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CALIFORNIA EMINENT DOMAIN LAW BLOG

Don’t Think Twice, It’s All Blight: Voice of San Diego, 7/18/07

By Nina Peterson-Perlman

Wednesday, July 18, 2007 | Grantville’s Friars Road Pet Hospital and National City’s Community Youth Athletic Center, while not gleaming edifices of commercial might, don’t fit the traditional definition of an eyesore. The windows aren’t cracked, the plaster isn’t peeling and they attract concerned pet owners and kids wanting to learn how to box, not a rough crowd looking to cause trouble.

Yet, according to local officials, they’re blight.

The word, which used to be reserved for seedy, dilapidated areas of the city, is being increasingly attached to places that may be profitable, just not profitable enough.

California’s Community Redevelopment Law has evolved since it was first enacted in 1945 to create benefits for cities wishing to redevelop, enticing them to replace existing businesses with those that will yield increased tax profits, said Bill Chopyk, director of San Diego’s chapter of the American Planning Association.

If a building is incompatible with nearby land uses, or if it decreases the desirability of those around it, it can be considered physically blighted — and, therefore, can be taken by the government from private owners. As an area attracts new developments, the older ones can be pushed out because they no longer fit in their posh surroundings. Cities might blight an area as a tool to attract developers.

“Cities have been enticed to make that slum and blight designation,” Chopyk said. “I think cities have stretched the interpretation of it to meet the criteria. I think you have a wide range of examples in different cities of what slum and blighted designated areas look like. Some would be more deteriorated than others.”

In Grantville, the age and obsolete design of commercial buildings surveyed limits their attraction for top-tier users, according to a consultant’s report to the City Council in March 2005.

“Having older and obsolete buildings, many of which suffered from deferred maintenance on shallow/narrow lots in a haphazardly incoherent theme has left the Project Area visually blighted,” the report reads. “Developers find it more economically sensible to locate stores where successful retail centers are established.”

An area must be blighted before it can be classified as a redevelopment area. Once so classified, city redevelopment agencies can use eminent domain to take over individual homes or businesses by paying their owners a fair market value and then transferring ownership. Sometimes the city builds bridges, hospitals or schools in their place; sometimes private developers erect shopping centers or condos. In both Grantville and National City, preliminary plans call for mixed-use and condo developments.

Cities throughout the state have used redevelopment as a tool to clean up neighborhoods and attract new businesses to decaying areas. California has 395 active redevelopment agencies that oversee 759 blight zones. In fiscal year 2005-06, they owned $12.9 billion worth of property and had $8.7 billion in revenues.
Brian Peterson, president of the Grantville Action Group, leaves his veterinary hospital, which is deemed blighted under local regulations.

Animal HospitalPhoto: Sam Hodgson

San Diego’s classic redevelopment example is downtown’s Horton Plaza shopping center, which opened in 1985. Before the center opened, the downtown area was rife with a collection of rundown adult bookstores, card rooms and bars that attracted a rough crowd. Today’s mix of condos, Petco Park and a revitalized Gaslamp Quarter would not have come to the district without the helping hand of downtown’s redevelopment agency, said David Allsbrook, manager of contracting and public works at the Centre City Development Corp., the city of San Diego’s downtown redevelopment agency.

To property owners now threatened with eminent domain, the process can seem unfair or even unconstitutional, and some think a blight designation is a self-fulfilling prophecy. Would-be entrepreneurs might be hesitant to start their businesses in redevelopment areas with the threat of eminent domain hanging over their heads, they say.

Two communities in San Diego County are attempting to buck their blight designations as local agencies look to tap into potentially lucrative tax streams.

The county has challenged the city of San Diego’s blight designation for 990 acres of Grantville. And in National City, property owners along National City Boulevard, including the popular Community Youth Athletic Center, are lobbying the National City City Council to vote down a proposed extension of its eminent domain authority.

