Eminent Domain Report

Many states have enacted eminent domain reform since the U.S. Supreme Court's 2005 decision in Kelo v. City of New London, which broadly defined "public use" to include the government's acquiring property for another private owner to realize an economic benefit (such as increasing tax revenues).  However, as reported by the Institute for Justice in its 50 States Report Card, many of those reform efforts have been insignificant.  And, despite repeated efforts over the last 13 years, Congress has yet to pass legislation limiting the use of eminent domain for truly ...

For years, the College of the Desert has been seeking to acquire the former Palm Springs mall in order to expand its campus to the west valley.  It has been quite a lengthy battle, as the property owner had repeatedly objected to the College's use of eminent domain for the site.  However, last week, the parties finally reached a settlement of the condemnation action, with the College agreeing to pay $22 million for the property -- dramatically more than the $9.6 million the College originally offered to pay.

According to an article in the Desert Sun, the 29-acre property will allow the College ...

When state and local governments impose unreasonable conditions or exactions on private property, owners pursuing a regulatory takings claim often face a maze of procedural obstacles just to have their case heard. I once described these procedural obstacles as resembling Alice's trip through Wonderland, with the parties falling in and out of state and then federal court (instead of a rabbit hole) based on procedural and substantive rules that often seem as logical as the Mad Hatter's recitals at the Tea Party. The reason for this maze stems from (i) a U.S. Supreme Court decision ...

As we’ve seen all too many times in California, when local municipalities delay development approvals -- even improperly -- courts are reluctant to find liability under an inverse condemnation cause of action and award temporary damages. While there have been some successful cases (see Lockaway Storage v. County of Alameda (2013) 216 Cal.App.4th 161), those results are the exception, not the rule.  A recent court of appeal opinion, Mahon v. County of San Mateo 2018 Cal. App. Unpub. LEXIS 1483, provides an example of the uphill battle a property owner faces in successfully ...

Infrastructure projects take years to develop:  the environmental review, funding, design, procurement, and construction of a public project is time consuming in any state, but even more so in California given the strict regulations and oversight any public agency must comply with.  During that lengthy process, private properties situated in the proposed project alignment remain in a state of flux.  When those impacted properties are slated for development, what are the parties to do?

According to an article in the Morgan Hill Times, Council OKs new housing in one of two ...

With the passing of California's new gas tax (SB1) earlier this year, local government agencies have come across a new source of funding to complete public infrastructure projects.  According to an article in the Ceres Courier, Caltrans Seeks Comments on Service Road Interchange, the City of Ceres hopes its Service/Mitchell/Highway 99 Interchange project can benefit from the new funds.  As part of the project, Caltrans and the City are planning one of the State's first "diverging diamond" designs, which would add a new interchange at Service Road and modify the Mitchell ...

In the vast majority of cases, when a public agency exercises eminent domain, the only issue in dispute is the amount of just compensation the agency must pay for the property being acquired.  Even in situations where a property owner challenges the agency's right to take, it is typically for procedural reasons that can ultimately be corrected.  However, where a property owner successfully challenges the agency's right to take, the consequences can be significant, as the agency is required to pay the property owner's litigation expenses -- including attorneys' fees, expert fees, and ...

Acquiring a fee interest in property seems to be so out-of-style.  Nearly every linear infrastructure project I work on now involves the acquisition of various types of easements, whether its a typical temporary construction easement, access easement, street/highway easement, or transmission line easement, or a more complicated aerial easement, parking structure easement, or floating easement.  The scope and terms of these easements can have massive ramifications on compensation, and particularly severance damages to impacted properties.  If you're interested ...

Having recently worked on a number of pipeline and transmission line projects, I find the issue of proximity damages to be fascinating.  Does being adjacent to gas pipelines or electrical transmission lines diminish the value of an owner's remaining property?  I have seen studies suggesting nearly every possible conclusion.  If you're interested in this subject, there's a great article that was recently published in the Appraisal Institute's Appraisal Journal, Summer 2017 edition, titled The Effect of High-Voltage Overhead Transmission Lines on Property Values:  A Review of ...

According to an article in the Los Angeles Times, California lawmakers pitch a break from a key environmental law to help L.A. Olympic Bid, Clippers Arena, California lawmakers introduced Senate Bill 789 last week in an effort to exempt from CEQA any rail, bus, or transit project connected to the 2028 Olympics, along with expediting environmental challenges to construction of the Clippers arena in Inglewood.  If passed, SB 789 would streamline such projects as the environmental review process is typically a multi-year undertaking.  The Bill was introduced by Senator Bradford ...

