale.
The economic argument is that public use of the land is - supposedly - more valuable than private use; so valuable that the government's use outweighs private use.
In this case, a public school is more valuable than a private school.
At least that's the argument.