Eminent Domain Report

As we mentioned in our recent 2012 Eminent Domain Year in Review, we've seen a boom of infrastructure projects in California -- a trend we expect to continue into the near future.  So what exactly are we talking about?  Here's just a few examples:

• California Transportation Commission's $64 Million Allocation:  According to a Caltrans press release, the California Transportation Commission (CTC) recently allocated $64 million to 43 projects that will reduce traffic congestion and repair highways, local streets, and bridges.  You can find a list of the projects ...

For our readers who do not subscribe to Nossaman's Eminent Domain & Valuation Group E-Alerts, I'd suggest you check out our 2012 Eminent Domain Year in Review & 2013 Forecast.  There have been a lot of published court decisions this year, along with some interesting stories making the headlines.  The year in review is a nice, concise summary of what's taken place, and also a look forward to what to expect in 2013. 

We hope you've enjoyed our blog over the last few years.  If you have any suggestions for other topics or materials, or if we put out too much or too little content, please let us ...

This is a bit last minute, but I wanted to remind our readers to attend the International Right of Way Association (IRWA) meetings this week in Orange County and the Inland Empire.  Here's what to look out for:

• IRWA Chapter 67:  Orange County holds its monthly luncheon today, January 8.  John Ellis from Integra Realty Resources Los Angeles will provide us with an update on the 2012 real estate market and what to expect in 2013.  John and Integra are integrally tapped into the Southern California real estate market, so those in attendance should get some great insights. 

One of the prerequisites to instituting an eminent domain action is the governing agency's adoption of a resolution of necessity to acquire the necessary property.  At the time of adopting the resolution, the agency cannot be precommitted to moving forward with the condemnation.  In other words, the resolution hearing cannot simply be a "rubber-stamped," predetermined result.  

While it has happened, it is a very difficult, uphill battle for a property owner to prove that the government agency was precommitted to the taking at the time of the resolution hearing.  The agency can -- and ...

Those don't quite sound like the lyrics to the early-90's popular Ace of Base hit, "The Sign."  But they likely describe the situation of many travelers on the I-10 freeway in Los Angeles thanks to a recent California Court of Appeal decision denying a property owner's inverse condemnation action, and upholding Caltrans' required removal of an 8,000 square foot "wallscape" advertising space on the 155 West Washington Boulevard building.  

In West Washington Properties v. California Department of Transportation, a property owner filed an action against Caltrans seeking to (1 ...

Ever since we started this blog, one of the big topics we've touched on repeatedly deals with public agencies running into issues when trying to secure possession of property for right of way projects.  Whether it's due to project funding constraints, federal oversight demands, construction contract deadlines, project timing requirements, or difficulties dealing with impacted property and business owners, agencies are routinely pressed with stressful deadlines to start building their projects.  Would you like to know what pitfalls to look out for and how to avoid them?  ...

While most lawsuits typically start with the filing of a complaint, eminent domain cases really start one key step earlier, with the condemning agency’s adoption of a Resolution of Necessity.  The Resolution establishes (i) the agency’s right to take the property and (ii) the scope of the acquisition.  In order to adopt a Resolution, the agency must make a set of findings, including finding that [t]he proposed Project is planned and located in the manner that will be most compatible with the greatest public good and the least private injury.  In Council of San Benito County ...

A few weeks ago, the California Court of Appeal issued an interesting unpublished decision detailing a long, drawn-out eminent domain battle in Riverside County.  I haven't blogged about it yet because, well to be honest, it feels like such a crazy story I couldn't figure out where to start or what to cover.  But here we go.

Background

The case, Elsinore Valley Municipal Water District v. O'Doherty, starts off rather dull.  In order to serve a residential development, the Water District planned to construct a pump station in a public right of way.  Because it was believed the planned ...

