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REDEVELOPMENT ABUSE ENDS IN 2012... May it stay Dead!
The Big SCAM! SAN DIEGO...America’s Finest BLIGHTED City?
N. Bay- Point Loma, Midway/Sports Arena, Old Town, Linda Vista, City Hieghts, Barrio Logan, College Grove, Center Coty/Little Italy, Crossroads/College Community, Grantville, San Ysidro, Naval Training Center, North Park
Finally an End Eminent Domain Abuse in California. Public Money for Public Services ans Schools Restored!

RDAs: R.I.P.- FEBRUARY, 2012 | ISSUE 03
WWW.ASM.CA.GOV/NORBY
ASSEMBLYMEMBER.NORBY@ASSEMBLY.CA.GOV
As of February 1, California's redevelopment agencies are officially dissolved. Fiscal reality led to their demise. Of California's 482 cities, 368 were home to redevelopment agencies. It is an extremely rare case of the state abolishing an entire bureaucratic structure. Created by the Legislature in 1952 to clean up blight in older cities, redevelopment grew to consume over $6 billion annually in local property taxes-that's 12% of all such taxes statewide. With the state virtually broke, these losses were no longer sustainable. Those funds will now be returned to local government and education.

Redevelopment lobbyists and lawyers fought attempts by both Governor Schwarzenegger and Brown to use redevelopment funds to fund public schools. I joined a 52-24 bipartisan Assembly majority that was backed up by subsequent State Supreme Court decisions and the Governor now appears determined to veto any extension or revival of RDAs.

With this dissolution, K-12 education will ultimately receive $3 billion in additional revenue, community colleges $390 million, county services $1.3 billion, city general funds $860 million, and special districts $450 million. Before that happens, however, over $100 billion in bonded debt must be repaid.

Redevelopment was never intended to be permanent. While funds were properly used for public infrastructure, they also had become cash cows to subsidize big box retailers, NFL stadiums, auto malls, multiplex movie theaters, shopping malls and bars, often on land seized under threat of eminent domain.

Whether RDAs had successes or failures, they simply became too costly to maintain. Public subsidies are a poor way to stimulate economic development.

Redevelopment Implodes
Posted on January 4, 2012 by MORR
By Assemblyman Jim Nielsen, FlashReport | Since their inception, redevelopment agencies have somewhat fulfilled their promise of revitalizing decaying communities, but they foundered upon their institutionalized excesses. The powerful economic forces that fathered these excesses such as eminent domain abuse, obscene accumulations of "increment funds" that tempted government spenders, the insidious picking of winners and losers in the competition for redevelopment funds and the often hollow promise of urban revitalization, low income housing and economic prosperity all gave cause and resolve to the governor and legislators to end the rein of redevelopment. The Supreme Court decision sealed their fate. [READ MORE]

Mississippi becomes the 44th state to Reject Kelo New London Ruling

Institute for Justice Calls on California Republicans
To Eliminate Costly and Abusive Redevelopment Agencies— Arlington, Va.—The Institute for Justice—the nation's leading legal advocate against eminent domain abuse—is calling on Republicans in the California Legislature to approve a proposal currently before them that would eliminate more than 400 redevelopment agencies across the state.  The Institute sent a letter to Republicans today urging them to set aside partisan politics and focus on protecting the private property rights of California's hard-working home, small business and farm owners.  The Institute for Justice litigated the infamous Kelo eminent domain case before the U.S. Supreme Court.

"The Institute for Justice has catalogued hundreds of abuses by California redevelopment agencies," said Institute for Justice Senior Attorney Dana Berliner.  "Eminent domain is used over and over to take property from one private party in order to give it to a more favored private developer.  And California redevelopment bureaucrats continually violate the California laws and the Constitution, ignoring every effort by the Legislature to rein them in—most recently in 2007.  The past decades have shown that these agencies refuse to be reformed, and it is time now for the Legislature to abolish them."

California is one of the worst abusers of eminent domain in the nation.  IJ has documented nearly 200 projects across the state that have threatened or used eminent domain for private gain; within each of those projects, dozens, hundreds, if not thousands of homes, businesses, churches and farms have been impacted.  (That research can be downloaded at http://www.castlecoalition.org/3491.)  California Scheming:  What Every Californian Should Know About Eminent Domain Abuse explains how California's reform efforts to date have not addressed the core problem of the state's law, which provides incentives to perpetuate the designation of vast areas of the state as "blighted" and to continually increase redevelopment debt.

"Redevelopment in California is a billion-dollar, state-subsidized boondoggle responsible for out-of-control debt, higher taxes, and the erosion of private property rights through the habitual abuse of eminent domain," said Christina Walsh, the Institute's director of activism and coalitions.  "This is a historic opportunity to finally end eminent domain abuse in California, which has been fraught with abuse, fraud and waste.  Partisan politics shouldn't stand in the way of protecting private property rights."  So far, only one Republican has voted to eliminate redevelopment:  Chris Norby.  Norby is a long-time defender of property rights and fiscally responsible government.

The purpose of California's Community Redevelopment Law (CRL) was to remedy unsanitary urban slums that posed a genuine threat to the health and safety of the public.  Like blight laws all over the nation, the CRL grants local governments the authority to use eminent domain to seize private property and transfer it to another private owner in the hope that the latter will cure the purported blight.  But California redevelopment agencies stretch the law to declare nearly any area to be "blighted" and thus subject to eminent domain for private development.

Indeed, redevelopment in California often has little to do with true blight.  Instead, redevelopment mutated into a multi-billion dollar profit machine in which hundreds of redevelopment agencies and thousands of private developers, lawyers, consultants and bankers continually strip valuable property from people of modest means and give it to big business.

The scope of the California redevelopment machine is enormous.  There are over 400 active redevelopment agencies in California (about 80 percent of municipalities have one) overseeing around 750 blight zones.  In fiscal year 2005-2006, these redevelopment agencies owned $12.9 billion worth of property (a $1.5 billion increase over the previous year) and had $8.7 billion in revenues.  And according to a new report in the Orange County Register, "From January 1 through March 8, $689 million in bonds were issued in 45 separate measures by 30 local agencies, OC Watchdog reporter Teri Sforza found.  The bonds must be repaid with property taxes that otherwise would pay for local government services such as police and schools.  The new debt is on top of billions owed by redevelopment agencies for earlier bonded debts."

The engine driving the redevelopment machine is debt and taxes.  Under California law, once a local government declares an area "blighted," its redevelopment agency gets a property tax windfall.  In a scheme known as Tax Increment Financing, redevelopment agencies get 100 percent of the property tax revenue from a blight zone over and above the "baseline" amount of property taxes the area generated when it was first declared blighted.

California's redevelopment agencies now siphon off most of the property taxes from the hundreds of blight zones across the state.  In fiscal year 2005-2006, for example, the total assessed value of property in California's blight zones was $537 billion.  Because of Tax Increment Financing, however, redevelopment agencies received 100 percent of the property taxes on $381 billion of this total.  Overall, redevelopment agencies capture about 10 percent of all property taxes collected in California.

A redevelopment agency, however, is entitled to its property tax windfall only if it goes into debt to implement the redevelopment plan.  By 2004, redevelopment agencies in California had a total debt of $61 billion, and historical trends show that agency debts double about every 10 years.  The addiction to debt and property taxes has caused outright financial insanity in some communities.

The perverse financial incentives of California's redevelopment laws mean that redevelopment agencies:  (1) want their blight zones to be as large as possible; (2) want their blight zones to last as long as possible; and (3) want to incur massive debt.

Cities, in this context, have perverse incentives of their own.  They always want to replace low-tax land uses, such as single-family homes and small businesses, with tax-intensive uses, such as high-rise condominiums and big-box stores.

The absence of any concrete proof that redevelopment does any good makes California's redevelopment machine one of the greatest scams of all time.  Although redevelopment advocates like to point out shiny new big-box stores, there are a few things they do not like to talk about.  First, studies repeatedly show that redevelopment projects are net economic losers once the true costs are tallied in terms of jobs and businesses destroyed, and tax breaks and other subsidies to big business.  They also do not talk about how the preference for sales tax-generating retail mega-stores creates low-skill service jobs and destroys small businesses that frequently require skilled labor.  Redevelopment agencies also do not talk about the personal implications of taking away someone's cherished home or an entrepreneur's small business.  Finally, the last thing redevelopment apologists don't want to discuss is the fact that redevelopment overwhelmingly targets the poor and minorities.

DVD:  "Not for Sale:  
A Comprehensive Guide to Fighting Eminent Domain Abuse"
Not for Sale:  A Comprehensive Guide to Fighting Eminent Domain Abuse” is a live-action DVD and companion to the Castle Coalition’s popular Eminent Domain Abuse Survival Guide.  Both can be purchased together at www.ij.org/freedommarket.  
  Featuring interviews with property owners and activists from across the nation who have successfully battled eminent domain abuse, “Not for Sale” provides tips, tactics and practical advice for anyone waging their own grassroots battle to save their home or small business.  
  The DVD employs cutting-edge graphics and illustrations along with interviews to explain to viewers how to gather information, build a coalition and engage in local activism.  The DVD instructs homeowners on how to hold a rally, create a website, work toward legislative reform and file a Freedom of Information Act request, among other topics.

Report reveals details of redevelopment agency finances
Capitol  Alert-The latest on California politics and government, Feb. 1, 2011
Gov. Jerry Brown's proposed 2011-12 budget has  many controversial aspects, but one of the most contentious is his  call for eliminating 425 local redevelopment agencies and redirecting  about a third of their property tax revenues into other state and  local services.
 Last week, nine big city mayors called on Brown  to abandon his proposal, claiming that redevelopment is central to  economic development. But Brown insists that supporting schools and  other public programs is a more important use of the funds.
 Underlying  the political exchanges is a phenomenal growth in redevelopment agency  activity -- especially their diversion of property tax money into  their own activities. By law redevelopment agencies can retain  property taxes on increased development within redevelopment projects,  although they must share some of it with other local governments and  schools under reform legislation enacted in the 1990s.
 Each  year, the state controller's office publishes a thick report on the  activities of redevelopment agencies, most of which are operated by  city governments. And the latest report, covering the 2008-09 fiscal  year, details the extent of their finances.
 It reveals, for  instance, that redevelopment agencies captured about 12 percent of all  the property taxes collected in the state, $5.7 billion. It shared  $1.2 billion of those revenues with schools and other local  governments, but retained the other $4.5 billion.
 That $5.7  billion is well over three times as much tax money as redevelopment  agencies captured 10 years earlier, an examination of the 1998-99  controller's report shows. And the debt incurred by redevelopment  agencies also has grown sharply. In 1998-99 they had $42.7 billion in  debt. By 2008-09, that had more than doubled to $87.5 billion, most of  it in the form of bonds.
 Brown would allow the agencies to  retain enough tax money to pay their debts, but shift about $1.7  billion to the state for one year, and then to schools and local  governments. That $1.7 billion represents 40 percent of the money  redevelopment agencies retain, calculated to be the portion of the  retention that the state must pay to schools under Proposition 98,  enacted by voters in 1988.
 The 710-page controller's 2008-09  report on redevelopment agencies is available here.
Read  more: http://blogs.sacbee.com/capitolalertlatest/2011/02/report-reveals-details-of-rede.html#ixzz1CrpMxCU9

Steven Greenhut column, Sr. editorial writer and columnist,
The Orange County Registers, sgreenhut@ocregister.com
  A few weeks ago, I admitted a deep, dark secret: I'm enjoying this economic downturn. Despite the misunderstanding of several readers, I was not saying that I enjoy watching people lose their jobs, their fortunes, their retirement savings and their livelihoods. But it is refreshing to watch sanity return to the housing market, to see poor-performing companies (GM, Chrysler, etc.) pay the price for decades of foolish decisions, to see unions scale back their outlandish demands, and, in particular, to watch cash-strapped governments get a grip on reality. When times were flush, government made promises that couldn't be sustained, just as mortgage companies -- at the urging of the feds -- gave out loans that couldn't possibly be paid back. Tough economic times force people to deal with reality.
  I was happy when I wrote that, but I'm even happier now, after Gov. Arnold Schwarzenegger signed into law a budget package that does not raise taxes and actually scales back spending. Sure, the deal falls far short of a permanent solution. We should all expect yet another budget crisis in a few months, given that no fundamental changes were made. But the public, in refusing to approve the tax-raising May 19 budget-related initiatives, spared itself tax increases and reminded Republicans that, yes, there is something to be gained by holding firm. Nothing good would have happened in flush times.
  And something even more wonderful took place in Sacramento last week: The budget package "takes" $1.7 billion away from the state's redevelopment agencies, and the Assembly refused to pass a piece of special interest legislation promoted by that giant redevelopment agency of a town, the city of Industry, that would have allowed cities to expand redevelopment zones for 40 years without conducting a blight finding. In an up economy, the state never would have grabbed the cash, and it would almost certainly have given the redevelopment agencies that extra latitude, which Industry wanted as an obvious means to pay for the infrastructure for a new NFL stadium proposed by the city's most influential developer.
  Some local politicians (Mayor Sanders) mistakenly decried the shift of funds from local redevelopment agencies to the state. That knee-jerk response stems from a basic, sound conservative idea that the government that governs best is the one that is closest to home. Unfortunately, I have found in my reporting that local governments typically govern poorly, and they are so close to home that they know where you live and can take retribution on their critics in real and troubling ways. Talk to developers some time. Most of them are terribly afraid of speaking out against city officials. They know if they do so it will suddenly become difficult to get their building plans approved.
  Nevertheless, local governments are more responsive to local pressures than governments in far-off Sacramento, Washington or Brussels (if the One Worlders ever get their way!). But redevelopment agencies, although run by cities, are state agencies. But now that Sacramento is taking the money, the redevelopment types are whining about a loss of local control. I can feel the tears welling up. As I see it, the $1.7 billion is a start. The state should take all the money from redevelopment agencies and shut them down. Debt service would have to be paid off, so it would take a while before the state recouped all its cash (about 12 percent of property taxes, or approximately $5 billion) but that's what needs to be done.
  Before you start accusing me of being callous, let's remind ourselves what redevelopment agencies are all about. Originally, redevelopment law was created to help cities clean up blighted areas. But urban renewal doesn't work, and cities have long ceased targeting truly blighted neighborhoods. They instead use redevelopment as a tax-generation mechanism and a means to subsidize new shopping centers, auto malls and big-box stores. The way it works: A redevelopment agency conducts a blight finding proving that the targeted area is, indeed, blighted. It then creates a "redevelopment area." The agency floats bonds and uses that money to subsidize developers to build new projects within the specified area. The new property tax dollars -- called tax increment -- pay off the bonds. The new projects provide sales and hotel taxes, which the cities use to enhance their general funds. (In reality, cities often give away so much to developers that they end up losing on the deal.)
  I've seen agencies determine that entire downtowns (old downtown Anaheim and Brea), well-kept suburban neighborhoods (i.e., a nice neighborhood south of Garden Grove Boulevard), vacant desert land (in the Coachella Valley) and church properties (i.e., Cottonwood Christian Center) are blight. The real the motivation by redevelopment agencies is not to upgrade areas but to subsidize new Costcos and other tax-generating businesses (or political donors). Within redevelopment areas, the government gains expanded powers of eminent domain to transfer properties to developers. The goal, again, is to maximize the tax revenue. The U.S. Supreme Court's obnoxious Kelo decision in 2005, upholding the use of eminent domain against non-blighted properties as part of an economic development plan in a Connecticut town, sparked a nationwide debate over this issue. Most states passed eminent-domain reforms, but many of them -- including those in California -- were shams that tightened up some inconsequential condemnation standards but have allowed redevelopment agencies to continue along their merry path of destruction.
  Basically, redevelopment gives the government central-planning powers. Redevelopment is a Soviet-like system that distorts the market (why do you think Southern California is awash in big-box stores?), undermines freedom and diverts tax dollars from legitimate public services to private developers.It elevates politics over the free market, given that the beneficiaries always are the politically well-connected, and the losers always are regular folks, often minorities, immigrants, the elderly and working-class people.
  Go figure, then, how the California Legislature managed to get something right. It must have been by accident -- and, of course, the plan will be challenged in court. For a local example of what this means, consider that Santa Ana -- which stands to lose $17.5 million in redevelopment funds -- will have a much tougher time implementing its Renaissance Plan, a redevelopment travesty designed to gentrify and de-Mexicanize the city's central core. This is great news and yet another happy result of the economic downturn.
Contact the writer:sgreenhut@ocregister.comor 714-796-7823