Jeff Rowes, an attorney with national nonprofit law firm Institute for Justice, said one of the biggest impediments to developing in a redevelopment area is that developers know they invest at the whim of the redevelopment agency and mayor. He suggested that National City’s blight designation may in fact be perpetuating the problem.

Lawyers at Institute for Justice, who represented the homeowners in a 2005 Supreme Court case regarding land use, said the decision opened a floodgate of eminent domain cases nationwide. Kelo v. New London allowed the taking of private land for other private development, regardless if the land was blighted.

At a meeting Thursday, National City elected lawmakers recommended the city extend its eminent domain authority. The City Council was set to finalize that vote on Tuesday evening. The current authority expires this summer after 12 years.

The Institute for Justice lawyers were in National City last week to protest the blight designation on the Community Youth Athletic Center, a nonprofit boxing gym for at-risk youths. Community members and city officials helped remodel the 3,700-square-foot former gun shop in downtown National City for a January 2002 opening. The center serves about 50 kids per day with its free boxing and tutoring programs.

“The area is not blighted, and they haven’t established that it’s blighted, and the only reason they want it blighted is so they can transfer property from one private owner to another,” Rowes said. “It doesn’t matter to me whether it’s six years, 12 years or 12 minutes, that’s just unconstitutional and they shouldn’t be doing it.”

Sherm Harmer of Urban Housing Partners, the firm that intends to build a mixed use housing project where the CYAC currently sits, urged city leaders at the meeting to continue its redevelopment. Eminent domain is an important tool to revitalize the city, he said.

Councilman Fideles Ungab agreed. “Eminent domain can’t stop because of the CYAC,” he said. “We do need to have eminent domain. How and where we’ve used it have been very positive.”

If the council extends its authority as expected, Rowes said Institute for Justice will sue the city to “ensure that not just the gym but all Californians get proper protection for their property rights.”

In Grantville, redevelopment has to wait until a court can decide if the redevelopment area is legitimately blighted. The county’s lawsuit, with a trial date set for November, challenges the blight finding, which will lead to tax losses in the area for the county.

A redevelopment label caps the areas property taxes at that year’s levels, and as property taxes rise due to the increased value of new businesses and housing developments coming in, the difference goes back to the redevelopment agency for the area instead of into the county and city tax coffers. Twenty percent of that tax increment must be set aside to create low- and moderate-income housing. Tom Harron, chief deputy county counsel, projected that could translate into a $200 million loss for the county at Grantville.

“Instead of going to the best use in the county, it all stays in the Grantville area. General fund money is unconstrained; it could be roads, it could be health care, whatever is considered to be higher priority is where it goes,” he said.

Tax increments can translate into windfalls for the redevelopment agency. For example, the Omni San Diego Hotel, which at 675 L St. sits in CCDC’s redevelopment area, paid $1.3 million in property taxes last year, according to the County Assessor’s Office. The site’s former owner — Frost Hardwood Lumber Co. — produced about $7,500 in property taxes at the creation of the project, the amount that will continue to be paid to the county and city until the project sunsets. CCDC, however, received 99.3 percent of the hotel’s taxes last year.

Brian Peterson, a veterinarian who owns the Friars Road Pet Hospital in Grantville, is active in fighting the blight designation. He started Grantville Action Group after learning of the project area plans in hopes of rallying community support against redevelopment. His own business is considered blighted for multiple reasons, including the fact that it’s almost 30 years old.

“Lot 5 is an irregular shape; that’s blight. Our parking is not adequate, that’s blight, and you can see our dumpster from the parking lot so that’s blight, too,” he said.

Eminent domain opponents say there are other ways to achieve redevelopment goals without resorting to condemning property. They point to cities like Anaheim, where the mayor and City Council committed to not using eminent domain to accomplish development goals. Using means such as rezoning the area around the Angels’ stadium to allow for easier development, clearing environmental impact statements and reducing old building requirements, the city was able to create the Platinum Triangle, a new urban district.

