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

We've reported in the past about some of the regulatory takings issues created as a result of the Western Riverside County Regional Conservation Authority's ("RCA") efforts to conserve property pursuant to the Multiple Species Habitat Conservation Plan ("MSHCP").  It now appears that those conservation efforts have created quite the turmoil with citizens in the City of Murrieta.

According to a recent North County Times article, "MURRIETA: Landowners frustrated with conservation board, city leaders who refuse to meet," about 100 members have organized a group called the Members of Citizens for Quality of Life in Murrieta in an effort to get the City's and the RCA's attention about the ramifications of the MSHCP.  In particular, the property owners are frustrated with the MSHCP process and how they've been unable to develop their property without having to give up large portions of their land. 

The article recounts stories we've heard from many property owners, describing the exhausting maze of paperwork that must be completed, the hundreds of thousands of dollars that must be spent on biological studies, and the repeated denial of any attempt to ultimately develop.  And at the end of the process, the owners claim that they are often left with little choice but to sign a contingent, below-market-value purchase agreement proposed by the RCA that, according to one owner, "will destroy your ability to ever sell your land."

The group wants a sit-down meeting with the City and the RCA, but so far, that meeting has been rebuked.  The reason, according to the City and the RCA, is due to the fact that there is a pending lawsuit brought by the Calvary Chapel - Murrieta seeking $25 million in damages as a result of the MSHCP's designating the church's 118-acre property for conservation.  It will be interesting to follow that lawsuit and the impact it has on negotiations with other owners.

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This week the Orange County Register reported in an article titled "Transportation agency to spend millions saving habitat" that the Orange County Transportation Commission is "beginning quietly" with what could be "one of the largest habitat preservation efforts in county history" by which the OCTA may acquire millions of dollars of land to protect native landscape. 

The article states:  

The preservation push [is] meant as a hedge against possible habitat damage from a 30-year, $4.8 billion freeway improvement project the agency is planning.

According to the article, the OCTA will use Measure M Funds (the County's 1/2 cent sales tax initiative) to purchase the properties, and the OCTA is currently studying 26 properties for possible acquisition, hoping that the current economic climate will make the owners interested in selling.

Such large-scale habitat conservation efforts are becoming a standard approach for trying to achieve balance between the need to construct infrastructure and the need to protect wildlife habitat.  For example, we previously reported on conservation/acquisition efforts by the Western Riverside County Regional Conservation Authority, which was established by the County of Riverside and other jurisdictions to implement a massive Multiple Species Habitat Conservation Plan, or "MSHCP," and similar plans have been adopted in a number of other parts of California.

Experience from these other conservation plans suggests that in addition to balancing infrastructure needs and wildlife habitat needs, the OCTA will find itself needing to balance the rights of the owners of potential conservation properties, ensuring that they are truly "willing sellers" -- not sellers with no option but to sell because their property has been identified as potential conservation land.

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In 2003, the County of Riverside and the cities within western Riverside County formed the Western Riverside County Regional Conservation Authority (commonly known as the "RCA").  They delegated to the RCA the task of acquiring approximately 153,000 acres of privately owned property deemed necessary for habitat conservation under the Western Riverside County Multiple Species Habitat Conservation Plan (the "MSHCP").

Many property owners whose land falls within the MSHCP conservation area find themselves with few options:  generally, they can either (1) sell their property to the RCA at a dramatically below market-value price (usually on the RCA's payment terms); or (2) allow the RCA's looming conservation cloud to hang over the property for years, essentially rendering it worthless.

Nossaman attorneys Rick Friess and Brad Kuhn have assisted several property owners over the past few years in challenging the RCA's acquisition/conservation tactics.  A few past examples:

• Last year, we represented Winchester 700, the owner of 454 acres of property north of Murrieta between the I-215 and SR-79, in an arbitration with the RCA.  The County had refused to process Winchester 700's proposed 1,034-unit residential development, and while the RCA demanded 100% conservation, it never made an offer.  The RCA ultimately agreed to pay over $70 million for the property, along with other acreage owned by Winchester 700.
• Earlier this year, we represented San Jacinto River Ranchos and the Meadows at Lone Cone, two owners working together to develop just over 200-acres of residential property.  Development entitlements for their land were stalled when the RCA deemed the property necessary for conservation.  The owners and the RCA ultimately reached a deal allowing the developers to keep about 70 acres for development purposes, with the RCA paying for the remaining property.

This week, after months of effort on behalf of Saul and Maria Delgado Velazquez, the owners of 80 acres of property in Wildomar that the RCA deemed it wanted for 100% conservation, we were able to assist in closing a sale transaction with the RCA.  The process was not easy, as the Delgados were forced to file a lawsuit against the RCA, alleging that the RCA's actions constituted a de facto taking and resulting liability for inverse condemnation, precondemnation damages, and violations of the state and federal relocation assistance and real property acquisition policies act. 

The RCA offered the Delgados a price well below fair market value, and refused to pay the purchase price until 2013.  After the Delgados filed their lawsuit, the RCA's Board approved a deal whereby the RCA is acquiring the property in phases at a value acceptable to the Delgados.  The acquisition of the first phase just closed.

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