California Eminent Domain Report

The International Right of Way Association's (IRWA) International Education Conference in Seattle has just wrapped up, and boy was it a great event.  Over 1,200 right of way professionals from across the United States and Canada (along with some visitors from Japan, Uganda, Saudi Arabia, Thailand, and the UK) all in one location for four days.  What could be better?  If you weren't able to make it, let me tell you that Alaska and Canada -- two chapters vying for hosting the 2017 event -- sure know how to have a good time. 

As I travel home on my flight back to Orange County, California, I'm stuck in a middle seat (ugh), but it's between two of California's finest right of way agents, Michele Folk from Overland, Pacific & Cutler, and James Staudinger from HDR, Inc.  We dubbed our aisle "Right-of-Way Row."  I know, not quite as catchy as the 1920's Bronx Bomber's "Murderer's Row," but I'm quite certain we could give Babe Ruth and Lou Gehrig a run for their money -- at least when it comes to right of way issues.  And as I sit between these two wonderful folks pondering what I've learned over the last several days, I thought I'd share a few good take-aways from the Conference.  So here it goes.

• Re-Establishment Cap to be Increased?  Most of us will agree that one of the great inequities for businesses being forced to relocate due to public projects and eminent domain is the $10,000 cap on reimbursement of re-establishment expenses.  (See 49 CFR 24 and our discussion here.)  The number was set many years ago, and it is simply too low to be meaningful.  Good news on this front:  word is the cap is likely to be increased to $25,000 in the near future.  The in-lieu relocation payment is also supposed to be significantly bumped.  And, so we don't have to revisit these figures again 5 or 10 years from now, the payment caps will also be subject to CPI adjustments each year. 
• Right of Way Acquisition Pre-NEPA Clearance?  When California beefed up its laws to make it more difficult and lengthy for public agencies to obtain prejudgment possession of properties through eminent domain, this was thought to be a benefit for property owners.  But unfortunately it's actually harmed owners.  Why?  Because many public projects are supported by federal funding, and FTA requirements currently dictate that, on the one hand, right of way acquisition cannot start until the project has been environmentally cleared, and on the other hand, posession must be obtained promptly in order to secure federal funding.  The result has been agencies diving directly into condemnation with almost no time to negotiate purchases before turning the properties over to the eminent domain attorneys.  That may all change, as we're told that the FTA may start permitting right of way acquisitions to begin prior to obtaining full environmental clearance under the National Environmental Policy Act (NEPA).  This will allow agencies to spend more time reaching negotiated acquisitions before resorting to condemnation.
• FHWA's Temporary Programmatic Waiver to be Extended?  Given the state of the economy, many people are upside down on their homes.  This creates a very complicated circumstance when the owners are forced out of their homes by eminent domain.  Typically, they're only entitled to the "fair market value" of their property, plus relocation expenses and a purchase price differential (PPD) if necessary to put them in comparable replacement housing.  But what happens to the all the money still owed to the bank on the loan?  The FHWA addressed this issue by enacting a "Temporary Programmatic Waiver" which allows public agencies to pay off the upside down loan through an administrative settlement.  That program is set to expire soon, but word is the FHWA will likely be extending it for another two years.   

For those of you that made it out, feel free to chime in with some of your take-aways as well.