Eminent Domain Report

Despite being destroyed and dismantled, redevelopment in California has been born once again, this time reincarnated under the name of "Infrastructure Financing Districts."  Last week, Governor Brown signed into law AB 471, which amends section 53395.4 of the California Government Code to allow infrastructure financing districts to finance a project or portion of a project located within a redevelopment project area or former redevelopment project area.

Infrastructure financing district law now provides a mechanism to finance projects that would have otherwise ...

It's not too often you see one government agency threaten another agency with eminent domain.  But it does happen.  A recent article by Barbara Henry in the U-T San Diego, Encinitas has few options on Pacific View site, highlights on such dispute taking place right now.

According to the article, the City of Encinitas very much wants to acquire the Encinitas Union School District's 2.8-acre property that formerly housed the Pacific View Elementary School.  But the School District has rejected the City's overtures, turning down a $4.3 million offer to purchase.  Instead, the School ...

California's infrastructure received another push in the right direction last week as the California Transportation Commission (CTC) allocated $152 million to 36 projects statewide -- bringing its total transportation funding for 2013 beyond the $3 billion barrier.  

Some highlights of projects receiving funding this year as 2013 winds to a close:

• Los Angeles received (i) $26 million to improve the Port of Los Angeles, (ii) $20 million to widen the I-5 freeway from the Orange County Line to the I-5/I-605 junction, and (iii) $28 million for the Exposition Light Rail Project ...

The Southern California Chapter of the Appraisal Institute will be holding its 46th Annual Litigation Seminar this Friday, November 15.  The list of topics sounds fantastic:

• It's Just a Simple Rent Re-Setting in a Ground Lease
• If the Glove Doesn't Fit . . . Make it Fit (Abuses in the Tax Appeal Process)
• Hot Topics in Eminent Domain
• Planning for and Managing Large Acquisition Projects -- Lessons Learned
• Uneconomic Remnants -- Are They Always?
• We Just Need Your Property on a Temporary Basis -- For the Next 4 Years
• Decisions, Decisions, Decisions (A Review of Recent Major Valuation Cases)
• The ...

Eminent domain litigation can be expensive.  Acquiring small strips of property often costs more in legal and appraisal costs than the value of the property itself.  Sometimes public agencies have no choice but to condemn these minor acquisitions, as property owners cannot be found, will not negotiate, or otherwise take unreasonable positions.  But when property owners are willing to reasonably negotiate, public agencies need to think hard about these cost savings and weigh them against setting a precedent for other acquisitions.  

For example, if it will cost an agency $20,000 in ...

Eminent domain actions are unique in that "the court, rather than the jury, typically decides questions concerning the preconditions to recovery of a particular type of compensation, even if the determination turns on contested issues of fact."  (See Emeryville Redevelopment Agency v. Harcros Pigments, Inc. (2002) 101 Cal.App.4th 1083, 1116.)  This is consistent with the general rule in eminent domain that the jury’s role is only to determine the amount of damages, leaving other questions to be resolved by the Court.  While these factual disputes are typically decided by the judge ...

According to Jason Henry's article in the San Gabriel Valley Tribune, West Covina contests condemnation of properties at Westfield Mall, Lakes Drive, the City of West Covina plans to contest an eminent domain action filed by the California Department of Transportation (Caltrans) to acquire land near Westfield Mall needed for the expansion of the I-10 Freeway.  

Caltrans' proposed acquisition will eliminate a California Pizza Kitchen, the former Bob's Big Boy building, an AT&T store, as well as a row of parking spaces along the I-10 near Lakes Drive.  The City claims that Caltrans ...

More than 50 years ago, Caltrans purchased roughly 500 homes under threat of eminent domain within the planned right-of-way for the anticipated construction of the I-710 freeway (linking Monterey Park to Pasadena).  That freeway project still has not been built, yet Caltrans continues to own the properties.  There have been plenty of negative news stories about the amount of money Caltrans has spent on the upkeep of those residences (see Gideon's Trumpet), but apparently Caltrans' property ownership may finally come to an end.  Not because the I-710 freeway is actually going to be ...