On occasion, public agencies decide to abandon or partially abandon an eminent domain proceeding.  The most typical reason is due to a revision in project design, making the property no longer necessary for the proposed project.  However, to the surprise of many, an abandonment can also occur after an agency receives an unfavorable jury verdict.  Code of Civil Procedure section 1268.510 provides that an agency "may wholly or partially abandon the proceeding" any time after filing the complaint up until 30 days after the entry of final judgment.  (The only exception is if the ...

As the summer months come to an end, it means the International Right of Way Association monthly luncheons are set to resume -- at least in Orange County and the Inland Empire (those crazy right of way folks in Los Angeles go year-around).  Chapter 67's lunch is scheduled for September 11 at the Marriott in Santa Ana, and Chapter 57's lunch is set for September 12 at the Old Spaghetti Factory in Riverside.  So what's on tap?

In Orange County, my partner Rick Rayl will be presenting on the use of eminent domain for underwater mortgages.  We've covered this topic in detail here on the blog, but please ...

Below are some updates on California projects have turned to eminent domain to complete right-of-way acquisition.  They involve issues that are somewhat typical in condemnation proceedings: disputes over severance damages and a property's highest and best use.  

• Riverside County Flood Control Project:  According to an article in the North County Times, LAKE ELSINORE: Board authorizes condemnation for flood channel, the Riverside County Board of Supervisors has approved the use of eminent domain to acquire a 5-acre easement across a 33-acre property for the Arroyo Del Toro flood ...

The FHWA recently published a series of useful short videos on its website.  For those of you working on transportation projects involving federal aid, check them out below:

• Right-of-Way Coordination and Certification Requirements.  Before an agency gets to construct its project, it needs to coordinate and certify the right-of-way.  This video provides an overview of the initial coordination process when federal funds are involved, including what must be completed before putting a project out to bid, and the need to obtain physical possession of the impacted properties.

I know our blog is called the Eminent Domain Report -- implying we only cover eminent domain-related issues, but in actuality we cover anything valuation-related.  After all, our group of attorneys is known as the Eminent Domain & Valuation Practice Group.  With that said, an interesting value dispute has popped up, making its way to the California Supreme Court.  This one deals with whether intangible assets should be included in one's property tax assessments, and we're looking forward to the Court's decision.

The case, Elk Hills Power v. California State Board of Equalization, deals ...

Earlier this year in City of Livermore v. Baca, the California Court of Appeal held that as long as an expert can identify damages arising from a taking or public project, those damages likely will not qualify as speculative, and they can be presented to a jury in an eminent domain action.   Did this broad holding turn upside down traditional rules of admissibility and recovery of damages, or did it just affirm existing law?  And how will courts apply Baca in the future?  Two recently issued unpublished appellate decisions may help guide the way.

The Superior Coatings Decision

Last ...

If you're an infrastructure and right of way junkie like me, you'll be interested in a few of the updates below.  If you're not a transportation nut (and understandably so), it still doesn't hurt to get caught up on the happenings in California and at the federal level.  So read on.

MAP-21:  This Summer, Congress passed the "Moving Ahead for Progress in the 21st Century Act."  If you ever hear the acronym MAP-21 thrown around, this Act is what's being referred to.  What does it do and why do you care?  In its simplest terms, the Act reauthorizes transportation funding through the end of 2014.  But it is ...

Two recent news articles caught my eye about a project taking place in San Diego County.  A North County Times article, ESCONDIDO: Eminent domain hearing set for Bear Valley properties, reports that the San Diego County Board of Supervisors was set to vote this week on potentially using eminent domain to acquire necessary properties for the expansion of Bear Valley Parkway.  While the project would widen the busy roadway from two to four lanes, add a center median and bicycle lanes, it would also necessitate the demolition of 18 homes and the taking of 32 slices of property -- mostly ...

A new Court of Federal Claims opinion was handed down this month coming right out of our own Southern California backyard.  The case, Stueve Bros. Farms, LLC v. the United States, deals with whether a "physical taking of title" has occurred when a government agency's activities create a risk of flooding.  The answer, according to the Court, is no.

