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CALIFORNIA EMINENT DOMAIN LAW BLOG

Studio City Residents and Community Groups Seek to Stop Property Owner’s Redevelopment Plains: Open Space vs. Condos

Open Space vs. Condos

Proposed development of a portion of the privately-owned 17 acre Weddington Golf and Tennis, located on the banks of the Los Angeles River in Studio City, is a hot topic of debate between Studio City residents and the Weddington owners. The public golf and tennis facilities have been a neighborhood gem for many years providing rare open space within the densely developed neighborhood.

In 2008, the Weddingtons submitted a development proposal to the City of Los Angeles for a 200-unit senior housing condominium complex where the tennis courts are presently located. The proposed development would include six four-story buildings and 635 parking spaces. In July, a Draft Environmental Impact Report for the Project was issued for review and comment. Currently, the Weddingtons are preparing for the development by lobbying for necessary development approvals, including a requested change in zoning from agricultural to multi-family residential.

While the Weddingtons seek to develop part of their property, and generate income, local residents want the property to remain as open space.

This debate brings to light the often conflicting interests of the public and a private property owner.

The Community’s Perspective

The surrounding community would prefer that the Weddington Golf & Tennis facilities remain as open space available to the public. Although it is private property, opponents of development argue Weddington Golf & Tennis is a community amenity similar to public parks and designated open spaces. As it has been there for many years, the property has become an established community fixture. Now, the community has a vested interest in its future and views the property as a key feature of the community.

Because the property has become like a public park, some argue that the simple answer is for the City to simply purchase it and permanently establish it as a public park.  This, however, would come at a substantial cost: Councilman Paul Krekorian, who represents the area and is opposed to the project, has attempted to find funding for the City to buy the land from the Weddingtons, possibly resorting to the use of eminent domain. So far, his attempts to secure the $20 to $30 million necessary to purchase the land have failed. Unless the Weddingtons are willing to donate the land, or accept a steep discount, this scenario does not appear likely.

Since the community is opposed to development of the site, can the City simply prevent the Weddingtons from building 200 condominiums on their private property? To answer briefly, possibly. However, the explanation is multi-faceted and the line between government’s reasonable regulation of private land use (called the “police power”) and government’s regulation effectively taking private property (“eminent domain”) is not always clear.

Because development of the Weddington’s private property requires development approvals, the City does have the ability to deny outright, or limit, the Weddingtons proposal for the condominiums. There is an established development process that the City and Weddington are following, including a public review and consideration of the proposed Project. This process allows the community to voice its concerns about the Project and its potential impacts. As long as the process is followed, the City’s ultimate determination – granting or denying development approvals – would probably be technically legally valid.

As a property owner, though, the Weddingtons are permitted to use their property in an economically viable manner– including potentially the right to change the use of their property. What are the incentives for the City to stop the Weddingtons from developing their property as proposed? The public’s dissatisfaction with the Project may influence City officials to side for open space and preserve access to the LA River.  The Weddingtons, however, would probably be entitled to develop their property to some extent – which would probably result in the elimination of some of the existing recreational facilities.

Studio City Residents Association and Save LA River Open Space have submitted their own development impact report to the City outlining impacts of the Project, one of which is the destruction of what they characterize as “rare, irreplaceable open space.” Their intentions are to keep the area open and convert it to the Los Angeles River Natural Park which would include the existing tennis courts and golf course.

The Property Owner’s Point of View 

The Weddington’s have the right to use their private property in an economically viable way. The fact that they have opened their property to the public for many years, and provided an important recreational facility to the community, does not negate their rights as private property owners. One of the most important elements of American society is the concept of strong private property rights and a mechanism for upholding those rights.

Economist Armen A. Alchian does not differentiate between property rights and human rights stating “property rights are human rights.” Private property rights are protected under the Fifth Amendment of the Federal Constitution, “…nor shall private property be taken for public use, without just compensation” and Article 1, Section 19 of the California Constitution, “Private property may be taken or damaged for a public use only when just compensation … has first been paid to … the owner.”

