Eminent Domain Report

SB 77 - the budget trailer bill to eliminate redevelopment agencies in California - has been debated on the Assembly floor much of the afternoon.  When it finally came time to vote at a little after 4:00 p.m. this afternoon, it was still unclear whether Governor Brown would receive the two-thirds vote necessary. 

As the votes came in, it became obvious that (1) the votes, as expected, would fall largely on party lines, with Democrats approving the bill and Republicans rejecting it, and (2) that the final result was going to be very close, one way or the other. 

Ultimately, the vote came in ...

It looks like Governor Brown's proposal to end redevelopment as part of his overhaul of California's budget may come to a vote on both the Assembly and Senate floors today.  AB 101 and SB 77 are scheduled for a 1:00 p.m. vote, and both include within them the plan to eliminate redevelopment agencies.  They require a 2/3 vote for passage.

In the meantime, the California Redevelopment Association is promoting an alternative proposal that it hopes will be presented on the floor.  They claim that the CRA proposal will:

• Provide significant funding to schools which could also help close the ...

We've blogged a lot in the past two months about redevelopment issues and the Governor's plan to help right California's budget by, among other things, eliminating redevelopment agencies.  But most of what we've written has viewed redevelopment from the 30,000 foot level. 

For policy-making decisions, viewing the big picture is hugely important.  But a case making news this week out of National City reminds us that the redevelopment fight is also quite personal. 

The Community Youth Athletic Center has been fighting what it perceives as an attack on its very existence for nearly four ...

As we noted in yesterday's post, Vote on Redevelopment Agencies' Future Uncertain, the Governor's deadline of March 10th is slipping away.  How far can it slip?  Some believe that a vote on his budget proposal could slip all the way into the third week of March, unless a few Republicans break ranks before then.  Thus far, at least publicly, Republican opposition to both the tax extension and abolition of redevelopment remains unabated.  Among the demands in the now infamous March 7th open letter to the Governor from five key Republican senators is "Save but reform Redevelopment Agencies and ...

Just when it looked liked we had reached the eleventh hour in the California's redevelopment battle, redevelopment agencies appear to be getting at least a temporary stay of execution. Governor Brown had declared a March 10 deadline for a vote on his proposal to overhaul California's budget, including "disestablishing" redevelopment agencies. 

But on Monday, those efforts stalled.  In an open letter to the Governor, five key Republican senators announced:

Although it is clear that you [the Governor] engaged in our conversation seriously, it appears we have reached an impasse.

In ...

The Legislature may deal a death blow to redevelopment in California as early as next week.  Late yesterday afternoon, on a party line vote, the members of the Budget Conference Committee voted to move the Governor's proposal to eliminate redevelopment to both houses for a vote by the Assembly and Senate members.  The Governor wants the State Legislature to send him a budget package to sign by March 10, the date by which he must secure a two-thirds vote to get a measure to extend tax increases on the June ballot.

Therein lies the rub.  A minimum of two Republicans are needed in the Assembly ...

One recent article by our Infrastructure Group, "New Surface Transportation Legislation Likely to Encounter Many Roadblocks in the Coming Months," seems particularly useful.  The article indicates that the Obama Administration has the passage of a multi-year surface transportation bill high on its legislative agenda, and its new budget proposal pushes for a $556 billion surface reauthorization bill.  John Mica, the Republican Chairman of the House Committee on Transportation and Infrastructure, however, has warned transportation stakeholders that a Republican bill this ...

Recently we've been reporting on redevelopment agencies' efforts to utilize redevelopment funds before they're no more under new proposed legislation.  Whether you agree or disagree with the existence of redevelopment agencies, sometimes those agencies acquire properties on behalf of other government entities for undisputed public purposes.  For example, the Redding Redevelopment Agency is currently acting on behalf of the State Administrative Office of the Courts to acquire property necessary to build a new Shasta County Courthouse.  If redevelopment agencies are ...

I wanted to alert people to two meetings coming up soon that may be of interest if you're in Southern California. 

