Next Phase of Edison's Tehachapi Transmission Project to Commence Construction

In May, we reported on the City of Chino Hills' efforts to stop a portion of Southern California Edison's Tehachapi Transmission Project.  The project involves 175 miles of transmission line right of way designed to serve wind farm development in the Tehachapi area. 

Much of the right of way for the transmission lines runs through remote, undeveloped areas.  Though there have been many disputes over the amount of money SCE must pay to acquire any new right of way it needs (much of the project runs along pre-existing right of way), there has been little dispute about SCE's right to build the project.

The notable exception involves "Segment 8a," which runs through the Chino Hills area.  Though SCE already has transmission lines in the area, the project calls for replacing existing 220 kV lines with much larger 500 kV lines.  Officials in Chino Hills argue the higher-capacity lines are not safe, claiming that no precedence exists for placing such lines in populated areas. 

Earlier this month, the court denied the City's request for an injunction to stop construction while its appeal of an earlier decision proceeds.  The ruling allows SCE to start construction, and SCE is wasting little time in moving the project forward. 

Following the favorable court ruling, SCE promptly issued a Notice of Construction, announcing that construction will commence October 9, 2010, and will last through December 2011. 

Fate of Eminent Domain Bill to Be Decided Tomorrow

Proposed changes to California's redevelopment law have been quietly making their way through the California legislature.  With little publicity, AB 2531, authored by Assemblyman Felipe Fuentes, made its way through the process this summer.  After a series of amendments, AB 2531 was passed by California's Senate on August 12 by a vote of 22-13.  On August 27, it passed California's Assembly, 50-26.

On September 10, the bill was presented to Governor Arnold Schwarzenegger for signature.  Under the California legislative process, the Governor has until September 30 to sign or veto the bill.  If he signs (or takes no action at all), AB 2531 becomes law.  If he vetoes, the bill goes back to the legislature for a possible vote to override the veto.  (Overriding the veto would require a 2/3 vote, meaning AB 2531 would fall just short in both houses unless the votes change.)   

I'll get into more details about AB 2531 if it passes, but the basic premise is that it would:

  1. Expand the ability of the Los Angeles Community Redevelopment Association to acquire property through eminent domain by removing the restriction that the CRA can only exercise its eminent domain authority within designated redevelopment areas.  In other words, if AB 2531 becomes law, the CRA could condemn property anywhere within the City of Los Angeles. 
  2. Expand the CRA's bases for asserting eminent domain to include eminent domain motivated by pure economic motives (essentially, the very conduct that created all the controversy when the Kelo opinion came down in 2005). 

If you think this sounds like a significant change in the law, you're not alone.  Several commentators have reacted negatively to AB 2531, including:

On the other hand, the California Redevelopment Association (not surprisingly) urges support for the bill:  "AB 2531 will give redevelopment agencies clear authority to use their resources for economic development–activities that will create and support jobs, assist industrial and manufacturing businesses, and investments to grow California’s green economy."

One of the interesting things about AB 2531 is that as initially proposed, it would have applied throughout California.  But during the course of the legislative process, the bill was amended and narrowed.  As passed, AB 2531 expressly applies only to the CRA in Los Angeles. 

More tomorrow once we know what happens. 

Imperial Beach Continues With Eminent Domain for Miracle Shopping Center

We've previously reported on the City of Imperial Beach's use of eminent domain to displace tenants in the Miracle Shopping Center.  According to a recent  San Diego Union Tribune article, "Eminent domain to begin soon against IB merchant," the City is continuing down that path -- this time with the business South Bay Drugs.  The owner has operated the business in the shopping center for 28 years. 

The City Council voted on Wednesday to move forward with the adoption of a Resolution of Necessity so the eminent domain process could begin.  But the case has a bit of an interesting twist.  

Specifically, the business owner stopped paying rent several months ago based on a City consultant's telling the business that the rent payments would be offset against the business' relocation benefits.  When the City sued to evict the business for non-payment of rent, a San Diego Superior Court judge sided with the business.  The City is now appealing that ruling, apparently hoping that if the business is evicted, it may not be entitled to any eminent domain proceeds.

If the tenant had a reasonable belief -- based on a statement by a City consultant -- that rent payments would be offset against the payment of future relocation benefits, it is difficult to understand the City's basis for trying to evict the tenant.  And if the City is not trying to avoid the payment of just compensation and business goodwill losses, why is it continuing to attempt to evict the tenant when the City can simply take possession through the upcoming eminent domain proceeding?

