California Eminent Domain Report

On April 1, Nossaman’s Eminent Domain Group hosted a webinar to discuss the impacts COVID-19 is having on the Right of Way industry.  First, I’d like to thank the people who attended, many of whom added thoughtful questions to the discussion.  It’s clear a lot of people are giving these issues a lot of thought.  Second, obviously things continue to evolve at a breathtaking pace, and even by the time this post goes from being drafted to appearing on the blog, things are likely to change. 

Note that this post is not meant to recap the things we discussed at the webinar.  If you weren’t able to join us and want to review what we covered, feel free to download the COVID-19 PowerPoint we used, or watch the entire recorded webinar.  No, the purpose of this post is to provide some insights as to what other right of way professionals are thinking about a few of these issues.  During the webinar, we asked several poll questions, and since the Nossaman team found the results interesting, I’m hoping some of you will as well ...

COVID-19 has undoubtedly upended the world, including the way we do business and the future of our economy. We have received a number of questions and concerns from clients in the right of way industry on how the current pandemic affects the way we do business, and what to expect going forward. Please read on for links to helpful resources...

As we have seen far too many times in California, eminent domain becomes a key tool for public agencies in order to keep public works construction on schedule and avoid jeopardizing state or federal funding.  According to an article in the Santa Cruz Sentinel, Santa Cruz council approves eminent domain for road widening, situation is playing out in Santa Cruz, where the City Council recently approved the adoption of a resolution of necessity to acquire two properties by eminent domain in order to satisfy a July deadline for a $2.8 million construction grant.

The properties in question ...

Before an eminent domain action is filed, public infrastructure projects involve years of planning, environmental approvals, design, and property negotiations.  During this time, property owners and real estate agents/brokers are often faced with deciding what to disclose about the potential condemnation to prospective tenants when attempting to lease out space.  It is a difficult position to be in, as (i) disclosing too much makes it extraordinarily difficult to find a tenant willing to pay market rents with the looming "cloud" of condemnation, and (ii) disclosing too ...

At some time or another, most of us have experienced sitting in our cars at a railroad crossing waiting for what seems like the longest freight train in the world go by. And it always seems to happen when you’re late for an appointment or for once trying to make it home in time for dinner.  If you live or work in the San Gabriel Valley, sitting in traffic waiting for the freight-train to go by is likely a daily occurrence.

With vehicle and rail traffic projected to increase, in 1998, the San Gabriel Valley Council of Governments (SGVCG) decided to do something about the safety and traffic ...

Because billboards are typically near public transit, they are routinely impacted by public projects such as street widenings, highway and freeway expansions, and grade separation projects.  When impacted, billboard companies may make claims for (i) the value of the billboard itself (fixtures and equipment), (ii) loss of business goodwill, and (iii) relocation expenses.  Usually the first two items can be addressed through a successful billboard relocation.  But when happens when a moratorium is in place prohibiting new billboards?  Does a moratorium on new billboards ...

One issue that eminent domain attorneys face routinely involves helping businesses obtain the relocation benefits to which they are entitled under the law, while at the same time pursuing a claim for lost business goodwill.  To us, there is a clear difference between the two, as we are indoctrinated early in our careers into understanding that the two types of relief, while seemingly closely related, are instead largely unrelated in the eyes of the law.

But to a typical business owner facing a forced relocation due to a government acquisition, the issues can appear thorny and complex.  ...

On March 7th, a U.S. District Court sided with the Federal Aviation Administration (FAA) on whether the Uniform Relocation Act (URA) provides private property owners with a private right of action: it does not.  The Pacific Shores Property Owners Association sued the FAA over improvements the Border Coast Regional Airport Authority is required to make to a regional airport, Del Norte County Regional Airport, also known as Jack McNamera Field.  To meet the FAA's runway safety standards, the Authority had to close roads and acquire nearby lots to make up for the wetlands lost as a result ...

According to an article in the Mercury News, Fremont may use eminent domain process to buy land needed for proposed downtown, the City of Fremont's City Council will be holding a public hearing on Tuesday to consider the adoption of a resolution of necessity to acquire a property for the Capitol Avenue Extension Project.  The impacted property is located at 39138 Fremont Blvd., and it consists of 65,150 square feet of land improved with a three-story building.

The Mercury News article indicates that the staff report supporting the adoption of the resolution of necessity provides ...

The FHWA recently published a series of useful short videos on its website.  For those of you working on transportation projects involving federal aid, check them out below:

• Right-of-Way Coordination and Certification Requirements.  Before an agency gets to construct its project, it needs to coordinate and certify the right-of-way.  This video provides an overview of the initial coordination process when federal funds are involved, including what must be completed before putting a project out to bid, and the need to obtain physical possession of the impacted properties.

I'm at the IRWA Education Conference in Atlanta, and yesterday I attended a number of interesting sessions.  Since I don't have time to write about all of them, I want to focus on the presentation that discussed local agency practices where their projects receive federal dollars.  And even that one session contained far too much information to reduce to a single blog post, so I'll focus on two of the four speakers, FHWA Realty Specialist Marshall Wainwright and Oklahoma Department of Transportation Assistant Division Manager for Right-of-Way Kevin Stout. 

Mr. Wainwright started the ...

It's been a crazy couple weeks with the redevelopment saga continuing to play out in California.  But let's shift gears and take a breather – at least for a moment – while hundreds of redevelopment agencies continue to hang on for dear life.