• IRWA, Chapter 57 meeting on March 2:  Chapter 57 is holding its monthly meeting tomorrow in Riverside.  The speaker will be Chris Mazier from Lawyers Title and his subject will be Preliminary Title Reports and their Dreaded Schedule B Items!  As all eminent domain attorneys and right of way consultants know, navigating "Schedule B" issues is a huge part of the precondemnation planning process.  And having now spent a huge part of the last several months reviewing Schedule B items ...

Around California, agencies are scrambling to use or secure redevelopment funds in an effort to protect against anticipated legislation to abolish redevelopment agencies in California.  We've been following the story for weeks, but things are really heating up now. 

As just a few examples from the past couple of days:

• A City of Perris councilman, Mark Yarbrough, is asking the city staff to deplete existing redevelopment funds before the state can seize them.
• Tuesday night, the San Mateo City Council voted to use $34.2 million in redevelopment funds for local projects "effectively ...

They have been around for over 20 years.  Established at a time when state and federal governments were withdrawing from financing infrastructure projects, Infrastructure Financing Districts (IFDs) were developed as an alternative vehicle for local financing of those types of projects.  However, they are difficult to establish and have limited powers.  As a result, they have rarely been seen as an alternative to redevelopment agencies.  Now, a generation later, with the possible demise of redevelopment, cities and counties are once again casting about for alternative sources of ...

Some of my colleagues at Nossaman have prepared a pretty detailed nationwide summary of key transportation projects and their progress in 2010.  The piece, 2010 Transportation Infrastructure Year in Review, struck me as potentially being a helpful resource for any number of reasons, and it occurred to me that anyone else working in transportation infrastructure may also find it useful.  

They've included information about federal TIFIA grants, TIGER II grants, updates on efforts to implement public-private partnerships, and procurement of and milestones for some of the biggest ...

A new bill -- AB 238 -- is working its way through the State Assembly which would require a reduction in compensation payable to a successful plaintiff in an inverse condemnation action in direct proportion to the owner’s percentage of fault in causing damages to the owner’s property.  While the doctrine of comparative fault is one of the cornerstones of tort law, it is rarely applicable to inverse condemnation actions. 

Ever since the seminal decision in Albers v. County of Los Angeles (1965) 62 Cal.2d 250, there has been a more or less bright line distinction between the strict ...

Last week, we give a brief overview of the new published California Court of Appeal decision in City of Gardena v. Rikuo Corporation (Feb. 7, 2011).  For anyone interested in a more detailed explanation of the City of Gardena case, you can read our E-Alert, "Court Dismisses Appeal Arising From Stipulated Eminent Domain Judgment."

The case is probably worth a read for all of us in the right-of-way industry, as the decision serves as an important reminder for public agencies and property owners to carefully document eminent domain settlements, especially where additional actions ...

The Clean Water Act requires states to identify rivers and creeks that fall below specified water quality standards.  Those water bodies are thereafter designated as "impaired" by the Environmental Protection Agency, and certain standards are imposed to limit pollution and runoff. 

If a river or creek's designation results in a nearby property suffering a decrease in value, does the property owner have standing to seek removal of the designation?  In Barnum Timber Co. v. United States Environmental Protection Agency, the Ninth Circuit Court of Appeals held that ...

In a report issued in advance of today’s Senate Subcommittee hearing on the issue, the Legislative Analyst's Office reiterated its support for the Governor’s call for an end to redevelopment in California.  While acknowledging that redevelopment does lead to economic development within redevelopment project areas, the report asserts that there is no reliable evidence that it attracts business to the state or increases overall regional economic development. 

This may all be well and good, but analyzing the issues this way creates a subtle - but important -shift in the ...

Most eminent domain cases don't proceed to a full-blown jury trial.  Rather, most get settled somewhere along the way, and those settlements often come in the form of a stipulated judgment.  In most of those cases, nothing more happens.  The agency pays the judgment, obtains a final order of condemnation, and all parties move on with their lives.

