Eminent Domain Report

The Assembly has been in session since 11:00, and as best I can tell (I haven't been able to watch the feed the entire day), it has not yet taken up SB 77 or redevelopment again today.  My understanding is that further discussion is planned before the session ends, and that SB 77 was - at least at the beginning of the session - "item #7" on the agenda. 

In the meantime, the 11:00 session started a bit late this morning, and both houses almost immediately convened in caucuses.  Later, they moved forward with a few of the budget bills, taking them up and (apparently) approving them based on a ...

As the evening has worn on in the Assembly, SB 77 has been called to a vote several more times.  What started as 50 yes votes (four short of passage) has now become 53 "yes" votes - now a single vote away. 

Just before 7:00, the vote was 53-23, with 3 still abstaining.  Another vote was called at about 7:10, but the tally remained 53-23.  The plan at that time was to adjourn at 8:30 barring some change, but discussions continued until well past 9:00.

At about 9:20 p.m., the vote was called one more time.  It remained 53-23, one vote short.  At that point, the Assembly adjourned; it is scheduled to ...

SB 77 - the budget trailer bill to eliminate redevelopment agencies in California - has been debated on the Assembly floor much of the afternoon.  When it finally came time to vote at a little after 4:00 p.m. this afternoon, it was still unclear whether Governor Brown would receive the two-thirds vote necessary. 

As the votes came in, it became obvious that (1) the votes, as expected, would fall largely on party lines, with Democrats approving the bill and Republicans rejecting it, and (2) that the final result was going to be very close, one way or the other. 

Ultimately, the vote came in ...

It looks like Governor Brown's proposal to end redevelopment as part of his overhaul of California's budget may come to a vote on both the Assembly and Senate floors today.  AB 101 and SB 77 are scheduled for a 1:00 p.m. vote, and both include within them the plan to eliminate redevelopment agencies.  They require a 2/3 vote for passage.

In the meantime, the California Redevelopment Association is promoting an alternative proposal that it hopes will be presented on the floor.  They claim that the CRA proposal will:

• Provide significant funding to schools which could also help close the ...

We've blogged a lot in the past two months about redevelopment issues and the Governor's plan to help right California's budget by, among other things, eliminating redevelopment agencies.  But most of what we've written has viewed redevelopment from the 30,000 foot level. 

For policy-making decisions, viewing the big picture is hugely important.  But a case making news this week out of National City reminds us that the redevelopment fight is also quite personal. 

The Community Youth Athletic Center has been fighting what it perceives as an attack on its very existence for nearly four ...

Just when it looked liked we had reached the eleventh hour in the California's redevelopment battle, redevelopment agencies appear to be getting at least a temporary stay of execution. Governor Brown had declared a March 10 deadline for a vote on his proposal to overhaul California's budget, including "disestablishing" redevelopment agencies. 

But on Monday, those efforts stalled.  In an open letter to the Governor, five key Republican senators announced:

Although it is clear that you [the Governor] engaged in our conversation seriously, it appears we have reached an impasse.

In ...

I wanted to alert people to two meetings coming up soon that may be of interest if you're in Southern California. 

• IRWA, Chapter 57 meeting on March 2:  Chapter 57 is holding its monthly meeting tomorrow in Riverside.  The speaker will be Chris Mazier from Lawyers Title and his subject will be Preliminary Title Reports and their Dreaded Schedule B Items!  As all eminent domain attorneys and right of way consultants know, navigating "Schedule B" issues is a huge part of the precondemnation planning process.  And having now spent a huge part of the last several months reviewing Schedule B items ...

Around California, agencies are scrambling to use or secure redevelopment funds in an effort to protect against anticipated legislation to abolish redevelopment agencies in California.  We've been following the story for weeks, but things are really heating up now. 

As just a few examples from the past couple of days:

• A City of Perris councilman, Mark Yarbrough, is asking the city staff to deplete existing redevelopment funds before the state can seize them.
• Tuesday night, the San Mateo City Council voted to use $34.2 million in redevelopment funds for local projects "effectively ...

