While the Fifth Amendment to the US Constitution states in part, (relating to individual rights,) “nor be deprived of life, liberty or property, without due process of law; nor shall private property be taken for public use without just compensation” I shall skip the debate of “public use” as the focus of this post relates to “just compensation” that is often lost in discussion of property rights.
When seven of us, representing private property rights, met with representatives of the U.S. Government Accountability Office and U.S. General Accounting Office in July of 2006 one of the issues we addressed was just compensation.
During his remarks, Loyola School of Law Prof Emeritus Gideon Kanner, one of our three property rights attorney’s in attendance, cited examples of actual cases where the victims were short changed in the “takings” offers received from various public agencies. He pointed out that many private sector firms did not survive the relocation of their business, especially in light of the relocation offers which they received.
This meeting was a result of a Congressional mandate for these agencies to “conduct a nationwide study of the use of eminent domain by state and local governments.” Our group was selected to represent such practices in the city of Los Angeles.
On page 35 of their final report the GAO acknowledged our input. Let me post a few sentences from that page. “Multiple property rights groups believed the localities undervalue property and make offers lower than owners would receive on the market. One group cited large differentials between final jury awards and first appraisal amounts in cases in which owners challenged a condemnation. Owners in this property rights organization who challenged initial offers reported receiving an average of 40 percent more in compensation than the initial offer.”
Note: I believe that last comment was from our group.
Let’s shift gears and head down Interstate 5 to the OC City of Laguna Woods. I was in their chambers when that city council voted to take the building which they were sub leasing from a private owner to be their future City Hall. While technically a City Hall facility falls under the broad definition of a valid public use I still look at the side of the property owner who may be shortchanged in the process. Many private individuals lack the resources to “fight city Hall” which has the deep pockets and years to wait us out as they utilize taxpayer funds for all legal costs.
I introduced myself to the owner’s attorney at that time, whose name might have been Ivan Gold, to see what action his client, who had no desire to sell, had in store. Somewhere in this office are my notes of that July 2005 exchange and proceedings where I believe the vote to take this building was unanimous. At that time the council argued that there were no comparable buildings that would meet their future city hall needs.
For those not familiar with the building in question it is on south side of El Toro Road just east of Moulton Parkway.
In any event I was pleased to read today’s OC Register Editorial entitled “Land grab costs Laguna Woods.”
According to the Register Editorial an OC superior Court jury, above an beyond their revised valuation, just awarded $851,000 in attorneys’ fees and experts’s fees to Raintree Realty. The original offer from the city was $3.65 million. Last August the jury raised the valuation award to $6.43 million. With the additional fees the final tab to be paid by the city of Laguna Woods is now $7.2 million dollars.
If I were a taxpayer in Laguna Woods I would not overlook that hit when the next election cycle comes around. City council members have a fiduciary responsibility to be good stewards of taxpayer money. In this example their council gambled and lost with OPM.
Let’s see. In the GAO meeting we pointed out that “just compensation” might be 40 percent higher when contested. In this case the number is 75 percent above the initial offer.
Gilbert closing comments. A word of caution to anyone whose home, business or family farm is about to be “taken” when you have no desire to sell. Do not, under any circumstances, accept the first “offer” based on their assessor’s evaluation.
We are currently aware of two southern CA examples as my keys complete this post.One is a valid public use and the second could have been avoided if Prop 98 has passed.
Laguna Woods city hall
This process is now out or whack. Courts have stretched the Fifth Amendment Constitutional protection to the point that it is the property owner that carries an extremely difficult burden and then is often short changed by the government offer over either valuation or relocation. While the law is stretched to allow damages to be awarded to a thief injured while falling through the skylight of his victim’s home, the laws protecting the rights of private property owners, the founding bedrock of this country, have grown increasingly byzantine and pro government. Thanks for keeping this issue in the forefront Larry.
Geoff. Thank you.
In my travels around the country supporting victims of redevelopment and eminent domain abuses I met attorney/author Carla T. Main through the Institute for Justice’s Castle Coalition.