Stueve Bros. Farms owns property in San Bernardino County within the Prado Dam Flood Control Basin.  In the 1940's, the federal government condemned flowage easements over the property to an elevation of 556 feet above sea ...

A few odds and ends for our readers:

• New Federal Eminent Domain Legislation:  According to the Eminent Domain Law Blog, two Senators have introduced a new bill, Protection of Homes, Small Businesses, and Private Property Act of 2012.  This, again, you may ask?  What ever happened with HR 1433, the Private Property Rights Protection Act of 2011?  HR 1433 appears to be dying a slow death, but the new 2012 bill seeks to pick up the slack.  In particular, it is targeted at the same issue:  preventing the federal government from using its eminent domain power and state and local ...

The International Right of Way Association's (IRWA) International Education Conference in Seattle has just wrapped up, and boy was it a great event.  Over 1,200 right of way professionals from across the United States and Canada (along with some visitors from Japan, Uganda, Saudi Arabia, Thailand, and the UK) all in one location for four days.  What could be better?  If you weren't able to make it, let me tell you that Alaska and Canada -- two chapters vying for hosting the 2017 event -- sure know how to have a good time. 

As I travel home on my flight back to Orange County ...

 Here are a few updates for right of way professionals:

• IRWA International Conference:  The International Right of Way Association's (IRWA) 58th Annual International Education Conference will be taking place starting this weekend in Seattle.  Nossaman's eminent domain attorneys will be there in full force:  I know at least seven of us are attending, and we'll have representatives from our Orange County, Los Angeles, and San Francisco offices.  For the first time ever, we'll also be hosting a booth at the Conference, and we have a number of great give-aways, so plan to stop by ...

This Friday, May 11, International Right of Way Association Chapter 11 (San Diego) will be hosting a great program titled "Eminent Domain Seminar:  The Acquisition Process and Litigation Case Study."  If you want an update on recent developments in eminent domain, or if you've ever wondered what a relocation appeal hearing or a condemnation trial looks like, this seminar is for you.  There are a number of great speakers lined up for the full-day class.  

My colleague Rick Rayl and I will be going toe-to-toe in a mock trial on the valuation of a gas station and the loss of business ...

The demise of redevelopment in California has surely sparked strong emotions from both its supporters and its opponents.  And while the wind-down process continues to dominate the headlines, a recent article caught my eye about the tale of a long, hard-fought redevelopment battle -- with a happy ending, for everyone. 

If you have a moment, check out a great story in last week's Park La Brea Press, Eminent Domain Didn't Send Bernard's Packing, detailing a property owner's successful fight against redevelopment in Los Angeles.  The article provides a current update on a ...

If you've ever watched the show Shark Tank on ABC, you know that many individuals value their businesses much higher than their business' numbers suggest.  It's human nature:  you focus on the upside and tend to ignore the blemishes or risk areas.  As Kevin O'Leary -- "Mr. Wonderful" -- would say, the numbers tell the story, because it's all about the money. 

Mr. Wonderful's it's-all-about-the-numbers concept also holds true in the valuation of businesses in the eminent domain context:  the jury's task is supposed to be a sober inquiry into values, ignoring ...

It's common practice for government agencies and property owners to reach an agreement on the acquisition of property without the use of eminent domain.  Agencies understand the negative connotation of condemnation, along with the litigation costs involved, and right-of-way agents typically make strong efforts to negotiate a voluntary purchase.  Acquisitions are usually resolved by the parties' entering into a standard right of way contract or purchase agreement.  But once the eminent domain action is filed, attorneys like to resolve the case through the entry of judgment -- as ...

The demise of redevelopment world tour continues!  Gale's been speaking away up north at the IRWA, the Appraisal Institute, and various other organizations, and Rick and I have been trying to do our part to keep up down here in Southern California.  So, here we go again -- this time down in San Diego, and we hope you'll join us.  We promise to use some new materials and give some updates on the status of pending clean-up legislation and how the redevelopment agency winding up process is playing out in California. 