According to an article in the Desert Sun, CVAG OKs plan to help fund passenger rail, the Coachella Valley Association of Governments ("CVAG") recently approved an agreement with the Riverside County Transportation Commission for a new rail fund that will devote a portion of local transportation funds to expanding passenger rail service.  It will likely take at least a year before the agencies are able to report on possible station locations and schedules, but the long-term plan is to have connections through the valley with Los Angeles.

A prior study proposed stops in three cities ...

Property owners are routinely hiring attorneys well in advance of a public agency's filing of an eminent domain action.  Many times, the representation begins before it is even certain whether the agency will actually move forward with acquiring the property.  And sometimes, claims for inverse condemnation may ripen during the public agency's construction of the project on other nearby properties.  When this overlap exists between inverse condemnation and potential future eminent domain actions, owners should be careful to assess how the attorney will be compensated.  A recent ...

The Southern California Chapter of the Appraisal Institute holds a great conference each year covering a variety of hot-topic issues.  The 2013 Conference will be held this Thursday, September 12, 2013, and my partner Rick Rayl and I will be presenting on the future of redevelopment in California.  So, if you're interested in what's played out over the last year for redevelopment agencies, what lawsuits have been filed, what projects are moving forward, and what the future holds for all the property that is now owned by the successor agencies, come join us.  

The rest of the Conference is ...

Eminent domain cases typically revolve around a "date of value" – the date on which property is valued in determining the amount of just compensation the condemning agency must pay.  That date is set by statute; typically, it is the date on which the agency deposits the amount of "probable compensation" to be awarded.  But sometimes, the agency's activities, such as project planning and acquisition efforts, negatively affect the value of the property.  In such circumstances, property owners may attempt to hold the agency responsible for such declines in value by claiming (1 ...

Downzoning property is always a thorny issue:  on the one hand, zoning changes are typical, "police power"-type governmental activities; on the other hand, they can significantly impact property values, and in some cases can result in governmental takings liability.  When a property owner experiences a change in zoning, there are typically two theories that can be pursued:  one is so-called "spot zoning," and the other is a regulatory taking.  

Under the first theory, "spot zoning," a property owner can have a zoning designation invalidated if it can prove the government targeted the ...

It appears the raisin handlers' luck in the recent U.S. Supreme Court decision Horne v. US Department of Agriculture has spawned a new federal takings challenge by another group of fruit growers.  This time it's a group of tomato growers asserting a takings challenge against the federal government, with a bit of a twist.  (And yes, I had to check, but both raisins and tomatoes are technically fruits -- see the things you learn?)

According to an article in the Packer, Tomato growers say eminent domain applies to 2008 crop, tomato growers are suing the federal government for $40 million in ...

Money is once again being allocated to improve public infrastructure in California.  The California Transportation Commission announced this week the award of $487 million to various projects throughout the state.  Included are:

• San Bernardino Associated Governments' (SANBAG) Lenwood Road Railroad Grade Separation Project in the City of Barstow.
• Orange County Transportation Authority's (OCTA) Lakeview Avenue Grade Separation Project in the City of Placentia.
• The Richmond Rail Connector for a new route between San Pablo and Richmond.
• Several Caltrans State Highway ...

Over the past several months, the United States Supreme Court and the California Courts of Appeal have issued several significant regulatory takings opinions addressing the liability of government agencies for enacting regulations or otherwise conditioning proposed developments.  To really dig into these opinions and their importance, Law Seminars International will be putting on a one-hour telebriefing, Regulatory Takings Claims In California, on August 19 at 1 p.m. (PST).  I will be moderating the discussion with two other outstanding regulatory takings attorneys:  Robert ...