Redevelopment is based on the concept of blight and attracting capital into a blighted area.
Tom Mullaney, Friends of San Diego
Here's what the Supreme Court has said about the meaning of the term blight: We recognize the statutory definition of blight has evolved over the years. However, as stated just two years ago in County of Riverside, supra, 65 Cal.App.4th at pages 627-628, "True blight is expressed by the kind of dire inner-city slum conditions described in the Bunker Hill case: unacceptable living conditions of 82 percent; unacceptable building conditions of 76 percent; crime rate of double the city's average; arrest rate of eight times the city's average; fire rate of nine times the city's average; and the cost of city services more than seven times the cost of tax revenues."
 So far as I am aware, no physical area of any appreciable size in the City of San Diego has ever suffered from blight. So all redevelopment in the City is a fraud.
  When you commence a government program based on falsehoods, economic resources tend to be misappropriated and the community as a whole suffers accordingly. Moreover, falsehoods breed corrupt practices. Developers characterize the enhanced revenue stream as money that is supposed to be earmarked to promote new development, otherwise known as a government subsidy. Developers look elected officials in the eye and tell them that if subsidies aren't granted that the development will build in other areas of the community, e.g., the Golden Triangle. Therefore, developers argue, a refusal to grant subsidies equates to a support of continuing blight.
 It sounds great and provides just the cover many elected officials need to divert scare public resources to those who constitute their contributors.
  The press promotes the concept of fighting blight. A bureaucracy (e.g., CCDC) is created. It hires PR firms. It paints rosy pictures of what central planning can accomplish. (See CCDC promotions of 10 years ago regarding the salutary effect that redevelopment would have on C St.)
 It all constitutes a vicious downward spiral. See the editorial Jan. 2 in Voice of San Diego regarding the practical result: a downtown that is functionally unlivable. 

A Better Way for Grantville
By Brian T. Peterson, Voice of San Diego, 3/10/09
Excerpt: When Marti Emerald took the reins of the District 7 San Diego City Council office, she asked the Grantville Action Group for the community's top three priorities. Here they are:"For some owners, the uncertainty of the ongoing threat of eminent domain has forced them to put off expansion plans or capital improvements. This is the reason Grantville businesses oppose Grantville redevelopment." Full Article

Redevelopment bond scheme floated again
By Dan Walters, Sacramento Bee dwalters@sacbee.com Jan. 06, 2009
Excerpt: A convoluted and highly questionable scheme to generate billions of dollars for the state via local redevelopment agencies is being revived as Gov. Arnold Schwarzenegger and legislative leaders race with the calendar to close an enormous budget deficit.
 The proposal first surfaced during last summer's budget negotiations, pushed by a squad of lobbyists ˆ most of them ex- legislators ˆ for the City of Industry amid indications, which city officials denied, that it was aimed at building a new professional football stadium.
 It was not part of the budget enacted in September. But since then the deficit has ballooned to an estimated $40 billion over the next 18 months, and now some Republican legislators and those around the governor are intrigued by its potential for easing the need for tax increases and/or spending cuts.
 Under the deal now being weighed, the state would allow city redevelopment agencies to extend local redevelopment projects now scheduled to expire, without having to meet recently enacted reforms, including proving the existence of blight. In return, the redevelopment agencies would float bonds secured by property taxes on those extended projects and share the borrowed money with the state.
 In effect, the state would be borrowing against itself, because it now is on the hook for about $2 billion a year in reimbursements to schools for the property taxes that redevelopment agencies retain ˆ a state burden that would decrease slowly were the older projects to expire. But the deal would effectively allow the state to recapture some school money up-front. Full Article: http://www.sacbee.com/342/index.html

The Blight Fight
By Vladimir Kogan, Voice of San Diego, Aug. 20, 2008
Excerpt: The recent media coverage and ensuing commentary about the city's efforts to turn Grantville into a designated redevelopment project area have raised important questions about the needs of the city, its Redevelopment Agency, other local governments, and -- of course -- the Grantville community. The problem is that the discussion has not allowed us to address these interrelated questions one at a time, in a rational way that allows all of us to understand the many complicated tradeoffs involved. READ: www.voiceofsandiego.org/articles/2008/08/20/opinion/kogan082008.txt

Read Tenuous Connection
Voice of San Diego columnist Scott Lewis wrote this editorial about the Grantville Settlement Agreement.  He makes the point that if Grantville is part of downtown because of the trolley connection, then San Diego is part of L.A. because of the Amtrak link. READ: http://www.voiceofsandiego.org/opinion/slop/

What CCDC spends isn't its money 
By Mel Shapiro, Union Tribune, February 9, 2008
LOCAL PERSPECTIVE: CITY EDITION
  There is a long-standing misconception in San Diego about who finances downtown redevelopment. The general public seems to think it's the Centre City Development Corp., known as CCDC. It isn't. CCDC, a city-owned corporation, has only a small administrative budget. It has never funded any redevelopment. It only advises the City Council on funding.
  CCDC officials and the unquestioning media help perpetuate the myth. But the millions of dollars spent on downtown were all approved by the San Diego City Council acting as the Redevelopment Agency.
  The “Redevelopment Agency” is seldom mentioned in articles or the many CCDC publications.
  It is a little-known corporation, created under Section 33110 of the Health and Safety Code of California. A redevelopment agency is created for a city or a county, not for a neighborhood. Since a city can have only one redevelopment agency, the term “downtown redevelopment agency” is a confusing misuse.
  The top brass of CCDC is well aware of that. But it hasn't stopped them from claiming that CCDC is a redevelopment agency and funds the hundreds of millions spent downtown.
  Here are some examples: From the CCDC budget for fiscal 2008' “$82.3 million for projects ... total revenue $217.5 million.”
  In fact, the revenue and the project money are part of the Redevelopment Agency's budget, not of CCDC's.
  Nevertheless, the council approved both the Agency budget and the CCDC budget. From the CCDC publication Downtown San Diego Affordable Housing: “To date, CCDC has provided over $150 million in downtown tax-increment funds to help create affordable housing within and outside of downtown.”
  In fact, CCDC spent zero dollars on housing. All the money came from the Redevelopment Agency and was voted on by the City Council. An entire page of this publication is titled “CCDC funds,” which don't exist since its funds are entirely Redevelopment Agency funds. From the CCDC magazine Downtown Today, page 3: “CCDC has purchased a 19,000 square foot site...” Page 6: “CCDC is in the process of acquiring land...” Page 10: “CCDC board of directors has committed more money than ever before...” In fact, CCDC purchased no land and made no financial commitments. The Redevelopment Agency made the decisions and financed the projects.
  The City Council, sitting as the Redevelopment Agency, voted the money for them. In August I sent a memo to CCDC's chief financial officer about such misinformation. He then sent the following memo to all of CCDC staff: “I have received several concerns raised by Mel Shapiro that we are referring to funds in our staff reports that “CCDC funds” are being used to fund projects.  
  However, (Redevelopment) Agency funds are actually being used. Where appropriate, we should use “Agency” funds and or reference as we typically do in our Fiscal Impact statement that “funds are available from a certain district in the Centre City Redevelopment Project.” Unfortunately, the CFO's advice is being ignored. A second outrageous raise for Graham who helped overbuild Downtown (unsellable condos) and promote the giveaway earthquake ridden Navy Broadway Complex property

Union-Tribune Letters to the Editor, August 2, 2008
Note: In the print edition of the U-T they accompanied the letters with a photo of the old Alpine Glass building—before renovation.  At that time, it was fenced off and boarded up.  Now it’s a going business, and the Redevelopment Agency can take no credit for this.
Deal by Madaffer bad for Grantville
Regarding “Madaffer drums up support for redevelopment proposal” (Our San Diego, July 26):
 Here's what the citizens of San Diego don't know: Councilman Madaffer has sold out his constituents. He and the council have approved giving the county, through the auspices of the downtown Centre City Development Corp., $31 million for tax payments lost to the county because Grantville is now a redevelopment area. The money will be spent on county property at the North Embarcadero, not in Grantville, where the money is supposed to spent.
 What does the county have to say about this? According to an interview with the San Diego Business Journal, “The county dropped the suit last month in exchange for a $46 million settlement. Mark Mead, senior deputy counsel, said the county still believes the area is not blighted. 'But since we are made whole in what we will lose under the redevelopment project, we saw no reason not to settle,' he said.”
 No reason not to settle? How about ethical use of the money, for one thing. Many residents and businesses will be displaced (yes, their land and buildings were taken by eminent domain) because of this “redevelopment” and the entire amount of tax base change will not be used in the area where it was supposed to be used. How ethical is that?
If a politician is going to be dishonest, he should at least guard his words. Is it any wonder that we have been called Enron by the Sea? I love San Diego, but this just breaks my heart.
—DONNA NUSS-RICK, Allied Gardens

Where others see blight and the need for redevelopment, I see the stores and services I use weekly: Vons for groceries, Kaiser for medical, Home Depot for my yard and house, Farmers Outlet for fruits and vegetables, California Bank and Trust for banking, the Grantville Post Office for stamps. There are schools, a park in the residential area and easy access to freeways. There is a variety of good quality and affordable restaurants, a butcher shop, live theater and performance space, a variety of auto and house service and repair shops, churches and the Grantville trolley station, with free parking to get me to the “Q” and beyond.
 I disagree that Grantville is blighted; it just needs some attention to its community plan.
 Redevelopment representatives and those supporting the lawsuit settlement agreement to move redevelopment tax dollars from Grantville to downtown claim a “nexus.” There is no “ nexus “ between the trolley stop in Grantville and C Street downtown. Using the proposed redevelopment funds from Grantville to fix C Street is ludicrous.
 Grantville just needs a little more appreciation for what is there and some additional community planning input that can address how to add another park or two, make a couple of street and traffic light improvements. That and a few affordable housing units would make Grantville the undiscovered gem in your own back yard.
 The Grantville community has not weighed in on this “deal.” This is just another “sweetheart” deal that benefits the downtown interests, not the citizens of Grantville.
—CHARLES KAMINSKI, Grantville

Left unsaid is that Superior Ready Mix and Fenton are the two major beneficiaries of the Grantville redevelopment project and, frankly, they don't need the help.
 Each would like to redevelop its land holdings into urban-village, mixed-use, high-density developments, which are out of character with Allied Gardens and Grantville. They would like public funds from redevelopment to pay for the infrastructure needed for their projects. This, of course, is to maximize their profits.
 We certainly do not begrudge businesses making money. We do, however, reject the idea that our tax dollars would be used to subsidize their plans. We also object to the fact that their business plan would threaten the other business owners in Grantville with eminent domain.
 The rest of us in Grantville aren't asking the government for handouts. We just want them to leave us alone.
— BRIAN T. PETERSON, President, Grantville Action Group

Grantville Businesses Opposing Proposed Land-Use Changes
City to Use New Taxes for Trolley Line Improvements
By NED RANDOLPH, 7/28/2008, San Diego Business Journal Staff
 Veterinarian Brian Peterson, owner of Friars Road Pet Hospital, has fought city efforts to redevelop low-key Grantville neighborhood into a high-density urban village.
 A group of small-business owners in the Grantville community, just east of Interstate 15 and Qualcomm Stadium, are opposing efforts by the San Diego Redevelopment Agency to implement sweeping land-use changes to the area that could be enforced through eminent domain.
They are making their last stand at the City Council's July 29 meeting, where members are expected to approve a plan to establish mixed-use, transit-oriented projects along the Metropolitan Transit System trolley line.
 The city in May 2005 declared the area blighted and established the Grantville Redevelopment Project Area, allowing it to recoup a much higher percentage of property taxes for improvements that otherwise go to the county and state.
 Several high-density residential and commercial developments are proposed for the area, which encompasses parts of the Navajo, Tierrasanta and College Area communities.
"They want to turn Grantville and Allied Gardens into a high-density population center. That's why we have such a broad coalition behind us," said Brian Peterson, owner of Friars Road Pet Hospital, who claims to have a petition of 2,000 signatures.
 Peterson says the city can seize property if the owner is unwilling to negotiate.
 "In the end, there's no free market transaction with that threat. We oppose that," he said.
 The business owners had taken solace after the county of San Diego, eyeing the loss of property taxes, challenged the city's definition of Grantville as "blighted."
 But the county dropped the suit last month in exchange for a $46 million settlement.
Mark Mead, senior deputy council, said the county still believes the area is not blighted.
"But since we are made whole in what we will lose under the redevelopment project, we saw no reason not to settle," he said.
In the settlement, the city pledged to the county $31 million from the Centre City Development Corp. for a North Embarcadero waterfront park, as well as affordable housing credits and taxes from joint projects in Grantville.
 The city intends to repay CCDC with Grantville taxes to improve the trolley line along C Street, which is slated for revitalization under a CCDC master plan.
 "They're taking Grantville property tax and sending it downtown for improvements," said Peterson. "They sold (redevelopment) to the community as a way to improve Grantville to address infrastructure improvements and flooding along Alvarado creek, and here they are taking tax dollars and sending it downtown.