But sometimes, the judgment itself isn't the end of the story.  And in City of Gardena v. Rikuo Corporation (Feb. 7, 2011), the parties still had to deal with ongoing environmental remediation issues long after their stipulated judgment was ...

Over the weekend, Chlorinated Liberty posted a pretty good article that articulates the primary reasons people cite as the basis for abolishing redevelopment agencies.  The article, "How Eliminating California's Redevelopment Agencies Spurs Economic Growth," takes a reasoned approach to why the free market is better equipped to handle redevelopment and blight remediation than the government - and its redevelopment agencies. 

The article walks through some statistics that show that many of California's redevelopment agencies did not report any job creation generated by their ...

We thought it was over in 2009 when the Ninth Circuit held that the City of Goleta's rent control ordinance constituted a taking.

We thought it was over in late 2010 when an en banc Ninth Circuit panel ruled the other way, holding that the property owner failed to establish the "investment-backed expectations" necessary to establish a takings claim under Penn Central.

Now, we're not sure if it's ever going to be over.  Apparently, Dan Guggenheim has decided to seek review by the U.S. Supreme Court, so there may yet be more drama for the long-playing battle between the Guggenheims and the ...

We've reported on a number of rent control regulatory takings claims making their way through the court system, most notably the Guggenheim v. City of Goleta case.  Apparently, some cities and counties are fed up with the onslaught of challenges to their rent control ordinances, and they're looking for a way to recoup the attorneys' fees they expend in preserving the ordinances. 

According to an article in the Santa Cruz Sentinel, "Monning researching bill to address rent control lawsuits," Assemblyman Bill Monning looks to address this concern by considering a bill ...

In his Tuesday column for the San Francisco Chronicle, former Mayor (Willie) Brown takes former Mayor (Jerry) Brown to task for having forgotten about all the good things that redevelopment money did for him while he was Mayor of Oakland.  The renovation of the Fox Theater, construction of 10,000 units of housing downtown, the creation of two charter schools - all undertaken with redevelopment money.

But here is what may be the big news.  Despite all the talk of abolishing redevelopment agencies in California, a compromise may be in the works.  According to Willie Brown, in Deal on state ...

In the wake of the Governor’s proposal to abolish all redevelopment agencies, State Controller John Chiang announced that his auditors would be reviewing 18 redevelopment agencies.  As he stated in his press release,

The heated debate over whether the RDAs are the engines of local economic job growth or are simply scams providing windfalls to political cronies at the expense of public services has largely been based on antidotal evidence.

These reviews, designed to assist lawmakers in their budge debates will therefore focus on how the targeted RDAs define a blighted area ...

The California Court of Appeal has issued a new published decision involving an unusual set of circumstances surrounding an eminent domain and inverse condemnation case.  In Cobb v. City of Stockton, the City filed an eminent domain action to acquire the owner's property; shortly thereafter, the City obtained prejudgment possession and constructed a public roadway on the property.  So far, seems typical.

Here's where things get unusual.  After nine years, the matter had not made its way to trial, and the court dismised the action for "lack of prosecution."  (I'm not entirely sure how ...

A January 27 article in California Watch, "Eminent domain battles rage on despite Prop. 99," reflects the ongoing confusion that surrounds the efforts to reform eminent domain in the aftermath of the Supreme Court's 2005 Kelo decision. 

The article's premise is that Proposition 99, approved by California's voters in 2008, did not stop what the author describes as "eminent domain abuse."  But the case example that underlies the article reflects a fundamental misunderstanding about what Proposition 99 does (or does not do), and what people typically mean when they talk of "eminent ...

Earlier this month, we reported on the Governor's budget proposal, which includes the bold plan to "disestablish" (my new favorite word) redevelopment agencies as part of his plan to shore up California's budget.  We then told you about how the budget proposal interacts with Proposition 22, passed last November. 

Not surprisingly, the story is far from over.  A January 21 article in the Los Angeles Times by Patrick McGreevy, "Cities may sue governor over his redevelopment proposal," reports that earlier today, more than 100 mayors and city council members came together to condemn ...