Under inverse condemnation law in California, a public agency is generally strictly liable for physical damage to private property caused by a public improvement.  This means a public agency can be held liable even if the public improvement was properly designed, constructed and maintained.  Rarely is there a question of whether a project constitutes a "public improvement," but in Mercury Casualty Co. v. City of Pasadena (Aug. 24, 2017), the Court of Appeal recently addressed this issue and held that a tree constitutes a work of public improvement for purposes of inverse ...

The Martins Beach access dispute in San Mateo County continues to make headlines.  As a quick refresher, billionaire venture capitalist Vinod Khosla purchased 90 acres of beachfront property south of Half Moon Bay, and subsequently proceeded to lock the gated entry to Martins Beach, effectively preventing public access to the popular beach.  We've been covering the dispute for quite some time, including the recent introduction of legislation to potentially fund the State Lands Commission's use of eminent domain to acquire an easement for access to the popular beach.

While the ...

We've previously reported on the recent passage of Senate Bill 1 (SB 1), The Road Repair and Accountability Act of 2017, which will raise approximately $52 billion in funding over the next 10 years specifically for transportation.  SB1 is now in full swing, and Caltrans is on a fast track to release new grant funding provided under the legislation.

On August 3, Caltrans released for public review and comment the final drafts of the SB 1 Sustainable Communities and Adaptation Planning Grant guides, which will provide more than $270 million in planning grants for local communities ...

When public agencies analyze a potential public project, they often need to gain access to private property for surveys, testing, and to otherwise investigate whether a particular property is suitable for a planned project.  Often, agencies gain access by talking with the property’s owner and reaching agreement on a right of entry.  But where the owner refuses to allow access, the agency must resort to the courts.  For decades, agencies have followed a set of rules that allow them to obtain a court-ordered right of entry with minimal notice and without most of the formality of a ...

Public agencies own significant amounts of property throughout California and the United States.  Sometimes, those properties are not being put to a public use, and the government acts as a landlord, leasing out property to private entities.  But when the government is ready to put the property to a public use, and it terminates the lease, is there a "taking" of private property triggering the need to pay just compensation?  A recent unpublished Court of Appeal decision, California Cartage Company v. City of Los Angeles, addressed this issue and held that the government's termination ...

In California eminent domain proceedings, a property owner is entitled to the "fair market value" of the property being acquired.  Typically, fair market value is determined by analyzing comparable sales or by utilizing an income capitalization approach.  But every once in a while, there is no relevant market data, in which case the law permits determining compensation "by any method of valuation that is just and equitable."  (Code Civ. Proc., sec. 1263.320.)  A recent court of appeal decision, Central Valley Gas Storage v. Southam, explains when this "just and equitable" valuation ...

As we've reported in the past, temporary takings are compensable in California.  But such claims are not easy to prove, particularly when you're dealing with the federal government imposing temporary regulations preventing use of property.  A recent case, Reoforce v. United States, demonstrates some of the hurdles an impacted property owner may face.

In Reoforce, the plaintiff discovered a mineral deposit called pumicite on federal land in Kern County, California.  Believing the deposit had potential value for paint and fiberglass applications, Reoforce submitted a mining ...

Most Californians agree that our State's transportation system is in dire need of additional funding for additional improvements and repair.  The problem has always been where to secure the necessary funding.  In short, it has become more difficult to rely on the federal government, local and regional transportation agencies have become less reliant on the State, the gas tax has not been raised in years, and vehicles have become more fuel efficient, resulting in more miles traveled by more cars without the incremental increase in funding.  This week is a major turning point to ...

Before an eminent domain action is filed, public infrastructure projects involve years of planning, environmental approvals, design, and property negotiations.  During this time, property owners and real estate agents/brokers are often faced with deciding what to disclose about the potential condemnation to prospective tenants when attempting to lease out space.  It is a difficult position to be in, as (i) disclosing too much makes it extraordinarily difficult to find a tenant willing to pay market rents with the looming "cloud" of condemnation, and (ii) disclosing too ...

In a previous post, "What is 'Just Compensation' For Gas Station Acquisitions," we explored various methods for valuing gas stations and car washes in an eminent domain action, including a recommendation by a gas station appraisal firm, Retail Petroleum Consultants, to approach such valuation assignments as "special use properties".  Retail Petroleum has issued another useful article, "Value Trends in Gas Stations and Car Washes," which examines recent trends driving the valuation of such properties in California.

Retail Petroleum explains that because gas stations ...

