Eminent Domain Report

We've been closely tracking H.R. 1433 -- the "Private Property Rights Protection Action of 2011" -- a bill that would limit the power of eminent domain on a national platform.  (See our August and April 2011 posts.)   There hasn't been much action lately, but we finally saw some significant movement. 

According to an article by Lawrence Hurley in the E&E Reporter, "House panel approves bill limiting federal eminent domain power," the House Judiciary Committee finally approved the bill by an overwhelming 23-5 vote. Now, the legislation will move its way to the House for approval.

Last week, we sent out a blog post with a number of quick updates on right-of-way-related issues making headlines across California.  Rick thought it would be a cool idea if we made this type of post a weekly habit, so here it goes (and, if it doesn't work or happen every week, obviously blame Rick):

• City of Visalia Can't Negotiate With Property Owner:  Here's an interesting story.  According to an article in the Visalia-Delta Times, "Visalia moves to take land near St. Johns," the City of Visalia is using eminent domain to acquire property necessary for a walking trail.  So what makes ...

With the elimination of redevelopment agencies in California, we've been spending quite a bit of time lately discussing the impacts of Proposition 13 on California's budget woes as government agencies continue to fight over a slice of the shrinking property tax budget pie.  Proposition 13 has led to another interesting property valuation battle between county tax assessors and petroleum refineries, and the California Court of Appeal recently issued a published decision, Western States Petroleum Association v. State Board of Equalization, settling the dispute.

Prop 13 ...

 Here's a few updates on eminent domain-related issues taking place in California this week:

• City of Covina Condemnation:  According to an article in the San Gabriel Valley Tribune, Covina using eminent domain to take property from Alhassen-controlled company, the City of Covina has filed an eminent domain action to acquire a vacant, half-acre property owned by West Covina-based developer Ziad Alhassen.  The City intends to utilize the property for parking for police department employees and County firefighters.  The condemnation action was necessary after the City and the owner ...

The California Court of Appeal recently issued an unpublished decision, Ridge Properties v. County of Riverside Flood Control and Water Conservation District, which addresses whether a government agency's failure to pay an agreed amount of compensation gives rise to a claim for inverse condemnation.  The answer is "no."

In Ridge Properties, a property owner planned to develop an industrial park in Riverside County.  The conditions of approval for the project required the owner to dedicate some of its property and construct a drainage or flood control facility to protect ...

The last two weeks following the California Supreme Court's decision eliminating redevelopment have been nothing short of a whirlwind.  Stories are flying all over the place on the decision's implications, whether redevelopment may be revived, or whether there may just be some small tinkering with AB1X 26.  While the updates seem to be changing by the hour, here's what we know as of today:

• Senator Alex Padilla (D-LA) has introduced a bill to delay the dissolution of the redevelopment agencies until April 15, 2012.  It's unclear if this is a delay tactic to give RDAs a chance to come up with ...

Here's a new one.  Imagine you have a government agency as your tenant, paying above-market rent, and the lease is set to expire.  The government tells you they're going to move to a new site, but they need to hold over for a while until the new site is built.  You figure, fine, the parties will just continue with the same rental rate until the government tenant moves.  Hey, what other option does the government have?  It would be incredibly expensive to find a temporary site and do a temporary move until the permanent relocation site is finalized.

This logic may work with any typical private-market ...

After our webinar on the California Supreme Court's decision in California Redevelopment Assn. v. Matosantos, we've received a number of requests for the materials both by folks who attended and those who missed the event.

Let us know your thoughts.  And, if you have any follow-up questions, feel free to give us a call or shoot us an e-mail. 

We're taking our show on the road!  In case you missed our webinar on the California Supreme Court's decision in California Redevelopment Assn. v. Matosantos, or if you just want to see our fantastic presentation skills in person (not sure what's wrong with you, but ok...), we hope you'll join us at the International Right of Way Association Chapter 57's monthly luncheon on January 11, 2012. 

