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Modesto Considers Using Eminent Domain for Pelandale Freeway Project, 5/23/12

By A.J. Hazarabedian

The City of Modesto will consider acquiring properties by eminent domain for the Pelandale Avenue freeway interchange project at tonight’s city council meeting.  According to the Modesto Bee’s article, “Modesto considers seizing sites for Pelandale freeway project,” the City has been negotiating with affected property and business owners since March, yet an agreement has been made with only one of the eight parcels required for the project.

The Pelandale Avenue project plans to “replace an inadequate three-lane span with a seven-lane crossing at a better angle for traffic, with new southbound ramps,” as reported by the Modesto Bee.  The interchange was not built for the amount of traffic it now receives due to the popular businesses in the area.

A few businesses will be affected by this project, including a Quik Stop gas station and convenience store, Dolphin Spas & Stoves, as well as a vacant commercial property.  Temporary construction easements for up to one year are needed from neighboring properties, of which one has agreed to an offer of $4,800.

Under California’s Eminent Domain law, the government is required to pay the “fair market value” of the property.  The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by the seller, being willing to sell under no particular or urgent necessity for doing, nor obliged to sell, and a buyer, being ready, willing and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.

This is a bit different from the definition of market value used in the marketplace.  Put simply, owners in eminent domain proceedings are entitled to the “highest” price that might reasonably be expected.  This is determined by appraisal opinion, and the government’s and owners’ appraisers often differ substantially in their opinions of what the “highest” price should be.  The owners involved in this project are apparently dissatisfied with the City’s appraisals, so the City’s options are to either agree to pay the owners an amount that satisfies the owners, force the sales through eminent domain, or drop the project.

If the City decides to pursue eminent domain after tonight’s council meeting, these matters will then move into the hands of the Superior Court, and the owners will be entitled to a jury trial to determine the amount of compensation.  Stay tuned…

County of Santa Barbara files eminent domain lawsuit against Wal-Mart, May 10, 2012

By A.J. Hazarabedian

Recently, the County of Santa Barbara began eminent domain proceedings to acquire property from Wal-Mart for the Union Valley Parkway project.

As reported in the Lompoc Record article, “County files suit in UVP land case,” Wal-Mart Stores, Inc. owns three parcels that will be affected by the project.  These parcels are located on the east side of Orcutt Road near Foster Road.  According to the article, negotiations between the county and Wal-Mart have been ongoing for over a year and will continue to go on until their court date on July 5, 2012.

It appears that Wal-Mart is not disputing the project.  Rather, they want to be sure they are fairly compensated for the impact on their property.  Specifically, Walmart is complaining that “the county has not offered compensation to cover the cost of the four non-legal remnant parcels of land that will be created when the right of way is taken.”

The county has deposited $1.3 million with the state treasurer for the appraised value of the property being taken.  The county is also asking for prejudgment possession and per Scott McGolpin, Director of Public Works at the County of Santa Barbara, “if an agreement with Wal-Mart is not reached by June, the county will take possession of the property on or about the July 5 court date noted in the suit.”

Where, as here, only part of a property is taken, the take can sometimes have devastating impacts on the owner’s remaining property.  Walmart here claims that the part take is leaving it with four remnants that no longer comply with local land use ordinances.  If they are right, they may have a legitimate claim for severance damages.

As for the County’s request for prejudgment possession, prejudgment possession is fairly common in eminent domain proceedings.  California Code of Civil Procedure section 1255.410 authorizes the condemning agency to ask the court for possession of the property even before judgment has been entered in the eminent domain proceeding. The court may only do so, however, if the condemning agency has first deposited into the Court or the State Treasury the amount which it determines as the probable compensation to be paid for the property. In this case, the County of Santa Barbara has indeed deposited what they deem to be probable compensation.  If Walmart opposes the County’s request for prejudgment possession, the County will also need to prove that it has an “overriding need” for prejudgment possession, and that its hardship will outweigh any hardship suffered by Walmart as a result of early possession.  If the court grants the County’s request for early possession, Walmart may have as little as 30 days to turn over possession.

More is to be revealed in this situation.  We’ll keep an eye on the results of this case.

California Eminent Domain Quarterly – Vol. 2, April 2012

Click below to access a copy of Vol. 2, April 2012 issue of the California Eminent Domain Quarterly:

California Eminent Domain Quarterly, Vol. 2, April 2012

COPYRIGHT © 2010 Arthur J. Hazarabedian, Esq.