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.

 

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