The Press Democrat is reporting that Sonoma County has agreed to pay $815,000 to acquire by eminent domain a family's 6.5-acre property next to the Charles M. Schulz airport for a runway extension project, settling the contentious case on the eve of trial.  According to the article, Landowners, Sonoma County settle airport expansion lawsuit, the County valued the property at $135,000, while the owner's appraiser reached a valuation conclusion of $1.5 million.  Why the large spread in appraisals?  Apparently because of a dispute over the property's highest and best use.

To provide ...

It's not too often a property owner succeeds with an inverse condemnation/regulatory takings claim based on a general plan amendment or zone change.  The owner must generally demonstrate that the regulation either on its face, or when specifically applied to the owner's property, deprives the owner of the economically beneficial uses of the property.  The first attack (a "facial challenge") is difficult to prove, as it is uncommon that a general plan amendment/zone change is drafted in such a way that it -- on its face -- prevents all economic uses of the property.  The second attack (an ...

We haven't provided much in the way of updates recently on California infrastructure projects requiring eminent domain.  Either we've been too busy to notice or it's been surprisingly quiet recently.  But, some headlines did just catch our attention, so we thought we'd provide an update to our readers.

• San Luis Obispo to Institute Eminent Domain:  according to a recent article in the Tribune, City Council approves temporary easement on private land for work in congested area, the San Luis Obispo City Council unanimously adopted a resolution of necessity, approving the use of ...

Following up on my post on the case, I had the opportunity to speak with Colin O'Keefe of LXBN regarding the Supreme Court's ruling in Koontz v. St. Johns River Water Management District. In the interview, I explain the court's ruling and what impact it could have nationally. 

In our niche practice of eminent domain, inverse condemnation, and regulatory takings, the blogosphere world is going bonkers.  Why?  Because the United State Supreme Court just issued its decision in Koontz v. St. Johns River Water Mgmt District, No. 11-1447 (cert. granted Oct. 5, 2012), holding that the "essential nexus" and "rough proportionality" standards that apply to the government's attempt to exact land in exchange for a land use permit similarly apply to the government's attempt to demand monetary exactions.  This isn't necessarily shocking news for those of us ...

According to an article in the Mercury News, Fremont may use eminent domain process to buy land needed for proposed downtown, the City of Fremont's City Council will be holding a public hearing on Tuesday to consider the adoption of a resolution of necessity to acquire a property for the Capitol Avenue Extension Project.  The impacted property is located at 39138 Fremont Blvd., and it consists of 65,150 square feet of land improved with a three-story building.

The Mercury News article indicates that the staff report supporting the adoption of the resolution of necessity provides ...

Given the maze of procedural and substantive hurdles involved, property owners rarely succeed with regulatory takings claims.  Even when owners do win, it is yet more uncommon for courts to award damages, instead allowing the public agency to repeal the regulation.  But securing a victory on liability and a damages award for a temporary regulatory taking, well, that is nearly uncharted territory (going into the realm of unicorns, the Loch Ness Monster, and other mythical creatures); we've heard stories of such events, but it is rare to find reliable documentation.

That all changed ...

The California Transportation Commission (CTC) recently announced the award of $878 million to fund 114 transportation projects.  Brian Kelly, the acting Secretary of Business, Transportation & Housing Agency, stated:

This billion-dollar investment helps preserve California’s great infrastructure of the past and put thousands of Californian’s to work building something new.  These investments in preservation and innovation are absolutely critical to California’s economy:  In 2010, traffic congestion caused 95 million hours of delay, wasting fuel and ...

Light rail and rapid transit appear to be the hot ticket in California.  Most of our right-of-way acquisition and eminent domain work over the last few years has centered on such projects.  One interesting dispute that regularly pops up between the land owner's appraiser and the public agency's appraiser is whether or not there are "project benefits".  In analyzing the property's "before-condition" value, such benefits need to be excluded (whether positive or negative).  (See Code Civ. Proc., sec. 1263.330.)  But when assessing the property's "after-condition" value in the case ...