Some of my colleagues at Nossaman have prepared a pretty detailed nationwide summary of key transportation projects and their progress in 2010.  The piece, 2010 Transportation Infrastructure Year in Review, struck me as potentially being a helpful resource for any number of reasons, and it occurred to me that anyone else working in transportation infrastructure may also find it useful.  

They've included information about federal TIFIA grants, TIGER II grants, updates on efforts to implement public-private partnerships, and procurement of and milestones for some of the biggest ...

Most eminent domain cases don't proceed to a full-blown jury trial.  Rather, most get settled somewhere along the way, and those settlements often come in the form of a stipulated judgment.  In most of those cases, nothing more happens.  The agency pays the judgment, obtains a final order of condemnation, and all parties move on with their lives.

But sometimes, the judgment itself isn't the end of the story.  And in City of Gardena v. Rikuo Corporation (Feb. 7, 2011), the parties still had to deal with ongoing environmental remediation issues long after their stipulated judgment was ...

Over the weekend, Chlorinated Liberty posted a pretty good article that articulates the primary reasons people cite as the basis for abolishing redevelopment agencies.  The article, "How Eliminating California's Redevelopment Agencies Spurs Economic Growth," takes a reasoned approach to why the free market is better equipped to handle redevelopment and blight remediation than the government - and its redevelopment agencies. 

The article walks through some statistics that show that many of California's redevelopment agencies did not report any job creation generated by their ...

We thought it was over in 2009 when the Ninth Circuit held that the City of Goleta's rent control ordinance constituted a taking.

We thought it was over in late 2010 when an en banc Ninth Circuit panel ruled the other way, holding that the property owner failed to establish the "investment-backed expectations" necessary to establish a takings claim under Penn Central.

Now, we're not sure if it's ever going to be over.  Apparently, Dan Guggenheim has decided to seek review by the U.S. Supreme Court, so there may yet be more drama for the long-playing battle between the Guggenheims and the ...

A January 27 article in California Watch, "Eminent domain battles rage on despite Prop. 99," reflects the ongoing confusion that surrounds the efforts to reform eminent domain in the aftermath of the Supreme Court's 2005 Kelo decision. 

The article's premise is that Proposition 99, approved by California's voters in 2008, did not stop what the author describes as "eminent domain abuse."  But the case example that underlies the article reflects a fundamental misunderstanding about what Proposition 99 does (or does not do), and what people typically mean when they talk of "eminent ...

Earlier this month, we reported on the Governor's budget proposal, which includes the bold plan to "disestablish" (my new favorite word) redevelopment agencies as part of his plan to shore up California's budget.  We then told you about how the budget proposal interacts with Proposition 22, passed last November. 

Not surprisingly, the story is far from over.  A January 21 article in the Los Angeles Times by Patrick McGreevy, "Cities may sue governor over his redevelopment proposal," reports that earlier today, more than 100 mayors and city council members came together to condemn ...

It should come as no surprise that the budget proposal issued by Governor Brown today contains some painful cuts.  California remains in the midst of one of the worst economic cycles in history, and its budget shortfall has reached historic proportions.  According to the Governor, as he takes office, California's budget shortfall totals $25 billion - yes, that's Billion, with a "B." 

For me, I am particularly disturbed by proposed cuts to education; the UC system, which provided me with both my undergraduate and law degrees, may face numerous cuts, including a general ...

New subway lines don't come around every day.  They are expensive, complicated projects that take years to plan, finance, and build.  But it looks like major cities on both coasts are working towards new major new subway projects. 

In New York, the Second Avenue Subway Project is the first major expansion of New York's subway system in more than half a century.  The MTA started studying the project in the mid-1990's, issued an Environmental Impact Statement in 1999, and finally broke ground in 2007.  Construction is now well underway. 

In Los Angeles, the proposed project making most of ...

The City of Fremont announced that it plans to condemn a small, 1,249 square foot property located at the corner of Warren Avenue and Kato Road in order to facilitate its Warren Avenue Grade Separation Project.