City of Fontana Considering Eminent Domain for Bridge Project

The City of Fontana will meet tonight to consider adopting a resolution of necessity to acquire property for the Citrus Avenue Interchange project.  According to a September 21 article in the The Sun, "Citrus Avenue interchange on Fontana City Council agenda," the City is anticipating that the majority of the funding for the $57.5 million project will come from Proposition 1B and Measure I funds, along with State Transportation Improvement Program funds.  

The City has apparently been in negotiations with the property owner, but has been unable to reach an agreement.  According to the article, the City hopes to start construction in August 2011.  The project is intended to:

  • Replace the existing bridge over the 10 freeway;
  • Improve the existing on and off ramps for the 10 freeway interchange;
  • Add a new ramp for traffic going northbound on Citrus Avenue to the westbound 10 Freeway; and
  • Make improvements to the Citrus Avenue and Valley Boulevard intersection.

Stanislaus County Considering Eminent Domain for Highway 99/Kiernan Ave. Interchange

According to a Modesto Bee article, "Stanislaus County Board of Supervisors Watch," Stanislaus County will vote tonight on whether to utilize the County's power of eminent domain, if necessary, to acquire property necessary for the Kiernan Avenue / Highway 99 interchange project.  The County apparently believes it can secure the necessary property much quicker than state transportation leaders.  Construction is scheduled to begin in January 2012.

The County is also hoping to secure $46.5 million in state bonds set aside for Highway 99 improvements, and in order to obtain this funding, having all the right of way for the project may be necessary.  As we've seen in recently, bond/stimulus dollars may be driving the right of way acquisition timing more than anything else.

Talk of Eminent Domain in West Oakland

According to a Bay Area Biz Talk blog post for the San Francisco Business Times, "Talk of Eminent Domain Stirs Fears in West Oakland," the City of Oakland is contemplating reinstituting its redevelopment agency's power of eminent domain in order to acquire a site for a new Foods Co. (Kroger) grocery store.  

The five-acre site in question is located at the corner of West Grand Avenue and Filbert Street, and is currently home to an industrial warehouse and an autobody shop.  While the proposed grocery store has done much of the negotiating and acquisition itself, it has been unsuccessful in reaching an agreement with a property owner that controls .9 acres of the site.  The store has therefore turned to the redevelopment agency for help.

The city council's economic development committee has approved the policy amendment to allow the redevelopment agency to reinstitute its eminent domain powers, and the matter will therefore go to a vote before the city council.  

The article also notes that over the last several decades, city officials have turned to eminent domain in West Oakland to acquire land for a BART station, for Interstate 980, and for a U.S Post Office branch.  

Short Primer on Eminent Domain Right to Take Challenges

One of the most vexing aspects of eminent domain for many property and business owners is the fundamental fact that the owner does not get to decide whether to sell the property.  I cannot recall the number of initial client meetings I've had over the years that began with the client asking "How do I stop this from happening?"

In most cases, my clients are disappointed to hear my answer:  "You can't."  But this answer is overly simplified, because there are actually several grounds for preventing the government from condemning property. 

A recent post on the Biersdorf & Associates eminent domain blog, "The Right to Take in the Eminent Domain Process: A Brief Overview," walks through, in a fairly straight forward way, some of the ways in which an owner can challenge right to take.  I think the piece represents a good starting point for someone asking the "how do I stop them" question.   The post explains that right to take challenges typically revolve around the government's "public use and necessity" findings, which often these days turns on claims that the property being condemned is blighted.

Owners thinking of challenging right to take should review the Biersdorf piece, but should do so with some additional background in mind with respect to California eminent domain procedures. 

In particular, owners should always think about the reasons for challenging right to take.  Often, even a successful right to take challenge accomplishes little more than delay.  This is because the government can often correct whatever irregularities caused the successful right to take challenge and then simply file the eminent domain action again.  It is crucial to keep that in mind before embarking down an expensive right to take fight. 

Does the fact that the government may fix the problem mean that challenging right to take is a fool's game?  Not necessarily.  Consider these possibilities:

  • In some cases, the mere fact of delay can defeat an entire project, meaning even a temporary victory may for practical purposes be permanent. 
  • In some cases, the costs of a delay may be so massive that the government will offer a substantial settlement in order to avoid the risk of fighting right to take, making this a good tactic if the ultimate goal is to obtain the highest compensation, not necessarily to prevent the taking from occurring. 
  • In a rapidly rising real estate market, delay can result in a much more favorable date of value (of course, in a falling market, "winning" the delay associated with a right to take challenge may ultimately prove costly for the owner).
  • And, of course, in some cases, the flaw in the government's right to take simply cannot be cured, meaning a victory really does prevent the taking.

Thus while, I rarely recommend them to my clients, with the right combination of facts and circumstances, right to take challenges can be pivotal to an overall litigation strategy, and no property owner should waive its ability to challenge a taking without having a discussion with a qualified eminent domain attorney.  

