PRECONDEMNATION BEST PRACTICES - Best Practices Webinar... · Precondemnation Best Practices Strategies…

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We will begin in a few moments. The call will be on mute for the duration of the presentation. If you have a question, please use the Q&A pane on your screen. Questions will be answered at the end of the presentation.

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September 9, 2009

nossaman.com

Welcome to our webinar:Precondemnation Best PracticesStrategies and Steps to Avoid Unnecessary Costs and Delays

PrecondemnationBest PracticesStrategies and Steps to Avoid Unnecessary Costs and Delays

September 9, 2009

Presented by F. Gale Connor & Michael Thornton

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Gale Connor is a partner at Nossaman LLP and has a distinguished legal practice with in-depth knowledge of the valuation process and entitlement to goodwill. He has guided public agencies through the condemnation process on a variety of property types.

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Michael Thornton is a litigation partner at Nossaman LLP with over 20 years experience working on eminent domain, inverse condemnation, valuation issues, and other complex business litigation for both public agency and private clients.

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Have A Clearly Defined Project

An adequate project description is a prerequisite to condemnation.(City of Stockton v. Marina Towers (2009) 171 Cal.App.4th 93.)

Redevelopment Agency: Where RDA has followed prescribed procedures for adopting a plan that includes the power of eminent domain, the Agency need not identify specific uses for the property it seeks to acquire.

For All Others: The public entity must have a clearly defined public project for the property.

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Does the Public Entity Have the Power of Eminent Domain for the Project?

Condemnation may be exercised only by persons authorized by statute to exercise that power. (C.C.P. 1240.020.)

General Authorizations: Cities: Govt. Code 37350.5 Counties: Govt. Code 25350.5 State: Govt. Code 15854 School Districts: Educ. Code 1047 Redevelopment Agencies: Health & S. Code 33391(b)

Specific Authorizations: Public Parks: Govt. Code 38010 Parking of Motor Vehicles: Govt. Code 37353 Extra Territorial Condemnation: 1240.050, 1240.125

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Does the Public Entity Have the Power of Eminent Domain for the Project?

Condemnation may be exercised only by persons authorized by statute to exercise that power for a particular use. (C.C.P. 1240.020.)

Specific limitations on the power of condemnation: Cemetery Land: Health & S. Code 8134, 8560, 8560.5 Golf courses acquired by City for same purpose: Govt. Code 37353(c).

Land already appropriated to a more necessary public use: C.C.P. 1240.610 et seq.

Best Practices:Confirm powers of eminent domain early in planning provision.

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CEQA Compliance

Preparation of a valid EIR or negative declaration for the proposed project is a prerequisite to condemnation.(See, Burbank Glendale Pasadena Airport Authority v. Hensler (1991) 233 Cal.App.3d 577; City of San Jose v. Great Oaks Water Co. (1987) 192 Cal.App.3d 1005.)

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Design Project To Avoid Unnecessary Severance Damages

Severance Damages: A measure of damages, separate from the value of the take; as compensation for injury to the remainder in a partial taking.

Severance damages may be caused by such factors as: substantial impairment of access; irregular size and shape of the remainder; loss of commercial frontage; and many other conditions caused by the projects effect on the remainder propertys fair market value.Temporary severance damages? (City of Fremont v. Fisher (2008) 160 Cal.App.4th 666)

The condemnee may assume that the property will be put to the most injurious use reasonably possible.(People ex. rel. Dept. of Public Works v. Silveira (1965) 236 Cal.App.2d 604, 622)

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Design Project To Avoid Unnecessary Severance Damages

Best Practices: Allow appraiser and/or right-of-way consultant and eminent domain attorney to walk the proposed right-of-way with project engineer before plans finalize.

Team approach: Identify physical problems, legal implications and design, engineering or legal solution.

The more detailed the plans at the time of the condemnation, less room for assumptions regarding most injurious use of property.

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Potential Liability for Planning Activities?

