Eminent Domain Report

When eminent domain attorneys think of just compensation in the context of an eminent domain case, we're typically thinking about the value of what we can see:  the dirt itself; and anything built on that dirt.  But every so often, a property's real value lies not in what is on the surface, but what sits below the surface.

A recent post by the Biersdorf law firm, Mineral Rights in Eminent Domain Cases, reminds us about this often overlooked issue.  The post contains a nice summary of when and how these issues can arise, and I won't repeat all of what they have to say.  The bottom line is that when a ...

Last week was quite busy in the world of California eminent domain, and the start of this week appears to be no different.  A few updates:

• International Right of Way Assocation (IRWA) Chapter 67 is holding its annual, half-day seminar on May 10 at the Holiday Inn in Santa Ana (sorry for the late notice).  The seminar is focused on mobilehome acquisitions and appraisals, and there are a number of great speakers lined up.  (I'll also give a quick update on the City of Los Angeles v. Plotkin decision involving precondemnation damages.)  I hope to see you there.

• The Marysville Joint Unified ...

According to an article by Ken Carlson in the Modesto Bee, "Modesto will try eminent domain," the Modesto City Council this week voted 6-0 in favor of utilizing eminent domain to acquire easements necessary for the widening of Roselle Avenue.  The remaining hold-out properties include part-takes from a seven-acre ranchette and a two-and-a-half acre vacant lot.  The owner of the ranchette, Daniel Nickles, claims the City's survey is flawed, and its $15,000 offer is less than a tenth of fair market value.

The acquisition if Nickles' property includes a 5-foot by ...

I read a really interesting blog post by Robert Thomas, 10th Cir: Landowner Not "Prevailing Party" Even Though They "Won $3.8 Million -- Much More Than The Government Ever Offered Them".  It describes a recent 10th Circuit decision that denied the property owner an attorneys' fees award where (1) the property was valued at trial at $3.8 million and (2) the government's offer was a mere $186,500.  What caught my attention was the mechanism by which the federal courts award fees under the Equal Access to Justice Act (EAJA), as compared to the fee-shifting rules in California. 

Under the EAJA ...

The U.S. Court of Appeals for the Federal Circuit recently issued an interesting opinion which addresses the question of whether or not a government agency's application of the Endangered Species Act can trigger a property owner's Fifth Amendment Takings Claim.

My colleague Ben Rubin has a more detailed post about the case, Klamath Irrigation District v. United States, on our firm's Endangered Species Law and Policy Blog.  More generally, the Klamath Irrigation District case analyzes whether the US Bureau of Reclamation's decision to reduce water delivery to farmers ...

As we have previously reported (Fate of Redevelopment Remains in Limbo), the bills to eliminate redevelopment agencies have languished due to Republican opposition.  With so many redevelopment agencies scrambling to use or secure redevelopment funds in an effort to protect them from being taken by Sacramento and with shortfalls in property tax revenues due to declining property values, redevelopment agencies are no longer as tempting a target for bridging the State’s budgetary shortfall.  

While redevelopment agencies may survive this budget cycle, the fight over their ...

The case involving a small boxing gym in National City, California, has garnered national media attention.  The owner filed suit challenging National City's redevelopment plan for, among other things, failing to follow California's post-Kelo rules on making blight determinations.

We reported on the case last month in A More Personal View of the Redevelopment Fight from National City.  The trial ended a few weeks ago, and the parties have been anxiously waiting for a decision ever since.  Late yesterday, the court issued its decision, ruling in favor of plaintiffs.  According to ...

We've been following the Guggenheim case for more than a year now, and in the last week or so, there have been a number of developments.  As a quick recap, this decision by the Ninth Circuit Court of Appeals held that the City of Goleta's rent control ordinance - which had the effect of transferring the vast majority of a mobile home park's value from the park owner to the tenants - did not constitute a taking.  The decision followed an earlier decision by a different panel of the same court, in which the court held that the ordinance did qualify as a taking. 

Not surprisingly, the owner then sought ...

I presented an update on eminent domain/redevelopment issues making their way through the legislature at this week's IRWA Chapter 67 (Orange County) monthly meeting, and I've received a few follow-up requests for more information.  So I decided it was probably worthwhile to put all the information here on the Nossaman blog. 

