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CALIFORNIA EMINENT DOMAIN LAW BLOG

California Eminent Domain Project News: Update, CHSRA’s Petition Denied by Appeals Court: Next Stop, Trial

Late Tuesday, three justices with the Third District Court of Appeals denied the California High Speed Rail Authority’s (CHSRA) petition asking the court to overturn a decision by the Sacramento County Superior Court. The Superior court had ordered a trial on one part of an ongoing lawsuit between Kings County farmer John Tos, Hanford homeowner Aaron Fukuda and the Kings County Board of Supervisors and CHSRA.

One part of the lawsuit is still pending appeal; however, the Court of Appeals decision on the second part of the lawsuit has paved the way for a trial to take place between the Kings County opponents and CHSRA as to whether the High Speed Rail project complies with state law. The lawsuit was filed against CHSRA by the Kings County opponents alleging that the CHSRA is violating Proposition 1A for numerous reasons. Prop 1A was a $9.9 billion high-speed rail bond approved by California votes back in 2008. The Kings County opponents allege that CHRSA’s idea to share electrified tracks along the San Francisco Peninsula goes against Prop 1A by not complying with the promise that the high-speed rail would have a line of fully dedicated tracks. Also, sharing tracks would mean that the CHSRA’s assurance of a 2 hour and 40 minute trip from San Francisco to Los Angeles would be unachievable. Furthermore, a public subsidy would be needed for the blended system.

CHSRA made promises when rounding up California voters to okay the high-speed rail project and now the Kings County opponents assert that the shortcomings to their promises add up to illegal spending of public funds.

CHSRA’s business plan in late 2011 calculated that a fully dedicated track for the high-speed rail would cost $98 billion for only the first phase. In efforts to cut costs, CHSRA decided that a blended track system would save them $30 billion.

Whatever CHSRA’s reasons may be, the Court of Appeals of the State of California has decided that the high-speed rail’s next stop is trial. Whether CHRSA will seek review from California Supreme Court is unclear at this time. However, the Court of Appeals will be deciding on two other rulings made by Sacramento County Superior Court. The first being part of the Kings County opponents’ lawsuit on the 2011 financial plan and the second on the Superior Court’s refusal to validate the sale of the Prop 1A bonds for funding to pay for the first phase of construction.

For regular updates on California High Speed Rail Authority look for “California Eminent Domain Project News:Updates” on our blog at http://blog.eminentdomainlaw.net/

Eminent Domain Appeal Denied: Sacramento On Track For Kings’ New Arena, 4/21/14

After months of deliberation, negotiation and court appearances, the city of Sacramento won its appeal for possession of the former Macy’s building. The last piece of the puzzle completes the needed land for the new $448 million Kings arena scheduled to open in 2016.

But the battle for the ex-Macy’s building remains fierce. The City made an offer to the owners of the building, CalPERS and some mortgage certificate holders, for $4.35 million for the property. However, the ex-Macy’s owners believed the property is worth more than $10 million.

The disagreements during negotiations led the City to file an eminent domain lawsuit in January of this year. CalPERS was not against the City’s plans to acquire the property. However, the certificate holders were objecting to the plan. Their attorney, George Speir, raised the issue that the owners were not given a proper chance to object to the taking. He also argued that the City had incorrectly handled the eminent domain lawsuit. Ultimately, those arguments failed with the court holding that they City could proceed and the owners’ remedy was to challenge the amount of the compensation.

As the scheduled opening of the arena is in 2016, the Kings are wasting no time. The Kings future arena will be underway soon as demolitions begin in June. Sticking to a strict timeline, the NBA has stated that should the construction of the arena go beyond 2017, they have the right to buy the Kings from the City and move them out of town. Although Sacramento has acquired the property for the $448 million arena, it will be paid for by the Kings. The Kings have already spent $36 million on the Downtown Plaza for the rest of the needed property for the arena.

“Just compensation” for the property will be determined in trial and will include expert testimony on appraisal of the property. Meanwhile, the City still needs to complete its environmental review, create a financing package and develop an agreement with the Kings in regards to payment and development of the new arena. The development agreement will be introduced to the City Council late April or early May. The City has also indicated that it will be contributing a $258 million subsidy towards the project. Stay tuned for more updates on the new Sacramento King’s arena.

