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Family awarded $26.5 million in eminent domain case: The San Diego Union-Tribune, 12/20/07

By Greg Moran

SAN DIEGO – A Superior Court jury has awarded $26.5 million to a family whose Otay Mesa land was targeted for condemnation by the state Department of Transportation so it could build a freeway.

The award was made to Anderprises Inc., a small San Diego family business that has owned land on Otay Mesa since 1974. The land was bought by Phil and Marjorie Anderson; their four sons and their families now own it. After a three-week trial before Superior Court Judge Patricia Cowett, the jury deliberated one day before making the award Wednesday.

At issue was the value of a piece of land that the Andersons controlled off Otay Mesa Road east of Interstate 805 and south of Brown Field. Caltrans had used eminent domain to take a 2.8-acre sliver of a 58-acre parcel, said Vincent Bartolotta, Jr. the Andersons’ lawyer.

But by doing that, the family claimed the majority of the parcel was cut off and landlocked – with no viable access in or out.

The agency contended it did not have to pay damages for the balance of the land and offered $172,410 for the 2.8 acres, Bartolotta said. The agency argued that the land was slated to be used for open space anyway and could not be developed.

But the Andersons rejected the offer, setting the stage for the trial.

The jury ruled unanimously in favor of the landholders. The panel concluded the value of the 2.8-acre parcel was $1.3 million. Additionally, it set damages for the lost use of the landlocked property at $20.1 million.

Bartolotta said that Caltrans announced it would build the Route 905 freeway in the early 1990s, and initially planned to complete it by 1997. But the road is still not built and it was not until 2006 that Caltrans moved to condemn the Anderson property.

In the interim, one business approached the family to lease the parcel and use it for truck parking, but backed out believing that it would not be able to use the land after 1997.

The jury pegged damages for that lost use at $5.1 million.

Bartolotta called the award “truly a victory for the little guy. The justice done in this case shows that Caltrans can’t just come in and bulldoze people.”

The victory might be short-lived, however.

“We respect the jury’s verdict, but disagree with the assumptions that support the verdict,” said Ed Cartagena, Caltrans San Diego district spokesman. “We will review our options and move forward. An appeal is likely in the future.”

This is the second largest award in a property rights case Bartolotta has won. He was the attorney for developer Roque de la Fuente, who won a $94 million award in 2001 against the city of San Diego over the development of an Otay Mesa business park. That award has been thrown out on appeal, and the suit is back in San Diego Superior Court. Bartolotta also represented the owner of the Gran Havana cigar lounge in downtown San Diego, which the city condemned in order to build a hotel.

The San Diego Union-Tribune:

Citrus Heights to use eminent domain on 11 properties: The Sacramento Bee, 12/14/07


By Stan Oklobdzija

Citrus Heights started the eminent domain process against 11 properties abutting Antelope Road as part of a planned expansion of the city’s thoroughfare at its council meeting last night.

Following a 4-0 vote, with Councilman Steve Miller absent, the council started the process in order to meet construction deadlines in the spring, said Stuart Hodgkins, senior civil engineer.

The eminent domain process can take up to 3-4 months, Hodgkins said. In addition to paying a “fair market appraisal” for the properties, the city will compensate landowners for any improvements made to their properties, he said.

No owners of the affected properties spoke at the meeting.

Hodgkins said some of the 11 property owners were concerned about appraisal prices on their properties.

The project would convert the four-lane segment of Antelope Road between the western city limit (near Daly Avenue) and Interstate 80 to a six-lane configuration, according to a city report.

This segment of Antelope Road is heavily congested during peak hours, the report said. The project would improve traffic flow for vehicles and improve access for bicyclists and pedestrians, the report said.

The Sacramento Bee:

Traffic Plan Threatens Million-Dollar Homes: NBC San Diego, 12/14/07

Monica Dean

The project is a connector from the southbound Interstate 5 to eastbound state Route 56. The plan could threaten as many as 30 million-dollar homes along Portofino Drive, pushing residents out through laws of eminent domain.

