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CALIFORNIA EMINENT DOMAIN LAW BLOG

Restaurant Owner in Riverside Suing the City for Lost Business Revenue, 6/7/12

By A.J. Hazarabedian

A restaurant owner in the City of Riverside is suing the city for lost business revenue after a relocation deal never came to fruition.  In the Press Enterprise article, Restaurant owner sues after relocation deal fizzles,” Lucky Greek restaurant owner Tony Georgopoulos argues that his business has been negatively affected by the City’s Magnolia Avenue underpass project.  The project, he claims, has decreased vehicular traffic by 90%, thereby decreasing his restaurant’s revenue.

Mr. Georgopoulous is seeking $750,000 in damages in a suit filed last month.  He asserts that the City did not follow through with a relocation plan they set out to execute over a year ago.  According to the article, the City had agreed to a land swap; moving his restaurant to the old Marcy branch library.  After some negotiations over the City’s offer, the deal was delayed and then scrapped when Jerry Brown eliminated redevelopment agencies earlier this year.  As noted by Riverside City Attorney, Greg Priamos, the deal was contingent on redevelopment dollars for funding.  Without the redevelopment agency, the deal could not move forward.

Tony Georgopoulos now indicates his business is struggling to keep the doors open, having had to shrink his staff from 17 down to 11.  A court will have to decide whether or not the City must pay damages in this case.

This is just a tiny tip of the iceberg of the carnage that has been left in the wake of the sudden demise of redevelopment in California.  While reasonable persons can differ on the propriety of the use of eminent domain for redevelopment, the manner in which redevelopment agencies were killed almost overnight in California left many victims, such as Mr. Georgopoulos, in its wake.  People were informed their properties and businesses would be acquired.  They made decisions based on that information.  And now, they’ve been left hanging in the wind.

It is questionable whether Mr. Georgopoulos will have a legally viable claim, without any portion of the property he occupies actually being taken.  Generally, Cities and other public agencies are permitted to impact the flow of traffic without liability, provided reasonable access remains to the property.  It will be interesting to see how this one plays out…

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COPYRIGHT © 2010 Arthur J. Hazarabedian, Esq.