• Status of California Redevelopment Agencies:  It's now been several weeks since the  attempted Assembly votes, where Governor Brown's attempt to eliminate redevelopment agencies fell one vote short.  The Governor needs the $2.2 billion in ...

Roy Fowler's Furniture Station has been a well-known staple within the City of Azusa.  The 39-year-old store has witnessed much change in the area known as Corky's Corner.  However, the store is now officially shutting down after the City of Azusa acquired the property through eminent domain.

According to an article in the San Gabriel Valley Tribune, "Long-time Azusa furniture store to close after losing battle against city, eminent domain," the Furniture Station finally reached a settlement with the City after a contentious eminent domain battle.  The City sought to ...

If Gov. Brown wins, plans for sports venues in Escondido and San Diego lose.  So ran a headline on the Los Angeles Times' blog earlier this year.  The article noted if the governor were successful in abolishing redevelopment agencies, it could kill plans for a minor-league baseball park in Escondido and a new football stadium for the Chargers in downtown San Diego.  Any new stadium for the A’s, either in Oakland or San Jose, could experience some similar fate.

With SB 77 falling 1 vote short of the requisite 2/3 majority in the Assembly, and traction being gained by the California ...

I wanted to provide a quick update on a couple of cases we've reported on earlier. 

The first case is the dispute between the City of Seal Beach and Bay City Partners over 10.7 acres of waterfront property.  The city wanted the property preserved for the public, while the owner wanted to use it as part of a new oceanfront development.  According to a March 29 article in the Orange County Register by Roxana Kopetman, Seal Beach and developer agree on waterfront property, the parties agreed this week to a settlement that will result in leaving about 70 percent of the property open to the ...

We've covered the Guggenheim v. City of Goleta regulatory takings case pretty exhaustively, most recently noting there is a pending petition for Supreme Court review.  While we wait for the fateful decision as to whether the Supreme Court will take up the Guggenheim case, the 9th Circuit Court of Appeals recently issued another mobilehome rent control regulatory takings decision in Colony Cove Properties v. City of Carson.  Like the 9th Circuit's en banc decision in Guggenheim, the park owner's regulatory takings claim was unsuccessful.

The owner in Colony Cove

The California Court of Appeal recently issued an interesting unpublished decision addressing a property owner's claim that a government entity's regulation of asbestos constituted a regulatory taking.  The owner's unsuccessful challenge presents a nice summary of what not to do when pursuing a regulatory takings claim, and just how difficult it is for an owner to succeed.

In Butte Equipment Rentals, Inc. v. California Air Resources Board, the property owner operated a rock mining and quarrying business.  The owner alleged that two regulations adopted by the ...

Despite daily rumors to the contrary, neither chamber took up the issue of redevelopment last week.

Both the Senate and Assembly held brief floor sessions Friday morning without voting on either SB 77 or AB 101, the bills eliminating redevelopment. While both houses remained on-call over weekend and today, the next floor sessions are not scheduled until Tuesday, March 29.

Meanwhile, there have been intensive lobbying efforts in support of the CRA and League of California Cities Alternative solution. Essentially, they are proposing that redevelopment agencies voluntarily ...

Today the California Transportation Commission announced the allocation of $101 million to fund 90 state-wide transportation projects.  The CTC's updated project allocation list provides a full breakdown of all the projects.

In reviewing the project list, there appears to be a big push towards going "green":  many of the projects involve improvements such as tree planting, compressed natural gas (CNG) buses, pedestrian and bicycle trails, or acquisition of property for restoration and habitat protection.  There's also a handful of ...

Another day has passed with no apparent movement on the two remaining elements of the Governor’s budget.  Rumors are circulating that plans are afoot for bypassing Republican legislators by placing a tax measure on the November ballot. 

Officially, the Governor’s office remains focused on the original plan.  In fact, the Governor’s spokesman, Gil Duran, was quoted as saying that it was a lie that the Governor has decided on a November election.  However, other anonymous sources say that while Brown is continuing to negotiate with Republicans to put the tax extension on a June ...

It's been a crazy couple weeks with the redevelopment saga continuing to play out in California.  But let's shift gears and take a breather – at least for a moment – while hundreds of redevelopment agencies continue to hang on for dear life.

I received a call today from a business owner who faced a potential eminent domain action, and the owner unforntuately did not take the appropriate steps to preserve goodwill and find a suitable relocation site.  The owner's difficult dilemma prompted me to mention an excellent article I came across a while ago from Martyn Daniel LLC

A pretty dull Monday on the redevelopment front.  We're hearing that it's likely that the Assembly will not take up the issue again today or tomorrow, so Wednesday may be the next big day.