Author: A.J. Hazarabedian
To learn more about A.J. Hazarabedian, please visit http://www.eminentdomainlaw.net/aboutAJH.php.

California Eminent Domain Project News: LA Metro Purple Line Extension Project

The extension of the Metro Purple Line has been discussed, studied and planned for years and now the city of Los Angeles has begun construction on the first of three sections of the subway. Metro Purple Line will be extended 9 miles to the west starting at the Wilshire/Western terminus. The project will also be adding seven new stations dispersed along the west side of Los Angeles at Wilshire/La Brea, Wilshire/Fairfax, Wilshire/La Cienega, Wilshire/Rodeo, Century City, Westwood/UCLA and Westwood/VA Hospital.

Metro has begun the process to acquire needed property for the Westside Subway Extension. Hundreds of properties will be affected by this project; if you are an affected owner, an eminent domain case may reach you. It is important that you contact a reputable firm with extensive experience in eminent domain, such as California Eminent Domain Law Group, APC to protect you rights.

Metro has made it clear that it will exercise its power of eminent domain for their $6.3 billion project should negotiations fail. If you are affected by this project you have the right to seek just compensation for your business or property. Do not be left without proper representation from experienced eminent domain attorneys. California Eminent Domain Law Group, APC has handled numerous eminent domain cases, including against Metro, and has taken a substantial number of these cases to verdict and settlement with extraordinary outcomes for clients.

To learn more about California Eminent Domain Law Group, APC or if you have any questions regarding an eminent domain matter, please feel free to visit our website at www.caledlaw.com, where you may request an initial consultation or a copy of our California Eminent Domain Handbook, free of charge. The Handbook may help answer any general questions you have regarding eminent domain. However, the handbook is intended only as an aid for understanding general eminent domain issues. It does not constitute legal advice and may not be relied upon for that purpose.

FOR A FREE CONSULTATION PLEASE CALL 1-866-EM-DOMAIN

California Eminent Domain Project News: California Speeds Up on the High-Speed Rail Project

Even as the controversial High-Speed Rail project continues to be debated on in the Capitol and challenged in the courts, the California High-Speed Rail Authority (“CHSRA”) is already taking action towards the project. CHSRA has begun to acquire private property to build the foundation for the speed-rail’s tracks. Thousands of properties will be affected by this project; if you are an affected owner, an eminent domain case may reach your door step in no time. It is important that you contact a reputable firm with extensive experience in eminent domain, such as California Eminent Domain Law Group, APC to protect you rights.

The CHSRA is essentially saying “damn the torpedoes, full speed ahead.” Project supporters claim that the high-speed rail will create new jobs, increase tax revenue, preserve agricultural lands and better the environment. However, the project will also unequivocally impact thousands of property and business owners. Construction is estimated to take up to 2 decades.

Just recently the CHSRA appointed a new executive staff. James Andrews, Assistant Chief Counsel for CHSRA, will be in charge of the legal strategies enabling CHSRA to take the land needed for the project. This means eminent domain will be used to take private properties.

Whether you agree or disagree with the California High-Speed Rail project, you may be forced to address an eminent domain lawsuit if your property or business is in the route of the high-speed rail. Attorneys at California Eminent Domain Law Group, APC have over 25 years of exclusive experience in eminent domain law and inverse condemnation law, and currently represent property and business owners impacted by the High Speed Rail project. They are dedicated to obtaining maximum compensation for their clients. As a property or business owner you have rights to “just compensation.” Do not go unrepresented when faced with an eminent domain matter. Let experienced attorneys get you the compensation you deserve.

To learn more about California Eminent Domain Law Group, APC or if you have any questions regarding an eminent domain matter, please feel free to visit our website at www.caledlaw.com, where you may request an initial consultation or a copy of our California Eminent Domain Handbook, free of charge. The Handbook may help answer any general questions you have regarding eminent domain. However, the handbook is intended only as an aid for understanding general eminent domain issues. It does not constitute legal advice and may not be relied upon for that purpose.