California's loss of business goodwill statute, Code of Civil Procedure section 1263.510, provides that before a business can submit its goodwill claim to a jury in an eminent domain case, the business must first demonstrate that:

• The loss is caused by the taking;

• The loss cannot be prevented by relocation or other reasonable mitigation efforts; and

• The loss will not be covered through another form of compensation, such as relocation benefits.

In late-2012, the California Court of Appeal issued a decision in People ex rel. Dept. of Transportation (Caltrans) v. Dry Canyon ...

Acquiring property for public projects typically does not occur until after the project has received environmental approval. While this is the generally accepted rule – and it makes sense for a number of reasons – must a project receive environmental clearance before an agency may begin the property acquisition process? In a recent published decision, Golden Gate Land Holdings, LLC v. East Bay Regional Park District, the California Court of Appeal answered no, and permitted an agency to proceed in reverse order: filing an eminent domain action prior to its complying with the ...

Next Tuesday, April 16, Rick Rayl and I will be hosting a teleconference for the National Business Institute titled "Acquiring Right-of-Way".  It's a 90 minute conference geared towards a national audience of attorneys, real estate professionals, government agencies, appraisers, energy companies, and right-of-way consultants.  You can find a link to the conference here.  For those of you who may be interested, here's the agenda:

1. Acquiring Right of Way for Public & Private Projects (environmental review process & funding constraints, acquisition process & timing, and ...

According to an article in the Daily Republic, Jury: County owes $1.24M in eminent domain dispute, Solano County and a local land owner recently completed an eminent domain trial, and the jury sided with the owner.  The case, Solano County v. Valine, involved the County's partial acquisition of about 10 acres through the middle of the owner's 82-acre farmland in order to develop the Suisun Valley Parkway.  

Our esteemed colleague, professor Gideon Kanner, reports that the government agency initially offered $575,000 for the partial acquisition.  After no agreement could be reached ...

According to an article in the Whittier Daily News, La Mirada agrees to pay $1.8 million to settle eminent domain case for new railroad underpass, the City of La Mirada has agreed to pay $1.8 million to settle the last eminent domain case involving acquisition of easements and property for the Valley View Avenue underpass at the BNSF Railroad crossing.  The parties were likely close to trial as they had recently exchanged final offers and final demands (see Code of Civil Procedure section 1250.410).  

The $1.8 million settlement sounds like a good deal for the City, as the owner's final ...

For those of you who have followed Nossaman's blog since the very early days, you'll recall our coverage of a significant regulatory takings case, Monks v. City of Rancho Palos Verdes.  The 2008 California decision received much press coverage in that it was one of the very few instances where property owners overcame the myriad substantive and procedural obstacles and succeeded under a regulatory takings theory.  While the Court found a taking occurred, the case was remanded back to the trial court to determine the appropriate remedy.  Now, nearly five years later, the dispute has now ...

Over the past several months, we've been following some of the recent takings cases that have made their way up to the United States Supreme Court.  So where do things currently stand?  As you've likely heard, the Court issued its decision in Arkansas Game & Fish Commission v. United States (see our summary here); we're waiting for a decision after oral argument in Koontz v. St. John's River Management District (see our summary here); and just this week, the Court heard oral argument in Horne v. U.S. Dept. of Agriculture.  

If you're looking for an excellent summary of the Horne oral argument ...

Rick Rayl and I will be speaking this Tuesday, March 19, at the International Right of Way Association (IRWA) Chapter 1 (Los Angeles) annual co-luncheon with the Appraisal Institute.  We'll provide an eminent domain "Year in Review," covering all the important court decisions from the past year.  To make it a bit interesting, we'll be coming up with some funny phrases, and we're hoping some of you will be able to guess what case we're talking about.  Rick promises there will be prizes....

The annual lunch between the IRWA and the Appraisal Institute is always a good one, so we hope you'll ...