IRWA Chapter 57's monthly luncheons typically begin at 11:30 a.m., and they take place at Canyon Crest Country Club at 975 Country Club Drive, Riverside, California.  Here's the ...

Before a public agency can exercise the power of eminent domain, it must adopt a resolution of necessity making certain findings in support of the taking of property.  The resolution defines the scope of the agency's acquisition, and the agency is typically prevented from contradicting the terms of the resolution in the eminent domain action.

There is a delicate balancing-act in drafting the scope of the taking in the resolution.  If the scope is too narrow, the agency may ultimately need to go back and acquire additional rights or property.  On the other hand, if the scope is too broad, it ...

We've covered in the past the impacts property and business owners suffer when government agencies plan for public projects.  We've also covered when agency planning crosses the line and results in precondemnation damages or a de facto taking.  A recent unpublished Court of Appeal decision, Joffe v. City of Huntington Park, highlights (1) the types of impacts owners suffer and (2) the difficulty owners face in trying to recover for such impacts.

In Joffe, a related property owner and furniture manufacturing business claimed that the city repeatedly expressed a desire to ...

As you may recall, we've been closely following an eminent domain action pending in Sacramento County Superior Court involving the Rancho Cordova Redevelopment Agency.  The case involves the RDA's efforts to acquire a 9-acre site owned by the Lily Company.  After the property owner lost its challenge to the RDA's right to take the property, the case proceeded to a jury trial with respect to the property's value.  The results are in, and it's not a happy ending (at least so far) for the RDA. 

The Sacramento Bee reports in its article, "Price tag sky rockets for Rancho Cordova in land ...

Anyone involved in the right-of-way industry understands that communication is key.  Whether you are on the side of a property owner or a public agency, a forced acquisition of property is never comfortable.  But being straightforward and opening an honest dialogue usually goes a long way.  Public agencies and their agents should be prepared to explain the need for the public project, the details of the take, the potential impacts, and how the value of the property was determined.

A perfect example of what happens when there is miscommunication is highlighted in a Redding.com article by ...

When we think of some of the most well-recognized and controversial decisions from our judicial system, cases like Roe v. Wade (abortion) and Dred Scott v. Sandford (slavery) come to mind.  Within our group of right of way professionals, we obviously think Kelo v. City of New London is a huge deal, as it allows for the use of eminent domain for purely economic purposes.  But does it rank up there with the others?  It does, according to US Supreme Court Justice Scalia.

According to an ABA Journal article, Justice Scalia was recently speaking to a group of students at Chicago-Kent School of Law ...

Most of us in the right of way profession are following closely the redevelopment lawsuit pending before the California Supreme Court.  The decision could have widespread implications.  So, to keep you fully informed, here's another quick update.

Yesterday, the California Supreme Court announced it will hear oral argument from 9 a.m. to 10 a.m. on Thursday, November 10, 2011.  For those of you up north who are keen on seeing the event in person, oral argument will be taking place at the Supreme Court Courtroom, Earl Warren Building, Fourth Floor, 350 McAllister Street, San ...

Many times before a government agency actually commits itself to moving forward with acquiring a property for a public project, the agency needs to undertake certain testing at the site to make sure the site is viable and feasible.  After all, no agency wants to unknowingly be stuck with a contaminated property or one that cannot support the proposed use.  The testing involved usually involves various degrees of soil sampling and boring. 

Public agencies typically seek permission from the owner of the property in question to conduct the testing.  But what happens when the ...

Want the scoop on what future challenges local government agencies face with respect to eminent domain and redevelopment?  Want to hear from some of the most well-recognized eminent domain attorneys across the nation?  Want to get some CLE credit?  Want to get all your questions answered?  Want to do it all from your desk, in a short one-and-a-half hour presentation?

Come join us on Thursday, December 1, at 10 a.m. (PST) for the online seminar, "Eminent Domain: Redevelopment Challenges for Local Government, Navigating Federal Funding Requirements, Challenges for Public ...

