Eminent Domain Report

The Alameda Corridor-East Construction Authority ("ACE") is working on a $75 million project to improve rail service in the San Gabriel Valley.  The project involves constructing a rail underpass on Baldwin Avenue in El Monte, and it is part of a larger, $1.1 billion project that includes 20 grade separations.   

ACE has acquired nearly all of the right of way for the Baldwin Avenue underpass, but one owner, Fred Jast, has not moved.  According to a recent San Gabriel Valley Tribune article by Rebecca Kimitch, "El Monte man fights eminent domain claim," Mr. Jast has been fighting with ACE for several years:

"They have the right to take my property, but they don't have the right to steal my property," Jast, 69, said.

While the article describes gaining possession of Mr. Jast's property as "one of the last hurdles ACE faces before construction can begin," the Baldwin Avenue underpass is only part of the larger project.  ACE plans another, similar underpass in 2010 on Nogales Street South between Gale and San Jose in the City of Industry.  The Nogales Street (South) underpass will cost $84.1 million.  ACE will need to acquire a number of parcels for that part of the project.  

Other phases of the project are planned for 2011, including the $499-million San Gabriel Trench, and the Ramona Street, Mission Road, Del Mar Avenue, and San Gabriel Boulevard grade separations in San Gabriel. 

Turning back to Mr. Jast's situation, the timing of the negotiations has made things challenging.  Since Mr. Jast rejected ACE's initial, $585,000 offer two years ago, we all know what has happened to Southern California real estate prices:  they have plummeted.  ACE claims the property's value has dropped by $200,000; Mr. Jast still dreams of the $745,000 he thinks the property was worth when the negotiations started. 

Were the parties to litigate the issue, these changes in the real estate market could make things quite interesting.  Mr. Jast would presumably argue that ACE's precondemnation conduct resulted in precondemnation damages and/or a de facto taking dating back to the time of the initial offer.  Assuming it has not yet filed a condemnation action, ACE would presumably seek a current, 2010 date of value.  The dispute would then center not on what the property is worth per se, but rather, the date on which it should be valued. 

Ms. Kimitch's article suggests that the parties did reach agreement on a $550,000 price in 2009, but that Mr. Jast now refuses to move.  If this is true -- and ACE must resort to using the sheriff to forcibly evict Mr. Jast -- the story is unlikely to have a happy ending for anyone.