There's nothing particularly notable about the announcement, except for a potential regulatory overlay.  The parcel is apparently owned by AT&T Communications, and even though the property currently lies vacant, AT&T is apparently taking the position that it cannot agree to any deal with the City without first obtaining approval from the California Public Utilities ...

I received an interesting email last week about possible claims against a neighboring property owner who was taking steps in an apparent effort to lower the amount of compensation the agency would have to pay for the property.   I didn't get much in the way of details, but it did get me thinking about how (and why) this might occur, and what someone could do about it.

The first thought that occurred to me is why would a neighboring property owner want to cause the value of property to be lower?  It seems that in most circumstances, the last thing one owner would want is for a low value to be established ...

One of the cases we've been following the entire year is Guggenheim v. City of Goleta.  The case involves a challenge to the City of Goleta's rent control ordinance for mobile homes.  The owner claimed that the ordinance had the effect of transferring the vast majority (as much as 90 percent) of the property's value to the tenants, constituting a taking. 

Last September, the Ninth Circuit Court of Appeals reversed an earlier District Court decision, holding that Goleta's ordinance constituted a taking, and it remanded the case for a trial on the amount of compensation the owner should be ...

On those cold winter nights as the holidays approach, who doesn't pause for a moment to consider the long history between Christmas and eminent domain?  For those who don't spend their time in front of the fire sipping egg nog and contemplating condemnation, I offer these tidbits:

• In August 2010, the Nevada Irrigation District voted to condemn part of a farm owned by Robert Hane.  How does this involve Christmas, you say?  Mr. Hane's farm produces - you guessed it - Christmas Trees.  For more on the story, read the Fair market value? Water district invokes eminent domain, from the Auburn ...

Ever since the Supreme Court issued its infamous 2005 Kelo decision, people have been anxiously awaiting the Court's next opportunity to weigh in on the extent of the government's eminent domain authority and, in particular, the limits (if any) created by the "public use" requirement. 

One of the cases that has been watched closely involves efforts to expand Columbia University in New York.  In Tuck-It-Away, Inc. v. New York State Urban Development Corporation, dba Empire State Development Corporation, the New York State Urban Development Corporation sought to condemn ...

I wanted to provide a quick update on some things about which we've reported over the past few months:

1.  Los Angeles Unified School District v. Casasola (2010) 187 Cal.App.4th 189

In Court Blurs Line Between Goodwill and Relocation Benefits, we reported on the Casasola decision, which expanded upon the earlier decision in Redevelopment Agency of the City of Emeryville v. Arvery Corporation (1992) 3 Cal.App.4th 1357 to hold that business owners cannot recover as lost business goodwill anything that falls within the scope of the Relocation Act, whether or not the losses are actually ...

The City of Rancho Cordova's Redevelopment Agency has been working to implement plans to eliminate blighted conditions along Folsom Boulevard.  As part of those efforts, the RDA filed an eminent domain action to acquire a 9-acre site owned by Lily Company.

Lily Company challenged the RDA's right to take on numerous grounds, including lack of proper blight findings and allegations that the RDA was colluding with the Los Rios Community College District.  We initially reported on the case in an August post, Rancho Cordova Eminent Domain Case Involves Allegations of Contractual ...

Earlier this year, we reported on the decision in Ridgewater Associates, Inc. v. Dublin San Ramon Services District.  There, the Court of Appeal rejected an inverse condemnation claim by a purchaser of a property that suffered water intrusion damage caused by an adjacent waste water treatment facility. 

The court held that the seller's failure to assign the inverse condemnation claim to the buyer, coupled with the fact that the buyer was "compensated" for any damages through payment of a reduced purchase price, left the buyer with no standing to sue in inverse condemnation. 

The buyer ...

I live in Orange County.  Every time I contemplate a trip to San Diego, I run the calculations: 

• How bad is the I-5 freeway going to be;
• How badly do I need to be in San Diego; and
• Can I find a way to extend/change my schedule to avoid the worst of the traffic? 

Granted, I engage in the same internal debate when I need to head towards Los Angeles, but at least going that direction, I have a number of route choices.  Going to San Diego, it's basically the I-5 or stay home. 