According to an article in the Press Democrat, Rohnert Park OKs eminent domain at site of future hotel, restaurant, the Rohnert Park City Council recently adopted a resolution of necessity authorizing the use of eminent domain to acquire part of a property needed for a street widening project.  The street widening project is necessary accommodate increased traffic from the new Graton Resort & Casino, and it will require the partial acquisition of 22 properties.

The acquisition encompasses over 16,000 square feet from an undeveloped property that is slated to be improved ...

The California Department of Transportation (Caltrans) and the owner of Silveira Ranch are involved in an interesting valuation dispute stemming from Caltrans' acquisition of part of the ranchland needed for Highway 101 improvements.  According to an article in the Marin Independent Journal, Judge gives state a nod in Silveira ranch eminent domain case, the parties disagree on the property's highest and best use, and as a result, they are widely off on their valuation opinions.  Caltrans has offered the owner $1.8 million for the acquisition, while the owner is demanding $6 ...

California continues to move forward with more infrastructure improvement projects.  According to an article in the Daily Republic, Agency starts eminent domain proceedings for I-80/680 project, the Solano Transportation Authority and the California Department of Transportation (Caltrans) are embarking on a $100 million-plus project to improve traffic flow near the Interstates 80 and 680 interchange.  The project includes widening the freeway and constructing new on-ramps at the Green Valley Road interchange.

In order to move forward with project construction ...

For all you Southern California right-of-way folks, the next few weeks have quite a bit in store.  Here's what's going on in the local International Right of Way Association (IRWA) Chapters:

• IRWA Chapter 57 Meeting (2/6/13):  This Wednesday, February 6, IRWA Chapter 57 (Inland Empire) will be hosting its monthly luncheon at the Old Spaghetti Factory in Riverside.  The guest speaker is Mike Mason, MAI, from Overland, Pacific & Cutler.  Mike is a well-known eminent domain appraiser in Southern California, and his presentation is titled, "How Appraisers Lie Without ...

As we mentioned in our recent 2012 Eminent Domain Year in Review, we've seen a boom of infrastructure projects in California -- a trend we expect to continue into the near future.  So what exactly are we talking about?  Here's just a few examples:

• California Transportation Commission's $64 Million Allocation:  According to a Caltrans press release, the California Transportation Commission (CTC) recently allocated $64 million to 43 projects that will reduce traffic congestion and repair highways, local streets, and bridges.  You can find a list of the projects ...

For our readers who do not subscribe to Nossaman's Eminent Domain & Valuation Group E-Alerts, I'd suggest you check out our 2012 Eminent Domain Year in Review & 2013 Forecast.  There have been a lot of published court decisions this year, along with some interesting stories making the headlines.  The year in review is a nice, concise summary of what's taken place, and also a look forward to what to expect in 2013. 

We hope you've enjoyed our blog over the last few years.  If you have any suggestions for other topics or materials, or if we put out too much or too little content, please let us ...

This is a bit last minute, but I wanted to remind our readers to attend the International Right of Way Association (IRWA) meetings this week in Orange County and the Inland Empire.  Here's what to look out for:

• IRWA Chapter 67:  Orange County holds its monthly luncheon today, January 8.  John Ellis from Integra Realty Resources Los Angeles will provide us with an update on the 2012 real estate market and what to expect in 2013.  John and Integra are integrally tapped into the Southern California real estate market, so those in attendance should get some great insights. 

One of the prerequisites to instituting an eminent domain action is the governing agency's adoption of a resolution of necessity to acquire the necessary property.  At the time of adopting the resolution, the agency cannot be precommitted to moving forward with the condemnation.  In other words, the resolution hearing cannot simply be a "rubber-stamped," predetermined result.  

While it has happened, it is a very difficult, uphill battle for a property owner to prove that the government agency was precommitted to the taking at the time of the resolution hearing.  The agency can -- and ...

Those don't quite sound like the lyrics to the early-90's popular Ace of Base hit, "The Sign."  But they likely describe the situation of many travelers on the I-10 freeway in Los Angeles thanks to a recent California Court of Appeal decision denying a property owner's inverse condemnation action, and upholding Caltrans' required removal of an 8,000 square foot "wallscape" advertising space on the 155 West Washington Boulevard building.  