The use of eminent domain in a declining real estate market presents a number of unique issues.  I often receive calls from property owners who are frustrated with the government's timing of condemnation proceedings, and want to know how they can get market-peak-values for their property. 

This issue was the hot topic of a previous IRWA seminar I chaired, Property Acquisition, Appraisal, and Relocation in an Upside Down Market.  And a recent blog post by the Weiss Serota Helfman law firm, Eminent Domain Valuation in a Falling Market Poses Questions for ...

We've covered in the past regulatory takings claims and the benchmark three-prong Penn Central test for analyzing potential liability.  We've also noted the issues involved in consistently applying those factors, and the resulting unpredictibility in evaluating the merits of potential regulatory takings claims.  

William Wade, Ph.D., a resource economist with the firm Energy and Water Economics, often writes about these issues, offering clearly articulated potential solutions to dealing with these Penn Central issues.  And Mr. Wade has done it again, as his recent ...

Eminent domain is typically used in the context of a freeway widening, a grade separation project, a utility corridor, or perhaps a new school.  It's not often you hear about the use of eminent domain in the healthcare industry.  But it does happen. 

Take a recent example in Oceanside:  the Tri-City Medical Center, a public hospital, is looking to expand its facility.  It apparently has the power of eminent domain, and according to a North County Times article, OCEANSIDE:  Tri-City seeks to take land through eminent domain, it's ready to use that power this week by adopting a resolution ...

Six years ago, the US Supreme Court issued its landmark decision in Kelo v. City of New London, affirming the government's ability to exercise eminent domain for purely economic purposes.  The public backlash and media firestorm surrounding the decision turned our quirky group of eminent domain attorneys into rock stars for a short moment in time.  Ms. Kelo's battle was put to print in Jeff Benedict's Little Pink House:  A True Story of Defiance and Courage, and it now appears the infamous case is making its way to your television. 

According to a Hartford Courant article

A new published California court of appeal decision may be important for private utility companies with respect to the valuation of their possessory interests in public rights-of-way for property tax assessment purposes.  The case, Charter Communications Properties v. County of San Luis Obispo, provides that when assessing the fair market value of a utility's possessory interest, the County tax assessor will likely be able to disregard the utility's agreed-upon remaining term of possession and instead assume a much longer anticipated term of possession to match reality.  This ...

According to a Red Bluff Daily News article, "Eminent domain grants access in Tehama County," the realignment of Bowman Road and the replacement of South Fork Cottonwood Creek are moving forward, and the County is reaching deals with the impacted property owners, but only after the commencement of eminent domain proceedings.

One property owner is granting Tehama County a permanent easement and a temporary construction easement for $2,500, and another owner has reached a deal at $50,000.  On top of the monetary compensation, the County has agreed to create a driveway encroachment to ...

It is common practice for government agencies to condition approval of large developments on providing off-site public improvements.  Road widenings, park dedications, etc., are all too familiar for California developers.  When those improvements require others' property, many times the government agency utilizes eminent domain on the developer's behalf (with the developer footing the bill).  But what if the agency refuses?

According to an Inside Self-Storage article, "Derrel’s Mini Storage Owner Battles City, Homeowner in CA Self-Storage Eminent Domain Case," a ...

According to a Turlock Journal article, "TID moves ahead with eminent domain," the Turlock Irrigation District approved the adoption of a resolution of necessity in order to move forward with eminent domain for the Hughson/Grayson 115 kv transmission line project.  

As expected, impacted property owners are not satisfied with the agency's appraised value.  The article reports that residents are in the process of obtaining their own appraisals, and have requested a 30 day extension prior to the commencement of eminent domain proceedings.  (As a public agency, the irrigation district ...