In the meantime, the California League of Cities has officially endorsed the CRA's alternative proposal, which is not particularly surprising since one of the "losers" if redevelopment is abolished is likely to be the cities. 

The League's summary of the CRA proposal is as follows:

1. Local redevelopment agencies can voluntarily suspend their housing set-aside for FY 2011-12. An equivalent amount of ...

Both the Senate and Assembly have adjourned for the weekend, but what a week it has been in the battle over the future of redevelopment.

The bill to kill redevelopment, SB 77, came up for multiple votes in the Assembly on Wednesday. The bill initially garnered only 50 of the 54 votes needed for the two-thirds majority. The Governor, working out of the Speakers office just off of the Assembly floor, personally lobbied and cajoled legislatures throughout the day. Eventually, he won over two wavering Democrats and one Republican, Chris Norby of Orange County. By the time of the bill’s final ...

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 ...

As we noted in yesterday's post, Vote on Redevelopment Agencies' Future Uncertain, the Governor's deadline of March 10th is slipping away.  How far can it slip?  Some believe that a vote on his budget proposal could slip all the way into the third week of March, unless a few Republicans break ranks before then.  Thus far, at least publicly, Republican opposition to both the tax extension and abolition of redevelopment remains unabated.  Among the demands in the now infamous March 7th open letter to the Governor from five key Republican senators is "Save but reform Redevelopment Agencies and ...

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 ...

The Legislature may deal a death blow to redevelopment in California as early as next week.  Late yesterday afternoon, on a party line vote, the members of the Budget Conference Committee voted to move the Governor's proposal to eliminate redevelopment to both houses for a vote by the Assembly and Senate members.  The Governor wants the State Legislature to send him a budget package to sign by March 10, the date by which he must secure a two-thirds vote to get a measure to extend tax increases on the June ballot.

Therein lies the rub.  A minimum of two Republicans are needed in the Assembly ...

One recent article by our Infrastructure Group, "New Surface Transportation Legislation Likely to Encounter Many Roadblocks in the Coming Months," seems particularly useful.  The article indicates that the Obama Administration has the passage of a multi-year surface transportation bill high on its legislative agenda, and its new budget proposal pushes for a $556 billion surface reauthorization bill.  John Mica, the Republican Chairman of the House Committee on Transportation and Infrastructure, however, has warned transportation stakeholders that a Republican bill this ...

Recently we've been reporting on redevelopment agencies' efforts to utilize redevelopment funds before they're no more under new proposed legislation.  Whether you agree or disagree with the existence of redevelopment agencies, sometimes those agencies acquire properties on behalf of other government entities for undisputed public purposes.  For example, the Redding Redevelopment Agency is currently acting on behalf of the State Administrative Office of the Courts to acquire property necessary to build a new Shasta County Courthouse.  If redevelopment agencies are ...

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 ...

They have been around for over 20 years.  Established at a time when state and federal governments were withdrawing from financing infrastructure projects, Infrastructure Financing Districts (IFDs) were developed as an alternative vehicle for local financing of those types of projects.  However, they are difficult to establish and have limited powers.  As a result, they have rarely been seen as an alternative to redevelopment agencies.  Now, a generation later, with the possible demise of redevelopment, cities and counties are once again casting about for alternative sources of ...

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 ...

A new bill -- AB 238 -- is working its way through the State Assembly which would require a reduction in compensation payable to a successful plaintiff in an inverse condemnation action in direct proportion to the owner’s percentage of fault in causing damages to the owner’s property.  While the doctrine of comparative fault is one of the cornerstones of tort law, it is rarely applicable to inverse condemnation actions. 

Ever since the seminal decision in Albers v. County of Los Angeles (1965) 62 Cal.2d 250, there has been a more or less bright line distinction between the strict ...

Last week, we give a brief overview of the new published California Court of Appeal decision in City of Gardena v. Rikuo Corporation (Feb. 7, 2011).  For anyone interested in a more detailed explanation of the City of Gardena case, you can read our E-Alert, "Court Dismisses Appeal Arising From Stipulated Eminent Domain Judgment."

The case is probably worth a read for all of us in the right-of-way industry, as the decision serves as an important reminder for public agencies and property owners to carefully document eminent domain settlements, especially where additional actions ...