Caltrans is in the midst of a major planning process for possible expansion of the I-5 between La Jolla and Oceanside.  The public ...

This never would have happened five years ago.  A small game company is advertising its latest offering, Eminent Domain, a card game based on the colonization of various planets.

It's hard to imagine a game called "Eminent Domain" before the 2005 Kelo decision made the phrase ubiquitous in American conversation.  Heck, I'm an eminent domain attorney and I'm not convinced I had a clear understanding of what eminent domain was when I graduated from law school.

More interestingly, the title has generated a somewhat heated debate among gamers as to whether the game's true purpose is ...

In an all-too-familiar tale these days, a redevelopment agency is seeking to acquire property as part of its efforts to alleviate blighted conditions in the city, and owners are reacting strongly to the agency's plans to utilize the power of eminent domain where owners are reluctant to sell. 

According to a November 5 article in the Signal Tribune, "Property owners condemn Signal Hill RDA’s use of eminent domain," the situation in Signal Hill pushes all the buttons on both sides of the issue:

1. The redevelopment agency touts numerous successful projects, including converting ...

In response to my earlier post on the Pombo decision, I was asked whether complying with the decision to avoid an award of litigation expenses would expose the agency to an illegal gift of public funds claim. 

This is an issue that arises with some frequency with public agencies, where people are understandably -- and appropriately -- sensitive to claims that they have misused taxpayer money.  In particular, people worry about making an "illegal gift of public funds."  This principle arises from the idea that taxpayer money must be used for public purposes; the government cannot simply ...

In California eminent domain cases (this is an area in which the law varies dramatically from state to state), the property / business owner is entitled to an award of litigation expenses (including attorneys' fees) if (1) it makes a reasonable final demand for compensation and (2) the agency makes an unreasonable final offer of compensation.  (See Code Civ. Proc. § 1250.410.)

How one analyzes "reasonableness" once the jury issues its verdict has been the subject of a number of court opinions.  Tracy Joint Unified School Distract v. Pombo (Oct. 29, 2010) adds to that body of law. 

In ...

Few property owners look forward with any enthusiasm to the date the government finally announces it is moving forward with plans to condemn their property.   But owners who pretend that day will never actually arrive often realize too late that they have missed opportunities to protect their investments.

Eminent domain often proceeds over a very long time-table.  From project conception to right of way acquisition, years may pass, with properties held up in a cruel limbo as owners wait to see if the project really happens, and if so, whether their property will ultimately be impacted. 

In ...

Yesterday, we celebrated the one-year anniversary of our blog's launch.  We were planning to get a cake, but remembering back to what my one-year-old looked like after we put a cake in front of him on his first birthday, we decided to commemorate the occasion by preparing a "top 10" list from our blog's first year.

Admittedly, selecting 10 items was not a scientific process, and "top 10" really became "10 posts I can describe in a single short sentence," but in any event, here it is, the Top 10 Things You've Learned if You've Been Following Our Eminent Domain Blog (by the way, I find it ...

Just a quick update on yesterday's post about West Oakland involving Kroger's plans to build a store there.  Last night, the City Council unanimously approved changes to its eminent domain policies to allow the city to condemn the property necessary for the planned project. 

While reports of the hearing have somewhat different tones, it is fairly clear that the meeting was well attended, and that audience members were passionate, regardless of which side of the issue they supported. 

As the Sean Maher reports it for the Contra Costa Times in "Oakland City Council changes eminent ...

West Oakland has some notoriously tough neighborhoods, including the large ACORN project area where Black Panther co-founder Huey Newton was killed and an area known unflatteringly as "Ghost Town."  Over the years, it has been the subject of some controversial public works projects, facilitated through extensive eminent domain.  This includes the West Oakland BART station, a major postal facility, and the ACORN housing project.  

An October 4 article in the Contra Costa Times by Brian Beveridge, "'Eminent domain' draws shudders in West Oakland" describes the ...