The existence of California's redevelopment agencies continues to make headlines across the state.  Despite the pending lawsuit between the CRA and the State concerning the constitutionality of AB1X 26 and AB1X 27, local government agencies are still taking things into their own hands, sometimes in very opposite directions.  Two examples:

The City of Ukiah:  Over a year ago, we reported that the local business community was urging the City of Ukiah to reinstate its redevelopment agency's power of eminent domain in an effort to eliminate blight.  (Yes, you read that correctly.)  The ...

We reported earlier this month that a referendum to ultimately decide the fate of redevelopment agencies could make its way onto California's 2012 ballot.  Eminent domain opponent Marko Mlikotin had obtained clearance to begin collecting signatures to overturn ABX1 27, the bill that allows California's redevelopment agencies to avoid extinction by paying money back to the State.  With the CRA's pending lawsuit to decide the fate of ABX1 26 and ABX1 27, Mlikotin's collection efforts have apparently been nixed. 

According to a Capitol Alert article by Torey Van Oot, "Referendum of ...

It's not often a film comes out dealing with eminent domain issues.  You may remember when Avatar came out, my partner Rick Rayl and our esteemed colleague Gideon Kanner had a nice back-and-forth spar about whether the film had anything to do with eminent domain.  (Rick ended up buying Professor Kanner a movie ticket in the hopes of changing his mind.)  

Well, there can be no dispute about the eminent domain context in the recent documentary "Battle for Brooklyn," which follows a man's fight to save his Atlantic Yards neighborhood from condemnation for the New Jersey Nets' new basketball ...

Improving California's infrastructure continues to be a major focus across the state.  We've been reporting for months the stream of funding that is making its way towards much needed transportation projects.  This week California saw a major influx of additional Proposition 1B funding to the tune of $2.2 billion which will be spread across 146 highway, transit and rail projects.

• In Los Angeles, Caltrans reports that money is being spent on high occupancy vehicle (HOV) lanes on US 101, along with rehabilitation of the I-710, I-5, and SR-60 freeways.  
• For the San Diego folks, check out ...

While the redevelopment battle wages on in California, there's a somewhat similar discussion taking place on Capitol Hill.  We reported back in April about the House Judiciary Committee's consideration of H.R. 1433 -- the "Private Property Rights Protection Act of 2011" -- a bill that would prevent states and municipalities from using eminent domain for economic development purposes (such as redevelopment) on any project for which the agencies are receiving federal funding.  But there has not been much news since.  That may all change today.

According to an Energy & Environment ...

Anyone who's ever been involved in real estate development knows that as part of the permit approval process, developers are routinely required to make concessions to the government in order to move forward with proposed development plans.  And, if you're building near the coast, you usually need to jump through even more hoops (sometimes backwards and through fire) to please the Coastal Commission.  But when do the demanded concessions go too far?

We've covered in the past the "rough proportionality" and "nexus" requirements that development conditions must ...

The heavy-weight boxing match continues:  after California Attorney General Kamala Harris filed an "informal" opposition, the California Redevelopment Association (CRA) has countered with a not-so-"informal" reply brief of its own in an effort to overturn AB1X 26 and AB1X 27.

The CRA's informal reply requests oral argument in the Fall of 2011 since no one seems to dispute the urgent need for the California Supreme Court to decide the constitutionality of the recently passed legislation.  The CRA then focuses on the Attorney General's request to consider the statutes ...

Want to know what's going on with some of Southern California's largest infrastructure projects?  Here's a quick update.

• I-5 Corridor Improvements:  If you live in California, you've almost certainly spent many hours on the 5 freeway.  It runs from the US/Mexico border all the way through Oregon and even up into Canada.  With Southern California's population growth, Caltrans has invested over $3 billion to improve two areas of the I-5 over the next five years:  (i) the segment between the Orange County line and the San Gabriel River Freeway (I-605); and (ii) the segment between the ...

While Governor Brown's push to eliminate redevelopment agencies seemed to drag on forever, California's redevelopment agencies were not so slow to act once the long-contemplated ABX1 26 and ABX1 27 became law.  On Monday, the redevelopment agencies filed suit directly in the California Supreme Court seeking to overturn the recent enactments.