The details:  we'll be speaking to the San Diego Chapter of the International ...

A few months ago, I had a property owner call me and explain he had recently sold his property to a utility company under threat of eminent domain.  He took the sale proceeds and invested the money in a comparable replacement property.  When he applied to transfer his Proposition 13 base year value to the replacement property, the County assessor denied his request.  The assessor explained that because the sale under threat of eminent domain was not to a public entity, it did not fall within the exception that allows for a transfer of the base year value.

I was a bit surprised by the assessor's ...

 Here's some news making headlines this week in the eminent domain community:

• The Base Year Transfer Rule Under Threat of Eminent Domain:  A new published California Court of Appeal decision -- Duea v. County of San Diego -- came out yesterday addressing whether a property owner can transfer their base year value to a replacement property when the owner sells its property to a private developer under threat of eminent domain.  The Court held that the owner had some procedural missteps which doomed the case, but also went on to hold that this type of transfer does not qualify for a base year ...

Over the past few years, we've seen California courts go in several different directions when it comes to admitting opinions on the value of a business' loss of goodwill in the context of an eminent domain action.  As a result, eminent domain attorneys, public agencies, and appraisers have been left shooting at somewhat of a moving target as to whether courts will be flexible on the admission of unique or unconventional goodwill opinions.  This week, the California Court of Appeal issued an unpublished decision, City of South Gate v. S&M Auto Sales, which, although not ...

There are a number of redevelopment updates making headlines both in California and nationwide. 

National Redevelopment Update:

We've been following H.R. 1433 -- the "Private Property Rights Protection Act of 2011" --  a bill that would limit the power of eminent domain on a national platform.  We last reported in January that the bill was finally adopted by the House Judiciary Committee, and would next make its way to the House for approval.  According to an article on The Hill by Pete Kasperowicz, House votes to overturn Supreme Court decision on eminent domain, that next step ...

Here's a quick update about some recent headlines in our eminent domain community.

• Eminent Domain for New School in Foster City?  According to a Mercury News article, Charter Square owners resistant to selling property to school district, the San Mateo-Foster City School District is looking for a site for a new school, and it may turn to eminent domain to acquire the Charter Square Shopping Center.  Moving forward with the new school depends on the passage of a $130 million bond measure in June.  If it goes forward, more than a dozen businesses will need to be relocated.
• Orinda to Condemn ...

We all knew that redevelopment agencies wouldn't go down without a fight after the California Supreme Court delivered the elimination-knock-out-punch in California Redevelopment Association v. Matosantos.  As expected, agencies took a two-pronged approach to try and stave off their elimination: (1) through the legislature, and (2) through the court system.  Friday delivered another one-two punch to redevelopment agencies, and this time they may be finally pinned in a corner.  

Legislative Update:  With respect to the legislative fix, we reported a few weeks ago that Senator ...

We've been closely tracking H.R. 1433 -- the "Private Property Rights Protection Action of 2011" -- a bill that would limit the power of eminent domain on a national platform.  (See our August and April 2011 posts.)   There hasn't been much action lately, but we finally saw some significant movement. 

According to an article by Lawrence Hurley in the E&E Reporter, "House panel approves bill limiting federal eminent domain power," the House Judiciary Committee finally approved the bill by an overwhelming 23-5 vote. Now, the legislation will move its way to the House for approval.

Last week, we sent out a blog post with a number of quick updates on right-of-way-related issues making headlines across California.  Rick thought it would be a cool idea if we made this type of post a weekly habit, so here it goes (and, if it doesn't work or happen every week, obviously blame Rick):

• City of Visalia Can't Negotiate With Property Owner:  Here's an interesting story.  According to an article in the Visalia-Delta Times, "Visalia moves to take land near St. Johns," the City of Visalia is using eminent domain to acquire property necessary for a walking trail.  So what makes ...