In West Washington Properties v. California Department of Transportation, a property owner filed an action against Caltrans seeking to (1 ...

Ever since we started this blog, one of the big topics we've touched on repeatedly deals with public agencies running into issues when trying to secure possession of property for right of way projects.  Whether it's due to project funding constraints, federal oversight demands, construction contract deadlines, project timing requirements, or difficulties dealing with impacted property and business owners, agencies are routinely pressed with stressful deadlines to start building their projects.  Would you like to know what pitfalls to look out for and how to avoid them?  ...

While most lawsuits typically start with the filing of a complaint, eminent domain cases really start one key step earlier, with the condemning agency’s adoption of a Resolution of Necessity.  The Resolution establishes (i) the agency’s right to take the property and (ii) the scope of the acquisition.  In order to adopt a Resolution, the agency must make a set of findings, including finding that [t]he proposed Project is planned and located in the manner that will be most compatible with the greatest public good and the least private injury.  In Council of San Benito County ...

A few weeks ago, the California Court of Appeal issued an interesting unpublished decision detailing a long, drawn-out eminent domain battle in Riverside County.  I haven't blogged about it yet because, well to be honest, it feels like such a crazy story I couldn't figure out where to start or what to cover.  But here we go.

Background

The case, Elsinore Valley Municipal Water District v. O'Doherty, starts off rather dull.  In order to serve a residential development, the Water District planned to construct a pump station in a public right of way.  Because it was believed the planned ...

On occasion, public agencies decide to abandon or partially abandon an eminent domain proceeding.  The most typical reason is due to a revision in project design, making the property no longer necessary for the proposed project.  However, to the surprise of many, an abandonment can also occur after an agency receives an unfavorable jury verdict.  Code of Civil Procedure section 1268.510 provides that an agency "may wholly or partially abandon the proceeding" any time after filing the complaint up until 30 days after the entry of final judgment.  (The only exception is if the ...

As the summer months come to an end, it means the International Right of Way Association monthly luncheons are set to resume -- at least in Orange County and the Inland Empire (those crazy right of way folks in Los Angeles go year-around).  Chapter 67's lunch is scheduled for September 11 at the Marriott in Santa Ana, and Chapter 57's lunch is set for September 12 at the Old Spaghetti Factory in Riverside.  So what's on tap?

In Orange County, my partner Rick Rayl will be presenting on the use of eminent domain for underwater mortgages.  We've covered this topic in detail here on the blog, but please ...

Below are some updates on California projects have turned to eminent domain to complete right-of-way acquisition.  They involve issues that are somewhat typical in condemnation proceedings: disputes over severance damages and a property's highest and best use.  

• Riverside County Flood Control Project:  According to an article in the North County Times, LAKE ELSINORE: Board authorizes condemnation for flood channel, the Riverside County Board of Supervisors has approved the use of eminent domain to acquire a 5-acre easement across a 33-acre property for the Arroyo Del Toro flood ...

The FHWA recently published a series of useful short videos on its website.  For those of you working on transportation projects involving federal aid, check them out below:

• Right-of-Way Coordination and Certification Requirements.  Before an agency gets to construct its project, it needs to coordinate and certify the right-of-way.  This video provides an overview of the initial coordination process when federal funds are involved, including what must be completed before putting a project out to bid, and the need to obtain physical possession of the impacted properties.

I know our blog is called the Eminent Domain Report -- implying we only cover eminent domain-related issues, but in actuality we cover anything valuation-related.  After all, our group of attorneys is known as the Eminent Domain & Valuation Practice Group.  With that said, an interesting value dispute has popped up, making its way to the California Supreme Court.  This one deals with whether intangible assets should be included in one's property tax assessments, and we're looking forward to the Court's decision.

The case, Elk Hills Power v. California State Board of Equalization, deals ...