The redevelopment agencies are represented by the California Redevelopment Association and the League of California Cities.  San Jose and Union City also joined in the lawsuit claiming they will face elimination since they cannot make the ...

When dealing with regulatory takings claims, we've covered in the past the maze of procedural landmines that await a property owner.  We've once gone so far as to describe it as resembling "Alice's trip through Wonderland, with the parties falling in and out of state and then federal court (instead of a rabbit hole) based on procedural and substantive rules that often seem as logical as the Mad Hatter's recitals at the Tea Party."  Could one of those major obstacles disappear, allowing land owners a more direct shot at a regulatory takings claim in federal court?  The US Supreme Court could ...

It's not often we go an entire week without a blog post, but last week was a bit hectic on our end.  Here's a few California eminent domain and infrastructure updates from throughout the week:

• San Bernardino Eminent Domain:  In its article "IVDA approves eminent domain for Tippecanoe widening," The Riverside Press-Enterprise is reporting that the Inland Valley Development Agency has authorized moving forward with eminent domain to acquire 461 square feet of property in San Bernardino near the north east corner of Tippecanoe and Central Avenue as part of a street widening effort ...

Albany Beach in Northern California is a popular waterfront hot-spot.  However, the East Bay Regional Park District feels it's far from reaching its potential.  A long-planned restoration project is intended to improve the area's public access and the ecological environment.  However, the project hinges on one missing piece of the puzzle:  acquisition of a 2.8-acre parcel owned by Golden Gate Fields.

According to an East Bay Express article by Nate Seltenrich, "The Beautification of Albany Beach," the District's nine-years of negotiations have not led to a deal on the property ...

We previously reported that the City of Azusa utilized the power of eminent domain to redevelop the area formerly known as "Corky's Corner," which required the acquisition of long-time (39 years) tenant The Furniture Station.  After the owner lost a right to take challenge, he settled with the City on the value of the property.  At the time, the City noted it planned to immediately begin redevelopment efforts, but it could not say who would ultimately end up in the new space.  Well, that new tenant has officially been announced.

According to a Pasadena Star-News article by Daniel ...

Access impairment disputes must be the hot topic.  I just wrote about the Wardany access impairment case, and now another similar dispute is brewing in the City of Temecula.  This one may be a bit more interesting.

According to a North County Times article by Aaron Claverie, TEMECULA: City looks ready to fight eminent domain suit, Old Town property owners Charles and Sylvia Hargis have filed an inverse condemnation action against the City of Temecula due to the City's purportedly closing off access to the Hargis' coffee shop during construction of the City's $70 million ...

California eminent domain law generally provides that a government agency's impairment of a property's access is not compensable unless the impairment qualifies as "substantial".  Dozens of cases have addressed access impairment claims raised by property and business owners both in the traditional eminent domain context and through inverse condemnation actions, and while there are some general guidelines that can be established, many times the determination of whether an impairment qualifies as "substantial" will depend on the particular facts of the case.

Take for ...

When analyzing potential liability for a regulatory takings claim, most land use and eminent domain attorneys immediately look to the three-prong test set forth by the U.S. Supreme Court in Penn Central Transportation Co. v. New York City (1978) 438 U.S. 104.  Those three factors include:

• the economic impact of the regulation;
• the extent to which the regulation has interfered with distinct investment-backed expectations; and
• the character of the government's regulation.

Unfortunately, it's much easier said than done.  Practitioners and courts alike have struggled ...

There's an odd story unfolding in Mendocino County's Brooktrails Township.  It dates back to when Lake Emily was originally built in 1972, where its development apparently resulted in the partial taking of a number of properties.  But the township never paid for the acquisitions.  It is unclear how or why the owners let this slide.  (My first thought was perhaps no one noticed; but the takings were rather large -- one owner alone lost 1,300 square feet of property.)

Fast forward to more than thirty years later.  In 2006, the township decided to raise Lake Emily several feet, which would further ...