Private property rights are often described as a bundle of rights – including the right to exclude others from your property. Another aspect of property rights is the “exclusive authority” to determine how to use that property. However, the phrase “exclusive authority” is subject to the “police powers” of the government. This means that the government can reasonably regulate such things as one’s use of their private property in the interest of the public health and safety. In this situation, the City’s has some discretion regarding the use of the Weddington property under its “police power.”

Many residents say they relied on the open space and recreational facilities of the area – including Weddington Golf & Tennis – when purchasing their homes in the Studio City neighborhood.

Is a homeowner’s reliance enough to trump private property rights? Generally, the answer is no. Should it matter that the Weddington’s property is privately owned and is not permanently committed as open space like a public park? Of course it should. The City must also consider the potential public benefits of development of the property as proposed – including significant property tax revenues.

Is There A Possible Compromise

Absent some form of compromise, or the City’s outright acquisition of the property, only one perspective is likely to win out. Or, is there a win-win solution in which both the interests of the public and the property owner are served? If so, both sides would need to compromise – with some open space being preserved, and some development allowed. This may not be palatable to either side – but often the best compromise is one in which both sides are equally unhappy.

 

By: Glenn L. Block, Esq.
To learn more about Glenn L. Block, partner at California Eminent Domain Law Group, visit

 http://www.eminentdomainlaw.net/aboutGB.php

Tug-of-War for Martins Beach Access: Possible Eminent Domain Case

martinConflict between Simi Valley billionaire Vinod Khosla and those seeking public access to Martins Beach will make its way to Gov. Jerry Brown. Last week the state Senate approved Senate Bill 968 which, in essence, requires the State Land Commission to negotiate with Khosla to acquire public access to his private property.

Khosla purchased the 87 acre coastal property in 2008 and, like prior owners of the property, he allowed public access to the road which leads to Martins Beach until 2010. Since then, Khosla has advised his property manager to block the gate which leads to Martins Beach Road.
If signed by Gov. Brown, the bill, written by Sen. Jerry Hill, D-San Mateo, requires that the State Land Commission negotiate with Khosla in an attempt to purchase an easement on his property. If negotiations fail and a compromise is not reached by January 1, 2016, the bill will authorize the power of the State Land Commission to use eminent domain to acquire the easement by providing just compensation for the property.

Earlier this month the bill passed the full Assembly, then was returned to the Senate where it was passed and is now awaiting Gov. Brown’s signature. Even if signed by Governor Brown, the decision of whether to exercise eminent domain would still need to be made by Lt. Gov. Gavin Newsom, State Controller John Chiang and State Finance Director Michael Cohen.

Acquisition of an easement on Khosla’s property would allow public access to Martins Beach just a few miles south of Half Moon Bay, a popular spot of surfers. So far, no comments have been made by Newsom and Cohen regarding their decision whether or not to implement the bill. A spokesman for Chiang stated that no decisions by Chiang have been made and he will take a position once all arguments are made and heard from the parties involved.

By: Glenn L. Block, Esq.
To learn more about Glenn L. Block, partner at California Eminent Domain Law Group, visit

http://www.eminentdomainlaw.net/aboutGB.php

California Eminent Domain Project News: California High Speed Rail Construction Slowed Down by Lack of Land

California High-Speed Rail

The recent approval of 160 parcels between Fresno and Kings County for segment two of the high speed rail track has stirred up some excitement for rail backers. As the California High Speed Rail Authority (“CHSRA”) wastes no time in preparing for construction of the second segment, questions about the first segment construction arise. So far, CHSRA has identified 550 properties it says it needs to acquire in order to build the first segment. However, only 71 parcels have been purchased and are available for construction.

The Federal Railroad Administration’s assigned deadline of September 2017 to achieve substantial completion of both San Joaquin Valley segments adds pressure to CHSRA to get its property acquisitions in line. Lack of property means the inability for construction companies, like Tutor Perni Corp., to begin building rail related infrastructures like tunnels, bridges and overpasses. Lagging construction can result in CHSRA not meeting its September 2017 deadline.

A possible cause for the lag in property acquisition could be shaky funding. Until recently, CHSRA was fighting in court to overturn the ruling from the Sacramento County Superior Court banning CHSRA from selling bonds to fund the project. A Court of Appeals decision earlier this month overturned the ruling and allowed CHSRA to continue selling $10 billion in bonds approved by California voters back in a 2008 ballot measure.