I received a call today from a business owner who faced a potential eminent domain action, and the owner unforntuately did not take the appropriate steps to preserve goodwill and find a suitable relocation site.  The owner's difficult dilemma prompted me to mention an excellent article I came across a while ago from Martyn Daniel LLC

We've previously reported on the Fresno Unified School District's plans to build its $20 million southeast elementary school which requires the acquisition of 20 different parcels.  While it initially appeared that the acquisition of the Foursquare Gospel Church would be a major hold-up, that no longer appears to be the case. 

According to a recent KMPH Fox News article, "Fresno Church Faces Eminent Domain," the District has reached a deal with the Foursquare Gospel Church, and eminent domain will no longer be necessary.  However, the story does not quite end there, as the ...

Both California and federal eminent domain laws set forth obligations on "public entities" or the "government."   When these specific terms are used, do the statutes also apply to public or private utility companies exercising the power of eminent domain?

One example is found in the Uniform Relocation Assistance and Real Property Acquisition Policies Act, which allows a landowner to seek reimbursement for costs and attorneys' fees when a condemnation action instituted by a "federal agency" is abandoned by the "United States."  (42 U.S.C. 4654.)  If a utility company ...

The site selection process for a new school is typically a difficult one, as large acreage is usually needed in the middle of a populated area.  When these two factors are combined, eminent domain often follows.  

According to a recent article in the Fresno Bee, "Fresno Unified moves ahead on southeast elementary school," this is precisely the situation faced by the Fresno Unified School District as it proceeds with building its new $20 million southeast elementary school.  The District needs 8.43 acres, requiring the acquisition of 20 different parcels from 17 different owners.  In ...

Business goodwill appears to be a hot topic for the California Court of Appeal, as it was the primary issue in the recent LAUSD v. Casasola opinion, and is again the focus of an unpublished decision that came down last week, People Ex Rel. Department of Transportation v. Ahn.

In Ahn, Caltrans condemned a shopping center where Ahn owned and operated a framing store and art gallery.  After Caltrans took possession, the owner transferred to a relocation site.  At trial, Caltrans' goodwill expert determined the business had $26,000 of goodwill in the "before condition," and ...

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.  

In Los Angeles Unified School District v. Casasola (Aug. 5, 2010), the Court of Appeal examined the interrelationship between recovery of lost business goodwill pursuant to Code of Civil Procedure section 1263.510 and recovery of relocation expenses pursuant to Government Code section 7267 et seq. 

My colleague, Gale Conner, prepared a good summary of the Casasola case detailing the facts and the Court's reasoning.  The bottom line is that the Court held that items that might be recoverable under the Relocation Act cannot be included in a claim for loss of business ...

We've previously reported on the City of Vista's moving forward with the use of eminent domain to acquire the Riviera Motel and other properties in order to assemble property for an auto mall.  It appears that the eminent domain dispute has now reached a resolution, as the North County Times is reporting that Vista city council approved a settlement with the motel owner and another nearby property owner.

According to the article, "VISTA: City approves $3.2 million in property purchases," the Riviera Motel owner is receiving compensation of $1.65 million for the .71-acre ...

I mentioned in an article last week that many redevelopment agencies are facing budget issues; the city of Imperial Beach is facing a similar, but slightly different, problem:  after investing over $8 million in bond money for redevelopment of the Miracle Shopping Center, the economic climate has made it impossible for the city to find an interested developer. 

Nevertheless, the city decided to raise more funds, and purchase the shopping center anyway, hoping the city's ownership would make the site more attractive to developers.  With city ownership now in ...

For years, Cathedral City has been acquiring property by eminent domain as part of its 23-acre Eastside Downtown Area redevelopment plan, which seeks to redevelop downtown Cathedral City into a 39-unit commercial center.  Our firm has also been involved in the project for years, having assisted several property owners impacted by the redevelopment agency's plans. 

According to a January 26 Desert Sun article, "Cathedral City council votes to pay $535,000 in eminent domain land deal," Cathedral City recently approved a $535,000 settlement with one of the final remaining ...

The City of Visalia's road widening project at the Mooney Boulevard and Walnut Avenue intersection depends on the acquisition of a strip of private property necessary to relocate power poles.  According to the Visalia Times-Delta article, "Power poles, land acquisition trip up Visalia's plans for transforming Mooney/Walnut intersection," the necessary strip of land belongs to the owners of the Peachtree Shopping Center.  Those owners do not want the power poles on their property, and Visalia's City Council has therefore approved the use of eminent domain.

According to the owners ...

There was an interesting discussion at the IRWA Chapter 57 seminar last Friday, and it’s one that I have seen play out many times in many contexts, so I thought it was worth a short discussion here. The issue was when the illegal gift of public funds doctrine comes into play in the context of an eminent domain case (the text appears in Article XVI, section 6 of the California Constitution). The concept is simple: The government cannot give away public funds to a private person or company. The eminent domain scenario is all too frequent: A proposed settlement is for more than the property’s ...

The Inland Empire chapter of the International Right-of-Way Association is holding its 2009 Education Seminar and Fundraiser (Casino Night) on October 16, 2009, at the Eagle Glen Golf Course in Corona.  The event starts with lunch at 11:30 a.m. and goes through a raffle at the end of the casino night at 9:45 p.m.

The education program is entitled "Looking Forward in a Backward Right of Way World," and it features Bruce Norris of The Norris Group, talking about foreclosures, followed by three moderated panels, one on acquisitions, one on relocations, and one on eminent domain.

One ...