We noted in our 2010 year-in-review E-Alert that the stimulus dollars were starting to make their way towards local agencies so infrastructure projects could be built.  2011 is now off to a fast start:  according to a recent Caltrans press release, the California Transportation Commission has announced the allocation of $1 billion towards 107 California transportation projects, including $838 million from Proposition 1B bond funds (which was approved by voters in 2006).

Here are some of the highlights as to how these funds will be utilized:

• $46.55 million to install rail ...

The large pool of tax increment revenue flowing to the state’s 400-plus redevelopment agencies has long made a tempting target for a cash strapped State.  Time and again Sacramento has dipped into this pool to offset budget deficits.  Local interests have fought back, both at the ballot box (e.g., 2004's successful Proposition 1A "Protection of Local Government Revenue"), and in the courts.  Sometimes local interests gained the upper hand and sometimes the advantage went to the State.

Proposition 22, approved by the voters in November, was intended by its backers to be the ultimate ...

In U.S. politics, mudslinging -- or negative political campaigning -- is "as American as Mississippi mud."  Just recently, I'm sure everyone recalls the heated back-and-forth between Governor Brown and Meg Whitman.  Usually, the attacks die down after the election is over.  And rarely do the attacks center on eminent domain issues.

That brings us to Palm Springs.  Mayor Steve Pougnet unsuccessfully challenged U.S. Representative Mary Bono Mack for the 45th Congressional District in November.  Months after the election, the debate continues between the two.  

According to a recent ...

It should come as no surprise that the budget proposal issued by Governor Brown today contains some painful cuts.  California remains in the midst of one of the worst economic cycles in history, and its budget shortfall has reached historic proportions.  According to the Governor, as he takes office, California's budget shortfall totals $25 billion - yes, that's Billion, with a "B." 

For me, I am particularly disturbed by proposed cuts to education; the UC system, which provided me with both my undergraduate and law degrees, may face numerous cuts, including a general ...

In case you missed it, in the news last month was a big story about the San Diego County Sheriff's Department torching a residence in Escondido as the only safe way to destroy a giant cache of explosives found in the house.  The house was burned to ashes in an effort to destroy the extremely volatile chemical compounds which could detonate at any second.  The house has since been dubbed, simply, the "Bomb House."

So what does this have to do with eminent domain?  Interestingly, the individual responsible for the explosives was a renter (who is now in jail), and the property owner -- who had no idea ...

New subway lines don't come around every day.  They are expensive, complicated projects that take years to plan, finance, and build.  But it looks like major cities on both coasts are working towards new major new subway projects. 

In New York, the Second Avenue Subway Project is the first major expansion of New York's subway system in more than half a century.  The MTA started studying the project in the mid-1990's, issued an Environmental Impact Statement in 1999, and finally broke ground in 2007.  Construction is now well underway. 

In Los Angeles, the proposed project making most of ...

We recently wrapped up assisting with the acquisition of several part-takes of commercial and residential properties for a public transit project.  One of the big issues involved with each of the acquisitions centered on whether the project provided the impacted properties with benefits that would offset the potential severance damages.

By way of background, when only a portion of property is acquired through the use of eminent domain, the acquiring entity is required to pay not only for the portion of the property acquired, but also for any decline in value the remainder ...

The City of Fremont announced that it plans to condemn a small, 1,249 square foot property located at the corner of Warren Avenue and Kato Road in order to facilitate its Warren Avenue Grade Separation Project.

There's nothing particularly notable about the announcement, except for a potential regulatory overlay.  The parcel is apparently owned by AT&T Communications, and even though the property currently lies vacant, AT&T is apparently taking the position that it cannot agree to any deal with the City without first obtaining approval from the California Public Utilities ...

I received an interesting email last week about possible claims against a neighboring property owner who was taking steps in an apparent effort to lower the amount of compensation the agency would have to pay for the property.   I didn't get much in the way of details, but it did get me thinking about how (and why) this might occur, and what someone could do about it.

