California Eminent Domain Report

As you may recall, we've been closely following an eminent domain action pending in Sacramento County Superior Court involving the Rancho Cordova Redevelopment Agency.  The case involves the RDA's efforts to acquire a 9-acre site owned by the Lily Company.  After the property owner lost its challenge to the RDA's right to take the property, the case proceeded to a jury trial with respect to the property's value.  The results are in, and it's not a happy ending (at least so far) for the RDA. 

The Sacramento Bee reports in its article, "Price tag sky rockets for Rancho Cordova in land case," that the RDA initially estimated the property's value at $2.2 million, but after taking into account contamination clean-up costs, it dropped its offer to $387,000.  The jury came back with a much different conclusion:  $7.9 million -- more than 20 times the agency's offer.  This value also included the remediation costs (meaning the jury really came in at $9.6 million, less $1.7 million for clean-up).  You can read more about the case on Gideon's Trumpet (our colleague Professor Kanner keeps a running tab of "lowball" offers by government agencies, although I'm not sure why his figures differ a bit from the Sacramento Bee article.) 

What's next?  The RDA can:

• Pay the judgment and record a final order of condemnation on the property, thereby transferring title to the RDA; 
• Appeal the jury's determination, but that's always an uphill (and expensive) battle; or
• Abandon the condemnation action, deciding not to go forward with the acquisition. (Absent some sort of prejudice, the Eminent Domain Law allows an agency to abandon an eminent domain action at any time, subject to the agency's paying the property owner's attorneys' fees and costs, along with any damages caused by the abandoned taking.)

We'll see what the agency ultimately does, but I doubt it likes any of the options.  

You may also be wondering how a redevelopment agency moves forward with a condemnation trial and pays a judgment given the pending California Redevelopment Association lawsuit before the Supreme Court which has essentially stayed all redevelopment agency activities.  If you happened to catch my presentation to IRWA Chapter 1 (Los Angeles) yesterday on the "Death (and Rebirth?) of Redevelopment," you may recall I mentioned that redevelopment agencies are still allowed to pay enforceable obligations; a judgment in condemnation would fall under this category, so here the RDA can fork over the money.