FOR A FREE CONSULTATION PLEASE CALL 1-866-EM-DOMAIN

California Town Uses Eminent Domain To Eliminate Private Water Company

Notwithstanding the public backlash following the U.S. Supreme Court’s ruling in Kelo v. City of New London several years back, government agencies are getting more and more creative with stretching reasons to support exercising eminent domain. The city government of Claremont, California is attempting to take over a private water company using eminent domain and justifies its attempts by claiming that the residents are unhappy with their water bills.

Claremont’s “solution” is to take the water company. A municipal utility is nothing new. But taking an already existing private utility is suspect and a potentially flawed plan. The residents are not certain about how the City would go about paying the offer of $55 million to Golden State Water Company and they definitely do not have reassurance that the pricing difference will benefit them. But, putting aside those concerns, there is a bigger issue lurking mischievously in the background. Is it really appropriate for a government agency take a private business away from its owners simply because some customers of the business are allegedly unhappy with their bills?

According to Claremont, they have good reasons for seeking to use eminent domain to replace the private water company. The fact that people are unhappy, however, may not be enough. The rules of eminent domain allow, under the U.S. and California Constitution, for the government to take private property for public use by paying just compensation.

In addition, California Code of Civil Procedure § 1240.030 requires:

The power of eminent domain may be exercised to acquire property for a proposed project only if all of the following are established:

(a) The public interest and necessity require the project.
(b) The project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury.
(c) The property sought to be acquired is necessary for the project

While a utility can amount to a public use, here the utility already exists and is privately owned. It is questionable whether Claremont meets the Constitutional “public use” requirements, as well as the requirements of “necessity” set forth in CCP § 1240.030. Moreover, given that the Howard Javis Taxpayers Association estimates the value of the business at $200 million, it is questionable whether the City’s $55 million offer will ultimately amount to just compensation even if the City is allowed to move forward with the taking.

We’ll have to stay tuned to see how this one plays out.

By A.J. Hazarabedian

To learn more about A.J. Hazarabedian, please visit http://www.eminentdomainlaw.net/aboutAJH.php.

Kelo, Landmark Eminent Domain Case: The Aftermath, 4/1/14

Nine years have passed since the controversial 5-4 decision of the United States Supreme Court in the eminent domain case of Kelo v. City of New London. What the advocates for economic development argued, fought for and supported has resulted in a 90 acre vacant wasteland where the homes of 7 small town residents once flourished.

Seizing the private property of the 7 Fort Trumbull residents would allow the City of New London to turn the property over to private developers to build luxury apartments, office buildings, retail space, restaurants and many more recreational hot spots. Pfizer, a leading pharmaceutical company, was also on board with the intent to build a research facility to generate new jobs and tax revenue for New London. The City seemed ecstatic about saving their “distressed municipality” which faced high rates of unemployment and economic decline and the Supreme Court ate up their sob story. To the Supreme Court, the idea of economic rejuvenation apparently outweighed the cost of the owners’ property rights and all American’s Constitutional liberties.

The 7 residents, including Susette Kelo, argued that taking private property and turning it over to a private company such as Pfizer “does not qualify as… public use.” However, the Supreme Court held otherwise stating that “the City’s development plan was not adopted ‘to benefit a particular class of identifiable individuals.’”

The Supreme Court, agreeing with the trial court, concluded that the City was rebuilding for growth and prosperity to benefit its citizens and that Pfizer “was not ‘the primary motivation or effect of this development plan’; instead, ‘the primary motivation … was to take advantage of Pfizer’s presence.’”

Pfizer was offered an 80-percent, 10-year property tax abatement for a $300 million research facility which the Supreme Court did not find suspicious.

So the residents were forced to take the compensation for the parcels they called home and the City was allowed to acquire the properties to turn them over to the developers to build their Pfizer project. If only this was a happily-ever-after story. Today the lots of those residents are filled with overgrown grass instead of high-rise buildings and upscale pedestrian “riverwalks.” In 2009, Pfizer backed out of its plan to build the research facility and redevelopment plans seized just as abruptly as they began.