“We don’t begrudge the government using eminent domain for a definite public purpose or a public use,” Peterson said. “But to take private property and transfer it to developers to build condos or whatever they want to do, that’s not right. There’s an alternative to eminent domain.”

Voice of San Diego: http://www.voiceofsandiego.com

Dan Walters: A preview of battle on seizure: Sacramento Bee, 7/13/07

By Dan Walters

California voters will weigh in next year on “eminent domain,” the quaintly named procedure by which governments seize private property for ostensibly public purposes, and a preview of the forthcoming battle was staged in the Capitol on Thursday.

Two Senate committees met back-to-back in the same room and approved a bill that’s part of a drive by local governments to change eminent domain rules just enough to stave off a more far-reaching overhaul by property rights groups.

The measure, Assembly Bill 887, had been defeated in the Senate Local Government Committee on Wednesday as Sen. Mike Machado, D-Linden, joined Republicans in opposition. But after some parliamentary maneuvers, the committee reconvened on Thursday and Machado switched sides, sending the bill to the Senate Judiciary Committee, which met minutes later and approved it. Machado said he had been given assurances that some provisions would be altered.

Republicans fumed that procedural rules were bent or broken to give the bill a second chance in Local Government. “It is not proper for the committee to hear the bill,” Sen. Dave Cox, R-Fair Oaks, complained, adding, “The public has been completely eliminated from participation.”

AB 887, carried by Assemblyman Hector De La Torre, D-South Gate, would provide businesses displaced by property seizures with some additional safeguards and compensation and is a companion to a constitutional amendment that would prohibit residential property from being seized and then resold or given to another private party.

The constitutional amendment requires a two-thirds vote to make it to the ballot, and is unlikely to pass because Republicans are opposed. But its sponsors — local governments and environmental groups, mostly — are circulating a similar initiative that would appear on the ballot if sufficient signatures are gathered. Opponents of eminent domain, meanwhile, are planning their own ballot measure to outlaw the seizure of private property for anything other than purely public purposes, such as roads and schools.

The maneuvering stems from a 2005 U.S. Supreme Court decision that private property could be seized for a private development as part of a redevelopment plan, touching off a firestorm of criticism from property rights groups. Last year, California voters rejected a ballot measure (Proposition 90) that would have prohibited such seizures, but also required governments to give property owners compensation for what was called “regulatory taking,” such as downzoning property.

Advocates of that measure are back with a new proposal that doesn’t include the regulatory takings language, at least not directly, and local officials are clearly concerned that it could pass, thus putting a crimp in their commercial redevelopment plans. They have, therefore, written their alternative measure that protects residential property from seizure and the De La Torre bill to provide additional protections to commercial property, though it stops short of prohibiting seizure.

That omission drew some pointed criticism in the Local Government Committee staff analysis. In a passage headed “fig leaves,” committee consultant Peter Detwiler wrote: “Why should a redevelopment agency take private property from one owner in order to sell it to another private party?” adding, “It’s one thing for a government agency to take private property for a public works project like widening a highway or building a fire station. It’s entirely different when public officials use their eminent domain powers to take a house or small business and turn over the property to a developer for a new shopping center. Where’s the public use?”

That’s the question that California voters will face next year.

The Sacramento Bee: http://www.sacbee.com

Newhall Fears Eminent Domain: The Signal, 7/5/07

By Reina V. Slutske

 

The concept of eminent domain is a scary one – especially to businesses and residents near public projects.

Eminent domain is the practice of a government taking a private property, whether business or residential, for public use.

Public projects such as roads and schools sometimes require the use of eminent domain in order to be built, said A.J. Hazarabedian, managing partner of the California Eminent Domain Law Group.

When it comes to redevelopment – like what is planned in downtown Newhall – eminent domain can get a little trickier.

“When it comes to redeveloping, it takes private property and turns it over to a public development,” Hazarabedian said.

The Santa Clarita Redevelopment Agency, which handles all potential redevelopment, was granted the power of eminent domain in November 1989, said Christopher Price, assistant city engineer in community development.

