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

The City of Fremont announced that it plans to condemn a small, 1,249 square foot property located at the corner of Warren Avenue and Kato Road in order to facilitate its Warren Avenue Grade Separation Project.

There's nothing particularly notable about the announcement, except for a potential regulatory overlay.  The parcel is apparently owned by AT&T Communications, and even though the property currently lies vacant, AT&T is apparently taking the position that it cannot agree to any deal with the City without first obtaining approval from the California Public Utilities Commission.  That is, unless the deal comes under the ambit of an ongoing eminent domain action.

As a result, though the December 30 article in the Mercury News, City of Fremont to enact eminent domain on another Kato Road property makes it sound like the parties are working amicably towards an agreement, AT&T actually suggested that the City proceed with the eminent domain action. 

This is not as unusual as it sounds.  Property owners and government agencies routinely engage in "friendly condemnations" where the amount of just compensation isn't seriously in dispute.  This can happen for any number of reasons.  For example, friendly condemnations happen:

• Because the owner wants to secure the favorable tax treatment that Internal Revenue Code section 1033 provides (though acquisitions made under threat of eminent domain should be sufficient to trigger these provisions);
• Where a property owner approaches the government with a plan to have the government purchase the property, and the parties agree to a "friendly condemnation" to secure section 1033 tax treatment for what would otherwise be an ordinary, arms-length sale;
• Where the involvement of third-party interest holders require condemnation to secure clean title in a transaction - or timely possession - where the fee owner has already agreed to a purchase price; or
• Where, as here, the owner is somehow precluded from making a decision to sell voluntarily.

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According to an article in the Valley News, "Riverside public hearing to consider eminent domain for bridge on Iowa Ave.," the Riverside City Council is contemplating using eminent domain to complete the Iowa Grade Separation Project. 

In order to (1) build the 500-foot long bridge over railroad tracks on Iowa Avenue and (2) construct necessary northbound and southbound ramps, the Project requires the acquisition of portions of seven properties on Iowa Avenue between Palmyrita Avenue and Spring Street.

The City has already begun negotiations with the owners, including obtaining appraisals and making offers.  The land acquisition is expected to cost about $2.8 million.  Construction is scheduled to begin in mid-2011, and will take approximately 16 months.

 

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According to the Alameda Corridor-East Construction Authority's ("ACE") Spring Newsletter (which was published yesterday), ACE plans to start construction of three major grade separation projects this year.  The three projects include:

• The Baldwin Avenue grade separation project in El Monte, which involves creating a roadway underpass beneath the Union Pacific Railroad tracks at the Baldwin Avenue crossing;
• The Nogales Street grade separation project in the City of Industry, which involves lowering Nogales Street 20 feet below the railroad tracks; and
• The San Gabriel Trench Project in the City of San Gabriel, which involves the lowering of a 1.4 mile section of Union Pacific Railroad track and the creation of bridges for vehicles and pedestrians to pass over the tracks (utility relocation construction will begin this year, with main construction commencing in 2011).

These three projects are part of ACE's larger, $1.1 billion project that includes 20 grade separations.

We previously reported hat ACE has already acquired most of the necessary right of way for the Baldwin Avenue project (some by eminent domain).  We assume at least some of the acquisitions for the Nogales Street project and the San Gabriel Trench will also require the use of eminent domain.  

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The Alameda Corridor-East Construction Authority ("ACE") is working on a $75 million project to improve rail service in the San Gabriel Valley.  The project involves constructing a rail underpass on Baldwin Avenue in El Monte, and it is part of a larger, $1.1 billion project that includes 20 grade separations.   

ACE has acquired nearly all of the right of way for the Baldwin Avenue underpass, but one owner, Fred Jast, has not moved.  According to a recent San Gabriel Valley Tribune article by Rebecca Kimitch, "El Monte man fights eminent domain claim," Mr. Jast has been fighting with ACE for several years:

"They have the right to take my property, but they don't have the right to steal my property," Jast, 69, said.

While the article describes gaining possession of Mr. Jast's property as "one of the last hurdles ACE faces before construction can begin," the Baldwin Avenue underpass is only part of the larger project.  ACE plans another, similar underpass in 2010 on Nogales Street South between Gale and San Jose in the City of Industry.  The Nogales Street (South) underpass will cost $84.1 million.  ACE will need to acquire a number of parcels for that part of the project.  

Other phases of the project are planned for 2011, including the $499-million San Gabriel Trench, and the Ramona Street, Mission Road, Del Mar Avenue, and San Gabriel Boulevard grade separations in San Gabriel. 

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