Thursday night, residents met with city officials. Caltrans officials said something needs to be done to ease congestion. They presented their ideas at the meeting, which could include taking over the properties using the law of eminent domain. Many residents reacted angrily.

Steven Olsher said he bought his home on Portofino Drive in 1999. He is afraid he may be told to move.

“This is the American dream: to buy a home, to build, to keep on going. And now I’m in La La Land. I have no idea where I’m going to go,” Olsher said.

Diane Bluechel said she shares Olsher’s concerns.

“I don’t even know the words to think about relocating after all this period of time,” Bluechel said.

Others living on Portofino Drive, like Barbara Gieskes, may keep their homes, but they say the project would ruin the neighborhood with noise and pollution. Gieskes is the original owner of her home.

“It was a quiet, nice neighborhood for our children to grow up in, and I feel like it’s being assaulted now,” Gieskes said.

Allan Kosup, the I-5 corridor director for Caltrans, said the agency is looking at all options.

“We’ve probably gone through 10 alternatives today, and we’re hoping there’s still some more we can look at,” Kosup said.

About half of the plans under consideration directly impact residents, he said. Homeowners forced to leave would receive market value for their property.

“It’s really difficult,” Kosup said. “They just need to be patient. We really ask for their patience to get through this study, and we’ll continue to work with them.”

Currently, planners are studying the environmental impacts of the project. Caltrans officials said they won’t decide on a specific plan until at least 2009.

NBC San Diego:

Condo-commercial proposal may require eminent domain: The San Diego Union-Tribune, 12/13/07

By Matthew Rodriguez

The city of Vista could consider using its eminent domain powers to help a developer acquire four parcels on North Santa Fe Avenue for an 8.9-acre residential and commercial project.

The City Council on Tuesday night voted unanimously to enter into exclusive negotiations for land purchases with Vista-based RA&B Development LLC.

While the company owns some of the land at the northeast corner of North Santa Fe Avenue and Cananea Street, it wants to buy an adjoining city-owned parcel at market value.

The company also is seeking the city’s help in buying four properties whose owners have declined to sell, said Jalal Rahman of RA&B.

“We’ve contacted all of them many, many times,” Rahman said.

The firm’s proposed three-story project calls for 315 condominiums and 127,000 square feet of office and retail space. It could also include underground parking.

The land is in the city’s redevelopment zone, which targets blighted areas.


“This represents a great opportunity for us to have a tremendously positive impact on this part of town,” said William Rawlings, the city’s redevelopment director. “It’s on my list of priorities.”

The city and RA&B have 90 days after the council’s action Tuesday to work out a Disposition and Development Agreement that would spell out whether the city would use eminent domain.

“Theoretically, we might use eminent domain there,” Rawlings said. “We’re a long way from entering into a contract, much less laying that out.”

The site is bordered by homes to the east and commercial properties on the other three sides. The site is a few blocks southwest of Vista High School.

Most of the land is vacant, but one parcel is home to a spa retailer, Pacific Coast Spas & Accessories, at 1309 N. Santa Fe Ave.

Barry Hayes, the owner of Pacific Coast, said he rents his building from a property owner who lives in Africa. He said if a sale goes through, he would want help finding space with similar rent and be compensated for moving expenses.

“I just don’t have the funds,” Hayes said.


SEAN DuFRENE / Union-Tribune – Barry Hayes stood on a proposed development site that might force him to move his business, Pacific Coast Spas & Accessories, from North Santa Fe Avenue in Vista.

The business, which sells new and used spas, has been on the site since 1987. “This is an established business in the city of Vista,” he said. “I pay taxes like everybody else.”

None of the property owners could be reached yesterday.

On Oct. 11, the city notified property owners of the developer’s proposal. According to the proposal, RA&B has been trying to acquire the five parcels for about two years.

