Your question is somewhat vague and missing pertinent facts. Here is what I understand your question to be (correct me if I am wrong): You are installing the infrastructure (e.g., power lines, water, sewer, etc.) for a new subdivision project, but recently discovered that the city has an easement on the land allowing them access to the land for utilities infrastructure. Your construction will somehow block access, thus denying use of the easement. You want to know if the city can stop construction as a result. The answer to your question is yes (the city can always take land for a public use), but the real question is whether or not they have to pay you for your loss. First, easements can run with the land. Therefore, if the easement was recorded (whether or not you knew about it), you may be bound by the easement. Second, if the easement does not run with the land, the city can always use its eminent domain power to take the land, but would have to pay fair market value for the loss. Third, the city has the power to make reasonable conditions for issuance of a building permit (e.g., we will only give you a building permit if your project includes a public park on the north end).