California Eminent Domain Report

The City of Seal Beach announced that it is moving forward with plans that certainly do not sound controversial.  The City intends to improve a bike path, expand a park, and repave a parking lot.  But an adjacent property owner thinks the City's plans are infringing on its plans to develop its property.  Bay City Partners is currently involved in two related lawsuits with the City. 

The City filed a 2009 action to acquire 21,000 square feet of the property; the eminent domain trial is scheduled for October 2010.  Earlier this month, Bay City Partners sued the City, attacking its improvement plans. 

Ultimately, what the devleoper really wants is the right to develop its property; I imagine the developer really doesn't care about the City's park expansion or parking lot repaving.  More to the point, the developer doesn't want the City to take 21,000 square feet before final development plans are approved. 

In the end, how much can we really be talking about; after all, it's only 21,000 square feet?  Maybe a lot.  According to an April 27 article in the Orange County Register, Seal Beach moves ahead with $2 million park project, the developer claims the City has offered only a small fraction of the property's fair market value:

The city had offered to pay Bay City Partners about $48,400 for the driveway and sewer easement but the developer contends this is a lowball offer. [The developer] said the land can go for anywhere from $500 to $700 a square foot. The city is offering about $2.30 a square foot.

In other words, if the developer is right, that 21,000 square feet is worth as much as $15 million, a far cry from the $48,000 being offered.  It will be interesting to see how it all turns out. 

My guess is that the developer would gladly give up its lawsuit against the City -- and its claim for millions in just compensation in the eminent domain case -- if the City were to approve its plans for the rest of its property. 

For a little more from the developer's point of view, take a look at its April 20 Press Release, which Project Development Manager Edward Selich sent me last week.