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Studio City Residents and Community Groups Seek to Stop Property Owner’s Redevelopment Plans: 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

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

Richmond, California Has Yet to Exercise Eminent Domain to Seize Underwater Mortgages, 6/30/14

While the city of Richmond is the first municipality to approve the concept of using eminent domain to acquire underwater mortgages, the city has yet to actually do so.

The City Council has been unable to get the needed 5 out of 7 votes to go through with eminent domain proceedings. Therefore, the city is looking to team up with another municipality in hopes that together a joint powers authority will help carry out the proceedings.

Other cities, however, are reluctant to join in. Reasons for the hesitation comes in two major forms; the first being fear of lawsuits and complex litigation from banks and trusts, and the other being the threat of losing support from the Federal Housing Finance Agency (FHFA).

Other cities take no comfort in the fact that Richmond recently won against the trustees for hundreds of residential mortgage-back securities trusts, mainly because the lawsuits were dismissed without prejudice. This means that after Richmond begins the eminent domain process, the trustees will more than likely file more suits. The potential liability of such lawsuits can carry a very high price tag which deters most cities from joining Richmond’s plan.

Furthermore, the FHFA’s position on using eminent domain for such purpose is another deterrent. The FHFA has made it more than clear it is against the use of eminent domain, arguing that using eminent domain to modify the mortgages would eventually be shouldered by taxpayers. Also, the FHFA fears that it would create credit restrictions for home buyers in the future.

The FHFA is not the only organization against the idea of using eminent domain to seize mortgages. The Securities Industry and Financial Markets Association (SIFMA), the National Association of Realtors, and the American Bankers Association have voiced their opposition as well. The fear is mainly the same; an increase in borrowing costs and restrictions on credit availability.

Richmond says it wants to help its residents come out of the slump that has been affecting many U.S. homeowners since the 2008 housing crisis, but does the city truly have its residents interest at heart? Richmond has been working closely with Mortgage Resolution Partners (MRP), a private investment firm that has been pitching the eminent domain route to numerous cities. The assumption is that if the city does acquire the mortgages, it will turn around and offer the mortgages for a lower price and pocket the interest. Only time will tell what the outcome will be; for now, it is still up in the air. And as the real estate market improves, the ostensible justification for using eminent domain to assist underwater homeowners becomes less and less compelling.

By: A.J. Hazarabedian
To learn more about A.J. Hazarabedian, the managing partner at California Eminent Domain Law Group, visit

Pre-Condemnation Entry: Procedure Can Be Unconstitutional, 4/25/14

The Third Appellate District Court of Appeals has ruled that pre-condemnation entry on to the property an agency is seeking to condemn may be unconstitutional. If upheld, it will ultimately create significant obstacles for agencies to overcome in attempts to progress with eminent domain actions.
Historically, California law entitled agencies to enter properties “to make photographs, studies, surveys, examinations, tests, soundings, borings, samplings, or appraisals.” The pre-condemnation entry statutes were enacted in 1976 and have allowed agencies to obtain a court order allowing testing of the property prior to condemnation.

The case that turned the tables, Property Reserve, Inc. v. Super. Ct. of San Joaquin County, challenged the agency’s entry stating that the testing and investigations planned by the agency constituted a taking. In this case, the State of California was seeking to construct a tunnel to transport water. In order to do so the State needed to conduct specific environmental and geological testing. Such testing included drilling myriad borings up to 200 feet deep on the properties and inspecting the properties over a one year period. The property owners argued that they were entitled to just compensation for the investigations because they constituted a taking. The State of California petitioned for an order for entry but the courts ruled that the proposed geological investigations and environmental testing constituted a taking which compensation must be provided to the property owners. The court evaluated the environmental testing based on four criteria:

(1) Degree to which the invasion is intended;
(2) The character of the invasions;
(3) The amount of time the invasions will last;
(4) The invasions’ economic impact on the landowners and interference with their distinct investment-backed expectations.

All in all, the Appellate court held that pre-condemnation entry without just compensation may be unconstitutional. If upheld or allowed to stand, the decision will allow invasive testing on property only through an eminent domain action to allow testing or after the property is condemned. Given what is at stake, it would seem reasonable for the California Supreme Court to review the Appellate Court’s decision.

If the Supreme Court denies review or upholds the decision, this will create great obstacles for agencies to overcome; it may also have a negative impact for property owners. Property owners may see increases in the cost and the time it takes to defend against eminent domain actions instead of simply defending against entry before a decision is made to acquire the property. It must be noted that the decision does not preclude voluntary agreement between public agencies and property owners to allow the agency access to the owner’s property. However, there may be some additional procedural hurdles to seeking such agreements.

