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

There was both good and bad news this month for San Francisco’s planned Central Subway Project.  Earlier in the month, the Federal Transit Administration issued its approval which permits San Francisco to begin the final design stage of its $1.6 billion subway which will ultimately link AT&T Park with Chinatown. 

To secure the necessary right-of-way, San Francisco's Department of Public Works recently notified 12 retailers along Stockton Street that their minor encroachment permits, authorizing them to occupy City-owned sub-sidewalk space, will be revoked. They were given until the end of this month to vacate those areas. This affects such high end retailers as Macy’s, Neiman Marcus, and Barneys.

A relative newcomer to Union Square, Barneys opened for business in the old FAO Schwartz building in late 2007. Having so recently built a perfume and cosmetics counter beneath the Stockton Street right of way in reliance upon the encroachment permit, Barneys challenged its summary revocation.

Arguing, among other things, that the revocation constitutes an unconstitutional taking of its real property interests without due process or payment of just compensation, Barney’s appealed the DPW's decision to the full Board of Supervisors.  At the hearing earlier this week, there was some dispute as to the actual ownership of the space in question.  However, in a 10-0 vote, the Board ultimately rejected Barney’s appeal. 

While this decision likely seals the fate of the perfume counter, it may only be round one of a more protracted battle.  Could a claim for inverse condemnation be next?  Stay tuned to this blog for updates.

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San Francisco's 99-year-old, historic Hugo Hotel, famed for furniture hanging off its outside walls, has been acquired by eminent domain by the San Francisco Redevelopment Agency.  

Kaleene Kenning's October 3, 2009 article, "Furniture on the Outside," explains that the historic site was purchased by the Patels in 1964 for $400,000, but when the Redevelopment Agency came knocking, they wouldn't sell for less than $7 million.  The Redevelopment Agency's $3.25 million offer was not accepted and an eminent domain action was filed.  The owners were eventually awarded $4.6 million for the property.

Kenning reports that:

the historic site is slated to be demolished and replaced with low-cost housing units with stores at street level.

Photo Credit:  Flickr, Whole Wheat Toast

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