The waters were a little murky; what does it matter? Possibly, those murky waters would have been forgotten if there was some type of redevelopment and economic growth in Fort Trumbull. But there wasn’t. The whole plan turned to nothing and the Supreme Court’s decision spiraled into a disaster. It shocked and scared many because it set precedent for private companies to take interest of citizen owned lands for their own economic interests. It caused many states, including California, to pass laws banning or restricting use of eminent domain for the purposes of economic rejuvenation. Indeed, in the wake of the backlash at Kelo, California did away with redevelopment agencies altogether.

In the end, all that is left are the memories of the once flourishing Fort Trumbull. Although there were no high-rise luxury apartments or gourmet restaurants, the residents of Fort Trumbull were happy with their home town. They fought a hard battle to save what was theirs; they pursued their rights to life, liberty and property. However, where there is no security for rights to property there is, consequently, no liberty.

On a somewhat brighter note for the future, dissenting Justice Antonin Scalia later predicted that the decision in Kelo would be overturned. He reportedly stated, “My court has, by my lights, made many mistakes of law…but it has made very few mistakes of political judgment, of estimating how far… it could stretch beyond the text of the Constitution without provoking overwhelming public criticism and resistance. Dred Scott was one mistake…Roe v. Wade was another… And Kelo, I think, was a third.”

Author: A.J. Hazarabedian
To learn more about A.J. Hazarabedian, please visit http://www.eminentdomainlaw.net/aboutAJH.php.

Rancho Cucamonga Moves Forward with Eminent Domain for New Shelby Place North Road, 7/12/12

By A.J. Hazarabedian

The city of Rancho Cucamonga began eminent domain proceedings to acquire a private dirt road from the Viramontez family, as reported by the Daily Bulletin.  The city plans on widening the road to 210 feet by 30 feet from Base Line to “connect the already developed Shelby Place, south of Base Line.”

According to the article, “Rancho Cucamonga proceeding with eminent domain for road,” the city offered $14,000 for the rights to the road and the Viramontez family made a counter-offer of $30,500, based on an appraisal obtained by the family’s hired appraiser.

Plans call for widening and paving the road, which as stated by the city’s director of engineering, Mark Steuer, would “provide better access to the subdivision tract, enhance traffic flow and provide access to public safety.”

For the Viramontez family, this private road has sentimental value as they have owned the land since the early 1940s and currently live on a 2.7 acre parcel near Baseline Road and Shelby Place.

It is important to note that a property owner is not required to accept the condemning agency’s offer. Instead, the property owner may make a counter-offer, as the Viramontez family did in this case, or may assert a higher value for his or her property if and when an eminent domain action is filed in court.

Often times property owners, tenants and business owners receive higher, and in some cases much higher, compensation than the amount of the condemning agency’s offer by asserting a claim for greater compensation.  An experienced eminent domain attorney should be contacted to evaluate each case on its own merits and assist in determining the appropriate course of action to the particular case.

At this point, if the City of Rancho Cucamonga rejects the Viramontez family’s counter-offer, the Viramontez family and the City will have to fight it out in the Superior Court – a prospect which given the relatively limited amounts involved, will probably not make much sense for either side.

Follow Up: Eminent Domain for Condeming Underwater Mortgages, 6/27/12

By A.J. Hazarabedian

In a recent post, we talked about the City of Hesperia voting on whether or not to join a Joint Powers Authority to begin acquiring underwater mortgages by eminent domain in an attempt to help homeowners.

Since our post, more information has been revealed providing the logistics to this interesting proposal.  A recent Reuters article outlined a plan by Mortgage Resolution Partners to find investors who will finance the process and then turn around and restructure the loans.

The idea is that a local government entity would acquire underwater mortgages by eminent domain, using the money funded by investors, and then pay the homeowners the fair market value for the property.  At that point, Mortgage Resolution Partners would work to restructure the loan so homeowners could keep their homes and have smaller mortgage payments.