With only a few days remaining until one of the most controversial presidential elections in history, there has been little focus on the candidates' plans as it pertains to the future of infrastructure development in America.  But both Hillary Clinton and Donald Trump have big spending plans -- they are just vastly different in their proposals on how funds will be raised and spent.  If you're interested in a detailed breakdown of Clinton's and Trump's infrastructure plans, there is an excellent article by Chuck Devore in Forbes titled "Where Clinton and Trump Stand on Transportation".

Redevelopment has quite the lengthy history in California.  Yet it has generally been "All Quiet on the Western Front" since redevelopment agencies were abolished in 2011 as part of Governor Brown's plan to fix the state's budget deficit.  Yes, the legislature breathed new life back into redevelopment last year through Community Revitalization and Investment Authorities (CRIAs), but a widespread return seemed unlikely given the safeguards and restrictions put in place -- particularly as to what can constitute "blight" (a term which previously could be interpreted so broadly ...

For years, we've been working with our public agency clients during the environmental and design-phase to minimize right-of-way impacts with new infrastructure projects.  Yet for many agencies, property acquisitions are an afterthought, as the costs of construction and environmental impacts headline agencies' concerns.  That thought process is slowly beginning to change, as agencies are starting to recognize that right-of-way acquisition can significantly delay projects, resulting in construction delay claims, change orders, loss of project funding, and in ...

It's an exciting time with the Olympics taking place in Rio De Janeiro.  But what takes place before the Olympics ever gets off the ground involves years of planning, lobbying, and infrastructure development.  That development often requires use of eminent domain.  And in countries without due process and constitutional rights to just compensation, the condemnation process is an ugly endeavor for those impacted.

In Rio, for example, KUSA reports in its article, Rio de Janeiro villages uprooted for Olympics, that leading up to the games, eminent domain was often used "without warning ...

For the last two-plus years, we have been waiting for guidance from the California Supreme Court on whether public agencies could utilize the statutory right of entry procedure to gain access to private property to conduct investigations and testing. Such activities are routinely part of the environmental approval process for public works projects, and if agencies are forced to go through a regular condemnation proceeding, projects could be delayed for many months or even years.  Today, the Supreme Court issued its decision in Property Reserve v. Superior Court, holding the right ...

As cities become more dense and urbanized, it is common for infrastructure to get outdated or insufficient to handle increased demand.  We see this with roads, highways, schools, and even utilities.  When new infrastructure is needed, many times eminent domain becomes necessary to acquire property in the way of the proposed new project.  But sometimes those properties are historical or, given their longstanding presence, have sentimental meaning to the community.

Such a situation is currently playing out in the City of Oakley.  According to an article in the Mercury News, Oakley ...

One of the most valuable assets many homeowners enjoy is their property’s view. If the government undertakes an activity that eliminates or obstructs that view, is an owner entitled to relief?  In Boxer v. City of Beverly Hills (April 26, 2016, B258459), the California Court of Appeal held that in an eminent domain action (where there is a direct taking of property), view impacts are compensable, but in the absence of a taking of property, a property owner is not entitled to compensation for loss of view.

Background

In Boxer v. City of Beverly Hills, a group of property owners filed an ...

While much of the focus in California lately has been on eminent domain for transportation projects, there's some new condemnations moving forward in both Northern California and Southern California for social -- or community -- development projects.

• Down south, the San Diego Union Tribune reports that the Port of San Diego has exercised its condemnation powers to acquire four acres of prime property on Chula Vista's Bayfront in order to construct the Chula Vista Bayfront Master Plan project.  The Master Plan, approved by the Coastal Commission in 2012, is a joint project ...

There are a couple exciting International Right of Way Association (IRWA) events coming up next week:

• On April 26, I will be participating in IRWA Chapter 1's (Los Angeles) 2016 Annual Valuation Seminar.  I will be presenting with Brad Thompson of Mason & Mason on "Project Benefits and Construction-Related Impacts:  Tangible or Speculative?".

• On April 29, I will also be participating in IRWA Chapter 42's (San Jose) 4th Annual Spring Conference.  I will be presenting with my partner, Artin Shaverdian, and Steve Parent of Bender Rosenthal on "The Value of Transit Proximity:  Assessing ...

The wait is nearly over:  for those living on the Westside of Los Angeles, passenger rail transit will be available in just a few short months.  Officials announced this week that the final extension of the Expo Line will open on May 20, extending service from Culver City to just a few blocks from the Santa Monica pier.

This will be the first passenger rail transit service to the far Westside since Pacific Electric streetcars stopped running to Santa Monica in 1953.  The project completes the 15-mile Expo Line between downtown Los Angeles and Santa Monica.  Train trips between downtown Santa ...