The first thought that occurred to me is why would a neighboring property owner want to cause the value of property to be lower?  It seems that in most circumstances, the last thing one owner would want is for a low value to be established ...

One of the cases we've been following the entire year is Guggenheim v. City of Goleta.  The case involves a challenge to the City of Goleta's rent control ordinance for mobile homes.  The owner claimed that the ordinance had the effect of transferring the vast majority (as much as 90 percent) of the property's value to the tenants, constituting a taking. 

Last September, the Ninth Circuit Court of Appeals reversed an earlier District Court decision, holding that Goleta's ordinance constituted a taking, and it remanded the case for a trial on the amount of compensation the owner should be ...

On those cold winter nights as the holidays approach, who doesn't pause for a moment to consider the long history between Christmas and eminent domain?  For those who don't spend their time in front of the fire sipping egg nog and contemplating condemnation, I offer these tidbits:

• In August 2010, the Nevada Irrigation District voted to condemn part of a farm owned by Robert Hane.  How does this involve Christmas, you say?  Mr. Hane's farm produces - you guessed it - Christmas Trees.  For more on the story, read the Fair market value? Water district invokes eminent domain, from the Auburn ...

We've previously reported on the Fresno Unified School District's plans to build its $20 million southeast elementary school which requires the acquisition of 20 different parcels.  While it initially appeared that the acquisition of the Foursquare Gospel Church would be a major hold-up, that no longer appears to be the case. 

According to a recent KMPH Fox News article, "Fresno Church Faces Eminent Domain," the District has reached a deal with the Foursquare Gospel Church, and eminent domain will no longer be necessary.  However, the story does not quite end there, as the ...

Both California and federal eminent domain laws set forth obligations on "public entities" or the "government."   When these specific terms are used, do the statutes also apply to public or private utility companies exercising the power of eminent domain?

One example is found in the Uniform Relocation Assistance and Real Property Acquisition Policies Act, which allows a landowner to seek reimbursement for costs and attorneys' fees when a condemnation action instituted by a "federal agency" is abandoned by the "United States."  (42 U.S.C. 4654.)  If a utility company ...

Ever since the Supreme Court issued its infamous 2005 Kelo decision, people have been anxiously awaiting the Court's next opportunity to weigh in on the extent of the government's eminent domain authority and, in particular, the limits (if any) created by the "public use" requirement. 

One of the cases that has been watched closely involves efforts to expand Columbia University in New York.  In Tuck-It-Away, Inc. v. New York State Urban Development Corporation, dba Empire State Development Corporation, the New York State Urban Development Corporation sought to condemn ...

I wanted to provide a quick update on some things about which we've reported over the past few months:

1.  Los Angeles Unified School District v. Casasola (2010) 187 Cal.App.4th 189

In Court Blurs Line Between Goodwill and Relocation Benefits, we reported on the Casasola decision, which expanded upon the earlier decision in Redevelopment Agency of the City of Emeryville v. Arvery Corporation (1992) 3 Cal.App.4th 1357 to hold that business owners cannot recover as lost business goodwill anything that falls within the scope of the Relocation Act, whether or not the losses are actually ...

The City of Rancho Cordova's Redevelopment Agency has been working to implement plans to eliminate blighted conditions along Folsom Boulevard.  As part of those efforts, the RDA filed an eminent domain action to acquire a 9-acre site owned by Lily Company.

Lily Company challenged the RDA's right to take on numerous grounds, including lack of proper blight findings and allegations that the RDA was colluding with the Los Rios Community College District.  We initially reported on the case in an August post, Rancho Cordova Eminent Domain Case Involves Allegations of Contractual ...

The Americana at Brand center in Glendale is a large, outdoor shopping community consisting of over 75 retail shops and 300 condos and apartments.  It opened to the public in 2008.  One would think this would not have been the best time to open up a retail center.  However, apparently in the midst of the recession, the center is doing quite well, and the developer is seeking to expand onto two adjacent properties.   