With the elimination of redevelopment agencies in California, we've been spending quite a bit of time lately discussing the impacts of Proposition 13 on California's budget woes as government agencies continue to fight over a slice of the shrinking property tax budget pie.  Proposition 13 has led to another interesting property valuation battle between county tax assessors and petroleum refineries, and the California Court of Appeal recently issued a published decision, Western States Petroleum Association v. State Board of Equalization, settling the dispute.

Prop 13 ...

 Here's a few updates on eminent domain-related issues taking place in California this week:

• City of Covina Condemnation:  According to an article in the San Gabriel Valley Tribune, Covina using eminent domain to take property from Alhassen-controlled company, the City of Covina has filed an eminent domain action to acquire a vacant, half-acre property owned by West Covina-based developer Ziad Alhassen.  The City intends to utilize the property for parking for police department employees and County firefighters.  The condemnation action was necessary after the City and the owner ...

The California Court of Appeal recently issued an unpublished decision, Ridge Properties v. County of Riverside Flood Control and Water Conservation District, which addresses whether a government agency's failure to pay an agreed amount of compensation gives rise to a claim for inverse condemnation.  The answer is "no."

In Ridge Properties, a property owner planned to develop an industrial park in Riverside County.  The conditions of approval for the project required the owner to dedicate some of its property and construct a drainage or flood control facility to protect ...

The last two weeks following the California Supreme Court's decision eliminating redevelopment have been nothing short of a whirlwind.  Stories are flying all over the place on the decision's implications, whether redevelopment may be revived, or whether there may just be some small tinkering with AB1X 26.  While the updates seem to be changing by the hour, here's what we know as of today:

• Senator Alex Padilla (D-LA) has introduced a bill to delay the dissolution of the redevelopment agencies until April 15, 2012.  It's unclear if this is a delay tactic to give RDAs a chance to come up with ...

Here's a new one.  Imagine you have a government agency as your tenant, paying above-market rent, and the lease is set to expire.  The government tells you they're going to move to a new site, but they need to hold over for a while until the new site is built.  You figure, fine, the parties will just continue with the same rental rate until the government tenant moves.  Hey, what other option does the government have?  It would be incredibly expensive to find a temporary site and do a temporary move until the permanent relocation site is finalized.

This logic may work with any typical private-market ...

After our webinar on the California Supreme Court's decision in California Redevelopment Assn. v. Matosantos, we've received a number of requests for the materials both by folks who attended and those who missed the event.

Let us know your thoughts.  And, if you have any follow-up questions, feel free to give us a call or shoot us an e-mail. 

We're taking our show on the road!  In case you missed our webinar on the California Supreme Court's decision in California Redevelopment Assn. v. Matosantos, or if you just want to see our fantastic presentation skills in person (not sure what's wrong with you, but ok...), we hope you'll join us at the International Right of Way Association Chapter 57's monthly luncheon on January 11, 2012. 

IRWA Chapter 57's monthly luncheons typically begin at 11:30 a.m., and they take place at Canyon Crest Country Club at 975 Country Club Drive, Riverside, California.  Here's the ...

Before a public agency can exercise the power of eminent domain, it must adopt a resolution of necessity making certain findings in support of the taking of property.  The resolution defines the scope of the agency's acquisition, and the agency is typically prevented from contradicting the terms of the resolution in the eminent domain action.

There is a delicate balancing-act in drafting the scope of the taking in the resolution.  If the scope is too narrow, the agency may ultimately need to go back and acquire additional rights or property.  On the other hand, if the scope is too broad, it ...

We've covered in the past the impacts property and business owners suffer when government agencies plan for public projects.  We've also covered when agency planning crosses the line and results in precondemnation damages or a de facto taking.  A recent unpublished Court of Appeal decision, Joffe v. City of Huntington Park, highlights (1) the types of impacts owners suffer and (2) the difficulty owners face in trying to recover for such impacts.