However, although Price said that eminent domain has so far not been used by the city, it could be if negotiations for a property fails.

In response to Newhall property owners’ fears and concerns about their property being seized to make way for a revitalized community, city officials have repeatedly said eminent domain would be a last-resort option.

The question of redevelopment, however, is also tied to the question of blight in a community.

Hazarabedian said that this type of eminent domain has been around for the past 50 years, but the term “blight” can be very general.

If a redevelopment project’s purpose is to eliminate blight and all the laws are in place, it is possibly legal for a city to do so.

He added that the U.S. Supreme Court’s decision regarding redevelopment and eminent domain through the case of Kelo v. City of New London, Conn., decided that transferring land from one private owner to another for economic development was a valid reason for redevelopment.

There was public outcry regarding that case, and many states including California, have been trying to pass laws governing eminent domain.

Eminent domain by a government is usually difficult for an owner to challenge.

“If the redevelopment agency has done it right, it might be difficult to challenge their use of eminent domain,” he said.

However, in order for a city to perform eminent domain, the city is required to compensate the business at a minimum.

The business can challenge the city regarding how much compensation they earn during their relocation.

Price said the city would help businesses with relocation and advertising when moving from one area to another.

In addition to compensating for property value, the tenants could also get financial assistance from the city of Santa Clarita for “loss of good will.”

The Signal: http://www.the-signal.com

Campaign to Reform Eminent Domain Abuse Kicks Off Signature Gathering: Californians for Property Rights Protection, 7/3/07

Press Release

 

Today, a broad coalition announced it is launching its efforts to begin the signature gathering process to qualify the California Property Owners and Farmland Protection Act (CPOFPA) for the June 2008 ballot. Since the U.S. Supreme Court’s controversial Kelo v. New London decision two years ago, 41 states have enacted eminent domain reforms to protect the private property rights of citizens, with 20 states passing meaningful protections, but true reforms have eluded California so far.

Supporters of eminent domain reform cite the State Legislature’s consideration of the redevelopment industry’s ACA 8 as further evidence that no meaningful reform will be considered this year. ACA 8, submitted by Assemblyman Hector De Le Torre (South Gate), has been roundly criticized by private property rights experts, small business, taxpayer, farm and faith based groups as meaningless legislation. The Institute for Justice, who litigated the Kelo case, says of ACA 8 that, “the act will do little to prevent the actual taking of private property in California – and this flaw is fatal.”

“Laws that allow government to seize private property from California homeowners to build shopping centers and industrial parks must be changed,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “Since the legislature has failed to protect private property, voters will.”

Unlike ACA 8 which is riddled with loopholes, the California Property Owners and Farmland Protection Act outright prohibits government’s ability to profit by taking private property from one property owner and giving it to another.

“Family farmers and ranchers are very concerned about abuses of the government’s power to condemn land. It’s not right that court decisions allow the government to take your property and give it to someone else.” California Farm Bureau Federation President Doug Mosebar said. “This ballot measure helps assure that farmland continues to produce food and agricultural products, and offers much-needed protection for home and business owners throughout California.”

Major provisions of the California Property Owners and Farmland Protection Act include:

– Protect all properties from being taken for private development – including homes, businesses, family farms, places of worship and rental property. — Continue to allow property to be taken for true public uses, such as highways, parks and schools. — Prohibit government from seizing property for the same use as that of the original owner. — Require that the property be offered for sale to the original owner if the public use for which a property was seized is ever abandoned. — Provide agricultural and open space protections (aka Conaway Ranch Provision). — Entitle property owners who are evicted by eminent domain to compensation for temporary business losses, relocation expenses and other reasonable expenses. — Prohibit government from determining the price a property owner can charge to sell or lease their property.

While Prop. 90 was defeated by a slim margin last year, a survey conducted by Public Opinion Strategies earlier this year indicated that over 67% of potential voters would support another ballot measure to protect their property from developers looking to build shopping centers and industrial parks. Since the CPOFPA does not include Prop. 90′s regulatory takings and has no limitation on government’s ability to take property for legitimate public projects, proponents are confident that this measure will qualify for the June 2008 ballot.