According to an article in the Los Angeles Times, "Developer wants to expand Americana at Brand shopping center," the developer of Americana at Brand -- Rick Caruso -- has sent a letter ...

According to an article in the Press Democrat, "City moves toward eminent domain for Hwy. 101 interchange," the City of Petaluma is contemplating the use of eminent domain to acquire property necessary for the Highway 101-East Washington interchange expansion.  

The impacted parcels include the land behind the Raley's shopping center, the K-mart center, and vacant land owned by Regency ...

The site selection process for a new school is typically a difficult one, as large acreage is usually needed in the middle of a populated area.  When these two factors are combined, eminent domain often follows.  

According to a recent article in the Fresno Bee, "Fresno Unified moves ahead on southeast elementary school," this is precisely the situation faced by the Fresno Unified School District as it proceeds with building its new $20 million southeast elementary school.  The District needs 8.43 acres, requiring the acquisition of 20 different parcels from 17 different owners.  In ...

Earlier this year, we reported on the decision in Ridgewater Associates, Inc. v. Dublin San Ramon Services District.  There, the Court of Appeal rejected an inverse condemnation claim by a purchaser of a property that suffered water intrusion damage caused by an adjacent waste water treatment facility. 

The court held that the seller's failure to assign the inverse condemnation claim to the buyer, coupled with the fact that the buyer was "compensated" for any damages through payment of a reduced purchase price, left the buyer with no standing to sue in inverse condemnation. 

The buyer ...

According to an article in the Valley News, "Riverside public hearing to consider eminent domain for bridge on Iowa Ave.," the Riverside City Council is contemplating using eminent domain to complete the Iowa Grade Separation Project. 

In order to (1) build the 500-foot long bridge over railroad tracks on Iowa Avenue and (2) construct necessary northbound and southbound ramps, the Project requires the acquisition of portions of seven properties on Iowa Avenue between Palmyrita Avenue and Spring Street.

The City has already begun negotiations with the owners ...

I live in Orange County.  Every time I contemplate a trip to San Diego, I run the calculations: 

• How bad is the I-5 freeway going to be;
• How badly do I need to be in San Diego; and
• Can I find a way to extend/change my schedule to avoid the worst of the traffic? 

Granted, I engage in the same internal debate when I need to head towards Los Angeles, but at least going that direction, I have a number of route choices.  Going to San Diego, it's basically the I-5 or stay home. 

Caltrans is in the midst of a major planning process for possible expansion of the I-5 between La Jolla and Oceanside.  The public ...

This never would have happened five years ago.  A small game company is advertising its latest offering, Eminent Domain, a card game based on the colonization of various planets.

It's hard to imagine a game called "Eminent Domain" before the 2005 Kelo decision made the phrase ubiquitous in American conversation.  Heck, I'm an eminent domain attorney and I'm not convinced I had a clear understanding of what eminent domain was when I graduated from law school.

More interestingly, the title has generated a somewhat heated debate among gamers as to whether the game's true purpose is ...

In an all-too-familiar tale these days, a redevelopment agency is seeking to acquire property as part of its efforts to alleviate blighted conditions in the city, and owners are reacting strongly to the agency's plans to utilize the power of eminent domain where owners are reluctant to sell. 

According to a November 5 article in the Signal Tribune, "Property owners condemn Signal Hill RDA’s use of eminent domain," the situation in Signal Hill pushes all the buttons on both sides of the issue:

1. The redevelopment agency touts numerous successful projects, including converting ...

In response to my earlier post on the Pombo decision, I was asked whether complying with the decision to avoid an award of litigation expenses would expose the agency to an illegal gift of public funds claim. 

This is an issue that arises with some frequency with public agencies, where people are understandably -- and appropriately -- sensitive to claims that they have misused taxpayer money.  In particular, people worry about making an "illegal gift of public funds."  This principle arises from the idea that taxpayer money must be used for public purposes; the government cannot simply ...