Eminent Domain Report

The City of Newport Beach is working on a plan to widen Jamboree Boulevard adjacent to State Route 73 (the northern end of the San Joaquin Hills Toll Road).   The city has acquired much of the property needed for the larger right-of-way, but has not been able to reach agreement with the owner of the Back Bay Court shopping center.   On Tuesday night, the city authorized proceeding with an eminent domain action to acquire the property.

According to a June 9 Orange County Register article by Jeff Overley, "City OKs using eminent domain on mini-mall":

The property is about one-tenth of an acre and consists of a narrow greenbelt that separates Jamboree and a shopping center parking lot.

This description provides good insights about why the city must resort to eminent domain.  From the city's perspective, it is acquiring only a small sliver of landscaping; it is not touching the buildings -- or even the parking lot.  The city presumably believes its $452,000 offer is more than fair for such a minor event. 

So what's the big deal?  From the property owner's perspective, the taking of that small strip of land may have dire consequences.  It may cause the shopping center property to exist as a legal, non-conforming use if the removal of the greenbelt cause the center to fall short of required set-backs.  While not an immediate problem, this could be an issue if someone wants to redevelop the property down the road. 

And, according to the owner's attorney, the "sliver" includes more than landscaping.  The city's project may also eliminate the center's main monument sign and involve construction of a view-limiting retaining wall, very big deals for the tenants.  

Finally, even a small taking can give rise to substantial severance damages if the construction of the project impacts access to the center for any extended period of time.  If the owner loses tenants as a result of the project, it may take a long time to replace them in the current market.  This could mean big losses, for which the owner will presumably want compensation.  

Like most eminent domain cases, this one will probably settle, but it may take time before the city and the owner see eye-to-eye on the scope of the project and its impacts on the center.  Often, these cases settle only after the construction has been completed, giving both sides a better sense of the actual impacts the project and its construction have on the center.