Redevelopment, San Diego style
By Michael Jenkins and Norma Damashek, Union-Tribune, 10/12/07 
Excerpt: San Diego's redevelopment agency – established to eliminate blight and revitalize older neighborhoods – is in crisis. Unless city leaders take decisive action to reform redevelopment, voters will take matters into their own hands.
  Under California law, a city can form a redevelopment agency to revitalize areas that meet state definitions of blight. A redevelopment agency has broad powers to use “eminent domain” authority to force private owners to sell property to the agency and then resell it for different private purposes.
  Anyone who remembers downtown 30 years ago, where new investment had shriveled and junkyards, crack houses, strip joints and incompatible uses were the norm, can attest to redevelopment's benefits. In North Park, City Heights, Southcrest and other neighborhoods, redevelopment has promoted homeownership, new jobs, preservation of historic properties and affordable housing.So what's the problem? When the U.S. Supreme Court in 2005 allowed New London, Conn., to use eminent domain to force a widow to sell her old but well-maintained home so the city could build an industrial campus, the public was outraged. In several states, initiatives were placed on the ballot to restrict eminent domain. California's initiative was rejected by voters as overbroad, but anger over eminent domain continues. Local critics are working to place a measure on San Diego's 2008 ballot to put an end to city redevelopment.
  But eminent domain is not the only flash point. Critics charge that redevelopment lacks public accountability and benefits influential private interests more than the public. They cite the Naval Training Center (Liberty Station) as a sweetheart deal for a politically connected developer. They condemn the selection process, project changes, nepotism for company employees, reneging on public improvements, lack of affordable housing and few new jobs. Other city redevelopment projects receive similar criticism. FULL ARTICLE

Berkeley Study on Infill Development. Heads Up.....
Berkeley study on infill development.  This study has an online database of properties  that would be "ideal" for infill.... and guess what.... most of our properties are on that list!
 The authors of the study say that this database is to help owners, developers, etc decide how to go about building infill.  In today's climate, its more of a tool to use the threat of Eminant Domain to "redevelop" an ecomically underutilized property.http://infill.gisc.berkeley.edu/

Redevelopment Abuse
Voice of San Diego, CAFÉ, August 20, 2007 
 Redevelopment done right is a good thing, a really good thing. It helps to revitalize communities by creating jobs and affordable housing and becoming a catalyst for beneficial economic activity. I'm a fan of such redevelopment.
But "redevelopment done right" in my book doesn't just focus on the end results. In fact, putting too much emphasis on the results of redevelopment leads to serious problems along the way and keeps redevelopment agencies from achieving their maximum potential in the public interest.
  Here are some problems going on right here in the city of San Diego.
1) Until recently, the San Diego Redevelopment Agency had not audited its finances for fiscal years 2003 through 2006. In July, one of my clients (through me) asked for copies of the audit reports for these periods and was told that they had not been completed, despite a statute requiring them to be completed not more than six months after the end of the fiscal year. Two days after my client sued, the SDRA provided copies of the audit reports for 2003 and 2004 -- both of which had been completed, it turns out, before my client asked for them. The SDRA‚s position is that the audits were -- and for 2005 and 2006 still are -- being held up by the city‚s audits. What‚s so astonishing about that position is the fact that the SDRA and the city are separate legal entities; the SDRA is technically a state agency run locally. What financial mismanagement is the SDRA and the city hoping to cover up by issuing a consolidated audit that treats two separate entities‚ finances as one? (Here's a fun fact in light of recent events at city hall: The first signature on the two audit reports belongs to Jim Waring. For those of you who didn‚t know, until last week Jim was also the SDRA‚s Assistant Executive Director, immediately under Executive Director Jerry "I'm-laying-here-on-a-beach-in-Hawaii" and "I-soon-will-be-throwing-Jim-under-the-bus" Sanders.)
2) The SDRA owes the city roughly $250 million in loans. Nobody knows the repayment terms for the loans -- a flaw noted by the Independent Budget Analyst last May as the Southeastern Economic Development Corporation was seeking approval of a $42 million bond. The last time I checked, the city could use a quarter-billion bucks to help it with its own debts.
3) The SDRA has not rendered a formal accounting on its affordable housing trust fund for at least the last five years. Further, the SDRA is supposed to take 20 percent of the gross additional property-tax dollars generated through redevelopment and use that money to provide affordable housing, but the 2003 and 2004 audits both noted that the SDRA was taking 20 percent of the net amount -- after tons of administrative and other charges -- and blamed the bad math on the lack of a written policy for calculating 20 percent of the gross additional property-tax dollars. (Honest, that was the excuse!) The note caught my attention for two reasons. On the one hand, the miscalculation was important enough to mention and yet the auditors expressly said that the amount wasn‚t big enough to be worth reporting. If the amount of the miscalculation wasn‚t a big deal--apart from violating the law, of course -- then why did the auditor note the miscalculation in the first place? On the other hand, nothing in the audit report indicates that the shortage has been put back into the trust fund. If the problem had been corrected, there would have been a note saying as much.
(To prevent future miscalculations, perhaps Carl DeMaio‚s Performance Institute could help the SDRA amend its procedures manual to state: "The amount to be deposited into the affordable housing trust fund is 0.2 multiplied by X, where X represents the gross additional property-tax dollars received for each fiscal year." Given Carl's reputation, he'll probably recommend that the SDRA outsource the task; government will save a bundle that way.)
4) The Centre City Development Corporation is living large, while SEDC wanes. SEDC has so few people working for it that it has a formal arrangement with the SDRA for staff support, but CCDC doesn't have such an arrangement. So, either SEDC needs more resources in order to do its job, or CCDC has too many people on staff and should be cut back and instead use SDRA‚s staff. (I suppose that one answer to the disparity could be that CCDC's success is more important than SEDC‚s success, but I‚m not prepared to accuse anyone of discriminating against SEDC (District 4) in favor of CCDC (District 2). If anything's certain, it‚s that the people and businesses in District 2 and District 4 are treated with equal fairness and concern by the leaders at city hall.)
5) Fred Sainz, the mayor‚s propagandist, is rubbing off on Carolyn Smith, SEDC's director. FULL ARTICLE/

Mr. Mayor, your credit card has just been declined.
by Pat Flannery, Blog of san Diego, 07/31/07   
 Today, Attorney Cory J. Briggs of the Briggs Law Corporation filed this complaint in the San Diego County Superior Court, alleging that the Redevelopment Agency (RDA) of the City of San Diego has failed to prepare and file its "annual report" for fiscal years 2003, 2004, 2005 and 2006 as required by California Health & Safety Code § 33080.1(a).
 Mr. Briggs is asking the court for a writ of mandate prohibiting the RDA from receiving or expending any funds and incurring any debt unless and until it fully complies with Redevelopment Law.
  He had made a Public Records Act request for these reports but the RDA was unable to produce them. He assumed they did not have them. He was right.
Then Briggs sent this letter to Mr. Christopher Cox, Chairman of the SEC, advising him of his complaint. Mr. Cox made a speech last week in Los Angeles in which he referred to the fact that the SEC had sanctioned San Diego for having committed securities fraud.
 According to Cox in LA: "San Diego's new procedures will cover disclosures it makes in its financial statements, its continuing disclosure agreements, and its disclosures to rating agencies." But how can it comply if its Redevelopment Agency has not filed financial reports for 2003 thru 2006? FULL ARTICLE

SI Comes to Gym’s Defense
Voice of San Diego, August 9, 2007 http://www.voiceofsandiego.org/articles/2007/08/10/this_just_in/184reilly080907.txt> There are no doubts about whose corner Sports Illustrated columnist Rick Reilly is in."You know what, Mayor?" Reilly writes in his column

Don't Think Twice, It's All Blight Blight,
which used to be reserved for seedy, dilapidated areas of the city, is beingincreasingly attached to places that may be profitable, just not profitable enough.
By NINA PETERSEN-PERLMAN, Voice Staff Writer, July 18, 2007 
  Grantville's Friars Road Pet Hospital and National City's Community Youth Athletic Center, while not gleaming edifices of commercial might, don't fit the traditional definition of an eyesore.
 The windows aren't cracked, the plaster isn't peeling and they attract concerned pet owners and kids wanting to learn how to box, not a rough crowd looking to cause trouble.
Yet, according to local officials, they're blight.
 Blight for Your Right: FULL ARTICLE

The Budget with an Extra Pay Boost
By ANDREW DONOHUE Voice Staff Writer, July 27, 2007
Excerpt: When staff from the Independent Budget Analyst's Office combed through the San Diego Redevelopment Agency's budget proposals in May, it found something that raised a red flag: a reported 30 percent increase in salaries at the Southeastern Economic Development Corp."
This increase in salaries appears to be excessive," wrote fiscal analyst Lisa Celaya in a report to the City Council, which was set to consider SEDC's budget.But, days after the report was released, SEDC President Carolyn Smith testified to the council that the IBA report was incorrect. The salary increase was only 4 percent, she said, ticking off a long list of other increased costs that had incorrectly been counted toward that 30 percent: added positions, unused employee vacation hours that are cashed out; a wellness policy that allows employees who aren't sick all year to take one week of paid sick leave; and funds for unanticipated payments of separation agreements with employees.
  The council seemed satisfied. It shook off concerns about the raises and approved the redevelopment group's budget.
  However, SEDC's pay increase wasn't so simple. FULL ARTICLE

Cigar Store Owner Receives Compensation for His Property
Developers of the Marriott Renaissance hotel said they would pay Gran Havana cigar shop owner Ahmad Mesdaq the nearly $7.8 million a court awarded him in November 2005 for the land taken from him by eminent domain, said Mesdaq's lawyer Vincent Bartolotta.The city used the power in 2004, originally offering Mesdaq $3 million for the Gaslamp site. The shop was razed and has been a parking lot since.
  Cindy Eldred, a land-use lawyer representing developers GRH, LLC., said last month the legal battle with Mesdaq pushed the hotel behind schedule, to a projected opening in 2010. She said today the settlement was offered in attempts to move the project forward.
  "We need to move the project as quickly as we can," she said. "This will give us a certainty we otherwise don't have.
  "The Centre City Development Corp. was scheduled to vote on giving the developers an extension at yesterday's meeting, but the item was taken off the calendar due to the settlement, said CCDC's David Allsbrook.Bartolotta said while his client would have preferred to have kept his property, he is pleased to be compensated for it. "This isn't a happy situation, but it's a practical solution to protect his family."The settlement is pending city approval.
--NINA PETERSEN-PERLMAN, Voice of San Diego, July 12 -- 1:42 pm
CCDC used a false allegation of toxic waste to seize Gran Havana.
by Pat Flannery, 06/25/07, http://www.blogofsandiego.com/
 Mayor Sanders must deal with the emerging Gran Havana scandal before he has another Sunroad on his hands, maybe even worse.
 Eli Sanchez, the CCDC project manager for Ramin Samimi's hotel project, admitted under oath blogofsandiego.com/GranHavana/CityAbusePolancoAct.pdf  at trial that he knew there was no contamination on the Gran Havana site and that he knew Samimi was using CCDC's false charge of toxic waste as a negotiating tool against Gran Havana. Isn't that corruption? A City employee lying for a developer?
 Here's the unfolding story:
 According to Cynthia Eldred's letter (pages 17-26) blogofsandiego.com/GranHavana/CCDC_Staff_Report.pdf to CCDC (she is the lawyer for the developer who seized Gran Havana) the developer, Ramin Simimi, has to date spent $23 million on this project. Now he is in default on his contract with the City. Read the draft Notice of Default (pages 15-16) blogofsandiego.com/GranHavana/CCDC_Staff_Report.pdf  prepared for the CCDC Board meeting tomorrow. They must decide between extending and changing his contract or pulling the rug on him.
 Simimi was contracted to close escrow (on the purchase from the now City-condemned Gran Havana property) by December 15, 2006 and to commence construction of a hotel by January 16, 2006. He has done neither. That escrow was due to close over 6 months ago! Try that one in the real world of private real estate.
 Mr. Simimi now has $23 million riding on the toss of a coin at  tomorrow's CCDC meeting. He is truly a risk-taker. Or is he? Somehow I don't think so. I suspect the fix has been in for a long time. We know he has friends in high places.
 Remember the  Iranian immigrant, Kourosh Hangafarin, Dick Murphy controversially appointed to the Port Commission, widely believed to be because of his extraordinary ability to raise big bucks for Republican Party causes from the deep-pocketed San Diego Iranian-American community? I am told Hangafarin is Samini's cousin. Read this CityBeat article <http://www.sdcitybeat.com/article.php?id=2957>  about Hangafarin's bizarre trip to Cuba that got him fired from the Port.
 So, Simimi has $10,165,000 on deposit with CCDC for the acquisition of the 5,000 square feet Gran Havana lot (which the City now owns) and according to Cynthia Eldred, he spent $8 million on consulting and legal fees. This means that he spent only $4,835,000 to acquire the other 35,000 square feet. He offered Mesdaq a mere pittance for the Gran Havana property, boasting that he would use CCDC to get it for him.
In her letter to CCDC (page 25) blogofsandiego.com/GranHavana/CCDC_Staff_Report.pdf, Ms. Eldred cites as evidence of Mr. Simimi's "good faith effort to develop the project" the fact that he has spent $23 million to date. To expend such money without a guarantee of success, she points out, would be "folly". I agree. Who then is Mr. Simimi's friend at CCDC? The Project Manager Eli Sanchez? His boss Mr. Allsbrook? Both? The whole CCDC Board?
 Why did CCDC appeal Mr. Mesdaq's successful court case? The Agency had nothing to gain. Simimi had contracted with CCDC to pay all the expenses, including acquisition costs and litigation expenses. CCDC is not at risk for a penny. And Simimi had already put the $10,165,000 on deposit with CCDC. There must be a reason why CCDC appealed.
 I suspect that CCDC knew all along that Simimi was no hotel developer, that he needed to find somebody to do what he was contracted to do. He needed time. Did they cover for him until he finally located such a hotel developer? Read the email (page 33) <http://www.blogofsandiego.com/GranHavana/CCDC_Staff_Report.pdf>  everybody was waiting for. It didn't take Eli Sanchez long to get things rolling after that.
 This vital June 5, 2007 email confirmed for Eli Sanchez and CCDC that Simimi's proposed lessee, Hansji Hotels Inc., had finally secured its contract with Marriott and everything was a go. Sanchez got it docketed for the CCDC Real Estate Committee June 13. They passed the buck to a full CCDC Board meeting tomorrow.
 Why would CCDC spend public money to help a private developer when they had no monetary interest in the case? It screams to high heaven of corruption!
 Project Manager Eli Sanchez's staff report to the CCDC Board tomorrow is taken almost word for word from Cynthia Eldred's letter. Sanchez is a City-paid advocate for Simimi.
 David Allsbrook, Eli Sanchez' boss, is a long time staffer with CCDC. He was CCDC's manager of contracting and acquisitions and managed the agency's "land assembly" efforts in the East Village. He knows all the tricks. He is an expert on the use of eminent domain and the use (and abuse?) of  the Polanco Act , the legal tool used by Redevelopment Agencies to clean up toxic waste sites.
 This extract from attorney Vince Bartolotta's court brief <http://www.blogofsandiego.com/GranHavana/CityAbusePolancoAct.pdf>  makes it very clear that CCDC, acting on behalf of a private developer, forced Ahmed Mesdaq, owner of Gran Havana, to spend $100,000 to defend himself against a trumped up charge of toxic waste. Read the whole brief <http://www.granhavana.com/pdf/Appeal.DOC> .
 Who is going to stop this corruption from being confirmed by the CCDC Board tomorrow? It is not too late. Nancy Graham, President of CCDC, should intervene and at least ask for a continuance until the matter can be investigated. If not, the false toxic waste charge is enough to launch an FBI investigation. The Feds don't like their laws being abused.
 If Nancy Graham does not act in time to save this scandal from becoming validated by the whole CCDC Board tomorrow, Mayor Sanders should intervene. Does he want another Sunroad, maybe much worse, on his hands? The smell of corruption is already starting to stick to this city. If Sanders does not act he may never be able to convince the credit agencies to reinstate our credit rating, this side of a Chapter 9 Municipal bankruptcy.

