Revocation of Encroachment Permit for San Francisco's Central Subway Project: An Unconstitutional Taking?
Posted in Projects

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.

California Eminent Domain Report is a one-stop resource for everything new and noteworthy in eminent domain in California. We cover all aspects of eminent domain in California, including condemnation, inverse condemnation, and regulatory takings. We also keep track of current cases, project announcements, budget issues, legislative reform efforts, and report on all major California eminent domain conferences and seminars.

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