California Eminent Domain Report : a blog following condemnation, inverse condemnation, and regulatory takings written by attorneys with Nossaman LLP.

It is common practice for government agencies to condition approval of large developments on providing off-site public improvements.  Road widenings, park dedications, etc., are all too familiar for California developers.  When those improvements require others' property, many times the government agency utilizes eminent domain on the developer's behalf (with the developer footing the bill).  But what if the agency refuses?

According to an Inside Self-Storage article, "Derrel’s Mini Storage Owner Battles City, Homeowner in CA Self-Storage Eminent Domain Case," a self-storage developer is facing this situation in Visalia.  And he's not too happy about it.  The City previously approved the owner's storage facility, subject to an agreement which required all nearby owners to widen and improve the road to the proposed development.  The self-storage developer has agreed to pay for the street widening (a $1.4 million project), but there is one hold-out home owner who refuses to sell the frontage necessary for the street widening.  

The developer has sued the home owner for refusing to sell after entering into an agreement to do so, and he's also demanding that the City use eminent domain to acquire the frontage property.  The City has so far refused, and the developer is threatening to sue the City as well.  

You may wonder how the developer could threaten the City for refusing to use eminent domain.  There's actually a statutory obligation under the Subdivision Map Act (Cal. Gov. Code sec. 66462.5) for public agencies to acquire property on the developer's behalf when required for off-site public improvements.  Not knowing all the facts, it's tough to determine whether the obligation applies here, but if it does, the City may need to either (1) withdraw the street widening condition of approval (and allow the development to move forward), or (2) acquire the necessary property on the developer's behalf.  

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Government agencies often require developers of large projects to build the necessary infrastructure to accommodate those proposed projects.  Examples include building a new roadway to reach the project, widening an existing roadway due to the project's adding extra trips to the daily traffic, and installing improvements for utilities and flood control, among other things.  But how do developers acquire the right-of-way when the necessary property is privately owned? 

The proposed Merriam Mountains residential development project in north Escondido is a perfect example of how the above scenario typically plays out.  In Morgan Cook's November 9 North County Times article, "ESCONDIDO: County could use eminent domain for Merriam Mountains development project," Cook explains that the Merriam Mountains 2,700-unit proposed residential development is conditioned upon the developer's widening Deer Springs Road from two to four lanes for a two-and-a-half mile stretch between Twin Oaks Valley Road and the I-15. 

Since this widening requires the acquisition of private property, the County of San Diego may exercise its power of eminent domain on behalf of the developer, NNP Stonegate-Merriam, in order to acquire the land from the necessary property owners. So what are the impacts of the proposed Deer Springs Road widening?  According to a study completed by one property owner, the widening will require the acquisition of 17.55 acres of private property. 

Mr. Cook's article explains that County policy requires the satisfaction of five criteria before the use of eminent domain may be exercised on behalf of a developer:

1. The developer must have made reasonable offers based on a fair market value appraisal report and made every reasonable effort to acquire the property rights;
2. Alternative locations for the public project must have been considered and found impractical;
3. County staff must have deemed it unwise to abandon the public project altogether;
4. The developer must have agreed to pay all the county's costs, including land purchases and eminent domain proceedings; and
5. The Board of Supervisors must have mapped out the land to be acquired. 

Should government agencies be able to exercise the power of eminent domain on behalf of private developers?  On the one hand, some argue that it is unfair to use eminent domain to accommodate the proposed development of a private developer.  On the other hand, it is the government that is imposing upon developers the requirements to build the infrastructure improvements.  If the agencies that impose the requirements do not provide a means of implementing those requirements, developers may be left with no way to develop their properties, regardless of a project's overall merit.

Photo Credit: Cohdra from Morguefile.com

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