Redevelopment: Public? Private?
By Joe Deegan, San Diego Reader City lights, June 28, 2007
http://www.sdreader.com/php/cityshow.php?id=1648
  As if Grantville didn't have enough traffic problems, local developer Leon Parma wants to build 588 new condominiums, plus new restaurant and office space, on land he owns in the area. The property sits on the block bordered by Mission Gorge Road and Fairmount, Twain, and Vandever avenues. At its May 15 meeting, the San Diego City Council approved the project, called Centerpointe at Grantville, rezoning the block from industrial and commercial designations to mixed use.
  Opposing the project in the council chambers was Brian Peterson, president of the Grantville Action Group (GAG). Peterson noted the eventual traffic problems but argued that Centerpointe's main damage will be a depletion of money from the City's general fund, which pays for basic services such as fire and police protection. True, Centerpointe will be more valuable than the light industrial and commercial businesses that are on the site now. And that will result in greater tax increments in the future. But those new dollars will not go into the general fund but to the Grantville Redevelopment Project Area. Meanwhile, the greater population density caused by Centerpointe in Grantville will demand more services from a City that has fewer resources to provide them.
  Centerpointe and the Grantville Redevelopment Project are two different ventures, one private and one public. For clarification of the connection between them that Peterson worries about, I visit his Friars Road Pet Hospital. Across the table he uses to examine the animals, Peterson and I talk. The veterinarian remains standing on crutches, as he recently broke his hip in a bicycle accident. "I've got three pins in my leg holding it together right now," he says."One angle on this whole scheme," Peterson tells me, "is that even if the Redevelopment Agency does nothing to promote development in Grantville, the Redevelopment Agency will collect tax increments from every building that sells or is built in the project area. Personally, I would not be opposed to Centerpointe -- which looks now to be a done deal -- if it weren't for the redevelopment zone. After all, it does not violate property rights. And I don't live in [nearby] Allied Gardens, although residents there are very upset about the increased traffic Centerpointe will bring.
  "Peterson supports a lawsuit that the County of San Diego filed against the City last year to stop the Grantville Redevelopment Project. The County argues that it will lose as much as $200 million in taxes over the 45-year life of the project. "The County needs its money, too," says Peterson, "to pay for health and other services it provides San Diego residents." A superior court trial to hear the County's suit is set to begin in November. FULL ARTICLE

Property seizure measure moves ahead
News from the Union-Tribune's newsroom, July 03, 2007
SACRAMENTO --  Ahmad Mesdaq's Gran Havana Coffee and Cigar Lounge was booted out of San Diego's historic Gaslamp Quarter to make way for a hotel, which so far has not risen from the temporary parking lot where his business was located.
 Years later, California lawmakers are attempting to respond to horror stories told by business people like Mesdaq, proposing to weaken the powers of cities to seize private property through eminent domain.
 But the response, crafted in a constitutional amendment that passed its first test Tuesday in the Assembly Judiciary Committee, has not satisfied most Republican lawmakers, private property rights advocates -- and Mesdaq.
 "My dream was shattered," Mesdaq told the committee. "The city of San Diego used the law as a tool -- a weapon -- to evict me."
 Mesdaq supports tougher limits contained in a separate initiative that private property rights advocates plan to circulate to qualify for the ballot. It would bar local governments from seizing private property in most cases, with exceptions for public uses such as schools, highways and hospitals. Full Article We owe Ahmad Mesdaq (Gran Havana coffee shop) our support.
by Pat Flannery, 06/25/07  
  This is a video interview with Ahmad Mesdaq, former owner of the Gran Havana cigar and coffee shop downtown.
  Ahmad had his property taken from him by the City of San Diego using eminent domain.
  The City gave it to Ramin Samimi. The case has attracted national attention. It is now a parking lot. The Castle Coalition released these exciting new projects:
50 State Report Card
The Castle Coalition examined and graded eminent domain laws for each of the 50 states over the past two years - since the Kelo decision allowing eminent domain for private gain.  “This report finds that your right to own your home free from the specter of eminent domain abuse depends on which state you live in,” said Steven Anderson, director of the Castle Coalition.  “States in the Northeast as well as California remain some of the biggest abusers of eminent domain and legislators in those states have so far refused to pass meaningful eminent domain reform despite the public’s overwhelming desire to be protected from eminent domain for private gain.”  The report is available at:  www.CastleCoalition.org/publications/report_card

SD Watchdogs say AB1162 is no protection (below)
State Senate OKs bill to trim eminent domain
By Michael Gardner, San Diego Union-Tribune, Aug. 31, 2005
 SACRAMENTO ˆ Jarred by stories of shattered dreams, California lawmakers took a first step yesterday to temporarily harness the power of local governments to seize private homes through eminent domain.
 However, tales of mom and pop shops shuttered by public agencies to make way for larger tax-generating retailers failed to persuade senators to extend the same protection to businesses.
 Their reluctance could ignite an initiative tapping into what appears to be a growing public backlash to a U.S. Supreme Court ruling that affirmed the broad eminent-domain powers in Connecticut.
 In the first crucial test of the California Legislature's response, the Senate Judiciary Committee approved a measure that would impose a two-year moratorium on taking homes for private projects, giving the state time to study whether to impose new limits.
 Some Democrats conceded that they remain wary of wading in, but still provided the 5-2 majority vote to keep the bill moving to give supporters time to hammer out some outstanding issues that threaten to keep it from reaching the governor's desk.
 "We're asking for an extraordinary remedy, but do we have an extraordinary problem?" asked Sen. Gil Cedillo, D-Los Angeles, who nevertheless supported the moratorium in AB 1162.
 Taking stock of the outpouring of reports of businesses, churches and homes being seized to make way for big-box stores and hotels, Cedillo urged caution. "Too often we legislate by hysteria," he said.
 Majority Democrats derailed SCA 15, a broader constitutional amendment that would have barred all seizure of private property unless it was for a public use, such as roads or schools. Sen. Christine Kehoe, D-San Diego, and others agreed to shelve a narrower version protecting homeowners, SCA 12, until hearings can be held this fall.
 San Diegan Jody Carey, who was ensnared in a high-profile eminent-domain proceeding, argued in vain for a broad ban on seizures.
 "They answer to no one," said Carey, whose nearly half-million-dollar City Heights home has been coveted by an obscure redevelopment authority pursuing a large housing project.
 The San Diego Model School Development Agency has retreated for now, but Carey says a blanket ban, not a moratorium, is the only way to save his home from being bulldozed.
 "The bill will give them two years to lick their wounds and come right back," he said.
 But officials with redevelopment agencies that use eminent domain sparingly say problems are overblown and that overreacting could eliminate a valuable tool to chase out drug dealers, remove toxic waste and revitalize neighborhoods.
 "It's a nuclear blast," said John Shirey, who represents redevelopment agencies, generally an arm of city or county governments.
 But that blast still may be leveled at redevelopment agencies at the ballot box.
 Orange County Supervisor Chris Norby, a strident critic of eminent domain, said influential supporters are ready to begin collecting nearly 600,000 signatures to place a constitutional amendment before voters that would restrict the use of eminent domain to public needs, such as freeways and hospitals.

County sues city over Grantville plan
By Doug Sherwin,San Diego Daily Transcript , July 21, 2005
 The county of San Diego is suing the city of San Diego over the proposed redevelopment of the Grantville area near Mission Gorge.
 County officials are hoping to prevent the project from starting, saying it could cost the county approximately $200 million in tax revenues over the life of the project.
 "It's a misuse of the (California) Community Redevelopment Law to keep tax revenues in that area, which we feel do not need them," said Laurie Orange, senior deputy of the County Counsel.
 Once a project has been claimed under the redevelopment law, all tax revenues must remain in that particular area.
 The redevelopment statute requires the areas to be blighted, in an urban setting and causing a serious physical and economic burden to that area, which can't otherwise be resolved by private or government action.
 The San Diego City Council and the city's community redevelopment agency was also named in the suit, which was filed July 8.
 "We believe that the evidence does not show it's physically and economically blighted," Orange said. "The county put in a number of objections that introduce other evidence showing that this area is actually thriving. It enjoys a low vacancy rate, and it has quite a bit of new development going on without the need for redevelopment.
 "What we saw was the area had a greater property value increase than the remainder of the city."
 The suit cites figures showing the property values in the Grantville area have risen 54.29 percent during the last five years.
 "That's not indicative of blight," Orange said. "The redevelopment law sets out factors that need to be met. The facts the city put forward either are incomplete, sometimes incorrect or if they were correct, they did not actually show blight."
 The complaint also notes a Grantville "sand and gravel operation" that is thriving and a "multimillion dollar development" occurring on property that the city identified as vacant.
 A spokesman for the city's redevelopment agency said he could not address pending litigation, and calls to the city attorney's office were unsuccessful.
 On the redevelopment group's Web site, a report claimed that 90 percent of the parcels in the project area exhibited one or more physical blighting characteristics, including 25 percent having exposed wiring.
 The report also claims that during the last two years, Grantville's "assessed values have risen 40 percent to 42 percent less than the city and county respectively."
 The city's findings also assert that the crime rate in the area, based on a 2003 survey, was 37 percent above the county average.
 The city's stated five-year implementation plan says it "strives to eliminate blight in the Project Area by assisting with rehabilitation and new construction of commercial and industrial areas and upgrading of public infrastructure, facilities, open space and parks."
 The county's lawsuit, however, alleges "the proposed redevelopment plan would actually exacerbate rather than relieve existing traffic problems. Rather than eliminating any burden on the community, creating a redevelopment project here would burden the entire city by redirecting property tax revenues away from the city's general fund where they could be used for badly needed services, such as police, fire and infrastructure throughout the city."
 The lawsuit also claims that a council member stated there "are no planned redevelopment activities" and that the project presented the only method to "capture the additional tax increment." Senator McClintock has introduced the Homeowners & Property Protection Act as SCA 15.  
 We start with the bi-partisan support of 45 other members of the Legislature who have signed on as co-authors, but it requires a two-thirds vote of both houses to place this important measure on a statewide ballot for approval.  If the Legislature has the will it can be placed on the November 8th special election ballot with votes during the week of August 15th.  Failing such immediate action they will still have plenty of time to place it on the June primary ballot in 2006.
  What we need at this point is for concerned supporters to contact their local Senate and Assembly members and asking them to support SCA 15, if they are not signed on as co-authors.  
[Co-authors are listed here:  http://info.sen.ca.gov/pub/bill/sen/sb_0001-0050/sca_15_bill_20050713_introduced.html ]
 There are currently over 6,000 government agencies that have the power of eminent domain and most do not want that power curtailed in any way and are aggressively opposing SCA 15.  It is important that we get as many letters of support for SCA 15 from individuals, small business, churches, organizations and any other groups that can be affected negatively by property seizures that are for the benefit of other private parties.  These letters of support can be addressed to Senator Tom McClintock, State Capitol, Sacramento CA, 95814 or faxed to 916-324-7544.  Or e-mailed to: tom.mcclintock@sen.ca.gov
 Thank you in advance of helping us spread the word and your support of this important measure.  Feel free to call our office at 916-445-8873 if you need any additional information or have questions about SCA 15.
1-page version of the language that amends the California State Constitution
 —John E. Stoos, Chief Consultant
—Senator Tom McClintock

Justices' ruling on property seizure ignites revolt
BY KENNETH HARNEY, July 24, 2005, WASHINGTON --
  To call it a backlash would hardly do it justice. Calling it an unprecedented uprising to nullify a decision of the highest court of the land would be more accurate.
  In the four weeks since the Supreme Court sanctioned the seizure of private homes by municipal governments for private economic development, a firestorm has broken out in dozens of state legislatures and in Congress.
  At the federal level, by a 365-33 vote the House adopted a highly unusual resolution deploring the court's ruling. The House also voted 231-189 for a bill that would prohibit expenditure of any federal housing, transportation or treasury funds "to enforce the judgment of the Supreme Court in the case of Kelo v. City of New London." The court ruled that municipalities have the right to determine what constitutes a "public purpose" for eminent domain seizure purposes -- even if that means taking privately owned real estate away from citizens and handing it over to private developers who promise to increase the local tax revenue base or increase employment.
  In effect, the House told the court: You may have narrowly approved the Connecticut city's eminent domain seizures of homes for a privately developed and owned urban renewal project, but we have a weapon in this fight, too. If the appropriations amendment passes the Senate, the city of New London will not be able to use key federal funds in any way, directly or indirectly, to move that project forward. No transportation money, no housing subsidies, no assistance from the U.S. Treasury. Meanwhile, bipartisan support is building in the Senate for the broader-sweeping "Protection of Homes, Small Businesses and Private Property Act of 2005," authored by Sen. John Cornyn, R-Texas. That bill declares it is Congress' view that "the power of eminent domain should be exercised only for 'public use' as guaranteed by the Fifth Amendment, and that this power to seize homes, small businesses and other private property should be reserved only for true public purposes."
  Under no circumstances, according to Cornyn, should local eminent domain powers "be used simply to further private economic development." If passed and signed into law, the bill would prohibit all uses of federal funds in connection with any eminent domain seizures for economic development purposes.
  At the state level, legislative moves are under way in more than two dozen states to rein in, or at least clarify, the powers of municipalities to condemn and seize homes. Eight states -- Arkansas, Florida, Illinois, Kentucky, Massachusetts, Montana, South Carolina and Washington -- already impose restrictions in some form.
 In Connecticut, Gov. Jodi Rell endorsed a moratorium on eminent domain seizures, and called the issue "the 21st Century equivalent of the Boston Tea Party: the government taking away the rights and liberties of property owners without giving them a voice. But this time it is not a monarch wearing robes in England we are fighting -- it is five robed justices at the Supreme Court in Washington."
  The outraged reaction to the Kelo decision erupted across the political and ideological spectrum and created momentary bedfellows out of legislators who rarely agree on anything. Name another issue on which House Majority Leader Tom DeLay, R-Texas, Rep. Maxine Waters, D-Calif., Senate Majority Leader Bill Frist, R-Tenn., the House's lone self-described socialist, Rep. Bernie Sanders, I-Vt., evangelical Christian groups, Rush Limbaugh and Ralph Nader all are on the same side.
 Waters denounced the decision as "the most un-American thing that can be done." She said it would weigh most heavily upon minority and poor neighborhoods. DeLay called the ruling "a travesty."
  A few opponents of the Kelo decision are looking to mount direct action -- sometimes tongue in cheek. A California group called Freestar Media LLC is organizing an effort to convince the town council of Weare, N.H., where Supreme Court Justice David Souter owns property, to condemn the land in order to give it to developers who promise to construct a hotel there and raise town revenue and employment.
 Souter voted with the majority in the case. The name of the proposed project: The Lost Liberty Hotel. It will house a restaurant called the Just Deserts Cafe.
  Logan Clements, chief executive of Freestar, insists "this is not a prank. The Town of Weare has five people on the Board of Selectmen. If three of them vote to use the power of eminent domain to take this land from Mr. Souter, we can begin our hotel development."
  Just deserts indeed.

