11/03/2006

Eminent domain's rare use : San Francisco CA Chronicle, 11/2/06

Survey of Bay Area agencies finds only 2 homes taken over past decade

By Patrick Hoge

Bay Area governments have very rarely used powers of eminent domain to seize private homes and turn them over to developers over the last decade, according to a Chronicle survey of every local agency that does such projects.

Only two owner-occupied homes have been acquired by governments using eminent domain for redevelopment over the last 10 years, local officials reported. Officials razed one to build an apartment complex in Concord and the other to help make room for a new downtown in Pleasant Hill.

About 190 other types of properties in the nine-county Bay Area were forcibly bought by officials using eminent domain for redevelopment in the same period, 1996 to the present.
The 191 Bay Area cases in which eminent domain was initiated over the last decade to acquire property for redevelopment, mostly for private commercial or residential projects. Some were leases that were broken, some were properties that were never purchased. In two cases, the city of San Jose lost a court case and was unable to take the subject properties. Two agencies condemned property in Richmond.
Just 27 of 80 local agencies exercised the power to acquire land for projects that included public parking, a park, a community center and a library, The Chronicle found. And the vast majority of the properties were purchased for just a few high-profile projects intended to reform rundown neighborhoods.

A total of 82 of the Bay Area properties were acquired for four large projects in three cities. About half of those, 44, were taken to build two massive commercial developments in poor areas of East Palo Alto.

Most of the eminent domain actions, which involved breaking leases as well as taking buildings or land, were never challenged in court. The Chronicle's survey did not include cases where eminent domain was used for public works projects such as building roads or utilities.

The Chronicle canvassed the Bay Area's 80 redevelopment agencies - the local agencies charged with rehabilitating downtrodden neighborhoods and promoting economic development - because the main argument advanced by supporters of a property rights initiative on Tuesday's state ballot is that Proposition 90 will stop governments from taking people's houses on behalf of developers.

The Protect Our Homes Coalition's Web site features a giant hydraulic shovel looming over a house, its bucket's teeth evoking a Tyrannosaurus Rex ready to bite. A spokesman for the initiative's supporters said he believes the use of eminent domain might be more widespread than Bay Area officials admit.

Opponents say Prop. 90 backers are scaring California homeowners to promote a measure that would raise costs for revitalizing blighted urban areas and limit governments' ability to control land use.

"Across the state, very few owner-occupied houses have been acquired through redevelopment,'' said Robert Stewart, redevelopment manager for the city of Pleasant Hill. In 1998, Stewart's agency used eminent domain in 28 cases for a $136 million project that created a seven-block downtown area.

The Chronicle's survey findings mirror the results of a recent California Redevelopment Association survey of most of the state's 386 redevelopment agencies. It found that between 2000 and the end of 2004, eminent domain was initiated in the purchase of 28 owner-occupied homes.

All but three of those cases were settled out of court; in two of the remaining cases, the court had to decide who actually owned the properties in question.

Numbers tell only part of the story, however. Property owners - both residential and commercial - frequently claim they were not paid enough for their properties, whether they settled before going to court or not. Some property owners say that they were bullied by government officials and that they got inadequate relocation help.

Prop. 90 campaign spokesman Kevin Spillane said Wednesday that he did not trust the numbers that local redevelopment agencies gave The Chronicle. He also said looking at lawsuits filed or court judgments is misleading, because government has many tools to compel owners to sell, such as declaring property blighted or changing laws that determine what can be built on the property.

"The redevelopment agency's goal is to get the property at the lowest possible price, and they've got the weight of the process on their side,'' Spillane said.

That happened in Redwood City, where city leaders adopted a policy last year calling for staff to respect property owners in eminent domain cases after the San Mateo County grand jury said officials used "delaying tactics and verbal coercion" to force owners to settle at the lowest possible prices.

Stephen Howard, owner of Livermore Cyclery, said that as a politically active business owner for three decades, he was in a relatively good position about five years ago when his city's Redevelopment Agency decided to seize his business property to build a retail and entertainment center as well as office space around an old rail yard.

Howard said the process was torturous. His appraisal valued his building at $2.4 million; the city offered him $960,000. After two years and $80,000 in legal fees, the city paid him $1.8 million for the property.

City Economic Development Director Kevin Roberts said Howard got "top dollar'' plus relocation costs and the right to file a claim for any loss of business he could prove, something Howard did.

When it came to relocating, Howard said he got little help from the city.

"One of the bigger losses for me in this whole process was my sense of civic duty. I worked for 20 years on committees for the city,'' he said. "I don't care to anymore. It all changed, and it has left me so bitter.''

Gov. Arnold Schwarzenegger, who signed eight eminent domain and redevelopment reform bills this year, said Tuesday that the initiative is "poorly written'' and "could cost taxpayers billions of dollars and could prevent the most basic use of eminent domain laws for vital roads, schools and construction." Proponents said the governor had bought the opposition's "false and misleading'' arguments.

Critics of the measure admit that abuses can happen.

"The abuses that happen are usually shocking, and they make for terrible examples,'' said state Sen. Christine Kehoe, D-San Diego, who sponsored three of the eminent domain bills the governor signed this year. Among other things, the bills are designed to increase state oversight of redevelopment actions.

Assemblyman Guy Houston, R-Livermore, who has made support of Prop. 90 a centerpiece of his re-election campaign, said all the "doomsday scenarios'' about Prop. 90 are "hyperbole.'' If redevelopment projects are desirable, government should be willing to pay people what they want for their properties, he said.

"You're going to have to get the buy-in of the property owner,'' Houston said. "That seems very reasonable.''


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