Without them, Rahman said, the project would have to be scaled back and could be financially infeasible.

Rahman said the owner of the Pacific Coast Spas property wanted money over time rather than at once. A payment plan over 10 to 15 years was proposed, but the owner opted out, Rahman said.

The others, Rahman said, have asked for too much money. “Everyone is holding out thinking they’re going to get four or five times what the property is worth,” he said.

The San Diego Union-Tribune: http//

Fresno’s eminent domain hot issue, Law city may use to take Running Horse is national topic: The Fresno Bee, 12/8/07

By Brad Branan

Photo by ERIC PAUL ZAMORA/THE FRESNO BEE — The main house, one of three structures on property identified as belonging to Henh Ho at the northwest corner of Hughes and Church avenues west of Fresno, is partially obscured by trees. City Manager Andy Souza wants Ho to sell his 22.5-acre parcel for close to market value, but a city-funded appraisal found the land is worth “nowhere near” the $6 million he was offered by a previous Running Horse developer.

Mayor Alan Autry doesn’t have the City Council votes he needs to seize property for Donald Trump’s planned golf course in southwest Fresno — eliminating a key reason for city involvement in the Running Horse project.

The city has a deal to help the developer by buying portions of the bankrupt golf course and luxury housing development — using, if necessary, its power of eminent domain to take property at fair-market value. Officials say such a step may be needed for at least one parcel.

But three of seven City Council members say they would not support using eminent domain to complete Running Horse. Five votes would be needed.

“This would make us the poster child for bad eminent-domain use,” said Council Member Brian Calhoun. “I don’t want to defend that kind of action. And all for Donald Trump? Hell no.”

City Council resistance to eminent domain — also known as condemnation — could hold up another major Fresno project. City officials said they may need to condemn land in a six-block area downtown targeted for redevelopment by Cleveland-based developer Forest City Enterprises.

The reasons cited by council opponents of eminent domain reflect a growing unease nationwide about government seizing land for private economic development. Even council members who say they would consider eminent domain share those reservations.

Several states have passed laws limiting eminent domain, and California could soon join them, with voters likely to consider two ballot measures in June.

Property-rights groups already are poised to make Fresno and celebrity billionaire Trump part of their campaign to stop government from taking land to help developers.

“We’re watching this very closely,” said Marko Mlikotin of the advocacy group Californians for Private Property Rights Protection. “The city is essentially shifting the burden from Donald Trump to taxpayers.”

City Manager Andy Souza said he thinks he can persuade at least one of the council holdouts, if necessary, to vote for eminent domain.

He said the administration would use arguments similar to those the city would use in court, where it would have to demonstrate that the project serves a public purpose justifying eminent domain.

“We can make a compelling case if needed,” Souza said.

Autry puts limit on use
Under a deal approved by the council, Trump is moving to buy most of approximately 480 acres needed for the Running Horse project himself. The project fell into bankruptcy this year after its original developer ran out of money.

The city is attempting to acquire the rest, which it would sell to Trump, who would then build the golf course and luxury housing development he plans to call Trump National Golf Course Fresno.

Some council members said the city’s eminent domain powers are the only reason for the city’s involvement. Otherwise, Trump would have bought all the property himself.

Autry has ruled out using eminent domain against owners who live on property they are unwilling to sell, and city officials have said the project can be built without two properties where people live.

But the city may decide to use eminent domain against another property owner, 46-year-old Henh Ho.

Souza wants Ho to sell his 22.5-acre parcel for close to market value, but a city-funded appraisal found the land is worth “nowhere near” the $6 million he was offered by a previous Running Horse developer, said Souza, who wouldn’t reveal the appraised value.

Ho won’t say how much he wants for the land. He said he lived there and ran a small vegetable farm on the property until a year ago, when he moved to Los Angeles because he thought the golf-course project was going to start soon.

