Eminent Domain Report

We're trying to keep on top of the developments over the future of redevelopment in California, but by the time we can get something drafted and posted, the story has already changed.  Here's a quick recap of what we know (and what we don't):

• Back in January, Governor Brown announced plans to eliminate California's redevelopment agencies as part of his plan to fix California's budget woes. 
• After several heated legislative sessions, bills to accomplish the Governor's proposal repeatedly fell a single vote short in the Assembly.
• In the aftermath of the failure to pass the Governor's plan ...

Yesterday, after heated floor debates, both the Senate and Assembly passed the two-bill package to end redevelopment as we know if.  In the Senate, the two bills each eked out the requisite 21 votes, with the final tally being 21-15. In the assembly the bills passed with the more comfortable margins of 51-23 for AB 26x and 47-28 for AB 27x.

Interestingly, these bills did not pass on party line votes, with some Democrats voting no and some Republicans urging a yes vote. A heated confrontation occurred when Assemblymen Don Wagner, R-Irvine compared provisions which compel redevelopment ...

It has been rumored for some time that a two bill strategy to eliminate redevelopment has been in the works.  Bill #1 would eliminate redevelopment agencies as of a specific date and bill #2 would exempt any redevelopment agency from elimination if it makes specified payments for the state. 

The text of those bills has now been released.  As predicted, Bill #1 (SB 14x / AB 26x) would, immediately upon enactment, suspend most agency activities including the issuance of new bonds, entering into new contracts, acquiring or disposing of properties, or taking other actions beyond the ...

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 ...

I'm at the IRWA Education Conference in Atlanta, and yesterday I attended a number of interesting sessions.  Since I don't have time to write about all of them, I want to focus on the presentation that discussed local agency practices where their projects receive federal dollars.  And even that one session contained far too much information to reduce to a single blog post, so I'll focus on two of the four speakers, FHWA Realty Specialist Marshall Wainwright and Oklahoma Department of Transportation Assistant Division Manager for Right-of-Way Kevin Stout. 

Mr. Wainwright started the ...

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 ...

So I'm off to Atlanta for the IRWA's Annual Education Conference.  I'll be there from Saturday night through Wednesday, and along with our outgoing President Michele Folk from OPC, I'll be representing Chapter 67 in Orange County as its nearly-installed President.  (Ironically enough, I'm missing my own installation, which takes place during the Conference.) 

It will also be a bit of a Nossaman Eminent Domain reunion for me.  In addition to my current Partner, David Graeler, who will be there as President Elect of Chapter 1, two of my former Nossaman colleagues, John Murphy and Brad ...

We've completed our analysis of the Galardi case and have some additional thoughts about the decision and its potential larger impact.

The real debate we've been having internally is whether Galardi can be read as signaling a change in the law concerning broadly worded waivers in condemnation clauses.  Many commercial leases contain broad waivers, skewed towards landowners.  Provisions such as "in the event of condemnation, tenant waives all rights to compensation" are not uncommon.  

Until now, even the broadest wavier imaginable has not affected the tenant's right ...

When a business subject to a franchise agreement is condemned, questions often arise as to the allocation of proceeds between the franchisor and franchisee.  When the question involves payment for lost business goodwill, the courts have placed strict limits on the franchisor's ability to recover. 

In particular, courts have long held that a franchisor cannot make a claim for lost business goodwill because the franchisor fails one of the key entitlement prongs:  the franchisor does not operate a business on the property.  (See Redevelopment Agency v. International House of Pancakes ...

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 ...