Eminent Domain Report

As cities become more dense and urbanized, it is common for infrastructure to get outdated or insufficient to handle increased demand.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 invokes eminent domain in quest to demolish century-old building, the City recently adopted a resolution of necessity in order to acquire -- or at least partially acquire -- the century-old building located at 3530 Main Street in order to make way for a street-widening project.  The building frontage is needed to widen the street, and the entire property may ultimately be needed for a proposed new train station for a passenger line that would run between Oakley and Oakland.

The property has a story that tugs at your heart-strings.  It was originally purchased in 1912 by an Italian immigrant named Venanzio Del Barba, who earned enough money to buy and open a general store after years of working on the railroad and farming.  In the 104 years since, the Del Barba family has held onto the property, weathering the storm through the Great Depression, the Great Recession, and two World Wars.

Having appeared at many city council, board of directors, or board of supervisors meetings over the years, I can tell you that these are the hardest acquisitions for local agencies.  And you hope for alternative, creative solutions.  Which may be a possibility in Oakley.  City Council members asked City staff to find a "creative compromise" with the family, perhaps a solution where the front of the building could be shaved off and partially re-built with a similar façade.

Despite the requests for compromise, the City has proceeded with filing an eminent domain lawsuit.  In the condemnation litigation, there could be an interesting dispute on fair market value.  The City has valued the property at $145,000 -- more than $100,000 less than what the property was appraised at in 2010.  (This seems surprising given the market has significantly improved in that time.)  Moreover, similar buildings on Main Street have been recently listed for sale in the $450,000 - $500,000 range.  And in addition to the valuation dispute, it sounds like the owners could have a potential pre-condemnation damages claim for loss of rents, as they've been unable to find tenants for the building since the City made it clear it was planning to acquire the property.

As for the historic significance of the building, I consulted with Joseph Haney, an attorney at Haney & LaBriola, who specializes in real estate transactional matters and handles historic preservation issues.  Mr. Haney indicated:

This situation shows the limits of California's historic preservation laws which are primarily procedural in nature.  CEQA requires a review of historic resources impacted by a project, but it does not compel preservation.  The City's Environmental Impact Report did identify the significant impacts from destruction of the historic buildings, however, that finding was ultimately outweighed by other concerns.

We'll continue to follow this one and see if a solution can be reached.