The court decision did leave a significant unanswered question as to where the line is to be drawn between an invasive entry and one which is not a significant invasion. The court did not offer any clear answer; it simply suggested that the Legislature can modify the right-of-entry statutes to insure the Constitutional rights of property owners.

If the Supreme Court does not grant review or efforts to depublish the Appellate decision fail, the next step will most likely take place in the Legislature. Stay tuned as this progresses.

Taking Possession of Property Before Final Value is Determined

California Code of Civil Procedure section 1255.410 authorizes the condemning agency to ask the court for possession of the property even before judgement has been entered in the eminent domain proceeding. The court may only do so, however, if the condemning agency has first deposited into the County or State Treasury the amount which it determines as the probable compensation to be paid for the property. If the court grants the condemning agency’s request for early possession — which the court almost always will — the property owner, in most cases, will be given 90 days notice before having to vacate the property.

Once the condemning agency deposits the amount of probable compensation, the property owner or tenant may apply to the court to withdraw that portion of the deposit which represents the owner’s or tenant’s probable amount of compensation. You may withdraw the amount of the agency’s deposit without waiving your claim for greater compensation. However, withdrawing the deposit does waive any challenge to the government’s right to take the property.

Disagreeing with the Government’s Deposit Amount

If you believe that the condemning agency’s deposit of probable compensation is too low, the property owner may apply to the court for an order requiring an increase in the amount of the deposit. Only upon a very strong showing that the deposit is much too low will the court grant such a request for an increase in the deposit. Generally, the property owner’s remedy will be to litigate the amount of compensation at trial or try to settle the amount of compensation before trial.

Again, asserting a claim for greater compensation in the eminent domain action often results in the owner obtaining higher compensation than that offered by the condemning agency. Experienced eminent domain counsel should be contacted to discuss your specific case. Usually, your case can be handled on a contingency based on a percentage of the amount the attorney obtains over and above the amount the condemning agency’s offer. In other words, the property owner owes the attorney no fee (other than reimbursement of out-of-pocket costs) unless the attorney obtains more than the amount of the condemning agency’s offer.

The Government’s Offer…Accept?

A property owner is not required to accept the condemning agency’s offer. Instead, the property owner may make a counter-offer, or may assert a higher value for his or her property once the eminent domain action is filed in court.

Property owners, tenants and business owners often 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 in the eminent domain proceeding. This is, of course, not always the case and an experienced eminent domain attorney should be contacted to evaluate each case on its own merits.

Understanding a “Resolution of Necessity”

A “resolution of necessity” is the government agency’s formal decision to acquire property by eminent domain. It must be adopted before the condemning agency can commence an eminent domain action in court.

California Code of Civil Procedure section 1245.230 provides that in order to adopt a resolution of ncessity, the government agency must find (1) that the project for which the property is to be acquired is necessary; (2) that the property is necessary for the public project; (3) that the project is located in such a manner as to offer the greatest public benefit with the least private detriment; and (4) that an offer to purchase the property has been made. Unless there are extraordinary circumstances (such as gross abuse of discretion, fraud or bribery), the agency’s finding that it needs the property is generally considered conclusive.

General Steps Involved in an Eminent Domain Proceeding

Generally, when the government wants to take your property by eminent domain, you can expect the government to take some or all of the following steps in about the following order:

1. Initial contact by government agency to express interest in the property and/or scheduling date for appraisal or environmental assessment of the property;

2. Appraisal of the property, including improvements, by agency retained apprasier;

3. Offer to purchase the property is made to the owner, together with summary of appraisal upon which offer of purchase is made;

4. Notice of public hearing to adopt “resolution of necessity” to acquire the property by eminent domain;

5. Public hearing is held to adopt “resolution of necessity” to acquire the property by eminent domain;

6. Eminent domain case is filed in court and served on property owner;

7. Deposit by agency of the probable amount of just compensation is paid into court and request by agency for early possession of the property;

8. Discovery (i.e., depositions and document production) takes place in eminent domain action, and both the property owner and government hire appraisers to determine “fair market value” of the subject property;

9. The property owner and government exchange their respective appraisers’ reports;

10. Final settlement offers and demands are exchanged (about 20 days before trial);

11. If settlement cannot be reached, trial of the eminent domain action takes place before a jury whose job it is to determine “fair market value” of the subject property;

12. Jury returns verdict and judgement is entered;

13. Government pays judgement within 30 days following entry of judgement and title to subject property is transferred to the government by the court.

In addition, early in the process – owner/occupants and/or tenants should be contacted by a relocation agent retained by the government. The purpose of the relocation agent is to provide assistance to residents and business owners to relocate their residence or business.

COPYRIGHT © 2010 Arthur J. Hazarabedian, Esq.