Homeowners Ask U.S. Supreme Court: Rehear Eminent Domain
Case Homes, Small Businesses & Even VFW Post, Could be Condemned for Private Development , If Case is Not Reconsidered
INSTITUTE FOR JUSTICE  www.ij.org , 7/18/05,Washington, D.C.-
 The U.S. Supreme Court has one final chance to correct one of its most-despised decisions in recent memory-its ruling in Kelo v. City of New London, which allows the use of eminent domain for private development.  Today the Institute for Justice will file a petition for rehearing on behalf of New London, Conn., homeowners asking the U.S. Supreme Court to reconsider its 5-4 ruling from June 23 that has already opened up the floodgates to eminent domain abuse.
 "We will be the first to admit that our chances of success with this motion are extremely small, but if there is any case that deserves to reheard by the Supreme Court, it is the Kelo case," said Scott Bullock, senior attorney at the Washington, D.C.-based Institute for Justice.  æThis is the worst Supreme Court decision in years.  Hopefully the Court will see the abuse of power that it has unleashed and will reconsider its misguided and dangerous opinion." 
Forget Hypotheticals:  Floodgates are Opened With Ruling
 As the petition points out as the first basis for the rehearing, the floodgates to eminent domain abuse have already begun to swing open.  "Justice O‚Connor predicted a world in which a Motel 6 can be taken for a Ritz-Carlton, and homes for a shopping mall," said Dana Berliner, a senior attorney at the Institute and co-counsel in the Kelo case.  "The majority wrongly dismissed these as hypotheticals when in fact such takings are already occurring throughout the country."
 Among many other examples of lower-tax producing businesses being taken for higher-tax producing ones just since the Supreme Court‚s ruling, the Institute for Justice cited: Hours after the Kelo decision, officials in Freeport, Texas,  began legal filings to seize two family-owned seafood companies to make way  for a more upscale business: an $8 million private boat marina.
 Homes are already being taken for  shopping malls.  On July 12, 2005, Sunset Hills, Mo., voted to allow the  condemnation of 85 homes and small businesses.  This is the first step in  allowing the private Novus Development Corp. to use eminent domain against the  property owners to build a planned $165 million shopping center and office  complex.  Also in Missouri, the City of Arnold plans to take 30 homes and  15 small businesses, including the Arnold Veterans of Foreign Wars (VFW) post,  for a Lowe‚s and a strip mall.
The Poor & Middle Class Will Be Targets
 The Institute for Justice pointed out to the Court that because property owners must pay their own litigation costs in eminent domain, many eminent domain abuse cases will never make it to court because property owners will simply be unable to afford the legal and other costs associated with challenging an eminent domain action on public use grounds.
 For less wealthy individuals and businesses, the cost of litigation will very quickly exceed the value of the property, which is why nearly all appellate public use cases in the state courts involve challenges by larger business owners.  Homeowner and small business cases, when they are brought at all, typically involve rare pro bono or public interest litigation.  The Institute for Justice wrote in its petition to the U.S. Supreme Court, "As a result, eminent domain for economic development purposes directed at poorer individuals, minorities and the politically powerless will rarely make it to the courts for evaluation on a case-by-case basis [as the Court suggested in its Keloopinion] and those individuals and groups will in large part bear the brunt of these takings.  "Petitioners respectfully ask this Court to rehear this case so it may prohibit the use of eminent domain for private economic development or, at a minimum, provide greater protections to property owners."
"Rarely does a Supreme Court decision generate such uniform and nearly universal outrage," said Chip Mellor, president of Institute for Justice.  "Clearly, Americans understand just how threatening the Court‚s decision is for ordinary home and small business owners everywhere."
 "Short of actually rehearing the entire case, the property owners ask the Court as the second basis for the rehearing to at the very least "vacate" the judgment of the Connecticut Supreme Court and allow more evidence to be submitted about the takings in this case.  The Court announced new standards in the use of eminent domain for economic development in Keloand four years have passed since the trial in the case.  Petitioners ask the Supreme Court to allow for reexamination of facts in the trial court in light of the new standards it announced.
Hands Off My Home
 In addition to asking the U.S. Supreme Court to rehear the Kelo case, less than one week after the decision, IJ and its Castle Coalition announced a $3 million "Hands Off My Home" campaign-an unprecedented financial commitment-to halting eminent domain for private profit.  "Hands Off My Home" will focus the universal wave of opposition to the Kelo ruling to, among other actions, ask state courts to enforce the "public use" limitations found in every state constitution and to support citizen activists nationwide who are urging their state and local officials to set stricter standards for the use of eminent domain.  Already, legislators in 25 states have introduced or promised to introduce legislation reforming the use of eminent domain for private development, but unless all 50 states enact such legislation, homeowners could be left in jeopardy.  The U.S. Congress is also considering several bills to prohibit the use of federal funds for municipal projects that use eminent domain for private development.

Redevelopment staff pleased in Sacramento
By Mary Lynne Vellinga -- The Sacramento Bee June 24, 2005 
Sacramento redevelopment officials Thursday cheered a U.S. Supreme Court decision upholding the right of a Connecticut city to demolish houses to build a commercial center. Private property rights advocates, meanwhile, called the decision a terrible mistake. Either way, the decision involving New London, Conn., won't have a direct impact on California, legal experts said. New London is planning to bulldoze homes and replace them with stores, offices and upscale townhomes in an area that has not been designated as economically blighted. City leaders envision a commercial development that will attract tourists to the Thames riverfront. California law, however, contains no provisions allowing cities or counties to seize private property through eminent domain and award it to another private owner - unless the property is in an economically blighted redevelopment zone. "I think it leaves things pretty much unchanged in California," said Brent Hawkins, general counsel to the California Redevelopment Association.
  "In Connecticut, they were operating under a statute that permits communities to adopt economic development plans that have to be approved at the state level. The statute authorizes the use of eminent domain to carry out those plans. We don't have a similar statute in California."
  Nonetheless, city and county redevelopment officials who rely on eminent domain to revitalize blighted neighborhoods said the court's action puts them on firmer legal ground.
  "We think it's a good decision," said Anne Moore, executive director of the Sacramento Housing and Redevelopment Agency.
   "It just allows us to preserve a tool we think is very valuable in community development," she said of the Supreme Court ruling. "Obviously, eminent domain is something you use as a very last resort. It's a tool that sometimes you need to bring economic development to blighted areas."
  The city of Sacramento has used eminent domain to assemble blocks of property used for some of its signature downtown projects, such as the Central Library expansion and the apartment building under construction at 9th and J streets.
 Outside downtown, the redevelopment agency has used eminent domain to overhaul the crime-plagued Franklin Villa development - now renamed Phoenix Park - and to build a new grocery store in Oak Park, Moore said.
  Sacramento's redevelopment effort has a good reputation statewide as following the spirit of the state redevelopment law, which is intended to help blighted areas, not build "big boxes" or auto malls to pump out sales taxes for local government coffers.
  But some cities and counties around the state have been heavily criticized for stretching the definition of blight so they can use redevelopment powers to assist a private project.
 State legislation passed in 1993 aimed to tighten the definition. But critics complain that some governments still abuse the law.
  In 2002 the city of Cypress in Orange County sought to use eminent domain to prevent a church from building on its property. The city wanted to put a Costco on the property.
 The church sued, and a federal judge temporarily halted the city's plans. Ultimately, the parties settled. The church sold its 18-acre parcel for $18 million and moved to a new site.
  Chris Norby, an Orange County supervisor and state chairman of Municipal Officials for Redevelopment Reform, said Thursday's court decision could embolden California's redevelopment agencies to use their condemnation powers more aggressively.
  "Under this Supreme Court ruling, every house of worship could be replaced by a Wal-Mart or a Costco," he said.
  Some local elected officials in the Sacramento area said the city of New London had gone far beyond what they would feel comfortable doing.
  "The decision to me is a little bit shocking," said Folsom Vice Mayor Andy Morin. "For a city to exercise the right of eminent domain in an instance like that case where it was really the transfer of property to another entity ... that seems to me to be overstepping the bounds of that piece of the law."
  "To take somebody's property, we need some really compelling, good-of-the-community reasons that do not include a commercial endeavor," he said.
  About the writer: The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 ormlvellinga@sacbee.com. Bee staff writer Jim Downing contributed to this storyS.D. official to quit over budget cuts
By Matthew T. HallUNION-TRIBUNE, May 28, 2005
 The head of San Diego's Community and Economic Development Departmentannounced this week that he will resign July 1, when his budget is set to beless than half what it was two years earlier.
  After 51⁄2 years with the city, Hank Cunningham is leaving because the city's plans for his department don't match his own, he said. In an e-mail to City Manager Lamont Ewell, Cunningham called it "painful" that San Diego officials don't provide more for services he called "largely financially self-supporting."
  The department focuses on revitalizing neighborhoods, creatingjobs, supporting business and expanding the tax base. Cunningham had hoped to turn the entire department into a nonprofit corporation operating outside city government.
  "I've seen the department whittled away and thought that was just somethingI couldn't live with," Cunningham said in an interview yesterday."I understand his concerns," Ewell said, "but the city as a whole has revenue shortfalls. "Ewell proposed a $5.7 million budget for the Community and Economic Development Department in fiscal 2006, down $3.5 million from the current year.
The 2006 proposal is down $6.8 million from two years ago.Ewell also wants the council to consider making the city's Redevelopment Agency, whose 25 employees make up about half of Cunningham's department, aseparate agency next year.Cunningham, who is paid nearly $144,000 a year, said he would have over seenthat agency if he had stayed. The City Council has until June 30 to approve the fiscal 2006 budget. Ewell said transferring the Redevelopment Agency outside the city would save more than $330,000 in the first year.
  Under the plan, the City Council would serve as a board of directors in the same way it oversees the Centre CityDevelopment Corp., the city's downtown redevelopment arm. As part of that plan, Ewell also suggested the council consider shifting the economic development duties of Cunningham's department to the San Diego Regional Economic Development Corp. to "eliminate redundant efforts."
  That corporation is a nonprofit that receives about a third of its funding from the city through transient occupancy tax revenues, which come from a taxpaid on hotel and motel rooms.In his letter to Ewell,  Cunningham said his department's economic development duties are not duplicative and called them "critically important." Mr. Honorable Governor:
  My name is Moses Abiola, I represent Mandira Investments, (we are a minority owned Real Estate Investments Company) we are located at the above stated address with 19 employees with a substantial yearly revenue.The purpose of this letter is to inform you that our business is faced with an unnecessary obstacle which I hope that your office can request for clarity from San Diego Counsel members at this juncture. I came to this country twenty three years ago. All we have achieved is about to be taken away from us because the location that is said to be a “blight” are predominantly minority owned businesses.
  The city council at its direction appointed a research group to conduct a
“research” of this area of San Diego. (It is called the Grantville which is
also known as Mission Valley/Del Cerro) It is a strip of land along freeway 8 from intersection of College Avenue towards Waring Road.
  According to the report submitted to the city council official, the
conclusion of the report is that “it will ease the flow of traffic in the
”During my speech to the council member in the council chamber on May 3, 2005, I asked for an explanation why some investors had advance knowledge of what the city want in that area. Because as far back as three years ago, some unknown developers already designed a condominium units in compromise to the city’s final report findings and requirements, a findings which was made known recently. No respond so far, but I want an answer to the question in the true spirit of our democracy.
  Our property is an “L” shape building which has a 96 newly renovated units which we rent out as an extended stay facility fully equipped with kitchen.
 We’ve carter for various out of state client who move to San Diego on a job assignment. Our previous clientsare such as Stu-Segal Production, Disney Production, Ingersoll-Rand just briefly.
 The property ownership has changed over the years. As the current owner, we are open to any suggestions from the City regarding possible improvements to our facility. I cannot even begin to tell you the impact of loosing this property will mean to a lot of people around the world. If you’ll ask me, with the income from this property, I have a foundation which Provide tuition for 18 poverty-stricken children in Africa and I have never mentioned it or claimed it for a tax benefit, just to be brief. 
  On May 17, a final vote will be taken by the Council which may result in an eminent domain of this area. I am hopeful that you can direct your office to take an in-depth look at this situation before this date.
 Thank you for your time and assistance.
Very Truly, Moses Abiola, Mandira Investments Grantville redeveloping plan wins OK
By Jeanette Steele, Union Tribune, May 4, 2005
Grantville will become the city's newest redevelopment area. The San Diego City Council made that decision yesterday despite protests from merchants and property owners who said the area is not blighted and who fear eminent domain will run longtime establishments out of business.
 Graphic: Grantville Councilman Jim Madaffer, who has championed the issue, said the money generated from a redevelopment area is the only way flooding, traffic and outdated buildings will get fixed. "There is no question in my mind this area is economically and physically blighted . . . I know people don't like hearing it, but the whole point of this redevelopment area is to eliminate blight and to do what we can to improve the area," said Madaffer, whose district includes Grantville, a neighborhood along Interstate 8 around Mission Gorge Road.
  A redevelopment project allows the city to capture new property tax dollars for use in the area. The vote was 7 to 1, with Donna Frye as the lone dissenter. Councilman Michael Zucchet was absent. Frye criticized the city's environmental impact report for not looking at the cumulative effects of development on the river.
  Frye, whose family owns a Bay Park surf shop, also said she is opposed to the city taking private property to sell it to another person to redevelop. "I'm a small-business owner," Frye said. "And it really bothers me to think that you could just come in and essentially relocate me, and tell me that where my business is you don't like it, because it's an irregularly shaped parcel . . . and that somehow that's blighted."
  A city official and consultants said Grantville qualifies as blighted because of small and odd-shaped lots, low lease rates, code violations and high crime in some, but not all, sections of the designated project area.
  Grantville merchants and landowners have complained about that definition, saying the area is home to many viable businesses. It's also something that county government has refuted. A letter from San Diego County administration last month said the city didn't provide "legitimate evidence" of blight.
  City officials said yesterday that, after meeting with county officials, they are standing by their findings. As for Grantville property owners, city officials tried to calm their fears about eminent domain. They said guidelines for Grantville redevelopment say the city must give current landowners first opportunity to provide a redevelopment proposal for their land before outside proposals will be considered.
  Annette Rountree, who depends on income from her Grantville commercial property, said that scenario doesn't work for her. "I'm not going to take the money they want to give me and build another property someplace else. . . . I couldn't, with all the permits. Who wants to go through this at my age?" said Rountree, 80, interviewed after the meeting. "Whether you join with firms that are going to build, or they relocate you, you're going to have to do the same thing." Gadfly Lloyd von Haden never surrendered to growth
Union Tribune, May 14, 2005
 A bouquet – the Gadfly Emeritus Award – to Lloyd von Haden, the former Vista councilman who fought downtown redevelopment all the way to the state Supreme Court. In North County's history, no one labored harder to preserve the region's rural quality of life. In his book – "Redevelopment – Boon or Boondoggle?" – there was never a doubt which side von Haden came down on.The last time I talked with von Haden was five years ago, when Vista Village had hit a dramatic roadblock. The project's developer was calling it quits.
 Von Haden, who was 85 at the time, was feeling frisky as a pup."I predicted it would be a failure," he said.Well, as anyone can see, Vista Village eventually did get built, as did Shadowridge, another development von Haden resisted as runaway growth. Von Haden, who died last month, was often a voice in the wilderness, but it was a strong, smart, tireless voice. He supported recycling long before it was in vogue. He opposed nuclear power. A resident of Vista for the last 60 years of his life, the self-taught gadfly never surrendered to the bulldozing economics of growth. Though they may hang out in different celestial neighborhoods,
 I like to think von Haden, who played with the San Diego Symphony and inlater years tuned pianos, might bump into his old adversary, Mayor Gloria McClellan, who preceded him in death by some three years.I can just see Mayor Glo hard at work in the downtown area. Seeing von Haden walk through the Pearly Gates, she'll say, "Go tune up the harps, Lloyd.
 They need the help. But leave my redevelopment project alone!" Redevelopment Abuse Info
MORR, 214 N. Yale Ave., Fullerton, CA 92831
For more info, call 714-871-9756 or 323-567Tim Keller Executive Director, Institute for Justice, and San Diegans Rallied to Support Our Neighbors in New London, Connecticut and
Expose Eminent Domain Abuse RIGHT HERE IN SAN DIEGO
at the Gran Havana Café and Cigar Loungein San Diego's historic Gaslamp Quarter