The city’s efforts could be stymied by three Fresno City Council members — Calhoun, Mike Dages and Cynthia Sterling — who say they would not support use of eminent domain for Running Horse.

Dages said he would support condemnation for the city’s infrastructure needs, such as roads or police stations, but not for a billionaire developer. He would also oppose using it for Forest City.

Sterling said she would have reservations using eminent domain for the Forest City project, as well, but would view it differently than Running Horse. The Forest City project is a redevelopment project aimed at blight and wouldn’t require the city to take people’s homes, she said.

Council members Jerry Duncan, Larry Westerlund, Blong Xiong and Henry T. Perea want the city to reach agreements with property owners, but would otherwise consider eminent domain as a last option for Running Horse.

Still, even those council members express reservations about seizing land. Duncan said he hates eminent domain, but may back its use if Ho wants too much money.

Westerlund conceded that the prospect of attracting national attention from anti-eminent-domain activists could influence his vote.

“This is certainly a hot-button issue in California and across the nation,” he said. “We can’t get away from the controversy.”

In the past five years, the City Council has approved the use of eminent domain to clear the way for at least 18 projects. Twelve of the projects were street construction, four were public buildings and two were private developments — Community Regional Medical Center and Old Armenian Town, which hasn’t been finished.

A different City Council made the 2003 decision to take land for the medical center, and it was one of many parcels needed for the project. The council voted last April to take an office building for Old Armenian Town. A staff report said the owner wanted 13% more than a city appraisal found it was worth.

Complaints across country
Complaints about eminent domain have grown dramatically across the country since 2005, when the U.S. Supreme Court upheld the right of a Connecticut city to take land for economic development.

On the surface, the case of Kelo v. New London raised the same question Fresno may consider with the Running Horse and Forest City projects: Can government take land to help a private developer?

New London designated a waterfront area for a riverwalk and residential, retail, and other business development. New London bought some of the property and condemned other land when owners held out. The holdouts included Susette Kelo, who didn’t want to give up her home and its prized view of the Thames River.

In a 5-4 decision, the Supreme Court ruled that the benefits of the project qualified it as a public use, the test for government to take property.

The court added, however, that “nothing in our opinion precludes any state from placing further restrictions on its exercise of the takings power.”

Many states took the court at its word.

In the past two years, 34 states passed laws in response to Kelo, according to the National Conference of State Legislatures. California and the rest of the states that haven’t passed laws considered similar legislation this year.

The laws and bills aim to restrict the use of eminent domain for economic development, transfers of private property to private developers and further define public use, among other things.

From a legal standpoint, the Kelo decision didn’t mean anything in California, said Glendale attorney A.J. Hazarabedian, author of the “California Eminent Domain Handbook.”

State law doesn’t explicitly allow condemnation for economic development, he said. Redevelopment agencies, though, can designate areas as blighted and seize them for that purpose.

But from a political standpoint, Kelo made a big impression in California. It “opened people’s eyes about what’s going on with eminent domain,” said Hazarabedian, who has represented property owners in such cases for 20 years.

A collection of groups, including the Howard Jarvis Taxpayers Association, has submitted signatures to place an eminent-domain measure on the June ballot. So has another coalition that includes the League of California Cities.

Both initiatives would restrict eminent domain for private development, although the League of California Cities measure would only protect homes, while the other proposal protects all property, supporters said.

Doug Sloan of the Fresno City Attorney’s Office said the city would take action on the Running Horse property before either initiative would become law.

But changes in the law could happen before the city considers eminent domain for the Forest City project, officials said.

City likely to win in court
If city leaders can overcome council opposition to eminent domain, they likely would prevail in court, experts said. State law allows cities to condemn land for golf courses, and the courts have broadly interpreted legal requirements that property be seized only for public uses.

If Fresno moves to condemn land for Running Horse and is challenged in court, the city would argue that the project serves a public use because anyone could play on the golf course, City Attorney Jim Sanchez said.