The Clean Water Act requires states to identify rivers and creeks that fall below specified water quality standards.  Those water bodies are thereafter designated as "impaired" by the Environmental Protection Agency, and certain standards are imposed to limit pollution and runoff. 

If a river or creek's designation results in a nearby property suffering a decrease in value, does the property owner have standing to seek removal of the designation?  In Barnum Timber Co. v. United States Environmental Protection Agency, the Ninth Circuit Court of Appeals held that ...

In a report issued in advance of today’s Senate Subcommittee hearing on the issue, the Legislative Analyst's Office reiterated its support for the Governor’s call for an end to redevelopment in California.  While acknowledging that redevelopment does lead to economic development within redevelopment project areas, the report asserts that there is no reliable evidence that it attracts business to the state or increases overall regional economic development. 

This may all be well and good, but analyzing the issues this way creates a subtle - but important -shift in the ...

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 ...

We've reported on a number of rent control regulatory takings claims making their way through the court system, most notably the Guggenheim v. City of Goleta case.  Apparently, some cities and counties are fed up with the onslaught of challenges to their rent control ordinances, and they're looking for a way to recoup the attorneys' fees they expend in preserving the ordinances. 

According to an article in the Santa Cruz Sentinel, "Monning researching bill to address rent control lawsuits," Assemblyman Bill Monning looks to address this concern by considering a bill ...

In his Tuesday column for the San Francisco Chronicle, former Mayor (Willie) Brown takes former Mayor (Jerry) Brown to task for having forgotten about all the good things that redevelopment money did for him while he was Mayor of Oakland.  The renovation of the Fox Theater, construction of 10,000 units of housing downtown, the creation of two charter schools - all undertaken with redevelopment money.

But here is what may be the big news.  Despite all the talk of abolishing redevelopment agencies in California, a compromise may be in the works.  According to Willie Brown, in Deal on state ...

In the wake of the Governor’s proposal to abolish all redevelopment agencies, State Controller John Chiang announced that his auditors would be reviewing 18 redevelopment agencies.  As he stated in his press release,

The heated debate over whether the RDAs are the engines of local economic job growth or are simply scams providing windfalls to political cronies at the expense of public services has largely been based on antidotal evidence.

These reviews, designed to assist lawmakers in their budge debates will therefore focus on how the targeted RDAs define a blighted area ...

The California Court of Appeal has issued a new published decision involving an unusual set of circumstances surrounding an eminent domain and inverse condemnation case.  In Cobb v. City of Stockton, the City filed an eminent domain action to acquire the owner's property; shortly thereafter, the City obtained prejudgment possession and constructed a public roadway on the property.  So far, seems typical.

Here's where things get unusual.  After nine years, the matter had not made its way to trial, and the court dismised the action for "lack of prosecution."  (I'm not entirely sure how ...

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 ...

We noted in our 2010 year-in-review E-Alert that the stimulus dollars were starting to make their way towards local agencies so infrastructure projects could be built.  2011 is now off to a fast start:  according to a recent Caltrans press release, the California Transportation Commission has announced the allocation of $1 billion towards 107 California transportation projects, including $838 million from Proposition 1B bond funds (which was approved by voters in 2006).

Here are some of the highlights as to how these funds will be utilized:

• $46.55 million to install rail ...

The large pool of tax increment revenue flowing to the state’s 400-plus redevelopment agencies has long made a tempting target for a cash strapped State.  Time and again Sacramento has dipped into this pool to offset budget deficits.  Local interests have fought back, both at the ballot box (e.g., 2004's successful Proposition 1A "Protection of Local Government Revenue"), and in the courts.  Sometimes local interests gained the upper hand and sometimes the advantage went to the State.

Proposition 22, approved by the voters in November, was intended by its backers to be the ultimate ...

In U.S. politics, mudslinging -- or negative political campaigning -- is "as American as Mississippi mud."  Just recently, I'm sure everyone recalls the heated back-and-forth between Governor Brown and Meg Whitman.  Usually, the attacks die down after the election is over.  And rarely do the attacks center on eminent domain issues.

That brings us to Palm Springs.  Mayor Steve Pougnet unsuccessfully challenged U.S. Representative Mary Bono Mack for the 45th Congressional District in November.  Months after the election, the debate continues between the two.  

According to a recent ...