“Our campaign to restore private property rights protections for all Californians will be one of the state’s most ambitious campaigns ever” said Senator Jim Nielsen, ret., president of the Alliance. “Voters must stand united against special interests that seek possession of their homes, businesses and family farms.”

Opponents of ACA 8 have questioned the motivation for the League of California Cities effort to introduce a poison pill provision (amendment) later in the legislative process that would undermine passage of the California Property Owners and Farmland Protection Act. Should both ballot measures win voter approval next year, the poison pill provision would dictate that the measure with the most votes becomes law. Conceivably, the measure with no real protections could become law, leaving voters with the impression that they have been provided property protections when in fact they have not.

The proposed initiative will require 763,789 signatures to qualify for the June 2008 ballot.

The California Property Owners and Farmland Protection Act is sponsored by the Howard Jarvis Taxpayers Association, California Farm Bureau Federation and California Alliance to Protect Private Property Rights. For more information on the measure, visit http://www.yesonpropertyrights.com/. Californians for Property Rights Protection

 

 

Californians for Property Rights Protection: http://www.yesonpropertyrights.com

Eminent domain battle resurfaces in Assembly: San Jose CA Mercury News, 7/1/07

By Steve Lawrence

 

SACRAMENTO—The debate over how much to restrict government’s use of its eminent domain powers to obtain private property for shopping malls and other developments resumes this week in the state Assembly.

The Judiciary Committee will consider rival constitutional amendments on Tuesday, one by Assemblyman Hector De La Torre, D-South Gate, and the other by Assemblywoman Mimi Walters, R-Mission Viejo.

The Walters legislation would, with a couple of exceptions, allow government agencies to use eminent domain to buy private property only for public projects.

The exemptions cover property for use by utilities and for redevelopment projects to promote economic development near closed military bases in San Bernardino County.

De La Torre’s proposal would ban use of eminent domain proceedings to acquire owner-occupied homes for private developments.

It also would prohibit using eminent domain to transfer property owned by small businesses—those with no more than 25 full-time employees—to other private owners unless it was part of a comprehensive program to eliminate blight.

Small business owners could avoid selling their property through eminent domain proceedings by agreeing to make improvements as part of the blight-elimination project. Or they could receive compensation to cover a move to a different location.

Both measures are a response to a 2005 U.S. Supreme Court decision that upheld the right of the city New London,
Conn., to use its eminent domain powers to force the sale of homes for a redevelopment project.

But the ruling also allowed several states to pass laws limiting eminent domain for nonpublic uses.

The De La Torre amendment is supported by a number of groups that opposed Proposition 90, an unsuccessful 2006 California ballot measure that attempted to impose broad limits on the use of eminent domain.

Those Proposition 90 opponents describe the De La Torre legislation as a “carefully crafted compromise.”

“We didn’t try to reinvent the wheel,” De La Torre said. “We’re trying to keep this as simple as possible to address the issue at hand and not bring in extraneous issues.

“This is tailored to the main concern of people, which is protection of their owner-occupied homes and extending some protections to small business, as well.”

But opponents complain the De La Torre legislation would not protect farms, churches, rental housing, second homes, investment property and businesses with more than 25 employees, although De La Torre said he is trying draft language to protect churches.

The critics also contend that the protections De La Torre’s legislation would provide small businesses would be undercut by a vague definition of blight.

“There are so many loopholes and exceptions. At the end of the day, it provides meaningless reform,” said Marko Mlikotin, president of the California Alliance to Protect Private Property Rights, which is trying to put an initiative similar to Walters’ legislation on the June 2008 ballot.

Walters could not be reached for comment.

San Jose CA Mercury News: http://www.mercurynews.com

 

 

COPYRIGHT © 2010 Arthur J. Hazarabedian, Esq.