Monday’s story about efforts by the California High-Speed Rail Authority to acquire property, and the resulting displacement of businesses along the route in the Fresno and Madera areas such as Angelo’s Drive In or Keith’s Automotive, struck a chord among readers who interrupted their Labor Day weekend to leave me phone messages and send a few emails.
It seems to underscore the complexity of the process involved in securing land for public works projects, including right of way for big ones like the controversial high-speed train project. There are two big factors at the heart of the issue:
- People who own businesses, farms and homes in the path of the railroad route have not only invested their money, but their effort and their sweat, into something that stands to be swept away, if and when the project is built; and
- They’re feeling a little pushed around by the process, and in some cases insulted by offers that don’t reflect what they believe their property and business is worth — that is, they don’t think it is what the lawyers call “just compensation.”
No wonder property owners, homeowners and affected businesses can find themselves confused and angry. But here’s some info that we weren’t able to work into Monday’s story.
The story reported that the rail authority has, as of last week, made more than 120 formal written offers to owners of land along the proposed railroad route in Fresno and Madera counties. Those written offers are based on appraisals done by consultants to the rail agency. You can see a copy of the California High-Speed Rail Authority’s parcel-by-parcel right of way plan here (warning: it’s a large file!). The right of way plan has been incorporated into the agency’s contract with Tutor Perini/Zachry/Parsons, the contracting consortium hired to design and build the first 29-mile section of the system in Fresno and Madera. You can find an interactive, clickable map of parcels identified by the rail authority as those likely to be needed earliest (by the end of September) here.
When the authority makes a written offer to a property owner, it triggers a complex process in which “most property owners probably are not aware of what the law provides in terms of compensation for an impacted business owner,” said Anthony Leones, an eminent-domain attorney for Miller Star Regalia, a Bay Area law firm that prepared a newsletter about high-speed rail and land issues.
“What a business owner needs to do when they get an offer is, first of all, understand that the offer may not be inclusive of all their potential damages,” Leones said. “A business can be damaged in a lot of ways, even if they’re only taking a portion of the property. … For businesses, the situation is a lot more complex and they should understand that the initial offer is not a final offer, and they don’t have to accept it.”
Nearly every potential effect of a public works project on a business can be on the table for compensation negotiations — loss of parking spaces, reduced access, relocation and reopening costs, loss of customers and loss of revenue because of a move. Even a tenant who has favorable lease terms can argue for damages based on the business costs of having to pay higher rent in a comparable location, Leones said.
Andrew Turner, another Bay Area attorney, said much the same thing when he spoke a month ago to a gathering of the Fresno County Bar Association. If a property owner can point to some factor of their land or business that will be damaged as a result of the loss of their property, they need to fight for compensation for that damage. That includes severance damages — the effects when the rail route slicing off only a portion of a parcel and leaves the owner with reduced acreage. Like Leones, Turner’s firm has done presentations on the intricacies of eminent domain.
The immense complexity is why property owners would probably be wise to not try to negotiate on their own with the rail authority for the range of possible damages available.
Keith and Nanette Erwin, the owners of Keith’s Automotive, said they do plan on lawyering up to make sure their business receives the relocation assistance and whatever other compensation is due to them — including potentially higher lease payments wherever
their business lands.
Angelo’s Drive In owners Keav Lim and Ken Chea, on the other hand, seem resigned to their fate and say they can’t afford an attorney. Lim said she’s prepared to accept the approximately $160,000 that resulted from a second appraisal of their 1950s-era eatery on Olive Avenue rather than fight. Whether that’s the best approach is, of course, a choice only they can make.
“What’s allowed under the law for recovery by a business owner is not as simple as just getting an appraisal of the real estate,” Leones said. “There is much more involved than that. And unless these business owners have the proper guidance or representation, it can be a daunting task for them to take on for themselves.”
Another thing some emailers and callers pointed out was the rail authority’s determination to continue with its land-buying efforts even after a Sacramento Superior Court judge ruled last month that the rail agency’s draft business plan failed to comply with Prop. 1A, the high-speed rail bond measure approved by voters in November 2008.
Several people called it “an outrage” and “a disgrace” that the authority is “disregarding” the court’s order. But while Judge Michael Kenny has issued an opinion, he has not issued an order blocking the agency from spending any money or otherwise halting the project — at least, not yet.
In fact, a close reading of Kenny’s ruling shows that he left the door open for the authority to continue its right of way plans, noting that Prop. 1A “appears to preclude the Authority from committing or spending bond proceeds on the high-speed rail project until a second funding plan is prepared and approved, except for expenditures falling within the terms of subdivision (g).”
And subdivision (g) of Prop. 1A allows, among other things, “acquisition of interests in real property and right of way and improvement thereof …” and “relocation assistance for property owners and occupants who are displaced as a result.”