Opposition from property owners has also made acquisition of properties more time consuming. Property owners are guaranteed just compensation for CHSRA’s acquisition of private property and in many cases, CHSRA and the property owners have been unable to reach agreement. Absent agreement, CHSRA’s only means of acquiring the properties it claims it needs would be through filing eminent domain actions in court.

The bottom line is that CHSRA needs to move quickly to acquire properties if it hopes to meet its 2017 deadline to substantially complete the two San Joaquin Valley segments. Owner and occupants at properties included in these two segments should be ready, as it is likely that CHSRA will ramp up its acquisition efforts shortly.

Proposition 13: Property Tax Roll-Over in Eminent Domain Cases, 8/20/14

In 1978, California’s Proposition 13 created security for home owners by limiting property taxes to one percent of the property’s value with a maximum two percent increase for inflation of the property value in a year. The property tax is reassessed when the property is being sold or if certain improvements on the property increase the property’s value.

In 1982, Proposition 3 was passed to protect those who are forced to purchase a replacement property when their property has been taken through the process of eminent domain. By freezing the base value of the property tax, those who are inclined to replace their property are ensured that the property tax they used to pay for their condemned house is rolled over to their new property.

The recent issued case of Olive Lane Industrial Park, LLC v. County of San Diego, heard in the California Fourth District Court of Appeals, dealt with the interpretation of Prop 3 and 13. In this case, Olive Lane lost its industrial park to the County of San Diego through the process of eminent domain. It eventually purchased a replacement property and asked for the County Tax assessor to transfer the property base value of the previously owned land. The tax assessor denied their petition on the basis that the 4-year statute of limitations under the state tax code had expired. Although the purchase of the new property occurred before the statute of limitations expired, Olive Lane had not requested the transfer of the base value for the property until five and a half years after the eminent domain process concluded.

The court noted that the state tax code was unclear in cases like Olive Lane where a property is purchased before the statute of limitations expires but the petition for base value transfer is made after the statute of limitation passes. The court turned to Proposition 3 to help answer the matter. Proposition 3, which now is incorporated in the article XIIA of the California Constitution, does not specify time period in which to initiate or complete a transfer request. Therefore, the court held that the statute of limitations is non-mandatory; the purpose of Proposition 3 was to treat eminent domain cases as outside a typical purchase of property.

The court also noted that the statutory purpose of the proposition was to allow those whose property has been taken through eminent domain to maintain the same base value for their new property, upholding an important constitutional right.

By: A.J. Hazarabedian
To learn more about A.J. Hazarabedian, the managing partner at California Eminent Domain Law Group, visit http://www.eminentdomainlaw.net/aboutAJH.php

California Eminent Domain Project News: More Condemnation Approvals: California High Speel Rail Gears Up for More Acquisitions

On Wednesday, the State Public Works Board approved approximately 160 parcels between Fresno and Kings Counties for acquisition for the high-speed rail project. The California High Speed Rail Authority (“CHSRA”) requested acquisition of the 160 parcels which, in addition to several hundred other parcels, they believe are necessary for the construction of the rail project.

Contractors have already begun demolishing improvements on already acquired parcels for the beginning of the first 29-mile segment in Fresno. The 160 parcels will be part of the second construction segment stretching to an approximate 65-mile span. The acquisitions vary from whole takes of many properties to part-takes of others.

An agency’s use of eminent domain or condemnation to acquire property needed for projects, such as the California High Speed Rail, is typically pursued only after negotiations have failed. A lawsuit is filed by the agency, and a jury decides the amount of compensation to which the owner is entitled.

The next step for the acquisition of the second segment will be negotiations with the property owners of the 160 parcels. If agreements cannot be reached, CHSRA will likely pursue eminent domain to acquire the parcels.