San Diego Rallies To Prevent Eminent Domain Abuse
On the evening of Monday, February, 21, 2005, home and small business owners from across San Diego will rallied in support of the homeowners in the U.S. Supreme Court case, Kelo v. City of New London; the homeowners in the case hope to set an important precedent establishing some outer limits on the use of eminent domain. Participants coming together to highlight the abuse of eminent domain here in San Diego. Sadly, the City has demonstrated an insatiable appetite for taking private property and transferring it to private developers for their private gain. For example:
The City is condemning the Gran Havana Café in order to make way for a luxury hotel that the City hopes will be able to generate more tax revenue. The City is preparing to begin negotiations with a developer in the North Bay Redevelopment Area to take a dozen small businesses in order to transfer the land to a developer who plans on building condominiums.
“Eminent domain abuse is rampant in San Diego,” declared Institute for Justice Attorney Tim Keller, who will speak at the rally. “Rather than protecting the fundamental rights of their citizens, local government officials are abusing their powers by taking property from small business and home owners and transferring it to politically connected developers in the name of increased sales tax revenue. If that is justification to take someone’s property, then literally no home or small business would be safe.”Stop! That's My Property
By Joe Deegan, San Diego Reader, April 7, 2005
 Bert Decker remembers calling Midway area tenant Vic Maidhof in early November 2003 to warn him that the San Diego Redevelopment Agency was about to "chop up" his business. Maidhof did not believe it and told Decker he must be crazy. But the retired Navy commander convinced Maidhof to attend a meeting of the redevelopment agency's North Bay Project Area Committee the following day.
 Maidhof refused to talk with me about his story. But as Decker tells it, when Maidhof got to the meeting on the morning of November 5, he witnessed a PowerPoint presentation of plans to build condominiums on property he was subleasing to other businesses. As a nine-year occupant of the property behind the Sports Arena (recently renamed ipayOne Center), Maidhof stood up in the meeting and objected to the plans. The condominiums were the main fixture in a redevelopment proposal by the Pacifica Development Corporation. The redevelopment agency supported Pacifica's proposal.
 During the meeting, the redevelopment agency's project manager, Alex Greenwood, declared Maidhof had no "owner participation rights" because he, too, leased the property. But private citizens on the North Bay Project Area Committee were flabbergasted that Maidhof, 52, had received no notification of the proposal to redevelop the property he hoped he could pass on to his children. Greenwood said he had not known how to reach Maidhof before the meeting but sent notification to the property's owner. It turned out that the owner was 92 years old and lived in a nursing home. It also came out that Bert Decker took the phone number off a banner on the building Maidhof was leasing and used it to reach him.
 The committee voted to delay action on the proposal and give Maidhof a month to come up with a counterproposal. In the following days, Maidhof contacted Vince Bartolotta, the attorney who won a $98 million lawsuit against the city on behalf of Roque de la Fuente. Bartolotta advised Maidhof to buy the property he was leasing as soon as he could. With great strain on his finances, Maidhof did just that. He then produced a plan at further expense to develop his own property. To this date he has been able to keep the city's redevelopment agency from his door.
 On March 21, private citizens on the North Bay Project Area subcommittee have turned thumbs down on condominiums proposed by developer Bill Kenton in the same neighborhood on Kurtz and Hancock Streets behind the Sports Arena. The city's redevelopment agency supports Kenton's proposal.
 Joe Fritzenkotter, president of Vanard Lithographics on Kurtz Street, says that in December he received a letter from the redevelopment agency demanding that he choose whether to sell his property to Kenton, redevelop it himself, or move to another location. The letter allowed a fourth choice called "other." Fritzenkotter checked the "other" box and wrote a note underneath it saying he wanted to remain in the printing business at his current location.In June of last year, Kenton told Fritzenkotter that he wanted to develop the two blocks on Kurtz and Hancock between Riley and Sherman Streets. Kenton claims to own 40 percent of the area. In July, Kenton sent Fritzenkotter an offer of $1.7 million to buy his property. The printer says he ignored the offer but later met Kenton outside on the sidewalk. "Then he hinted," says Fritzenkotter, "that if I didn't sell my property to him, the city would take it."
 The redevelopment agency's North Bay Project Area Committee held the first public discussion of Kenton's condominium proposal at a "workshop" on February 23. Fritzenkotter says a PowerPoint presentation that morning focused on his property first, then quickly moved on. Fritzenkotter said he yelled out, "Stop! That's my property! I want to talk about it!" only to be told to "shut up" by someone in the audience. To the private citizens on the committee, the proposal came as a surprise; they had heard nothing about it. So, they forced the group to convene a subcommittee to evaluate the proposal. It was that subcommittee that rejected the Kenton redevelopment proposal on March 21.
 Kenton presented his proposal at the meeting, telling area property owners he wanted them to become his partners in the venture. But the most important component of his pitch was that the condo project would eliminate three adult-entertainment businesses at the area's entrance, including the Body Shop and Les Girls nude-dancing nightclubs. Those businesses, he argued, were part of the area's current blight, which makes redevelopment mandatory. Kenton also contends they are an eyesore leading into the Midway area, at the Rosecrans entrance off I-8.
As soon as Kenton finished, most of the meeting attendees condemned his condominium plan. The most impassioned argument against it came from Chris Clifford, who has a financial interest in one of the Hancock Street properties. Clifford argued that Kenton was working with the redevelopment agency to develop his proposal as far back as spring of last year. "We, the property owners," Clifford told the meeting, "should be given the same kind of process and equity that Kenton was given. We deserve six months to put together our own proposals."
 The redevelopment agency had given those owners who chose to develop their own properties 30 days to outline their plans. The agency also denied the right to present proposals to owners who originally did not make that choice but later changed their minds. Clifford was one of them. He now wants to propose a plan that includes both industry and art in the redevelopment area. He calls it an "arts of industry" plan.
 A majority of the owners in the redevelopment area do not favor the condominium plan, insisted Clifford. "Kenton now says, 'Oh, be a partner.' That was not what we were offered when the original proposal letter was sent to property owners. No one said, 'Partner with us.'
"And the redevelopment agency's Greenwood," continued Clifford, "seems to have ignored his fiduciary duty to the property owners to inform us when he was first contacted by Mr. Kenton.
  What I got from [Greenwood in an earlier conversation] was that December 14 was the date of the official proposal. Yet the agency has never explained what an 'official' proposal is versus the nonofficial one that says, 'We'll work with you for five months while we sandbag everybody else.' The rest of the property owners don't deserve to be sandbagged."
 Clifford went on to suggest that Greenwood initiated the collaboration between Kenton and the redevelopment agency. Later in the meeting, Greenwood denied it, saying that Kenton's proposal to the agency was unsolicited. He did acknowledge, however, that he had seen its earlier versions. But he had sent Kenton back to rework the proposal before accepting it as "official" on December 14.
 The most serious allegation of the day came when Clifford noted Kenton's participation on the Sports Arena Ad Hoc Committee "since last summer." Kenton had a conflict of interest, said Clifford, since he was already putting together his proposal for the blocks behind the Sports Arena. On the Ad Hoc Committee, Kenton "took votes on the general area, not only the Sports Arena complex. Many of his motions covered the commercial zones and commercial byways [surrounding the Sports Arena]," said Clifford. "Kenton voted on the road that ran through his own property. He said, 'No, don't bring the stadium traffic along my road,' because obviously he wants to build condos on his road. He didn't tell the people on the Ad Hoc Committee that he was doing this project. That is an ethics-code violation.
 "Kenton also voted for multifamily housing in the Sports Arena area, knowing full well that that would influence areas outside the stadium property. And if you sit here and buy into his proposal," Clifford told the subcommittee, "you're putting a rubber stamp on unethical behavior. And you're allowing a city department to sandbag 60 percent of the property owners in the area."
 When Clifford had finished, subcommittee member Gail Cole spoke up. "I'd like to correct your mathematical equation," she said. "There are ten of you property owners [in the proposed redevelopment area]. Only one advocates the condominiums. That means 90 percent of you don't want the project."
 But no one on the subcommittee is sure that its rejection of Kenton's redevelopment plan will prevail. On March 29, Kenton, Greenwood, and Rene Coons of Vanard Lithographics appeared on the KPBS-TV program Full Focus. Host Gloria Penner asked Greenwood how the local community was responding to the Kenton condominium proposal. Greenwood launched into a filibuster on "suburban sprawl" and "the need for more housing" in the city of San Diego, conveying an impression of great community support. Only minutes earlier, he acknowledged that he had decided on a 60-day "cooling-off period" to allow property owners a chance to make proposals of their own.
  The owners are now worried that Greenwood will use the 60 days to delay a vote on the Kenton plan that was scheduled for yesterday's meeting of the North Bay Project Area Committee.CBS “Sunday Morning” March 6, 2005, ran a feature on eminent domain abuse that put the spotlight on the attorneys and clients of the Institute for Justice. Videos & transcripts of the program available from CBS. Online Coverage:
Feature on Kelo v. New London and property rights: http://www.cbsnews.com/stories/2005/03/07/sunday/main678427.shtmlMidway between old and new, Redevelopment has some people on uneasy street
By Angela Lau, Union Tribune, March 17, 2005
 Employees at Vanard Lithographers are keeping an eye on their work and proposals for redevelopment of the Midway district. Here, Tom Kopkowski made sure this press run was on the money. Businesses such as Vanard could be displaced by development.
A redevelopment proposal for a section of the Midway district has some property owners concerned they might lose their businesses or investments.
 They fear the city might resort to eminent domain if they refuse to sell their properties to make way for what some officials describe as the most significant redevelopment project proposed for Midway.
The proposal includes 124 condominiums in an area where civic leaders have lamented a lack of residences.
 Although officials with the city Redevelopment Agency emphasize they have not decided whether to accept the proposal and are waiting for competing plans from property owners, several of the seven landlords within the project area have organized to oppose the project.
 That followed a letter the Redevelopment Agency sent to property owners informing them of the proposed development. The agency invited alternative proposals and notified property owners that it might seek to acquire their property for development.
 The Midway district has been declared blighted by the city.
Joseph Fritzenkotter, who founded Vanard Lithographers on Kurtz Street in 1969, fears he might lose the business if he is forced to sell.
"There's no reason for someone to take it away. It's ridiculous," Fritzenkotter said. "We would have to go out of business. Printing companies are heavy on equipment, and equipment is hard to move. Finding a building would be very expensive.
"We have dedicated power for our presses here. We'd have to go through a lot of permitting that maybe we couldn't get."
 The condo project was proposed by Bill Kenton, an engineer and a member of the Midway Community Planning Board. He identified a two-block area bounded by Hancock, Riley, Kurtz and Sherman streets for the North Bay Gateway Project.
Joseph and Annette Fritzenkotter of Vanard Lithographers on Kurtz Street fear they might lose the business if forced to sell to make room for redevelopment.
 It would be at the entrance to the Midway area and Point Loma from Interstates 5 and 8. Kenton owns 40 percent of the site.
"We feel that this area needs to be redeveloped, particularly with reference to the girlie joints that are up here and the houses and the metal buildings," Kenton said.
 The condos would be priced at about $400,000 to $500,000, he said. About 10 percent of them would be affordable housing.
Fritzenkotter sees no need for redevelopment.
"It is not blighted. It's light industry," he said. "This is the lousiest place for housing. It's industrial property."
John Drumel, who owns property on Hancock Street, said he would lose a steady source of income if he had to sell. He leases it to a custom machine shop. "I have that and Social Security," he said.
 The concerns arose after the Redevelopment Agency sent a letter to property owners Dec. 15.
 The letter, which the agency said is a standard one sent to property owners, indicated that redevelopment officials are considering exclusive negotiations with Kenton and that the agency might acquire property for the project. The agency invited counter proposals.
AdvertisementAlex Greenwood, project manager for the North Bay area, which includes the Midway district, said three other property owners have indicated interest in submitting proposals. However, he has not received formal competing proposals.
 The letter was routine, said Hank Cunningham, the Redevelopment Agency's assistant executive director. "In California, you have to go through stringent criteria to demonstrate physical and economic blight. It's hardly comparable to what's going on in Connecticut."
Cunningham was referring to an eminent domain lawsuit in Connecticut that has been appealed to the U.S. Supreme Court. The plaintiffs are represented by the Institute for Justice, a libertarian nonprofit in Washington, D.C.
 Tim Keller, executive director for the institute's Arizona chapter, is reviewing the grievances of Midway property owners but said he is not yet representing them.
 In Connecticut, a group of New London homeowners sued the city and the New London Development Corp., a private nonprofit, for condemning properties for private development to produce tax revenue and jobs.
 Property owners are appealing a Connecticut Supreme Court decision that ruled in the city's favor.
 The Institute for Justice argues that governments cannot take private property and give it to a private party just because it can produce revenue for the city. Keller said the institute doesn't oppose the taking of private land for public use, such as roads or schools.
 Councilman Michael Zucchet, whose district includes Midway, said the area is ripe for redevelopment because its adult entertainment businesses give visitors a rude entry into Point Loma.
 "Whether it's a good idea and whether it makes sense is a process that is just beginning. To skip ahead and say eminent domain is happening is not true," he said. "Eminent domain is needed very, very rarely. There is a negotiation process . . . and an attempt is made to work it out to everybody's satisfaction."Established San Diego Family Owned Printer and other local businesses & Properties Threatened
My family owns Vanard Lithographers, Inc., which is located in the Midway/Pacific Highway Corridor. We are the only large family owned union printing company in San Diego. Unfortunately, we have recently learned that “redevelopment” means engaging in the worst form of corporate welfare: taking the property of hard working entrepreneurs for the benefit of well-heeled developers.