Last week was quite busy in the world of California eminent domain, and the start of this week appears to be no different.  A few updates:

• International Right of Way Assocation (IRWA) Chapter 67 is holding its annual, half-day seminar on May 10 at the Holiday Inn in Santa Ana (sorry for the late notice).  The seminar is focused on mobilehome acquisitions and appraisals, and there are a number of great speakers lined up.  (I'll also give a quick update on the City of Los Angeles v. Plotkin decision involving precondemnation damages.)  I hope to see you there.

• The Marysville Joint Unified ...

According to an article by Ken Carlson in the Modesto Bee, "Modesto will try eminent domain," the Modesto City Council this week voted 6-0 in favor of utilizing eminent domain to acquire easements necessary for the widening of Roselle Avenue.  The remaining hold-out properties include part-takes from a seven-acre ranchette and a two-and-a-half acre vacant lot.  The owner of the ranchette, Daniel Nickles, claims the City's survey is flawed, and its $15,000 offer is less than a tenth of fair market value.

The acquisition if Nickles' property includes a 5-foot by ...

The U.S. Court of Appeals for the Federal Circuit recently issued an interesting opinion which addresses the question of whether or not a government agency's application of the Endangered Species Act can trigger a property owner's Fifth Amendment Takings Claim.

My colleague Ben Rubin has a more detailed post about the case, Klamath Irrigation District v. United States, on our firm's Endangered Species Law and Policy Blog.  More generally, the Klamath Irrigation District case analyzes whether the US Bureau of Reclamation's decision to reduce water delivery to farmers ...

I presented an update on eminent domain/redevelopment issues making their way through the legislature at this week's IRWA Chapter 67 (Orange County) monthly meeting, and I've received a few follow-up requests for more information.  So I decided it was probably worthwhile to put all the information here on the Nossaman blog. 

• Status of California Redevelopment Agencies:  It's now been several weeks since the  attempted Assembly votes, where Governor Brown's attempt to eliminate redevelopment agencies fell one vote short.  The Governor needs the $2.2 billion in ...

Roy Fowler's Furniture Station has been a well-known staple within the City of Azusa.  The 39-year-old store has witnessed much change in the area known as Corky's Corner.  However, the store is now officially shutting down after the City of Azusa acquired the property through eminent domain.

According to an article in the San Gabriel Valley Tribune, "Long-time Azusa furniture store to close after losing battle against city, eminent domain," the Furniture Station finally reached a settlement with the City after a contentious eminent domain battle.  The City sought to ...

We've covered the Guggenheim v. City of Goleta regulatory takings case pretty exhaustively, most recently noting there is a pending petition for Supreme Court review.  While we wait for the fateful decision as to whether the Supreme Court will take up the Guggenheim case, the 9th Circuit Court of Appeals recently issued another mobilehome rent control regulatory takings decision in Colony Cove Properties v. City of Carson.  Like the 9th Circuit's en banc decision in Guggenheim, the park owner's regulatory takings claim was unsuccessful.

The owner in Colony Cove

The California Court of Appeal recently issued an interesting unpublished decision addressing a property owner's claim that a government entity's regulation of asbestos constituted a regulatory taking.  The owner's unsuccessful challenge presents a nice summary of what not to do when pursuing a regulatory takings claim, and just how difficult it is for an owner to succeed.

In Butte Equipment Rentals, Inc. v. California Air Resources Board, the property owner operated a rock mining and quarrying business.  The owner alleged that two regulations adopted by the ...

Today the California Transportation Commission announced the allocation of $101 million to fund 90 state-wide transportation projects.  The CTC's updated project allocation list provides a full breakdown of all the projects.

In reviewing the project list, there appears to be a big push towards going "green":  many of the projects involve improvements such as tree planting, compressed natural gas (CNG) buses, pedestrian and bicycle trails, or acquisition of property for restoration and habitat protection.  There's also a handful of ...