High court to hear eminent-domain case
October 4, 2004
The view from courts on eminent domain may be leaning toward property owners, according to a Sacramento attorney who represented a South Lake Tahoe pizza place in a case involving redevelopment near Stateline.
Gary Livaich, who won a legal settlement for Kurt Carlsen of Bandanas Whole Earth Pizza on a South Tahoe Redevelopment Agency challenge to remove the business a few years ago, thinks the public can expect to see more legal wrangling on the issue.
The U.S. Supreme Court will soon hear a case involving Connecticut homeowners whose land was taken in order to build a health club, among other things.
“This case (from Connecticut) is similar to the redevelopment cases we’re seeing in California. And we’re going to see more challenges. The door has swung open,” said Livaich, an attorney who specializes in law of eminent domain.
Eminent domain gives the government the right to force you to sell people’s property to build roads, facilities or other government projects. It involves the transfer of private property for public use on economic development projects. The U.S. Constitution provides two protections for private property owners in these cases: just compensation and property rights.
The case before the U.S. Supreme Court involves New London, Conn., homeowners challenging the city over the taking of their land to build a riverfront hotel, health club and offices.
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The Connecticut Supreme Court sided with the city in March because it showed the mere promise of additional tax revenue justified the condemnation.
Livaich said the courts tend to scrutinize whether the land will be used for private projects. They may see the building of a community center in a more favorable light.
“I think the pendulum is swinging back to property rights,” he said. The attorney was referring to an earlier sentiment in which local governments were able to get their way more often.
He cited a San Jose condemnation case involving a local grocer who challenged the city over a mall renovation. The revamp brought in a similar but modern grocery store.
“Governments have gotten bold,” he said.
In the Bandanas case, the city agency was ordered by an El Dorado County Superior Court jury to pay $561,000. It based the damages on the pizza parlor’s loss and the value of its lease.
The restaurant was demolished to make way for redevelopment three years ago.
The Bandanas owner, Kurt Carlsen, said Thursday he was simply seeking fair market value for the business. He said the city agency originally offered him moving and storing expenses, but he declined.
“I just wanted one of two things – A: I either wanted them to pay fair market value, or B: give me a better location,” he said.
The business was sketched to go in at Heavenly Village next to Wolfgang Puck Express, another pizza restaurant.
The legal challenge provided an education to a man who started out as a dishwasher at Bandanas when he was 19. He worked his way up to cook to manager to eventually the owner.
“I have no bad feelings. The bottom line is, I’m gone. The project looks great, and I’m sure it’s great for this town,” he said.
The city has paid out more than $15 million in 16 cases on the Park Avenue redevelopment project that involved the construction of the Heavenly gondola, two Marriott time-share hotels and Heavenly Village.
The property owners ranged from the Van Sickle ranch to the Paul Kennedy Steakhouse, which was just settled a month ago for $800,000.
The city and owner agreed to a payment plan spanning the next 10 years.
City Manager Dave Jinkens agrees to a certain degree with Livaich.
“The courts are using a higher level of scrutiny when it involves the taking of property. They tend to view a road going through more favorably than a health club,” he said. “Not to be cavalier, but bad facts make bad law.”
With his extensive experience in local government, Jinkens’ take on the challenges is simple.
“Eminent domain is always the thing to use last,” he said.
As talk of the next redevelopment project involving the convention center surfaces, Jinkens knows the topic will come up again.
“The (land) acquisitions will be a part of the (Exclusive Negotiating Agreement). We’ve made it clear to Marriott that they’ll have to figure this out,” he said.