In Joffe, a related property owner and furniture manufacturing business claimed that the city repeatedly expressed a desire to ...

As you may recall, we've been closely following an eminent domain action pending in Sacramento County Superior Court involving the Rancho Cordova Redevelopment Agency.  The case involves the RDA's efforts to acquire a 9-acre site owned by the Lily Company.  After the property owner lost its challenge to the RDA's right to take the property, the case proceeded to a jury trial with respect to the property's value.  The results are in, and it's not a happy ending (at least so far) for the RDA. 

The Sacramento Bee reports in its article, "Price tag sky rockets for Rancho Cordova in land ...

Anyone involved in the right-of-way industry understands that communication is key.  Whether you are on the side of a property owner or a public agency, a forced acquisition of property is never comfortable.  But being straightforward and opening an honest dialogue usually goes a long way.  Public agencies and their agents should be prepared to explain the need for the public project, the details of the take, the potential impacts, and how the value of the property was determined.

A perfect example of what happens when there is miscommunication is highlighted in a Redding.com article by ...

When we think of some of the most well-recognized and controversial decisions from our judicial system, cases like Roe v. Wade (abortion) and Dred Scott v. Sandford (slavery) come to mind.  Within our group of right of way professionals, we obviously think Kelo v. City of New London is a huge deal, as it allows for the use of eminent domain for purely economic purposes.  But does it rank up there with the others?  It does, according to US Supreme Court Justice Scalia.

According to an ABA Journal article, Justice Scalia was recently speaking to a group of students at Chicago-Kent School of Law ...

Most of us in the right of way profession are following closely the redevelopment lawsuit pending before the California Supreme Court.  The decision could have widespread implications.  So, to keep you fully informed, here's another quick update.

Yesterday, the California Supreme Court announced it will hear oral argument from 9 a.m. to 10 a.m. on Thursday, November 10, 2011.  For those of you up north who are keen on seeing the event in person, oral argument will be taking place at the Supreme Court Courtroom, Earl Warren Building, Fourth Floor, 350 McAllister Street, San ...

Many times before a government agency actually commits itself to moving forward with acquiring a property for a public project, the agency needs to undertake certain testing at the site to make sure the site is viable and feasible.  After all, no agency wants to unknowingly be stuck with a contaminated property or one that cannot support the proposed use.  The testing involved usually involves various degrees of soil sampling and boring. 

Public agencies typically seek permission from the owner of the property in question to conduct the testing.  But what happens when the ...

Want the scoop on what future challenges local government agencies face with respect to eminent domain and redevelopment?  Want to hear from some of the most well-recognized eminent domain attorneys across the nation?  Want to get some CLE credit?  Want to get all your questions answered?  Want to do it all from your desk, in a short one-and-a-half hour presentation?

Come join us on Thursday, December 1, at 10 a.m. (PST) for the online seminar, "Eminent Domain: Redevelopment Challenges for Local Government, Navigating Federal Funding Requirements, Challenges for Public ...

The use of eminent domain in a declining real estate market presents a number of unique issues.  I often receive calls from property owners who are frustrated with the government's timing of condemnation proceedings, and want to know how they can get market-peak-values for their property. 

This issue was the hot topic of a previous IRWA seminar I chaired, Property Acquisition, Appraisal, and Relocation in an Upside Down Market.  And a recent blog post by the Weiss Serota Helfman law firm, Eminent Domain Valuation in a Falling Market Poses Questions for ...

We've covered in the past regulatory takings claims and the benchmark three-prong Penn Central test for analyzing potential liability.  We've also noted the issues involved in consistently applying those factors, and the resulting unpredictibility in evaluating the merits of potential regulatory takings claims.  

William Wade, Ph.D., a resource economist with the firm Energy and Water Economics, often writes about these issues, offering clearly articulated potential solutions to dealing with these Penn Central issues.  And Mr. Wade has done it again, as his recent ...