When public agencies acquire property for public projects, many times only a portion of the property is required.  And, the government usually seeks various types property interests:  (i) permanent easements for street purposes, drainage, utilities, slope, aerial, or access rights, (ii) temporary construction easements, or (iii) fee interests, to name a few.  One common misconception among agencies is that acquiring an easement is completely different than acquiring the property in fee.  In some cases, it can be vastly different, but in others, depending on the scope of the ...

Public transit continues to be a major focus throughout Southern California, with virtually all of the county transportation agencies planning or undertaking important passenger rail projects throughout the region.  Some of those transit projects in Los Angeles and Orange County received a major boost this week, as the Los Angeles Times is reporting that the Obama administration has earmarked $500 million in the proposed federal budget for the next fiscal year for LA Metro's Westside Subway (Purple Line) and Regional Connector projects and OCTA's OC Streetcar project.

LA ...

Public agencies are routinely facing Buy America requirements in their infrastructure projects.  Some of the most difficult situations involve how to satisfy Buy America obligations with public utility relocations.  The rules continue to evolve, making compliance an ever-moving target.  To help provide some guidance, my colleague, Ann-Therese Schmid, recently provided a Buy America update on Nossaman's InfraInsight Blog.

In her blog post, Recent Buy America Developments, Ann informs us that in late 2015 the Federal Transmit Administration (FTA) and the Federal Highway ...

Because billboards are typically near public transit, they are routinely impacted by public projects such as street widenings, highway and freeway expansions, and grade separation projects.  When impacted, billboard companies may make claims for (i) the value of the billboard itself (fixtures and equipment), (ii) loss of business goodwill, and (iii) relocation expenses.  Usually the first two items can be addressed through a successful billboard relocation.  But when happens when a moratorium is in place prohibiting new billboards?  Does a moratorium on new billboards ...

Every once in a while, infrastructure projects we're working on involve traversing Indian lands.  For those of you involved in such projects, you should take a look at the Final Rule published by the Department of the Interior, which went into effect last month.  The Federal Register summarizes the Final Rule as follows:

This final rule comprehensively updates and streamlines the process for obtaining Bureau of Indian Affairs (BIA) grants of rights-of-way on Indian land, while supporting tribal self-determination and self-governance.  This final rule further implements the ...

We've been following the status of highway and transportation funding for quite some time, previously noting that Congress kept kicking the can down the road without agreeing on a long-term solution.  Finally, that is no longer the case, as our colleagues on Nossaman's Infra Insight Blog note that the House and Senate Conference Committees have agreed on a compromise $305 billion five-year surface transportation authorization: the Fixing America’s Surface Transportation (FAST) Act, which is headed to the White House in the next few days.  Check out Billy Moore's post the Infra ...

For decades, California public agencies have utilized a statutory "right of entry" procedure to gain access to private property to conduct investigations and testing before deciding whether to move forward with acquiring the property. (See Code of Civil Procedure section 1245.010 et seq.) That process was thrown into flux in 2014 with the Court of Appeal’s decision in Property Reserve v. Superior Court, which struck down an agency’s efforts to conduct precondemnation investigation and testing, concluding that any significant physical intrusion onto private property ...

For several years, we've been following an eminent domain lawsuit in Marin County involving Caltrans' acquisition of 34 acres for a $29.7 million interchange project at the Redwood Sanitary Landfill, which would widen the overpass over Highway 101 and install new frontage roads on both sides of the highway to create safer conditions for traffic going in and out of the landfill.  After a 20-day trial, the litigation has finally ended with a jury verdict that appears to be close to a split between the property owner's appraisal and Caltrans' appraisal.

According to an article in the ...

California's heat-wave continues, and so does the drought.  With water becoming more and more scarce, the topic of water supply and how to value water rights is becoming a key issue in California.  If you're interested in these issues, International Right of Way Association Chapter 57 is hosting is fall seminar this Friday, October 14, titled "Water Supply & Impacts."  There are some great speakers lined up to discuss California's water supply, how to value flowage and drainage easements, and how water can impact a property's highest and best use.

And if you're interested in a ...

It's not every day you're involved in a successful eminent domain case before the California Court of Appeal.  It's even more unusual when the case deals with a number of interesting legal issues, such as the enforceability of a waiver of just compensation, the compensability of a license, the breadth of the "project influence rule" for purposes of a property's valuation, and the substantial impairment of access test.  I was fortunate enough to have dealt with all these interesting issues in a single case, Los Angeles County Metropolitan Transportation Authority v. KBG I Associates ...