CHSRA is wasting no time in preparing for the construction of the second segment. It has already awarded a $71.9 million contract to a Netherland-based construction firm known as ARCADIS U.S. to help manage the construction contracts for the 65-mile segment. CHSRA will be accepting construction bids and will be depending on ARCADIS to help in choosing a construction company to help design and build the segment. ARACDIS will also be in charge of managing contract risks, overseeing inspections of the construction sites and testing material necessary for construction.

California Eminent Domain Project News: Update Part Two – Court of Appeals Decision Means Big Win for California High Speed Rail Authority

Back in April, the California High Speed Rail Authority took a hit when the State Court of Appeals denied its petition to overturn a decision by the Sacramento County Superior Court regarding CHSRA’s alleged noncompliance with the provisions of Prop 1A. On Thursday, ruling on a portion of the Superior Court decision which the Court of Appeals had not yet addressed, the California 3rd District Court of Appeals reached a unanimous decision to allow CHSRA to resume selling $10 billion in bonds to fund the rail project. The bond sales were approved by California voters back in a 2008 ballot measure.

The appeals panel stated that even though there are still legal questions about whether the project is in compliance with the Proposition 1A, their decision focused on the law related to selling the bonds, not compliance with Proposition 1A.

CHSRA has recently been facing funding issues; this appeal is a big win for them, allowing them to obtain funding to move forward with the project.

Claremont to Vote on Possible Eminent Domain Action Against Private Water Company, 7/15/14

The City of Claremont is turning to its citizens to ascertain whether or not the city should forcefully take possession of the local privately owned water company, Golden State Water Co. The City Council unanimously voted that a $55 million bond measure will be placed on the November ballot relating to acquisition.

As the water company’s rates and prices gradually increased, so did the backlash from the Claremont city residents. Since 2004, prices have increased 100%. Whether or not the city’s proposed acquisition is to benefit the residents with lower bills, however, is unclear. City officials believe so but Golden State Water Co. spokeswoman, Julie Hooper, believes that the city is trying to convince its residence that its appraised value of $55 million is all that the city will spend for the acquisition. She notes that the city is not disclosing the additional costs for borrowing the $55 million nor the interest it will incur.
Furthermore, there is a major discrepancy between the city’s appraised value and the value the water company claims. According to Hopper, Golden State believes that the company is worth close to $135 million. The city refuses to release its appraisal report to Golden State; its offer stands, as of October 2013, at $55 million.

Nevertheless, Hopper has made it clear that the company is willing to work with the city to try to reach a compromise in the hopes that eminent domain proceedings can be avoided. City officials say that they will not be filing the eminent domain lawsuit until after the November vote on the bond measure, so the City Council can get a better idea of the public’s perception towards the takeover.

California Eminent Domain Project News: CHSRA Adds Palmdale to Burbank Track on Route

California High Speed Rail’s recent increase in activity in the Central Valley has caused some rail backers and opponents to voice their dissatisfaction with the “train to nowhere” plan. Both groups have taken the position that starting the high speed bullet train in the Central Valley has no benefit.
The dissatisfaction has caused a political challenge for the California High Speed Rail Authority especially since there are struggles with getting the appropriate funding base for the project’s under-estimated budget. Recently the state of California has tentatively approved $250 million in fiscal 2015, however, that is merely a drip in the bucket given that the CHSRA’s proposed budget is roughly $4 billion for the year.

In attempts to satisfy the public’s concerns, CHSRA has stated it plans on bringing the rail project to Southern California sooner than expected with the addition of the Palmdale to Burbank track with the anticipation that some of the greenhouse gas fees will be allocated to the high speed rail project. However a segment between Burbank and Palmdale will require much planning as well as approvals from a number of government agencies and completion of extensive environmental reports. The hope is that the segment will bring benefits to the Los Angeles area, especially by improving traffic congestion. The current commute time using the Metrolink rail is approximately 90 minutes, which is still faster than by car. However the high speed rail is anticipated to cut travel time down to 14-16 minutes from Palmdale to the San Fernando Valley.

