California Eminent Domain Report

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 District now appears embattled with another church impacted by the project. 

That other church, La Promesa Church, does not appear close to reaching a deal.  While the District has offered La Promesa $440,000 as just compensation, the church pastor has indicated that this offer is insufficient to find a suitable relocation site.  If no deal is reached in the coming months, it sounds as if the District will proceed with a condemnation action to acquire the church property.  Check out the video news coverage for yourself. 

If the District proceeds with the condemnation, normal valuation rules may not apply.  California law includes a statute specifically tailored to the condemnation of "non-profit, special use" properties such as churches. 

Under Code of Civil Procedure section 1263.321, such properties may be valued by calculating the cost to purchase replacement property, along with the reasonable cost of making the property suitable for the same non-profit, special use.  This includes the full replacement cost of the improvements.  And, significantly, that replacement cost value does not take into account "depreciation or obsolescence," a crucial variance from a traditional replacement cost approach to value.