Monthly Archives: September 2010

Your Tax Money at Work – Los Angeles (Cont’d.)

Don’t miss an article in, by Tim Cavanaugh, entitled L.A.: Leading the Nation in Vacant Lots, September 7, 2010, discussing some of the fiscal misadventures of the Los Angeles Community Redevelopment Agency. Here is an excerpt: 

“The CRA’s post-1992 involvement in South L.A. has produced a nearly unbroken string of million-dollar projects that don’t get built. These projects come with big promises of affordable housing, high-end retail, world-class restaurants and private-public achievement. They proceed through costly subsidies and exploratory efforts. They nearly always involve eminent domain seizures of valuable land. They get gorged on by the friends and families of local politicians. And in the end, they produce vacant land.

“The CRA maintains a euphemistic log of its failures, so you can see what I’m talking about. The 107-acre Watts Project has become nothing. The Normandie 5 Redevelopment Project has become nothing. The massive and heavily promoted Marlton Square project has become nothing. My personal favorite, the Vermont/Manchester project, has become nothing.”

For the entire Reason article go to  

Follow up. For another article reviewing the dismal record of the Los Angeles redevelopment agency, go to

Brigham-Kanner Property Rights Conference Coming Up

The seventh annual Brigham-Kanner Property Rights Conference will be held on September 30 and October 1, 2010, at William & Mary College School of Law in Williamsburg, Virginia.

For details of the program presentations and a copy of the brochure contact Ms. Kathy Pond, Dean’s Office, College of William & Mary Law School, P.O. Box 8795, Williamsburg, VA  23187-8795, telephone 757 221-3796.

The winner of this year’s Brigham-Kanner prize is Professor Carol M. Rose of the University of Arizona.

CLE Program on Eminent Domain

CLE International will sponsor a program on eminent domain on October 28-29, 2010, at the Hotel Nikko in San Francisco. The presentations will cover a variety of topics ranging from developments in substantive law to practice matters and the use of expert witnesses.

For details and a copy of the program brochure, contact CLA International, 1620 Gaylord Street, Denver CO 80206, telephone 800 873-7130.

About that Taj Mahal of a School in Los Angeles . . .

A little while ago we had occasion to comment on the economic disaster unfolding in Los Angeles where the school district is in the process of spending some $578 million on a high school on land taken by eminent domain in the mid-Wilshire area. See our take on that at  

By way of follow-up, check out an op-ed in today’s Wall Street Journal, Sep. 4-5, 2010, at p. A13, Allysia Finley, Broke — and Building the Most Expensive School in U.S. History.

It turns out that this school is only one of several similar capers of the Los Angles Unified School District that is running a $640 million deficit, and fails to graduate about one-half of its students.

As we never tire of saying: Your tax money at work.

Common Sense in Minnesota – Valuing Contaminated Land in Eminent Domain

The Minnesota Supreme Court has just handed down an opinion dealing with the often muddled area of valuation of contaminated property that is taken by eminent domain.  

The basic problem seems deceptively simple: you take the value of the property, deduct from it the cost of remediation, and – voila! – there is its contaminated value. Unfortunately doing it that way doesn’t work. For one thing, the cost of remediation is not reflected dollar-for-dollar in the value of the property. The cost of decontamination may or may not be fully reflected in the market value of the property’s post-remediation condition, and the post-decontamination market value of the property may not be all that different than it was in the before condition.

Also, since valuation involves consideration of comparable sales, it is likely that at least some of the comparables are also contaminated, and if so, that means that the market has already considered and discounted the cost of decontamination in arriving at the sales price. So deducting the cost of decontamination, would amount to a double whammy on the owner: first, the fair market value of his property arrived at in the eminent domain valuation process (i.e., what an informed  buyer would pay for it in a voluntary transaction) would already reflect the diminution in value caused by its contaminated condition, and then, second, he would be charged again, in the form of a deduction for decontamination costs.  

Then there is the problem of determining the cost of decontamination – a process that can range from minimal compliance with environmental laws to an all-out “Cadillac” approach that would achieve the highest degree of decontamination.  

So the Minnesota Supreme Court took the efficient approach of holding that contaminated property should be valued as if uncontaminated, because the cost of decontamination is taken care of in other proceedings under various environmental laws.   

The case is Moorehead Economic Devevelopment Authority v. Anda, Nos. A07-1918 and A07-1930. To read the whole opinion go to