Ultimately the Palmdale track is intended to reach down to Union Square connecting Southern California with the Transbay Terminal in San Francisco. The Palmdale to Los Angeles track is estimated to cost $13.5 billion, however there have been no budget estimates released for the Palmdale to Burbank segment. Jeff Morales, the CEO of CHSRA, had proposed the idea for the Palmdale-Burbank segment in a letter to Sen. Fran Pavely (D-Agoura Hills). He stated that the board of directors would adopt the revised plan for the Palmdale-Burbank segment if the legislature could secure greenhouse gas fees for the rail. The action was secured last month giving the CHSRA a chance to bring the rail to Southern California.

So far, the CHSRA has been confronted with legal issues and lawsuits in Central Valley and the Simi Valley but there has been little opposition in Southern California. The long term funding provided by the greenhouse gas fees may cover billions of funding dollars that had not been allocated to CHSRA by the state. Greenhouse gas fees are typically allotted to projects which reduce or eliminate emissions in large amounts during a short time span. CHSRA argues that a bullet train in the Los Angeles area will be a great benefit to the public and the environment. State legislators have agreed and the long-term funding through greenhouse gas fees will, as Morales states, “accelerate the high-speed rail program and connect California from north to south and south to north.”

For frequent updates on the California High Speed Rail Authority project, and other California projects, visit our blog and look for “California Eminent Domain Project News” for the latest news and information on projects near you. Also, follow us on Twitter and Facebook.

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: Valley GOP Rally House to Put an End to High-Speed Rail

The GOP is rallying its troops in an effort to throw the California High Speed Rail project off its tracks. Efforts to do so, however, have been met with the full-blown resistance of the rail backers; they are not giving up their high-speed train without a fight.

Valley GOP delegates are deploying a transportation funding bill for fiscal year 2015 that would effectively prohibit allow the federal Surface Transportation Board for issuing the project new permits. Furthermore, Rep. Jeff Denham, R-Turlock, proposed an amendment to the bill, which was passed by the House, restricting CHSRA from getting any money from the $52 billion transportation bill. CHSRA made it clear, however, that it would not need any more federal funding for the fiscal year which starts October 1. CHSRA has already received $3.8 billion in federal funds for the high-speed rail project in the upcoming fiscal year.

California High Speed Rail Authority board chairman, Dan Richard, stated the actions of the rail opponents are an attempt at politicization of transportation policies and will lead to leaving almost 9,000 California employees jobless. Richard argues that since April, these 9,000 employees have been benefiting from the contracts that have risen from the project. Killing the high-speed rail, according to Richard, would lead to 71 companies in the Central Valley and 47 Fresno area companies to lose contracts for jobs for the high-speed rail.

In the 155-page transportation bill, project opponents include a provision that the Surface Transportation Board cannot take any action on the project unless it does so in whole, not in part. So far the STB has been reviewing phases of the rail project and issuing permits based on specific phases. More recently, the CHSRA board approved the 114 mile track from Fresno to Bakersfield. STB has yet to take action in regards to the newly approved phase. However, the bill will restrict STB’s action in a way which affects the whole rail project, from San Francisco to Los Angeles. The White House Office of Management and Budget opposes the provision and supports the rail backers in their effort to address transportation needs and opposes “any attempts to limit state choices in enhancing passenger rail.”

California Eminent Domain Project News: California High Speed Rail Authority’s Funding Dinged Again

A recently approved transportation bill which has blocked CHSRA’s possibility of getting additional federal funding for the up-coming fiscal year is not the only money crisis facing the rail project.

The planned funding by the State for the high-speed rail has been tentatively approved for $250 million beginning in fiscal 2015. This massive sum, however, is a drop in the bucket when compared to CHSRA’s proposed budget of roughly $4 billion for the year.

Even though the plan is not yet final, it is clearly evident that the high speed rail will be facing a budget crisis soon.

Along with the funding restrictions, CHSRA is also facing numerous lawsuits further complicating the dispensing of already limited funds. The lawsuits do not seem to cease and if CHSRA loses, it will face serious funding issues. Another lawsuit was filed last week by a Central Valley resident seeking a restraining order against the authority alleging that CHSRA submitted an incomplete environmental impact statement back in May. However, the record of decision for the Fresno-Bakersfield track was issued last week. CHSRA hopes funding will now be available through private investments and private-sector funding.

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COPYRIGHT © 2010 Arthur J. Hazarabedian, Esq.