Monthly Archives: May 2013

Fun With Words

If you haven’t checked it out already, we recommend Bryan Garner’s column, For the Word Lovers, ABA Journal. May 2013, at p. 24. Garner is a neat word wizard so not to our surprise, he regales us with a variety of words that are mostly unknown to most folks, but which, if judiciously used, can embellish your writing if you don’t mind the risk of coming off as a linguistic show-off. Then again, there are worse vices in life that aren’t so entertaining. So do check it out.

However, since in Zsa Zsa Gabor’s words, “nobody is perfect, darling,” we note that Garner, for all his skill and savoir faire missed a good one that is of particular interest to condemnation lawyers. Your opponent’s appraiser is lowballing it to the max? No problem. Just call him a Floccinaucinihilipilificator. See Mayor & City Council of Baltimore v. Kelso Corp., 416 A2d 1339, 1340 (Md. Ct. Spec. App. 1980). If you follow our Lowball Watch department in this blog, you know that there is a lot of that going around.

California Choo-Choo (Cont’d.)

Readers with a special interest in this subject should find interesting a new article that covers the fight between the construction of California’s “bullet train” project and our environmental laws.  It focuses on Madera County (between Fresno and Merced), an agricultural region where the first leg of the “bullet train” is going to be built. It contains considerable detail of this controversy and a list of all cases that have been  filed against the project. Glenn Martin, Collision Course — Holding Up the Bullet Train; It’s the cover story of the latest issue of the California Lawyer, May 2013, at p. 18. The article is on line — go to California Lawyer on Google, and you’ll find it there.

Related item: Today’s L.A. Times informs us that there is a controversy  over the report that the selected contractor for that first leg of the California “bullet train” submitted the lowest bid of $985 million “even though its design quality, safety plan and engineering, among other factors, ranked at the bottom of five teams seeking the works.” Ralph Vartabedian, Bullet Train Builder Faces Tests, L.A. Times, May 28, 2013, at p. AA1.

 

Remember: It’s Memorial Day

So as your faithful servant sat on the patio today, enjoying breakfast and the glory that is a California morning this time of year, a dark thought crept into our consciousness. It appeared that only our townhouse and maybe two or three others were displaying a flag to mark Memorial Day. How terrible, we thought. None of the 50 or so other neighbors could be bothered to display their recognition of Memorial Day, and a remembrance of the fallen warriors whose sacrifice makes it all possible.

We remember how, immediately after 9/11 the whole place was awash in American flags raised by my incensed neighbors in order to display their determination to resist the barbarians who had just leveled the WTC twin towers and killed some 3000 of our fellow citizens.

But it didn’t last. By degrees, the flags got fewer and the determination to get even for this atrocity diminished. How sad, I thought.  But then it came — the clear sound of a saxophone solo playing the Star Spangled Banner. It was a neighbor, a professional musician, who every national holiday, without fail, stands by the pool and plays the national anthem to remind us of the significance of the day, to the cheers and applause of our neighbors.

So maybe all is not lost.  True, as time goes on, the flags being displayed are getting fewer ad fewer (down to three this year), but like that star-spangled banner of our national anthem, they are still there to remind us of the solemnity of the day, and of the fallen heroes whose sacrifice keeps us free.

 

Lowball Watch — Two From California

First, one from San Francisco. City and County of San Francisco v. Convenience Retailers, San Francisco Superior Court, case No. CGC-11-507339. This was a taking of a former railroad station site south of Market Street. The City’s final offer was $5,000,000. The owner’s final demand was $8,600,000. At trial, the condemnor dropped its opinion of value to $3,125,000 (after deducting $1,300,000 for remediation — the subject property was the site of a former service station). The owner’s evidence of value at trial was $10,875,000.

The jury verdict was $7,119,000 — or $2,119,000 more than the condemnor’s offer.

Interestingly, we are informed that neither condemnor’s counsel nor the trial judge had ever tried an eminent domain case, but that did not keep the judge from refusing to give an instruction on project influence, in spite of the fact that the evidence included a memo from the city Planning Department, stating that rezoning would not be considered because of the project in issue.

Also, there was a “trial within a trial” on the issue of contamination/remediation. The city wanted to deduct $1,300,000, and the owner contended that the only remediation would have to be the removal of old underground storage tanks. The jury found that the deduction for decontamination should be only $81,000.

The second case comes from Beverly hills — City of Beverly Hills v. Beverly Hills Land Co., Los Angeles County Superior Court, case No. BC 461 255, verdict  returned May 23, 2013. This was a taking of a former electric railway right of way, now a privately owned 12,632 sq. ft. median at the intersection of Santa Monica Boulevard and Doheny Drive, for a “gateway” entrance into Beverly Hills. The city’s appraiser testified to total just compensation of $135,000 — $111,000 for land, $24,000 for trees and other improvements. But she used the across-the-fence valuation method which yielded a value of $2,210,600 which she then discounted by 95% on the ground that in her view the owner could not use the subject property.

By our calculator, the verdict comes to over 25 times the city’s evidence.

