City of Sacramento Considering Property Condemnation to Build Sports Arena

The City of Sacramento is considering the use of eminent domain to acquire a property necessary to build an arena for the NBA team the Sacramento Kings. Last week, the Sacramento City Council voted to take part in negotiations for the purchase of a property which sits on a portion of the site of the future Kings arena in downtown Sacramento. Currently, a Macy’s menswear store occupies the piece of land subject to possible acquisition.

According to the City Council meeting agenda, the Kings’ owners, Sacramento Basketball Holdings, LLC, had been working towards a deal to buy the property, which fell through, and the owners asked the City to step in. The City’s decision to get involved is incumbent on the owners signing an agreement which would protect the city’s interests. The full August 13, 2013 City Council meeting agenda can be viewed here.

Eminent domain is usually a process reserved for public agencies to acquire land for public improvement projects. According to the CBS affiliate in Sacramento, the arena will be funded by the Kings owners, but its owner will be the City of Sacramento. This could allow the arena to be placed in the category of a “public project”.   However, the Sacramento Bee reports that property condemnation for sports arenas is not unusual.

Eminent Domain Round-Up: Road Improvements in San Diego

A Final EIR (Environmental Impact Report) is expected to be released this summer for Caltrans’ I-5 North Coast HOV/Express Lanes Project in Northern San Diego County. The purpose of this project is to improve traffic conditions on the 5 freeway by adding two HOV lanes both in the north and south direction, between La Jolla Village Drive and Harbor Drive in Oceanside. According to Caltrans District 11, daily traffic along this stretch of the I-5 could reach 300,000 by the year 2030.

A road widening project in the city of Ramona will affect property owners in the area. Settlements for land acquisition consisting of partial takings and temporary construction easements have been reached, except for the owners of two parcels. According to the San Diego Union-Tribune, the widening of San Vicente Road is intended to improve safety conditions on a twisting 2-mile portion of the street where over 20 car accidents have taken place in the past five years.

Read More: http://www.utsandiego.com/news/2013/jul/15/san-vicente-road-widening/

The City of Santee held a Resolution of Necessity hearing on July 10, 2013 to approve eminent domain for approximately 50 parcels of land earmarked for the Prospect Avenue Widening project. Improving traffic conditions, relocating utilities and adding bike lanes along a 1-mile portion of Prospect Avenue are among the project goals.

Regional Connector Project Requires Condemnation of Commercial Property in Little Tokyo

By Jeffrey Horowitz

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.

Source: http://www.ladowntownnews.com/news/metro-to-use-eminent-domain-for-little-tokyo-site/article_a1efa8cc-e43f-11e2-a53d-001a4bcf887a.html

Eminent Domain on the Crops of California Raisin Growers?

The takings clause of the Fifth Amendment does not only apply to the government’s use of eminent domain to take real estate.  This was emphasized by the United States Supreme Court in last week’s opinion entitled Horne v. Department of Agriculture, 569 U.S. ___ (2013).

Horne is about a California raisin grower based in the counties of Fresno and Madera, who challenged a federal regulatory scheme which has been applied to California raisin growers since 1949.  The regulations, “adopted to stabilize prices by limiting the supply of raisins on the market”, require raisin growers to frequently turn over a percentage of their crop to the Federal Government. 

The government took action against the grower for failing to participate in and comply with the regulatory scheme.  The government assessed significant fines and civil penalties against the grower.  As a defense, the raisin grower argued that the statutory scheme, known as the Agricultural Marketing Agreement Act of 1937 and the California Raisin Marketing Order, violated the Fifth Amendment as an unconstitutional taking of their private property without just compensation.  The grower’s argument was that “it would be unconstitutional for the Government to come on their land and confiscate raisins, or to confiscate the proceeds of raisin sales, without paying just compensation.” 

The grower first went through an administrative hearing process where the first administrative law judge rejected the takings defense, and the appellate administrative officer declined to deal with that constitutional defense.  The raisin grower then filed a lawsuit in Federal District Court, where they lost a motion for summary judgment filed by the government.  The District Court held that there was no physical taking of the crop.  The Ninth Circuit Court of Appeals affirmed, but held that it lacked jurisdiction to hear the grower’s Fifth Amendment takings defense. The Supreme Court of the United States agreed to hear the case in order to decide the jurisdiction issue.

