The Los Angeles Metropolitan Transportation Authority (“Metro”) is expected to file a complaint in eminent domain against the owner of a parcel of land in the Los Angeles neighborhood of Little Tokyo. The property is the site of one of three future stations for Metro’s Regional Connector. The Downtown LA News reports that Metro has made an offer to the owner for the property, which consists of three commercial buildings and a parking lot. The owner’s position according to the news report is that Metro’s appraisal does not take into consideration the “highest and best use of the property”.
Condemnation of Commercial Property by a Public Agency
Eminent Domain or Condemnation is the process by which a government agency acquires private property for public use. The term “eminent domain” is not limited to litigation; it includes all proceedings from the initial offer or notice from the condemnor up until the filing of a lawsuit, and through trial or settlement negotiations. If the owner of a commercial property accepts the first offer made to him or her, or otherwise settles with the condemning agency prior to litigation, this is still part of the eminent domain process. Highest and best use is a major factor that sets apart a traditional real estate transaction arising from eminent domain proceedings. A determination of value based on highest and best use must take into consideration practical issues concerning the property such as zoning and location. A public agency will have the condemned parcel appraised, but property owners should hire their own licensed real estate appraiser to determine the value of the condemned land.