Running Horse would operate similarly to Trump National Golf Course in Los Angeles, which is open to the public, Sloan said. A day of golf at the Los Angeles course costs $275 to $375, depending on the day of the week, although fees here are expected to be less.

Hazarabedian said such a case would “test the limits” of the state’s eminent-domain law, and he would fight it in court if given the opportunity. But he conceded that property owners almost never win when they challenge government’s right to take land.

Gideon Kanner, a retired professor from Loyola Law School in Los Angeles, agreed.

A leading expert on California eminent-domain law, Kanner said the courts have taken a broad view of what constitutes a public use, which would help Fresno prevail.

The clearest example of this philosophy was the California Supreme Court’s decision to consider the Oakland Raiders a public use, when the city invoked its condemnation powers to try to keep the NFL team from moving to Los Angeles, Kanner said.

“Public use doesn’t mean public use; it means public interest,” Kanner said. “Given the California Supreme Court’s record, [the city of Fresno] would probably win.”

The Fresno Bee:

City postpones debate over K Street eminent domain: Sacramento Bee, 12/11/07

By Terri Hardy

A showdown between the city and landowner Moe Mohanna over the future of his key properties on Sacramento’s K Street will be postponed until Dec. 18 at his request, in order to allow for hours of testimony.

The Sacramento City Council was poised to vote today on taking Mohanna’s eight parcels through eminent domain, after a deal to revitalize the 700 and 800 blocks of K Street in downtown Sacramento unraveled.

On Monday, Mohanna’s attorney in a letter urged Mayor Heather Fargo to postpone the vote a week because of tonight’s full agenda, which includes approval of the environmental impact report for redevelopment of the downtown railyard. Mohanna and his team asked that the council set aside five hours for the eminent domain testimony and vote.

“We do not wish to rush our presentation, as we might inadvertently omit something that is legally required,” said attorney Myron Moskovitz. “And we prefer not to address our concerns to members who are yawning, distracted and preoccupied with thoughts of going home to sleep.”

Leslie Fritzsche, the city’s downtown development manager, said Fargo “is going to honor the request.”

The council vote is the latest wrinkle in the city’s push to transform blighted K Street into a thriving retail and housing destination. The eminent domain decision – seen as a last resort for the city – is politically sensitive, mixing concerns about property rights with the desire for economically recharging K Street.

For years, the city has pushed for Mohanna to rehabilitate his properties, and in 2006, Mohanna and his property partnership agreed to a complicated land swap. Under the plan, Mohanna’s team would develop the 800 block of K Street with condos and retail.

Another development group, led by Joe Zeiden, owner of the Z Gallerie furniture retail chain, would revamp historic buildings on the 700 block and bring in retailers.

Because some of the buildings Mohanna was to receive were demolished after a fire, the landowner argued the property value was lowered and the exchange was unfair.

Recent negotiations between the city and Mohanna seeking to resolve differences haven’t resulted in a deal.

City leaders said they were prepared to continue to meet and, at the same time, push forward with plans to take control of the land.

Mohanna’s group has vowed to fight the eminent domain challenge.

As the land swap fell apart, Mohanna lost his developer, John Saca. However, Moskovitz said Mohanna has regrouped and wants to rehab the 700 block instead.

Moskovitz said Mohanna has retained a consultant that brings in retail clients, has a builder, Howard S. Wright construction, and has secured a line of credit from the Bank of the West.

“The city wants to take the land on the 700 block so Zeiden can put in retail – but Moe is proposing the exact same thing,” Moskovitz said. “Eminent domain law doesn’t allow government to take property away from A to give to B.”

John Dangberg, the assistant city manager in charge of economic development, said the city is hoping for a settlement. However, he said any proposal has to make sense.

“We’ve been getting proposals from Mohanna for seven years, but nothing has worked out,” Dangberg said

The Sacramento Bee:

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