The government argued that the raisin grower’s claim was premature, because it should have first pursued its takings claim in the Court of Federal Claims, under the Tucker Act.  The Supreme Court disagreed, explaining that under the statutory scheme at issue, Tucker Act jurisdiction was withdrawn.  In fact, the regulatory scheme specifically gives the Federal District Court jurisdiction to review administrative rulings.  Therefore, the raisin grower’s Federal District Court claim was not premature.  The Supreme Court further held that a “takings-based defense” can be raised by the raisin grower in connection with the government’s action to enforce the regulatory scheme. 
The Supreme Court unanimously ruled that the raisin grower “raised a cognizable takings defense”, and that the Ninth Circuit Court of Appeals made a mistake when it declined to resolve that defense.  The ruling of the Ninth Circuit was reversed, and the case was remanded back to the Court of Appeals for further proceedings, where a determination will have to be made as to whether the government’s imposition of fines and penalties on the raisin grower violated the Fifth Amendment to the Constitution. 

It will be interesting to see what the Ninth Circuit Court of Appeals does with this case on remand.  Will the Court of Appeals put a stop to the confiscation of the crops or proceeds of the crops of California raisin farmers that has been happening since 1949?   Will this case eventually wind up back with the Supreme Court?

San Bernardino County Eminent Domain Update

Last week, the Victorville City Council held a vote on a settlement with a local church, for a partial taking of the property belonging to First Assembly of G-d of Victorville for a road improvement project. The Daily Press reports that the church will receive a total settlement of $2.5 million for the partial condemnation, which affects access to the property as well as reducing available parking spaces.

Read the full article here: http://www.vvdailypress.com/articles/city-40693-settles-victorville.html

In Ontario, the City Council voted on a resolution to initiate eminent domain proceedings against several businesses for a project that is intended to improve traffic conditions at a rail crossing on Milliken Avenue. The city is seeking easements on two businesses, including a distribution center for Sears and Kmart stores. The Daily Bulletin provides this description of the project:

“The Milliken grade separation will eliminate the at-grade crossing by elevating the thoroughfare over the trains adjacent to Mission. As part of the project the city is seeking the easements to relocate Southern California Edison poles.”

Read more: http://www.dailybulletin.com/news/ci_23397329/grade-separation-project-could-land-ontario-litigation-dispute#ixzz2VZvpuSGO

Bay Delta Conservation Plan Administrative Draft is now complete - Eminent Domain may be used in Northern California

On May 29, 2013, the California Natural Resources Agency released chapters 8-12 of the Bay Delta Conservation Plan (“BDCP”), thereby completing the administrative draft available for public review. According to a brochure on the BDCP official website, the estimated cost of this project is 24.54 billion and it will span the course of 50 years. Chapter 8 of the BDCP, which provides a detailed outline of costs and funding opportunities, also estimates the cost for land acquisition at $166 million. The project, led by California Department of Water Resources and supported by other public water agencies, will affect counties in Northern California. The BDCP’s objective is conservation and water quality improvement in the San Joaquin Delta.

The Sacramento Bee reports on the following components of the project, which will affect a 10-mile stretch of Sacramento County farmland:

“• Three intakes, each consisting of a 40-acre site elevated 2 to 5 feet above the existing levee, with industrial buildings six stories tall.

• A 1,000-acre reservoir south of the town of Hood, called an intermediate forebay, to provide gravity flow to the two main tunnels.

• High-voltage electrical substations and miles of power lines.

• Barge landings on the river's edge, each as long as a football field, one near Walnut Grove and another along the north fork of the Mokelumne River, on Tyler Island.

• A soil "borrow" area north of Hood, totaling 610 acres, to provide earth fill for the intake sites and other facilities.

• Disposal areas totaling 717 acres for "tunnel muck," the mixture of soil and excavation chemicals dug from the tunnel bores.”

Read more here: http://www.sacbee.com/2013/04/28/5377328/delta-tunnel-project-to-radically.html#storylink=cpy

The Sacramento Bee further reports that prime farmland, including vineyards, will be affected by the BDCP, which also seeks to address the affects of climate change on California landscape. In addition to affected farmland, some California homeowners may see their property become the subject of condemnation for the tunneling portion of the project. The condemning authorities might use eminent domain against homeowners in the County of Sacramento.

More info: http://baydeltaconservationplan.com/Home.aspx