We've been closely watching Assembly Bill 2 work its way through the legislature for most of 2015, and last week, it was finally signed by the Governor.  What does it mean?  You can find a detailed analysis by my partner, Bernadette Duran-Brown, in our recent E-Alert, but generally, it means redevelopment is back in California.

AB2 allows local governments to create Community Revitalization and Investment Authorities (CRIAs), which will have the power to issue bonds, provide low-income housing, prepare and adopt a revitalization plan for an area, and acquire property ...

Public agencies in California are once again getting busy with new projects.  It seems at every event I attend all the right-of-way professionals, appraisers and eminent domain attorneys tell me they're fully occupied.  Recent news articles support this conclusion.

For example, according to an article in the Orange County Register, Santa Ana council OKs EIR moving forward on Warner Avenue widening using eminent domain, the City of Santa Ana has adopted a final environmental impact report for the Warner Avenue Improvement Project, which will reconfigure the road from Main ...

With the improving real estate economy, there have been an influx of new large development projects throughout California.  With these new proposed developments, it is common for local government agencies to require public improvements -- such as streets or utilities -- to support the influx of traffic and people to a previously undeveloped area.  Those public improvements commonly take place off the developer's property, so what happens if surrounding property owners do not want to sell their land to support such improvements for a private development?  Can eminent domain be ...

Gas stations and car washes are primarily owner-occupied convenience businesses, typically located near freeway off-ramps and at the intersections of well-traveled roadways.  As a result, they're frequently involved in eminent domain acquisitions for freeway expansions or road widenings.  A common question is how should such properties and businesses be valued to satisfy California's requirement of "just compensation"?

A recent article by Retail Petroleum Consultants, Condemnation: Appraising Gas Stations and Car Washes, How to Ensure Just Compensation for Business and ...

One of the issues often disputed between public agencies and property owners in eminent domain actions is the assessment of severance damages, and in particular, whether damages should be based upon (i) the terms of the resolution of necessity, or (ii) construction of the project in the manner proposed.  This dispute grows from a seeming conflict between a court of appeal decision, County of San Diego v. Bressi (1986) 184 Cal.App.3d 112, and Code of Civil Procedure section 1263.420.  Specifically:

• Bressi held that in a condemnation action, (1) the jury must determine damages caused by ...

In California eminent domain actions, absent special circumstances (such as an abandonment, successful right to take challenge, or inverse condemnation finding), a property or business owner is typically only entitled to recover litigation expenses (attorneys' fees and expert costs) in one circumstance:  where the public agency's final offer of compensation is unreasonable and the property owner's final demand is reasonable.  In making this determination, the judge is only to consider the final offer and demand that were made at least 20 days before trial.  (See Code Civ. Proc ...

As California continues to expand and improve its infrastructure, public agencies are more frequently running into contaminated property.  A frequent question for eminent domain attorneys is:  "how does contamination impact 'fair market value' in a condemnation action?"  My general advice is that the contamination should be treated just as it would in an open market transaction.  But how is contamination handled in a typical transaction -- and how does it impact value?  Aside from potential clean-up costs, are there lending issues, and is there a general stigma with contaminated ...

When a public agency acquires a portion of property, under California law the property owner is entitled to "severance damages" -- or damages to the remainder portion of the property that was not acquired.  Usually, determining what constitutes the "remainder property" is relatively straight-forward.  But not always.  And, the determination could have a significant impact on the amount of compensation the public agency must pay, as a property owner is not entitled to compensation for damages to separate and independent parcels that are not touched by the condemnation.

So how is the ...

On March 5, Nossaman's eminent domain attorneys are hosting a complimentary seminar, "Taking Your Project from Concept Through Construction."  We have some great topics and an exciting group of experts joining us to cover topics such as implementing best practices for design-build projects during right-of-way acquisition, preparing for CEQA challenges at the condemnation stage, acquiring contaminated properties, and addressing business goodwill claims.  We will also provide a recap of the most important eminent domain court decisions and legislation from 2014.  Attendees ...

There has been a remarkable movement lately throughout California:  local government agencies are attempting to take over investor-owned, quasi-public utility companies in an effort to reduce utility bills to their constituents.  A number of electric and water utilities are facing pressure from agencies to sell their assets -- or face having them acquired through eminent domain.  Does this make sense?

As just one example, according to one recent article by Garth Stapley in the Modesto Bee, SSJID can boot PG&E from Ripon, Escalon, Manteca, the South San Joaquin Irrigation ...