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CALIFORNIA EMINENT DOMAIN LAW BLOG

San Jose Creek Capacity Improvement Project Will Require Eminent Domain, 8/23/11

By A.J. Hazarabedian

The San Jose Creek Capacity Improvement Project in the city of Goleta will require eminent domain; this according to Noozhawk’s article “Attorney Says Vote on Eminent Domain Puts Goleta Council ‘On a Road to Litigation.’”

At the August 16th City Council meeting, councilmembers adopted a “Resolution of Necessity” to acquire the necessary parcels by eminent domain.

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.

The project, per the city’s website, will include “the removal and replacement of both the existing concrete flood control channel from Hollister Avenue to the Twins Screen Drive-in property and the existing Hollister Avenue Bridge over San Jose Creek.”

While the city is only seeking portions of private properties for the project, the attorney for the property owners suggests that the city acquire the parcels on the east side of the channel in their entirety.  He argues this “would allow the construction equipment, vehicles and materials to be on site and accessible as needed, instead of affecting properties on both sides of the channel.”

As often occurs on properties potentially affected by eminent domain, the attorney points out that “eminent domain has already caused a major tenant to leave the property in anticipation of the difficulties that might happen as a result of the city’s activities.”

The article indicates Community Services Director Steve Wagner is hoping to continue negotiating with property owners, but adopting the Resolution of Necessity aids in the timing of the project.

Cathedral City May Use Eminent Domain to Acquire Angel View Thrift Mart, 8/22/11

By A.J. Hazarabedian

A thrift mart in Cathedral City is facing eminent domain to make way for future downtown development, reports The Desert SunAngel View Thrift Mart has been operating at the East Palm Canyon Drive location since before the city was incorporated.  And now, if the city gets their way, the store will be forced to relocate.

The article, “Cathedral City plans to push Angel View move” quotes the store’s General Manager Tracy Powers stating, “[they] don’t want to stand in the way of the city accomplishing their goal [but they're] distressed in that the city is not more forthcoming in details on what they can do for [them].”

The thrift mart was offered $750,000 for their property but Powers says he is less concerned with the money and more interested in finding a suitable place to relocate the business which will maintain the store’s revenue.

As for a possible relocation site?  The city had offered Angel View another building on East Palm Canyon Drive over a year ago.  However according to the article, Powers and the city weren’t able to come to an agreement regarding the necessary repairs the building would have required.  Now, Powers has learned that this same proposed relocation site is slated for demolition.

Where does this leave the Angel View Thrift Mart?  For now, they’ll have to wait for Cathedral City’s council meeting on September 14th when the issue is expected to be discussed.

SMART on the Hook for Property Owners’ Foreclosure?, 8/11/11

By A.J. Hazarabedian

Some property owners in Petaluma, CA are blaming Sonoma Marin Area Rail Transit (“SMART”) for their property going into foreclosure.

Since 2005, as reported in the Press-Democrat article, “SMART, land owners at odds over Petaluma site,” SMART has discussed using the 6.5 acre site owned by Patti and Clinton Gow and Robin and Larry Drew as a potential station location.

To this day, however, a formal decision has not been made as to whether or not the site will indeed be acquired.  It is this uncertainty, the article claims, that has put the Gow’s and Drew’s property in jeopardy.

According to the property owners, not knowing if the property will one day be acquired has caused them to lose “more than half of their commercial tenants” as well as “development deals for the property.”  The owners and their lawyer contend that this has caused a loss of income which has resulted in the property going into foreclosure.

The property owners’ attorney is quoted in the article, stating “for [SMART] to not work with the owners and then try to pick [the property] up for a fraction of its fair value isn’t right.”  He believes the agency is acting “unreasonably” and “can be liable for damages.”

On the other side of the issue, Sonoma County Supervisor Valerie Brown, who is also chair of the SMART board, disagrees with the property owners’ claims.  She believes the agency has “acted reasonably” and “didn’t cause the property owners’ financial troubles.”  She goes further to say that the 6.5 acre site “wasn’t even in [their] picture,” and that although the plan was “put in place a long time ago…it wasn’t something [they] were actively thinking about until this foreclosure came up.”

Per the article, the property owners’ attorney is currently “exploring legal options” for his clients.

Our Take: Our take on this is that the issues being faced by the Gows and Drews are relatively common, but serious.  It is unfortunately not unusual for public agencies to announce tentative project plans, deny development applications by the owner in light of the agency’s tentative plans, and then not take definitive action towards the proposed project for years.  In the meantime, what are the owners to do?  Business tenants become aware of the plans, and acting as reasonable business people wanting security, they do not renew leases and they move.  The owners then face difficulty in re-leasing the property.  The property declines as a result, and then years later attempt to purchase the property at fire sale prices.

Fortunately, however, owners do have some possible remedies.  If the agency does move forward with eminent domain, the owner is entitled to have his property valued free of project influence – i.e., as though the project was never announced.  If the agency does not move forward with eminent domain, the owner might attempt an inverse condemnation action based on unreasonable precondemnation conduct.  Agencies are permitted to engage in reasonable planning activities for a reasonable period of time.  They are not, however, permitted to engage in unreasonable conduct or unreasonably delay following an announcement of intention to condemn.

COPYRIGHT © 2010 Arthur J. Hazarabedian, Esq.