(Note that in California, many right to take challenges are waived by the owner's failure to object at the hearing on the government's precondemnation Resolution of Necessity, and all right to take challenges are waived if the owner withdraws the funds the government typically places on deposit at the outset of an eminent domain case.)

San Luis Obispo County Reconsiders Creation of Redevelopment Agency

The County of San Luis Obispo is considering a new way to finance infrastructure improvements -- the creation of a redevelopment agency.  According to a San Luis Obispo Tribune Article, "Redevelopment agency reconsidered," County supervisors have instructed their planning staff to investigate the pros and cons of instituting such an agency.  

County planners noted that a redevelopment agency could be set up to cover most rural communities, and specifically singled out San Miguel and Oceano as areas that could benefit from redevelopment.  While several individuals noted the positive aspects of redevelopment, others voiced concerns about the implementation of eminent domain to accomplish the redevelopment agency's purposes.

If the County decides to proceed with creating a redevelopment agency, it will likely take one to two years to get it up and running.

Reminder of IRWA Chapter 67 Meeting Next Week

Just a reminder for all you eminent domain and right of way practitioners still mentally on summer hiatus.  IRWA Chapter 67 (Orange County) starts its new year next week.  The September meeting is Tuesday, September 14, at the Holiday Inn, Santa Ana/OC Airport, located at 2726 South Grand Ave., Santa Ana CA 92705.

The meeting starts with a "meet and greet" at 11:30.  Lunch commences at 12:00.  We will have a lunchtime presentation from John Ellis of Integra Realty Resources in Los Angeles.  He's going to give us an update on the real estate climate here in Southern California, and I've made him promise to sugar coat it if it's going to be too depressing.   (John presented a similar topic last fall to Chapter 1, and it was very well received.)

Please RSVP to Joe Munsey (it's $15 for members who RSVP; $20 otherwise).  See you there! 

More Eminent Domain Issues Involving Accretion

For those who didn't get enough of littoral property rights, accretion, and avulsion in reading about this summer's Supreme Court decision in Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, there is a new case making its way through the system. 

In Maunalua Bay Beach Ohana 28 v. State of Hawaii, the court analyzed a 2003 Hawaii law that had the effect of transferring ownership of property created by accretion to the state.   In a split decision, the Hawaii Court of Appeal held in 2009 that with respect to property that existed at the time the law went into effect, any transfer of ownership constituted a taking. 

However, with respect to any new property created through accretion after the law's enactment, the Court held that no taking would occur, because "any claims that Plaintiff may have to future accretions are purely speculative, and other courts have held that a riparian owner has no vested right to future accretions."

In June, the Hawaii Supreme Court declined to review the case, and the plaintiffs have now filed a Petition for Writ of Certiorari before the U.S. Supreme Court.   Whether the Supreme Court accepts the case remains to be seen, but as fellow eminent domain blogger Robert Thomas of Hawaii aptly notes, the case does have the potential to fill in some gaps left by the Florida beach case:

  • Are future interests property, or can state legislatures confiscate them because they have not "vested?"
  • If a state appellate court finds a statute constitutional only by changing long-standing state common law and makes a formerly private right public, is that a "judicial taking?"
  • Are there some common law property interests that are so fundamental that a state court cannot alter them?

For more background on this interesting case, take a look at Mr. Thomas' September 8 post, Cert Petition In Hawaii Beach Takings Case: Is The Right To Accretion A "Property" Interest?

President Obama Proposes $50 Billion Transportation Spending Initiative

The use of "government stimulus" spending to spur economic growth has been a point of heated political controversy for the past several years.  A proposal outlined by President Obama over the weekend involves spending $50 billion on the nation's transportation infrastructure, focusing on the aging highway system, rail lines, and airports. 

According to a September 7 Wall Street Journal article by Gary Fields, "Obama in Infrastructure Push,"

At a Labor Day rally in Milwaukee, Mr. Obama said the initiative would be part of a larger effort to fix 150,000 miles of roads, lay or rebuild 4,000 miles of railroad track and refurbish some 150 miles of airport runways.

Not surprisingly, the proposal is not without controversy.  Mr. Fields' article quotes an email from House Republican Leader John Boehner of Ohio as saying "If we've learned anything from the past 18 months, it's that we can't spend our way to prosperity."

Time will tell whether this proposal moves forward.  However, regardless of your personal political views, if you live in California (or anywhere else with substantial population centers), it's hard to escape the conclusion that our transportation infrastructure needs a pretty serious face lift. 

And, if the spending plan moves forward, some of that $50 billion will likely involve efforts to expand right of way corridors, a task which almost always requires the use of eminent domain.