Just before the midnight deadline for taking action yesterday, Governor Schwarzenegger vetoed AB 2531, the bill that would increase the eminent domain authority of the Community Redevelopment Association of Los Angeles.  His late-night message to the legislature was as follows:

To the Members of the California State Assembly:

I am returning Assembly Bill 2531 without my signature.
Redevelopment funds are to be used solely for the purpose of eliminating blight in urban neighborhoods in California cities. This bill would authorize the use of redevelopment funds for projects ...

In May, we reported on the City of Chino Hills' efforts to stop a portion of Southern California Edison's Tehachapi Transmission Project.  The project involves 175 miles of transmission line right of way designed to serve wind farm development in the Tehachapi area. 

Much of the right of way for the transmission lines runs through remote, undeveloped areas.  Though there have been many disputes over the amount of money SCE must pay to acquire any new right of way it needs (much of the project runs along pre-existing right of way), there has been little dispute about SCE's right to ...

Proposed changes to California's redevelopment law have been quietly making their way through the California legislature.  With little publicity, AB 2531, authored by Assemblyman Felipe Fuentes, made its way through the process this summer.  After a series of amendments, AB 2531 was passed by California's Senate on August 12 by a vote of 22-13.  On August 27, it passed California's Assembly, 50-26.

On September 10, the bill was presented to Governor Arnold Schwarzenegger for signature.  Under the California legislative process, the Governor has until September 30 to sign or veto ...

The City of Fontana will meet tonight to consider adopting a resolution of necessity to acquire property for the Citrus Avenue Interchange project.  According to a September 21 article in the The Sun, "Citrus Avenue interchange on Fontana City Council agenda," the City is anticipating that the majority of the funding for the $57.5 million project will come from Proposition 1B and Measure I funds, along with State Transportation Improvement Program funds.  

The City has apparently been in negotiations with the property owner, but has been unable to reach an agreement.  According to the ...

One of the most vexing aspects of eminent domain for many property and business owners is the fundamental fact that the owner does not get to decide whether to sell the property.  I cannot recall the number of initial client meetings I've had over the years that began with the client asking "How do I stop this from happening?"

In most cases, my clients are disappointed to hear my answer:  "You can't."  But this answer is overly simplified, because there are actually several grounds for preventing the government from condemning property. 

A recent post on the Biersdorf & Associates eminent ...

Just a reminder for all you eminent domain and right of way practitioners still mentally on summer hiatus.  IRWA Chapter 67 (Orange County) starts its new year next week.  The September meeting is Tuesday, September 14, at the Holiday Inn, Santa Ana/OC Airport, located at 2726 South Grand Ave., Santa Ana CA 92705.

The meeting starts with a "meet and greet" at 11:30.  Lunch commences at 12:00.  We will have a lunchtime presentation from John Ellis of Integra Realty Resources in Los Angeles.  He's going to give us an update on the real estate climate here in Southern California, and I've made ...

For those who didn't get enough of littoral property rights, accretion, and avulsion in reading about this summer's Supreme Court decision in Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, there is a new case making its way through the system. 

In Maunalua Bay Beach Ohana 28 v. State of Hawaii, the court analyzed a 2003 Hawaii law that had the effect of transferring ownership of property created by accretion to the state.   In a split decision, the Hawaii Court of Appeal held in 2009 that with respect to property that existed at the time the law went ...

The use of "government stimulus" spending to spur economic growth has been a point of heated political controversy for the past several years.  A proposal outlined by President Obama over the weekend involves spending $50 billion on the nation's transportation infrastructure, focusing on the aging highway system, rail lines, and airports. 

According to a September 7 Wall Street Journal article by Gary Fields, "Obama in Infrastructure Push,"

At a Labor Day rally in Milwaukee, Mr. Obama said the initiative would be part of a larger effort to fix 150,000 miles of roads, lay or rebuild ...

In Los Angeles Unified School District v. Casasola (Aug. 5, 2010), the Court of Appeal examined the interrelationship between recovery of lost business goodwill pursuant to Code of Civil Procedure section 1263.510 and recovery of relocation expenses pursuant to Government Code section 7267 et seq. 