No liability for general planning:The deleterious consequences of haphazard community growth in this state and the need to prevent further random development are evident to even the most casual observer If a governmental entity and its responsible officials were held subject to a claim for inverse condemnation merely because a parcel of land was designated for potential public use on one or more of these several authorized plans [general plans; specific plans; district plans; and comprehensive plans], the process of community planning would either grind to a halt, or deteriorate to publication of vacuous generalizations regarding the future use of land.(Selby Realty Co. v. City of San Buenaventura (1973) 10 Cal.3d 110, 120.)

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Liability for unreasonable precondemnation activities: Klopping Damages

A public entity may be liable for precondemnation damages if: 1) The public authority acted improperly either by unreasonably

delaying eminent domain action following an announcement of intent to condemn or by other unreasonable conduct prior to condemnation; and

2) As a result of such action the property in question suffered a diminution in market value. (Klopping v. City of Whittier (1972) 8 Cal.3d 39, 52.)

Potential Liability for Planning Activities?

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Potential Liability for Planning Activities?

Examples of mere general planning, no liability.Enactment of general plan designating potential public uses of private land. (Selby Realty Co. v. City of San Buenaventura (1973) 10 Cal.3d 110).Adoption of redevelopment plan designating private lands for redevelopment. (Cambria Spring Co. v. City of Pico Rivera (1985) 171 Cal.App.3d 1080)Adoption of engineers report recommending right-of-way for street project and publication of project designs showing its effect onspecific parcels. (Jones v. City of Los Angeles (1979) 88 Cal.App.3d 965)City delay in acting on building permit to study possible acquisition of property as City park. (Guinnane v. City & County of San Francisco (1987) 197 Cal.App.3d 862)

4 year delay between announcement of intent to condemn and initiation of eminent domain where highest and best use of property was a long term investment, thus unreasonable delay did not cause damages. (City of Los Angeles v. Property Owners (1982) 138 Cal.App.3d 114)

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Examples of unreasonable conduct resulting in direct and special interference with property.

Initiating then abandoning condemnation action, announcing intent to resume without doing so resulting in owners inability to lease property. (Klopping v. City of Whittier (1972) 8 Cal.3d 39)

Designation of right-of-way by CalTrans which would cut-off access to land and, pursuant to a Freeway Agreement, the County denied a subdivision application on the grounds that the subdivided property would lack access once the freeway built, rendering the property undevelopable and unsalable.(Jones v. People ex. rel. Dept. of Transportation (1978) 22 Cal.3d 144.)

Potential Liability for Planning Activities?

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Examples of unreasonable conduct resulting in direct and special interference with property.(continued)

Public announcement of intent to condemn with no condemnation filed for more than 4 years, coupled with denial of permits to renovate property because such renovation would increase value of property.(Eleopoulos v. Richmond Redevelopment Agency (1972) 351 F.Supp. 63.)

Excessive delay by CalTrans in either offering to purchase or condemn land, which delay resulted in Citys inability to process development plans, rendering the property unusable. (People ex. rel. Dept. of Transportation v. Diversified Properties Co. III (1993) 14 Cal.App.4th 429.)

Potential Liability for Planning Activities?

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Key Distinction: Liability arises where condemnor's activities either directly interfere with owners use of his/her property places obstacles in the path of such use resulting in reduction in the value of the property.

Generally, no bright line test, except:Cause of Action for Inverse Condemnation if public entity fails to commence eminent domain within 6 months after adoption of a Resolution of Necessity. (C.C.P. 1245.260)

Adoption of a redevelopment plan, but no condemnation within 3 years, owner of any affected parcel may offer to sell to RDA at fair market value, and if Agency does not acquire or commence proceedings within 18 months, owner may file action in inverse condemnation. (Health & S. C 33399)

Potential Liability for Planning Activities?

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Best Practices:

Until the City Council/RDA Board votes, never state that the property will be condemned.

Usually announcement of intent to condemn is adoption of Resolution of Necessity. (Contra Costa Water Dist. v. Varguero Farmers, Inc. (1997) 58 Cal.App.4th 883, 898-900.)

Potential Liability for Planning Activities?

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Access to Property for Studies, Surveys, Appraisals, and Environmental Testing

To evaluate physical characteristics of property for planning and/or appraisal purposes C.C.P. 1245.010 et seq., provide that public entities may enter to make studies, surveys, examinations, tests, soundings, borings, sampli