Eminent Domain Report

We all knew that redevelopment agencies wouldn't go down without a fight after the California Supreme Court delivered the elimination-knock-out-punch in California Redevelopment Association v. Matosantos.  As expected, agencies took a two-pronged approach to try and stave off their elimination: (1) through the legislature, and (2) through the court system.  Friday delivered another one-two punch to redevelopment agencies, and this time they may be finally pinned in a corner.  

Legislative Update:  With respect to the legislative fix, we reported a few weeks ago that Senator ...

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 ...

On January 19, 2012, the California Court of Appeal issued an unpublished decision addressing this very question.  Specifically, in Flying J, Inc. v. Department of Transportation, Case No. F060545, the Court of Appeal affirmed the dismissal of plaintiff's claim for lost profits, finding that plaintiff's evidence was not sufficiently comparable in character and its calculations relied on too much conjecture about future events.      

Plaintiff Flying J operates truck stops.  In 1997, it purchased an 18.8 acre parcel adjacent to State Routes 14 and 58 in the Mojave ...

 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 ...

We're looking back on 2011's wild ride and looking forward to the twists and turns still in front of us in 2012.  We've summarized all of this into the 2011 version of our annual Eminent Domain Year in Review piece.

For those who don't want to take the time to read the actual article, here are a few of the highlights:

• In January, Governor Brown proposed eliminating redevelopment agencies.  In June, he finally got legislation to accomplish that goal.  In August, the Supreme Court agreed to hear a legal challenge to the new law.  And on December 29, the Supreme Court upheld the law dissolving ...

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 ...

Although best known today as the voice of bumbling Mayor West on Comedy Central’s Family Guy, Adam West’s real claim to fame was playing the caped crusader in the 1960s television series Batman.  Batman and the Boy Wonder regularly matched wits with the Riddler, a villain who would deliver clues to his elaborate criminal plans by deceptively simple riddles.  A recent unpublished decision, City of Southgate v. Jauregui (Court of Appeals of California, 2nd District, Division 4, No. B228334) both poses and solves a deceptively simple riddle, worthy of the Riddler himself. 

Riddle me ...

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 ...

We're gearing up for our webinar tomorrow on the Supreme Court's decision last week upholding ABX1 26, but striking down ABX1 27.  I will be moderating a panel that will include my colleagues Gale Connor, Brad Kuhn, Jeff Stava and Jennifer Capitolo.  

We'll also be joined for additional commentary by former California Senate Republican Leader Dick Ackerman and former Los Angeles County Counsel Bill Pellman. 

We're going to spend about an hour talking about the law and how it will be implemented.  We'll also take questions - and even do our best to answer them.  If you already ...

Yesterday, we reported briefly on the Supreme Court’s decision in California Redevelopment Assn. v. Matosantos.  As many of you undoubtedly know by now, the outcome was the nightmare redevelopment agencies feared most, but that many (including us) had forecast after listening to oral argument last month. 

The Court upheld ABX1 26, allowing the dissolution of California’s redevelopment agencies to proceed, but struck down ABX1 27, the voluntary buy back program that would have allowed redevelopment to continue.  In particular:

• The Court had little difficulty upholding ABX1 ...

Today, the California Supreme Court issued its much-anticipated opinion in California Redevelopment Assn. v. Matosantos, the case challenging ABX1 26 and ABX1 27.  In a decision foreshadowed by the tone of last month's oral argument, the Court upheld ABX1 26, but struck down ABX1 27 as a violation of California's Proposition 22:

• "Assembly Bill 1X 26, the dissolution measure, is a proper exercise of the legislative power vested in the Legislature by the state Constitution."
• "A different conclusion is required with respect to Assembly Bill 1X 27, the measure conditioning further ...

It's Christmas Eve Eve here in Southern California.  Our chances for a white Christmas seem small; as I look out my window, I see bright sunshine and know the temperature is in the 70s.  Still, it's easy to see that the holiday season is in full swing.

If you are in need of some last minute shopping ideas and don't know what to get the eminent domain practitioner on your gift list, there are some great choices to be found.

Perhaps the most all-inclusive option comes to us through the Institute for Justice.  Its "Rally in a Box" comes complete with stickers, posters, signs, and six ...

Yesterday, we wrote about the Avenida San Juan Partnership v. City of San Clemente decision.  For more information on the decision, see the following:

• Man Bites Dog! California Property Owner Wins Regulatory Taking Case in the California Court of Appeal, a blog post by Gideon Kanner on Gideon's Trumpet;
• Either Reverse Your Unconstitutional Spot Zoning, Or Pay. Your Choice, by Robert Thomas on his inversecondemnation.com blog; and
• Eminent Domain: Winning Owner In Inverse Condemnation Battle Cannot Recoup Fees By Attorney Owner Or Reap A Fee Multiplier Request, a piece in ...

Last April, we reported on a bizarre case arising out of the City of San Clemente's attempt to down zone a piece of property.  The trial court had concluded that the down zoning constituted a taking and ordered the City to rescind a decision supported by that down zoning.  The City had denied an application to develop the property because the application did not conform to the current general plan and zoning ordinance (the City seems to have sidestepped the fact that the development applications included applications to amend the general plan and zoning). 

In addition to a writ of mandate ...

The debate over the extensions of some of the Bush-era tax cuts have been making national news for some time.  It's splattered all over the newspaper and has its own running commentary on the political talk shows. 

But today, there's a different twist for those of us who deal with eminent domain.  Congress is debating the extension of the payroll taxes yet again, but this time, a major eminent domain issue is wrapped up in the fray.