Per Reuters, Mortgage Resolution Partners is “backed by a number of prominent West Coast financiers,” including Evercore Partners Inc and Westwood Capital, who would be paid back after the restructured loans were sold off to “hedge funds, pension funds and other institutional investors.”  This article, “Investors tout controversial “condemnation” for housing fix,” explains that Mortgage Resolution Partners would receive a fee for every loan condemned and restructured.

This is certainly one to watch in the coming months.  Many people have been looking for solutions to the housing crisis.  Let’s see if this idea gains any more traction.

Restaurant Owner in Riverside Suing the City for Lost Business Revenue, 6/7/12

By A.J. Hazarabedian

A restaurant owner in the City of Riverside is suing the city for lost business revenue after a relocation deal never came to fruition.  In the Press Enterprise article, Restaurant owner sues after relocation deal fizzles,” Lucky Greek restaurant owner Tony Georgopoulos argues that his business has been negatively affected by the City’s Magnolia Avenue underpass project.  The project, he claims, has decreased vehicular traffic by 90%, thereby decreasing his restaurant’s revenue.

Mr. Georgopoulous is seeking $750,000 in damages in a suit filed last month.  He asserts that the City did not follow through with a relocation plan they set out to execute over a year ago.  According to the article, the City had agreed to a land swap; moving his restaurant to the old Marcy branch library.  After some negotiations over the City’s offer, the deal was delayed and then scrapped when Jerry Brown eliminated redevelopment agencies earlier this year.  As noted by Riverside City Attorney, Greg Priamos, the deal was contingent on redevelopment dollars for funding.  Without the redevelopment agency, the deal could not move forward.

Tony Georgopoulos now indicates his business is struggling to keep the doors open, having had to shrink his staff from 17 down to 11.  A court will have to decide whether or not the City must pay damages in this case.

This is just a tiny tip of the iceberg of the carnage that has been left in the wake of the sudden demise of redevelopment in California.  While reasonable persons can differ on the propriety of the use of eminent domain for redevelopment, the manner in which redevelopment agencies were killed almost overnight in California left many victims, such as Mr. Georgopoulos, in its wake.  People were informed their properties and businesses would be acquired.  They made decisions based on that information.  And now, they’ve been left hanging in the wind.

It is questionable whether Mr. Georgopoulos will have a legally viable claim, without any portion of the property he occupies actually being taken.  Generally, Cities and other public agencies are permitted to impact the flow of traffic without liability, provided reasonable access remains to the property.  It will be interesting to see how this one plays out…

City of Hesperia May Use Eminent Domain to Acquire Mortgages, 6/7/12

By A.J. Hazarabedian

The City of Hesperia is considering an interesting use of eminent domain during its upcoming City Council meeting.  The Victorville Daily Press reported this week that the City may decide to use eminent domain to acquire underwater mortgages in an attempt to help homeowners.

As the article describes, the City will discuss whether or not they will join a new joint powers authority (JPA) aimed at helping homeowners whose mortgages are underwater due to declining home values.  The joint powers authority would consist of the City of Hesperia, City of Fontana, City of Ontario and the County of San Bernardino.

What’s interesting is that the JPA would not be acquiring the homes themselves as is common in the use of eminent domain.  Here, they would be acquiring only the mortgages so that the loans could be restructured.  Kelly Malloy, spokeswoman for the City of Hesperia states in the article, “the city is really looking at participating in this in order to be part of the dialogue and to be part of the research project.”

Many cities have been left with blighted neighborhoods after homes have gone into foreclosure and the properties eventually end up in despair.  This JPA sounds like an interesting attempt to avoid such cases in Hesperia.

The council will meet Tuesday, June 12th at 6:30pm to discuss this and other issues.

Whether the JPA can exercise the power of eminent domain for this purpose is questionable.  Eminent domain can only be exercised for a public use.  While there is some ostensible public interest in preventing foreclosure blighted neighborhoods, this seems to be stretching the public use requirement to its limits.  If the City decides to proceed, we doubt the lenders will take it lying down (unless, of course, the JPA intends to purchase the loans for the full loan balance – which is doubtful).

Stay tuned on this one…

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COPYRIGHT © 2010 Arthur J. Hazarabedian, Esq.