Vanard and a coalition of San Diego property owners intends to fight for their private property rights, which have been threatened by a local developer seeking to use the public power of eminent domain for his private gain.You could be next!
We have worked extremely hard to build-up our family business to the point where we now employ 35 individuals, most with families. We love our location. We love our land. We do not intend to leave. And neither do our neighbors.
Please help all of the hard working employers, property owners, employees and residents in the midway area.
Thank you for your support,
René Coons, VP Marketing, Vanard Lithographers, Inc. DEVELOPER GREED, Any reasonable person knows, it is WRONG, for the City to felicitate the taking of private property owners businesses & land for a politically connected developer's profit$, as in the North Bay Gateway Condo Project and others throughout San Diego. Many of these businesses are needed well established and locally owned. Also, North Bay Gateway area is sitting on a flood plain and should not be used for housing. Eminent Domain, Imminent Theft
By Pejman Yousefzadeh Published 03/01/2005
http://www.techcentralstation.com/030105E.html
We believe that our homes are our castles, which is why it rightly angers us when someone invades the sanctity and privacy of our homes. Usually, we associate burglars and other criminals with this kind of invasion. But if you think that keeping your home and property safe from outlaws is your only concern, I have bad news for you. You also have to worry about whether the government can take your property away from you.
On Tuesday, February 22, the Supreme Court heard arguments in the case of Kelo v. City of New London. This bulletin gives a good accounting of the case, but to summarize, in November, 2000, petitioner Susette Kelo was informed of a notice posted on the door of her home that she had four months to vacate her home or else police would remove her and her belongings via the power of eminent domain -- a power that the city of New London had transferred to the New London Development Corporation (NLDC), a private non-profit organization.
Eminent domain power extends from the Fifth Amendment's statement that property shall not be "taken for public use, without just compensation." In addition, the Supreme Court ruled in Berman v. Parker that private property can be seized through eminent domain when the property is blighted and the government wants to institute an urban renewal project. New London claims that it has offered Susette Kelo and other petitioners a fair price for their land, a claim which they say satisfies the "just compensation" requirements of the Fifth Amendment.
But the "urban renewal" loophole is large enough to drive a truck through. Consequently, local governments have abused eminent domain by claiming that it is being done in the name of urban renewal. This editorial, written by lawyer and blogger Tim Sandefur (who wrote a brief in favor of Susette Kelo and the other petitioners), reveals just how far the abuse has spread:
". . . In the early 1980s, the General Motors Corp. persuaded the city of Detroit -- reeling from recession -- to condemn a neighborhood called Poletown (due to the many Polish immigrants there) and sell it cheap to GM to build an auto factory.
"The Michigan Supreme Court held the condemnation was legal: If the government declared a condemnation would benefit the public, the courts would not stand in the way. In a whirlwind of litigation that lasted only a few weeks, neighbors watched as their community was pulverized.
"The Poletown decision led to an epidemic of eminent domain abuse. In 1999, the city of Merriam, Kan., condemned a Toyota dealership to sell the land to a BMW dealer instead.
"That same year, Bremerton, Wash., condemned 22 homes to resell the land to private developers. In one notorious case, billionaire Donald Trump convinced Atlantic City, N.J., to condemn an elderly widow's home so he could build a limousine parking lot."
In Kelo, the attempted exercise of the NLDC's eminent domain power was spurred by the decision of Pfizer, Inc. to build a $270 million research facility in the city of New London -- a decision that caused the city of New London to adopt a redevelopment plan that would ultimately affect the land currently owned by Kelo and the other petitioners. But as University of Chicago law professor Richard Epstein (who also wrote a brief on behalf of Susette Kelo and the other petitioners) informs us, "New London still hasn't found any viable projects to put on the nearly 90 acres of prime property it already owns." This -- as law professor Stephen Bainbridge points out -- means that it is not certain what the petitioners' land will be used for. Additionally, Susette Kelo has refurbished her home, and her neighborhood -- while depressed in value -- is not "blighted."
As such, the NLDC is not trying to take land for a "public use" such as a public works project, but rather, it is taking land that is not blighted in order to institute vague and unformed businesses and development projects that will generate higher revenues for the city. If this is not an abuse of the eminent domain power, it is difficult to conceive of a situation that is.
But conceive of a situation the Justices did during oral arguments in Kelo. At one point Justice Sandra Day O'Connor asked the attorney representing the city of New London whether eminent domain could be exercised in a situation where the government takes the property of a smaller business in order to give it to a larger one. The city attorney answered that under such a hypothetical, the government could indeed exercise eminent domain. Under this reasoning, not only will you have to lose your homes for development plans that are still up in the air, the local coffee shop may have to give way to a Starbucks, the local bookstore may have to surrender its property to the creation of the latest Borders outlet, and the local video store may have to vacate in favor of the creation of yet another Blockbuster franchise -- all because a Starbucks, a Borders and a Blockbuster could give local governments more tax revenue. In none of these hypothetical situations is the "public use" requirement satisfied. In none of these situations is an "urban blight" finding required. All that is required under the argument of the New London city attorney is that a local government must find that a current and existing business would yield less tax revenue than a potential incoming business would, and that government could exercise its power of eminent domain.
While the public seizure of private real property is scary enough, the power of eminent domain can be abused still further. This article calls for the exercise of eminent domain by local governments to take away the patents drug companies own on their products and give those patents to companies that will agree to sell pharmaceutical products at lower prices. Never mind the already heavy financial burden on pharmaceutical companies to perform the necessary research and development on their products. And never mind that drug companies will be less inclined to engage in research, justly worried that their inventions could be appropriated under this newfangled vision of eminent domain abuse. After all, what incentive is there for drug companies to come out with new products and engage in costly and time-consuming research if their property rights are not respected? Millions of Americans will have their lives negatively impacted by additional barriers against pharmaceutical research, development and distribution.
Blogger and attorney Marty Lederman reports that the oral argument session in Kelo appear to have gone poorly for the petitioners and that this could be the tiding of bad things to come when the Supreme Court ultimately rules. We should all hope that Lederman's impressions are incorrect. The abuse of eminent domain has reached worrisome levels, and if unchecked, will lead to disastrous policy consequences. It is heartening to see that a vigorous fight is being waged against such abuse, but such abuse can only be stopped by victories in cases like Kelo.Kelo v. New London: Specious arguments
2/24/05, Pittsburgh Tribune-Review <http://pittsburghlive.com/x/tribune-review/pittsburgh/>
Supreme Court Justices Ruth Bader Ginsburg, David Souter and Stephen Breyer live in a warped parallel legal universe.
The high court heard oral arguments Tuesday in what could become the seminal eminent domain case, Kelo v. New London. The Connecticut town wants to force private residences to be sold for a government-preferred private commercial development.
The Fifth Amendment restricts government taking of private property to a "public use" with "just compensation." "Public use" was self-evident to the Framers; constitutional relativists corrupted the precept. From the bench, Ms. Ginsburg and Messrs. Souter and Breyer turned willing accomplices.
"You're leaving out that New London was in a depressed economic condition," Ginsburg told attorney Scott Bullock, the Greensburg native who argued for the plaintiffs. But that's not germane.
Government economic development "ought to qualify as a (constitutional) public use," said Souter. There's no constitutional warrant for such an oxymoron.
Maybe cities should be required to show "reasonably foreseeable" public benefits, Breyer offered. Here come the trumped-up economic impact statements.
The Fifth Amendment means what it says. Private development is not a "public use." Should the high court side with the relativists, government, as Justice Joseph Story wrote long ago, will be granted "an uncontrollable power over the private fortune of every citizen."
And such tyranny we cannot accept.
Tim Keller Executive Director, Institute for Justice, Arizona Chapterand San Diegans Rallied to Support Our Neighbors in New London, Connecticut and
Expose Eminent Domain Abuse RIGHT HERE IN SAN DIEGO
at the Gran Havana Café and Cigar Loungein San Diego's historic Gaslamp Quarter
Landmark Supreme Court hearing
Eminent Domain Watch http://www.emdo.blogspot.com/
The end of eminent domain abuse: Develop Don't Destroy Brooklyn, 2/21/05
Excerpt: Today’s landmark Supreme Court hearing of Kelo v. City of New London — a case that will determine whether it’s legal for states to confiscate private property and give it to other private interests for reasons of “economic development.”
Excerpt: Joe Wright, representing the Institute for Justice, which will argue for Kelo to the Court, concluded, “Individual rights are sanctified in the Constitution and are fundamental requirements for man’s life. The Founders in this respect were ingenious. They said these rights are “inalienable” which means that they cannot be violated or regulated by anyone, at any time, for any purpose whatsoever.”
“We believe the Supreme Court will make the right decision,” Goldstein stated. “If they do not, it’s open season on every property owner in America.” Supporters rally for property owners, Eminent domain actions protested
By Jennifer Vigil UNION-TRIBUNE, February 22, 2005
Opponents of the government's power to take private property rallied in the Gaslamp Quarter yesterday in support of a local landowner battling City Hall and the plaintiffs in a New London, Conn., case due to be heard today by the U.S. Supreme Court.
About 90 people gathered at the rally, staged inside Gran Havana Coffee and Cigar Lounge, whose owner was ordered to give up his J Street building last year to make way for a hotel development.
The proprietor, Ahmad Mesdaq, has obtained a court order to keep his business open as he fights the decision by the San Diego City Council.
At yesterday's rally, speakers, including Mesdaq, expressed frustration that land can be seized to benefit private commercial ventures, rather than projects that benefit the public at large, such as roads, police stations or schools.
"Governments take homes, businesses and livelihoods," Mesdaq said. "I think it's a violation of human rights."
The ability of a government agency to condemn private property for the public benefit is known as eminent domain. Property owners then are offered compensation for the land.
Tim Keller, an attorney with the Arizona chapter of the Institute for Justice, which opposes government intervention in private affairs, said use of eminent domain constitutes "a national crisis."
Keller cited a 4-year-old case that could change the way eminent domain is invoked.
Attorneys who specialize in property rights are eagerly awaiting the Supreme Court's decision on that case, Kelo v. New London, Conn., which concerns owners whose homes were condemned for a commercial project.
Property-rights advocates argue that cash-strapped municipalities increasingly are using eminent domain to attract new businesses that pump up the tax base, not for revamping troubled areas.
"It's unconstitutional to take property to create wealth for cities and developers," Keller said.
Staff attorneys from the Institute for Justice's national office are representing the plaintiffs in the Supreme Court case. The institute is involved in other eminent domain suits in Ohio and New York.
"If the U.S. Supreme Court refuses to strike down use of eminent domain in New London, nobody's property is safe," Keller said.
Leslie FitzGerald, the senior eminent domain attorney in the San Diego City Attorney's Office, said officials carefully weigh when to use eminent domain and that the law places strict limits on how it can be invoked.
"The city takes its responsibility under eminent domain law very seriously and does not use the power lightly," FitzGerald said.
John McNab, who heads Save Our NTC, a civic group that criticized the handling of the Naval Training Center redevelopment project, disagrees. McNab said he is familiar with potential eminent domain battles in at least four San Diego communities.
"The whole taking and railroading of development in the city, people are fed up with it," McNab said. "People are furious."
FitzGerald said eminent domain has attracted more public attention because of its use in some high-profile city developments, such as Petco Park, but use of the option is not on the rise.
"It is not being used more often,"she said. "Sometimes there are bigger projects, such as the ballpark, that come along, but at any time there are numerous eminent domain actions proceeding."Kelo hearing 2/22/05- below are a few resources that offer a good "snapshot" view and summary of the arguments and events today. Also included is a must-see video and news story from Minnesota, just one of hundreds of moving stories around the country this week on vigils/rallies and local property rights battles.
Visit http://www.ij.org/private_property/connecticut/nl-argument_photo.html for a few photos from the hearing, and check back often to IJ's web site and www.castlecoalition.org <http://www.castlecoalition.org> for more photos, the latest on IJ's property rights cases, and information on property rights efforts in your state.
A few news articles/radio spots on the hearing that give a good summary of the arguments presented:
Washington Post: http://www.washingtonpost.com/wp-dyn/articles/A45249-2005Feb22.html
NPR: http://www.npr.org/templates/story/story.php?storyId=4508927
CNN: http://www.cnn.com/2005/LAW/02/22/scotus.eminent.domain/
ABC News: http://abcnews.go.com/Politics/wireStory?id=522629
KARE 11 (Minn.) - Great video: http://www.kare11.com/news/news_article.aspx?storyid=75825. Eminent domain can tear apart the American dream: Homeowners take case to highest court - By Carol Lloyd, SAN FRANCISCO CHRONICLE -It's a ragged old cliche, but when we lay our heads down at night, there's something to be said for the American dream. Even if not everyone can buy his or her own home, everyone can buy into the simple fairness of the idea. If you acquired a house and paid your mortgage and your taxes, you had a right to stay there until you decided to sell or were carried out feet first...
http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/02/27/REG57BGPUB1.DTL
More condos, more traffic
Evidently, the plan is to blanket San Diego with condos to save the city from its financial woes ("Face-lift urged for Midway," News, Jan. 31). The article didn't mention the North Bay Gateway Project to develop 123 condos in the Midway area, but the city has already sent registered letters to affected property owners about the condos.
More condos will definitely help city finances, but they also will cause more traffic and congestion for the people. Wake up, San Diego!
JOHN DRUMEL, El Cajon, The San Diego Union-Tribune Letters to Editor, 2/10/5Something Happened to Michael
By Joe Deegan Reader, February 17, 2005