The owner’s appraiser opined to a highest & best use as a transportation corridor. He also used the across-the-fence method, and came to the opinion of value of $5,475,000. The jury verdict came to $3,435,904.

More details as they come in.

 

Lowball Watch — Ohio

Columbus Business First of May 16, 2013, reports  that a Franklin County jury disagreed with the city’s valuation of eminent domain land acquisition for a beautification project in Westerville. The city had offered the owner $145,000, but the verdict was $1,320,000. See Brian R. Ball, Westerville Whacked With $1.3 M Verdict in Eminent-Domain Case – click here.

The article gives no indication  of the specific factual or legal bone of contention that separated the parties’ opinions of value, but the verdict came to over nine times the city’s offer.

Requiring a Permit to Build Houses? Oh My. What Will They Think of Next?

The L.A. Times of May 19, 2013, at p. A8 has a piece (Palestinians Fend For Themselves) that, amidst the Times’ usual lamentations over the [self-inflicted] plight of Palestinians, focuses on land-use issues in the so-called Area C of the West Bank. That’s land which the Israelis duly turned over to the Palestinian Authority following the Oslo Accords, but which they were forced to re-occupy after the Palestinians, instead of making peace as required by those accords, chose to use it as a base from which to wage war on Israel by means of what is often referred to as the “second intifada” — i.e., a violent attack on Israeli civilians. Tempted though we may be, we won’t go through the whole historical megillah, except to note the verity that people who launch a violent attack on others have no legitimate complaint when their targets turn around and take measures to defend themselves and to put down the attack, which is what “intifada” means.

We must note, however, as does the Times, that under the Oslo Accords “some of the infrastructure and social programs for Area C were supposed to be provided by the Palestinian Authority.” But it wasn’t. So why bitch at the Israelis?

Anyway, the nub of the current L.A. Times lamentation is that the wicked Israelis have been ordering  demolition of some Arab homes. Why would they do that? Well, if you have the patience to wade through the entire article (which is almost a broadsheet page long) you learn that the homes in question were built without construction permits, which makes them illegal — just as they would be here. So why don’t these folks get permits? Because, they say, it’s difficult. Well yeah. As a Californian, we can dig that because we know how land-use bureaucracies can operate. But since the L.A. Times is a California newspaper we wonder how it can muster the chutzpa to give such prominent voice to this complaint, being as getting a building permit here in California is no picnic and it can take decades. Yes, decades. Not years but decades. Just you try to emulate those Arabs right here in la-la land, and build hundreds of homes without permits and see what happens — particularly if you try doing that in the Coastal Zone.

You don’t believe us? Then check out the case of Bonnie Agins who had to suffer for 30 years of applications and litigation (including a trip to the U.S. Supreme Court) before she was permitted to build three properly zoned homes on her 5-acre parcel. Then there was poor Ken Healing whose plight was characterized by the California Court of Appeal (27 Cal.Rptr.2d 758) as a 17-year long nightmare that was inflicted on him when he tried to build a single family home for his wife and kids. And let’s not forget the Landgate case where the California Supreme Court — speaking with a presumably straight face — opined that eight years of litigation (in addition to years of administrative proceedings) was merely a “normal delay” for which the owner was not entitled to compensation, even though he demonstrated to the court’s satisfaction that the state, that had inflicted this nightmare on him was wrong and didn’t even have jurisdiction over the area. And in the Del Monte Dunes case, the city required the hapless developer to go through five applications and 19 plot plans, but in the end refused the permission to build anything at all. So where do these California folks get the chutzpa to complain about delays in Israeli land-use permitting process?

We could go on like this, but to get to the bottom line, the Times article eventually concedes that in the past decade the Israelis have approved 328 Arab infrastructure projects in the area, “including seven electrical facilities, four medical clinics, and six school renovations — for a population of 90,000. Maybe they could have been more generous, but maybe not. The Times provides no factual basis for either eventuality. Apart from assertions by self-interested Arab parties, the Times provides no evidence for any conclusion that this was done for improper reasons. What it provides is unverifiable, accusatory assertions by various self-interested Arabs, some of whom have lost their cases in court, or by leftist propaganda outfits. Moreover, the Times provides no explanation of why the Palestinian Authority that was concededly supposed to provide this infrastructure, didn’t make any effort to do so.

 

 

Pie in the Sky in New London — Again

You may recall the failure of the infamous New London, Connecticut, redevelopment project that gave us the awful 5 to 4 decision of the Supreme Court in Kelo v. New London. An entire unoffending, unblighted lower middle class neighborhood was seized  by eminent domain and razed to the ground by the New London redevelopment agency in order to build — or so the city plans asserted — a five star hotel, upscale shopping, pricy condos etc. to serve — according to the city — the well-paid employees of the Pfizer pharmaceutical corporation that had built a $300 million research center nearby, and thereby  to boost local taxes. But as you surely know, being a reader of this blog, the redevelopment project turned out to be an unmitigated failure in spite of the fact that the city’s plans called for a freebie to the redeveloper (turning over that land to him for 99 years for $1 per year). The cracks in the city’s project appeared when the selected redeveloper was unable to secure financing and had to default on his contract with the city. It went downhill from there. The city wound up with a vacant 92-acre waterfront parcel that it could not use but which ceased to generate taxes, and that no one would touch, even though the city took it by eminent domain in 2000, and the Supreme Court approved the taking in 2005 — that’s thirteen and eight years earlier, respectively. This caper cost the public somewhere north of $80 million; probably more like $120,000,000, with nothing to show for it. So much for boosting the community economy by the use of urban redevelopment.