Specifically, Republicans in Congress had said they planned to couple the extension of the tax cuts with a requirement to fast-track approval of a ...

One of the peculiarities with California's eminent domain law lies with the way it addresses situations in which an agency makes a deposit of probable compensation in a case in which one or more of the defendants raise a right-to-take challenge. 

The issue came to a head yet again, with the California Supreme Court holding that a lender's withdrawal of a condemnation deposit does not result in a waiver of the property owner's right to take challenge.  The decision, Los Angeles County Metropolitan Transpiration Authority v. Alameda Produce Market (November 14, 2011), chronicles the long ...

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 ...

The Supreme Court heard oral arguments yesterday in California Redevelopment Assn. v. Matosantos, the action filed by the California Redevelopment Association, League of California Cities and others challenging the constitutionality of ABX1 26 and ABX1 27.  Based upon their questions it appeared that the Justices were satisfied that ABX1 26, the bill abolishing redevelopment agencies, passes constitutional muster.  However, ABX1 27, the bill allowing for their reinstatement by the making of  voluntary payments, seemed to be on much shakier grounds.  The ...

Last Friday I spoke at the CLE Eminent Domain Conference in San Francisco.  The topic of my talk was "The Death And Possible Rebirth of Redevelopment in California."  I spoke on the current state of limbo in which redevelopment agencies find themselves as a result of the passage of ABX1 26 and ABX1 27 and the ensuing lawsuit challenging their constitutionality.  While I mentioned that the California Supreme Court would be hearing arguments on November 10th, I neglected to mention how to access the webcast of the proceedings.  For those interested in watching the arguments, direct ...

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 ...

As recently reported by Jason Plautz at E&E in his article "Bipartisan lawmakers seek $13.8B for infrastructure improvements," members of the Transportation and Infrastructure Committee are discussing a potential bipartisan bill that would provide approximately $13.8 billion in funding for wastewater infrastructure projects, and several billion in alternative financing for clean water infrastructure projects. 

According to the draft bill summary, the bill would "create thousands of new, domestic jobs in the construction and wastewater-support sectors through ...

I wanted to provide a quick update on what is going on in the lawsuits involving ABX1 26 and ABX1 27.  For those trying to keep score on who stands where, the following is a list of the amicus briefs that have been filed. 

In support of the CRA / League of Cities' position, seeking to overturn the laws:

• Association of California Cities - Orange
• City of Irvine
• Long Beach
• Public Interest Law Western Center
• San Bernardino County
• Southern California Coalition
• Southern California Non Profit Housing
• Riverside County

In support of the State's position, seeking to uphold the laws:

• Affordable Housing ...

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 ...

You may recall that last year in Ridgewater Associates LLC v. Dublin San Ramon Services District, the California Court of Appeal held that a subsequent purchaser cannot recover for inverse condemnation where (1) it knowingly purchases property impacted by a government taking, and (2) the purchase price reflects the property's condition in light of the government impacts.  See Buyer Beware: Improper Sale Documentation Results in Waiver of Inverse Condemnation Claim by Brad Kuhn and Rick Rayl.  While the decision was originally published at 184 Cal.App.4th 629, the ...

As probably everyone following this blog already knows, redevelopment is under attack in California.  While some might assume the attack flows from continued outrage over the Supreme Court's Kelo decision, the reality is actually quite different.  Here in California, the driving force is not moral outrage, but budgetary crisis. 

As I learned earlier this week at the IRWA Chapter 67 lunch meeting, Governor Brown's plan to eliminate redevelopment is not part of some long-planned effort.  According to a presentation by one of my partners, Gale Connor, when now Governor Brown was Mayor ...

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

All eminent domain attorneys know the importance of getting the Final Order of Condemnation right.  After all, it's the document that gets recorded, effecting the transfer of title to the agency.  But sometimes mistakes occur, and when they do, the condemning agency typically has a remedy. 

In DFP, LTD v. Sacramento Regional County Sanitation District, an unpublished opinion issued earlier this week, the agency requested a nunc pro tunc order revising the final order to correct a "scrivener's error."  The error:  the recorded final order stated that the agency acquired an easement, when ...

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 ...

It is pretty common, at least in California, for a business being displaced by an eminent domain proceeding to seek compensation for loss of business goodwill.  But what happens when the "business" is a non-profit organization?

In Cathedral City, the city has plans to acquire a property on which a longstanding thrift store sits.  An August 17 article by Colin Atagi in The Desert Sun, Cathedral City plans may push Angel View move, opens:

A Cathedral City thrift store that's older than the community itself may relocate if the city acquires the property through eminent domain.

While the ...

On Thursday we reported the California Supreme Court’s decision to assert jurisdiction over the writ petition challenging the constitutionality of AB 26 X1 and AB 27 X1.  The Court also issued a partial stay of AB 26 X1 and a complete stay of AB 27 X1.  While the Court’s actions were designed to preserve the status quo until it renders a final decision in January, the status quo can mean very different things to different agencies.

For those that could not afford the payments necessary to re-establish themselves, the Court’s action is nothing short of a stay of execution.  But for those ...

We'll have more soon, but I wanted to report quickly that the California Supreme Court announced today that will assert jurisdiction over the CRA's lawsuit involving the constitutionality of AB 26 X1 and AB 27 X1, the bills involving the dismantling of California's redevelopment agencies. 

The Court also announced a partial stay of the legislation while it considers the case.  A news release by the Judicial Council of California describes the scope of the Court's stay as follows:

The court allowed the first statute [the one that eliminates redevelopment agencies] to remain in effect ...