We have been out of town recently, so we missed the latest LA Times dispatch on the doings of California’s coming “bullet train” which is supposed to run — when completed, whenever that will be — between LA and San Francisco, but which for now is struggling to create a right of way around Fresno in the central valley. Ralph Vartabedian, Turf Wars, L.A. Times, March 6, 2015, at p. A1 (above the fold). So proceeding on the premise that better late than never, here is our opinion of what has been going on.
It sounds like the same old, familiar story. Owners of land in the path of that right of way, it would appear, have no intention of going along quietly with the state’s offers, and are demanding fair market value that exceeds the state’s opinion of what it ought to be. These farmers, it turns out to be, are not the rustics of yore in overalls and straw hats. They are wealthy owners of valuable ag land and they have been lawyering up, promising the state folks to see ’em in court. This is a potent threat because historical data make it clear that court awards — whether in California or elsewhere, whether by judges of juries — tend to run significantly higher than condemnors’ offers. So that those condemnees who reject state offers and try their cases tend to win more favorable verdicts more often than not.
Even way back in the bygone days of the 1960s, a State Highway Commissioner wrote an article in which he disclosed that “Actual costs [of right of way acquisition] were an average of 32 percent above estimates, most of the increment coming from additional right-of-way costs.” Joseph C. Houghteling, Confessions of a Highway Commissioner, Cry California, Vol. 1, No. 2 (Spring 1966, at p. 29). Not much has changed in the ensuing half-century, except that as California land values soared, the “spread” between condemnors’ lowball offers and actual recoveries in trials has grown bigger. For a sampling, see 40 Loyola LA L. Rev. at 1146-1148 (2007). Our favorite case like that, though admittedly a rare one, involved a taking of a Southern California Edison power line in which the state deposited $234,485 but the eventual award came to $49,400,000.
Why is that happening? The best explanation we are aware of was provided by Keith Harper, MAI, whose views may be found quoted in 40 Loyola LA L. Rev. 1106-1107, and are further explained by your faithful servant (id. at p. 1108, note 162). Read it! In a nutshell, condemnor’s appraisers know that most condemnation cases will be settled, and since in large projects they have to appraise hundreds of parcels, according to Mr. Harper, they tend to do a superficial job and save their serious effort for those cases that don’t settle and go to trial.
Right now, the LA Times informs us that the state is working on the acquisition of an initial 29-mile right-of-way section. It needs 525 parcels, but so far has acquired only 123 by settling with their owners. Some 154 land owners have rejected state offers, and it looks like those will go into litigation. So far, the state is behind schedule some two years.
Quoth the Times: “Valley landowners in the path of the train have a long list of grievances. Grape farmers say the authority plans to put fences so close to their fields they’ll be required to tear out additional vines to make room to turn their tractors. Cherry farmers say the state will disrupt irrigation systems by cutting off their fields from their wells.” And so it goes.
Sure, some of these cases will settle before going to trial, but some won’t. So it should be a high time for local lawyers. We look forward to the event.