You might read her book entitled “Bulldozed.” Bulldozed is one of the many illustrations in which a public entity pressures a private citizen to give up his private property for some alleged public use. Her book is about Western Seafood, a shrimping business in Freeport, Texas owned by Wright Gore, Sr. There are some heavy hitters involved in this story. Do the names Humble Oil/Exxon or Texaco ring a bell?
In her book, and she was threatened for publishing it, Carla offers the following text in her Epilogue.
“Papy Gore died on July 23, 2006 at his home in Lake Jackson.
If he been able to hang on just a few months longer, he would have seen the city pull the biggest Roseanne Roseannadanna move of all time.
After three years of fights to take the Gore’s property, property “the city said they desperately needed for a marina, and having endured three years of untold stress, grief and fear, and nearly half a million dollars in legal fees, the city of Freeport (TX) said in essence, “Never mind.”
Since joining the Castle Coalition I have exchanged emails with Wright Gore III.
That’s part of my angst. At times money cannot compensate the victims or their families.
I learned of a similar story that happened in Atlantic City, New Jersey in which the victim died as a result of fighting to protect his oceanfront land when it was not for sale. In another New Jersey case, if my memory of facts are accurate, a man protecting his home saw his dog being shot and killed as he resisted giving up his home. I will do some homework to provide specifics of that last comment.
And I would be remiss to ignore Ronzel Cato, one of the first victims I met when we each testified on abuses in Sacramento.
While eminent domain stories may not see action on this blog, when it happens to you or someone you know our phones begin to ring. We always answer regardless of the color of your skin, size of your bank account, political party registration or ethnicity.
Another interesting and horribly sad story is the Horan family whose horse ranch was involuntarily taken away to build the Brea mall. Father died and son had disabling accident.
Larry,
One need look no further at the eminent domain abuses in this country than the landmark Kelo case itself. Here we are 5 plus years later and the development that was supposed to bring so much to that small Connecticut city has never materialized.
As an attorney with some experience in eminent domain cases, I can attest that it is often difficult for a single property owner to put up the resources needed to fight a state that has unlimited attorney time on its hands (at taxpayer expense). And even if you do find an attorney in time, you run the risk of investing tens of thousands of dollars with the outcome in doubt. So you may take years (eminent domain cases are entitled to priority, but a recent case we won for our property client against CalTrans took nearly 5 years to get to court), invest all you have, and still come away with little to nothing.
The system is broken. Challenging the right to take is difficult to say the least. The eminent domain laws are slanted in favor of the public agency. And post-Kelo, Californians inexplicably failed to pass real takings reform.
That leaves it to tireless workers like Larry to continue the good fight. Property rights are sacred in this country, and I echo Geoff in thanking Larry for his work.
Newbie.
We all know the name Howard Jarvis but how many remember Paul Gann?
The same applies to Susette and Michael Kelo, a world famous name that I first saw in the London Times when I was there.
They were not the only victims in New London, CT. Due to the stress and pressure by public officials it takes a great deal of strength to continue the fight. Another couple I met at the Institute for Justice, in addition to Susette Kelo, were her neighbors Mike and Anna Cristofaro who eventually caved. Very few people know that they were one of the last New London holdouts. My memory is that there was some medical issues in their decision making. Yes, Pfizer changed their mind and bailed leaving weeds three feet high on the vacant land. While the Kelo property was taken, with support from IJ and others, the little pink Kelo house was moved.
Huell Howser can tour all the redevelopment projects CRA pays him to visit. Perhaps he might take one segment to interview victims whose properties were taken. In several cases fighting eminent domain “takings” resulted in broken families who disagreed on whether or not to accept the just compensation offers.
As to CalTrans. Beyond the initial offer and final settlement in taking property of a deaf church in Riverside that I reference in my presentations, I have begun a “discussion” with CalTrans relating to a new project on Interstate 5 in south county. As that project progresses I may provide the details. While I’ve told them the issue will not be a debate on public use the key will be just compensation. Hopefully the negotiations will result in a positive outcome.