My colleague, Gale Conner, prepared a good summary of the Casasola case detailing the facts and the Court's reasoning.  The bottom line is that the Court held that items that might be recoverable under the Relocation Act cannot be included in a claim for loss of business ...

For anyone looking to spend more time on eminent domain issues, there are two upcoming events you may want to consider. 

• For those looking for a one-day commitment, I recommend the IRWA, Chapter 1 2010 Fall Education Seminar, which is taking place on October 26 at the Quiet Cannon in Montebello.  I don't have the full list of speakers yet, but it's always a good event, and my partner, David Graeler, is Chair again this year. I'll be talking about the interrelationship between goodwill and the Relocation Act, using the recent Casasola opinion as a jumping off point (look for a post about ...

On its face, the City of Rancho Cordova's eminent domain action to acquire a vacant parcel for redevelopment purposes is a familiar story. The government wants to seize private property in order to turn the property over to a third party for redevelopment.  This is the basic fact pattern that caused the national eminent domain uproar that started when the Supreme Court issued its 2005 Kelo decision.

Unlike in Kelo, however, in California the government typically cannot take such steps without making appropriate findings that the property being condemned is "blighted."  This ...

The City of Glendale plans to vote tonight on a plan that would extend eminent domain authority in its central redevelopment area for an additional 12 years.  According to an August 10 article in the Glendale-News Press, "City Set to Extend Eminent Domain," the agency's eminent domain authority is currently set to expire next month. 

According to the Director of the Community Redevelopment & Housing Department, Philip Lanzafame, eminent domain is a key tool if redevelopment projects are to succeed:  "If you didn't have this, some property owners could hold the community hostage."

This ...

We have reported several times on the City of Barstow's efforts to renew its Redevelopment Agency's eminent domain authority, but Barstow residents apparently remain skeptical.  A public meeting in April left many dissatisfied with the City's efforts, and the City's Council's effort to address the issue in May led to a deadlock. 

Now, the City has scheduled an additional public meeting for this week in anticipation of the City Council's August 5 special meeting on the issue. 

According to a July 25 article in the Desert Dispatch, "City to attempt second eminent domain meeting ...

Most of the media surrounding eminent domain -- and eminent domain for redevelopment purposes in particular -- involves claims of eminent domain abuse and grass roots efforts to limit the government's ability to condemn property. 

In the City of Ukiah, however, local business owners are apparently taking the opposite stance, urging the City to reinstate its eminent domain powers that lapsed in 2001 to deal with a blight situation that business owners believe are hurting them.  We initially reported on the issues with the Palace Hotel back in Februrary, but a July 9 article in The ...

Five years ago today, the Supreme Court announced its decision in Kelo v. City of New London, triggering perhaps the most broad sweeping eminent domain reform effort in U.S. history, along with tremendous critical commentary -- including, as just one example, an August 2005 piece on Forbes.com titled Eminent Disaster.

Quite frankly, I'm a bit bored by the decision after five years (I can't begin to count the number of times I've explained the decision and what it means to clients, at seminars and conferences, and on this blog).  However, others are marking the occasion with ...

Last fall, we told you about a key rent control / takings decision, Guggenheim v. City of Goleta, in which the Ninth Circuit held that a rent control ordinance consituted a taking.  In March, we reported that the Ninth Circuit had ordered an en banc hearing of the Guggenheim case. 

Yesterday, the Court held the en banc hearing, and while it may be some time before the Court issues its opinion, the hearing itself may provide some good insights about what may happen (and what it may mean in the larger context of regulatory takings claims).  

Very generally speaking, the Court was critical of ...

Another recent interesting court decision was somewhat lost in all the excitement last week over (1) the County of Los Angeles v. Glendora Redevelopment Project case striking down Glendora's redevelopment plan for inadequate blight findings and (2) the US Supreme Court decision in the Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection case rejecting a "judicial takings" claim. 

That recent decision was by the California Court of Appeal in City of San Jose v. Union Pacific Railroad, which came down a month ago, but received little ...