And Pfizer for whose upscale employees’ benefit this caper had been undertaken, said “no thanks” and moved out of New London lock, stock and test tube, just as soon as the local tax breaks to it expired, taking some 1400 jobs with it.

Insult was added to injury, when that 90-acre waterfront parcel became a weed-overgrown wasteland, of interest only to birds and feral cats,  and was eventually used by the city as a dump in which to dispose of debris from a hurricane.

But in time, along came another redeveloper who was going to build — not the planned fancy-shmancy five-star hotel cum upscale shops and condos that the city sold to gullible judges as intrinsic parts of its “plan,” but plain ol’ housing that was first presented as 101 condos. But alas, those didn’t fly either (would you buy a condo in down-at-the-heels New London?). After the planned condos flopped, the new, new plans called for some rental units, except that didn’t work out either because history has repeated itself, and it turns out that the present redeveloper has not been able to secure financing either. So we are told by The Day, the local newspaper that has faithfully kept track of this caper all along.

“The first new construction in Fort Trumbull since the area became the focus of a national fight over  eminent domain was delayed Thursday after developers were apparently were unable to demonstrate how they were going to finance the $24 million Village on Thames project.”

“The Renaissance City Development Association said Monday’s groundbreaking ceremony for 34 units of  rental housing is postponed. A closing to transfer the property to developer Riverbank Construction did not take place Thursday as planned . . .” Kathleen Edgecomb, City Says Fort Trumbull Development Delayed, The Day, May 17, 2013.

What now? We have no idea. Maybe the city can get Justice Stevens whose majority opinion lauded the city’s plans, to invest in this land. You don’t think so? Neither do we.

The moral of it all is that where the players have no skin in the game, and judges, instead of keeping an eye on their doings, profess to be mere powerless automatons who have to accept the decisions of condemnor-redevelopers as long as they can be said merely to be “reasonably related to the conceivable,” which means that they have to uncritically buy the municipal BS about the wonders the proposed redevelopment scheme is about to perform, and do not hold anybody responsible for losses they inflict on the public fisc, that’s what you get.

We are once again  reminded of the line of Justice Macklin Fleming, of the California Court of Appeal who once observed in a redevelopment opinion (Regus v. City of Baldwin Park) that promoters of redevelopment projects like to argue that their favorite project will bake a bigger economic pie, with bigger shares for all, but in reality, what they often produce is pie in the sky. Here, in case you need a real life example of his wisdom, is the proverbial Exhibit A.

Edited May 18th, 2013, at 12:30 am

Follow up. For additional coverage of this latest debacle in the never-ending New London eminent domain fiasco, check out John K. Ross, Eminent Domain for No One’s Gain: New London Groundbreaking Ceremony Postponed, on the Reason.com blog — click here .

Bubble, Bubble . . .

We make no claim to being a housing maven, but having been in the eminent domain biz for the past four decades or so, one can’t help but pick up — shall we say? — a certain sensitivity to real estate stuff (which surely includes housing  prices). So we are gratified to see that our recent musings about the increases in housing prices having begun to flirt with a new bubble, are now being confirmed by people with a better claim to mavenhood, like Fortune magazine and CNN.Money for instance. See Nim-Hai Tseng, Signs of New Housing Bubble in Several Areas, May 17, 2013, http://finance.fortune.cnn.com/2013/05/17/housing-bubble/?iid=Lead — for the article, click here. Our gratification has to do with seeing a confirmation of our thinking, not an unreasonable rise in housing prices which is bad, bad, bad.

Of course, now we have unprecedentedly low interest rates, and a pent up demand generated by the sharp decline in housing construction brought about by the 2008 Great Recession. But however true these things may be, there is a limit to how much ordinary people can spend on housing, and those who flirt with that limit are asking for trouble.

Lowball Watch — Texas Style

Austin Business Journal (bizj.com) of May 10, 2012, reports (wsuit.html) that the Homeric battle between Harry Whittington and the City of Austin is just about over, having gone on for a decade. The report is that after originally offering Whittington a paltry $3,500,000, the city has now decided to up it to $14,100,000.  The Journal report is sketchy to put it with restaint, and we are still on the road, so details will have to wait. But we can tell you that Whittington was resisting the taking, successfully in the Texas Court of Appeals, only to see his victory (on grounds of lack of necessity) reversed by the Texas Supreme Court.

Whittington gained national notoriety when he was accidently shot by then Vice President Dick Cheney in a hunting accident. But evidently, it takes more than a shotgun to keep a determined Texan down