'At the beginning of his term, [San Diego District 2 councilmember] Michael Zucchet stopped Sports Arena redevelopment, which already had requests for proposals out," says John McNab. "I'll give him credit for that. But later he comes up with his own committee, and who does he put on it? Groups that nominate people who own property around the Sports Arena. Something happened to Michael," McNab concludes without suggesting what that something might be.
McNab calls the city-owned land the Sports Arena sits on "the next Naval Training Center." He is a member of the citizens' group Save Our NTC, which views transforming the Naval Training Center into Liberty Station as a city giveaway to developer Corky McMillin. According to McNab, at the start of that transformation process, former mayor Susan Golding claimed the training center was filled with "shacks and obsolete buildings." Now redevelopment proponents in the Midway area are screaming that the city makes less than half a million dollars on the lease of the run-down Sports Arena.
In June of last year, Michael Zucchet created the Sports Arena Ad Hoc Committee, consisting of three representatives from the Midway Community Planning and Advisory Committee, two representatives each from the North Bay Association and the North Bay Project Area Committee, and one representative each from the Peninsula Planning Board, Point Loma Association, Ocean Beach Planning Board, and Ocean Beach Town Council. For four months, starting last June 25, the committee has met weekly at 7:30 a.m. in the Peninsula Community Service Center on Sports Arena Boulevard.
According to the ad hoc committee's report, completed on January 5, Zucchet charged it with "the task of evaluating various land use and other issues relative to 95 acres of public land anchored by the 38-acre Sports Arena property."
Ad hoc members chose former local business owner Joe Mannino, one of the North Bay Project Area Committee's two representatives, to be its chair. (The city requires the formation of project-area committees to advise all redevelopment efforts.) Mannino is also executive director of the North Bay Association, an affiliate of the city's Business Improvement District Council.
In its first action on July 30, the committee recommended "that the Sports Arena be moved." Reasons cited for the recommendation include the facility's age (38 years) and low annual generation of revenue for the city ($460,000), competition from newer facilities such as Coors Amphitheatre and Cox Arena, poor area infrastructure, bad access by both pedestrians and vehicles, and the desire for suitable National Basketball Association and National Hockey League facilities in other parts of town.
The Peninsula Planning Board's Jarvis Ross voiced the lone vote against the Sports Arena being moved. Since the reasons for his vote and the reasons for all subsequent votes against the majority received less attention in the ad hoc committee's final report, Jarvis and Vance Spurrier of the Ocean Beach Planning Board wrote a Sports Arena Ad Hoc Committee Minority Report. It appeared online (www.obpb.org), with councilmember Zucchet's blessing, shortly after the majority report came out in early January.
The minority report states, "There are many reasons why the [current Sports Arena] should be retained. (1) Among those are a versatile entertainment venue with close and convenient access by large numbers of San Diego residents. (2) Aside from serving the Sports Arena building events the large parking lot serves a multitude of uses from a swap meet, a training area for city bus drivers, used auto sales, and visual relief from nearby commercial buildings. Yes, it can be enhanced by planting some islands with trees or shrubs as is done in other commercial parking lots. (3) The current usage is low-impact at critical traffic hours. (4) Its useful life can be extended through creative reuse and proper maintenance. (5) Perhaps the most important use is...[its] being a cell-phone tower for multiple installations. These might otherwise have to be dispersed into residential neighborhoods where they are unwanted."
The minority report goes on to make several additional points: "(1) If the leaseholder has and does perform proper ongoing maintenance, the structure has many years of useful life left. (2) Competition has and will alter events but will not necessarily [reduce] revenue and profitability. Not everyone wants to travel to Coors Amphitheatre and Cox Arena for entertainment...."
The minority report blames all the excesses of the ad hoc committee on "multiple layers of city-sanctioned entities that exert influence over the subject study area.... The overlapping jurisdictions of the Midway Community Planning Board, the North Bay Association, and the North Bay Project Area Committee [with its total of] seven representatives...outnumbered the remaining four."
But if the Sports Arena does move, new housing construction is likely to replace it. The minutes for the August 6 ad hoc committee meeting report chairman Mannino saying, "The Committee might want to review and use as a guide the section in the Ad Hoc [instruction] book which lays out the [city] Redevelopment Agency's recommendations. [Mannino] notes that one of [those] recommendations...is North Bay five-year goal, which suggests 987 housing units including 148 affordable units. Chairman Mannino...notes that... additional residents...would provide for a softening of the current hard-edged commercial community and would generate a need for schools, churches, and parks, all of which would help to limit adult entertainment in this community. The Chair states...his belief...that if this neighborhood is to improve, housing is a necessary component."
Eventually, in two separate motions on two dates, the committee recommended both reducing adult entertainment in the North Bay (September 10) and including affordable housing in any residential development on the 95-acre city property (October 22).
The minority report supports both of these recommendations. But it criticizes a September 10 committee recommendation to support large-scale, profitable residential development. The motion "gives the lessee the ability to terminate Kobey's Swap Meet," the report states, "remove the Sports Arena, and eliminate several active community-serving businesses. The blighted conditions, referred to in support of the motion, have...been artificially created by rent manipulation and short-term subleases. This has resulted in sub-lessees being unwilling to invest in the upkeep of their locations. The act of the principle [sic] lessee voting in support of this motion which directly benefits his interests is the basest form of conflict of interest."
The "principle lessee" is a reference to Ernie Hahn. Hahn's father Ron Hahn heads a business group that owns the arena and the San Diego Gulls hockey team, which plays there. If a decision to develop residential units on current Sports Arena property is made before the group's lease with the city runs out in 2017, the Hahns stand to profit handsomely.
Minutes of the August 6 Sports Arena Ad Hoc Committee state: "Mr. Hahn notes that...[the city] determined that the best thing would be approximately 40 to 60 units per acre. He notes that with the current 30-foot height limit [in the coastal zone], we would be limited to approximately 23 to 24 units per acre." Several paragraphs later, the minutes continue, "[Mr. Hahn] notes that by leaving the height limitation as is, we are condemning this community to remain the same."
On October 8, the ad hoc committee voted seven to three, with one abstention, "that the City Council support placing an initiative on the ballot to allow a variance to the 30-foot building height limitation" in the Sports Arena area up to 85 feet. Committee members stipulated that revenue generation from this recommendation must result in various benefits to the surrounding community.
But the minority report calls the recommendation "the worst motion made and approved. It was made solely to enhance the value of the lands owned or controlled by a majority of the supporters. It would result in further degrading of the coastal area."
In the past, Michael Zucchet consistently rejected any change of the 30-foot building-height limitation in the coastal zone. According to a January 31 article in the San Diego Union-Tribune by Angela Lau, Zucchet recently supported the height limit again, saying that "exceptions should be few and far between." This time, however, "He said the committee's reasoning was 'absolutely valid and cogent,'" writes Lau. "It may be only a matter of time before Zucchet no longer protects the 30-foot height limit." Lau goes on to note that Zucchet supports many of the committee's other recommendations, including "the development of residential and commercial projects."
But that means he favors the Sports Arena moving. "It's very clear that Zucchet's got this thing up for a giveaway," says Save Our NTC's McNab. "And now he's playing these games, saying, 'I'll save you from going over 30 feet.' Well, how about our public property? We own it. The Sports Arena is not only public property, but it's some of the most valuable because it's in the coastal zone. Everybody in the county wants to come to the coastal zone."
In McNab's estimation, Ernie Hahn makes lots of money on the Sports Arena site through subleases, Kobey's Swap Meet, the cell-phone tower, and other ventures. "At the same time," says McNab, "Hahn is not reinvesting in the site. He's making it look blighted, and he's doing what they did at the Naval Training Center: making the Sports Arena look like an obsolete shack. Yes, it may not be the prettiest sports arena ever built, but it's functional and it's paid for. And Zucchet is saying that public lands are supposed to make money. They're not supposed to make money; they're supposed to allow the public to do things at a very low cost. Protection of public lands for public purposes should be the goal. That's the philosophy of public service."
But Joe Mannino wants to revitalize the Sports Arena neighborhood. "The city is not likely to do it," he says. "Only the profit motive can make it happen."A Bowl of Business, San Diego Sports Arena has a rich history hosting sports events
Excerpt: In 2001, the San Diego Sports Arena was voted the No. 1 arena in the nation for facilities with 10,001-15,000 seats by Billboard Magazine. In 2002, the San Diego Sports Arena received the No. 2 ranking.
Excerpt: As the Hahns continue to make regular upgrades to the existing facility, the next chapter in San Diego sports history should be the development of a state-of-the-art sports arena, a vision that the Hahns have had since they took over the management of the arena in 1992.
 "The Sports Arena continues to be an extremely busy and successful facility, and our overall vision is to help in the redevelopment of the North Bay Area and hopefully see the completion of a new arena and bring an NBA sports franchise back to San Diego," said Ernie Hahn.
Full Article: A Bowl of Business, San Diego Sports Arena has a rich history hosting sports events National City Spotlight: Links in the Chain
By Ted Godshalk, La Prensa San Diego, February 25, 2005
Since the New Year, the National City City Council/CDC has discussed and voted on several significant issues, which will have a lasting influence on the community. Let us review these issues, thinking about them as links in a chain, and consider the interests which tie them together.
The first chain link is the Downtown Specific Area Plan, which was approved over the objections of some residents who wanted to see a guaranteed percentage of affordable housing included. Some people, including myself, wanted full documentation on how the city will deal with harmful impacts like air pollution, heavy traffic, and loud noise, and ask how expensive increased city services will be paid for. But in the end, even after a day-long workshop in which numerous concerns were raised and corrective actions suggested, CDC staff admitted it had neither analyzed the public‚s comments nor made any changes to the plan. When it came time to vote, to his credit, Councilman Luis Natividad made a series of motions requiring 15% affordable housing in all new downtown residential developments. His motion failed and Councilmembers Zarate, Morrison, and Parra voted to approve the Specific Plan with no requirements for affordable housing. So what‚s going on people? Do we not want to build homes downtown for families and for single income couples who currently rent? Or is it that the campaign donors are coming home to roost? The objections of the residents were completely ignored with respect to this plan, and the developers, including the several who spoke in favor of the plan, simply got their way. It really is no wonder they like this Specific Plan. It can save them thousands, if not millions, of dollars by clearing the way for them to avoid environmental review and public scrutiny, and by giving them public subsidies associated with their properties.
The second link in the chain is Impact fees. After a one-year study, consultants found that in almost all cases, cities like National City undercharge for development services. In fact, there has never been a true Impact fee. The recommendation to the Council was that the city starts recovering the full cost based on the notion that if someone is making a profit then the taxpayers should not foot the bill. The Council and Mayor approved the new fees. The key thing to note here is that new development can be required to pay fees for things like parks and new fire and police substations. Whew! I guess it‚s a good thing the voters didn‚t support Prop. S last November to raise their property taxes now that we have this better source of funding. I have to wonder about the timing of that proposition and the sense of urgency some of the proponents were claiming at election time.
The third link is eminent domain. Always hearing the claim that eminent domain is the tool of last resort and it has not been used, we now know that the process of eminent domain has been initiated at least twice in recent years. Two property owners in the Harbor District (24th Street and I-5), including the owners of Ace Metal, were forced into negotiations with the CDC. You see, the power of eminent domain is in its use as a threat, as in: "If you don‚t sell to us (the developers) you will lose your house (or business). It will be condemned and you won‚t get very much for it." Eminent domain is used to force someone to sell. At this week‚s City Council meeting, two NC Blvd. property owners told the Council that they had been threatened in this fashion. Natividad, Morrison, and Zarate (Inzunza and Parra are disqualified as property owners in the redevelopment area) heard more public testimony this week and have now agreed the scope of the proposed eminent domain power is too long (12 years) and too broad (805 to San Diego Bay). It is refreshing to see this more measured approach. They ordered staff to revise it for their reconsideration on March 22. If any of this affects you, you should get down to City Hall in advance, ask questions, and move to protect yourself.
We see how these three issues are certainly coupled together. Eminent domain is a hammer, which is held by the redevelopment agency on behalf of developers. Impact fees are used to "put out fires" when trying to keep up with the impacts from the new developments they encouraged in the first place. And a Specific Plan greases the skids so that the whole thing slides along without the hindrance of things like public participation and environmental impact reports. Furthermore, there are many more links in this complex chain. Campaign contributions, ethics, other Specific Area Plans, and of course, personal agendas and interests are all fastened together in a entangled relationship; but alas, these are the stuff of another Spotlight commentary.
Ted Godshalk can be reached at paradisecreek@mac.com

Gan Havana owner given until Dec. 28
San Diego Union-Tribune, May 4, 2004
A Superior Court judge yesterday gave the owner of a recently condemned cigar and coffee lounge in downtown San Diego until Dec. 28 to relinquish his property to the city.
The City Council last month voted to take the Gran Havana Cigar and Coffee Lounge at Fifth Avenue and J Street by eminent domain to make way for a four-star hotel.
The Centre City Development Corp., the city's downtown redevelopment agency, asked the court to grant it the property in 90 days. The judge instead set Dec. 28 as the day the owner, Ahmed Mesdaq, must get out.
Mesdaq has filed two lawsuits in the matter: one in Superior Court complaining that the city denied him the full use of his property; and the other in federal court, alleging that the city violated his constitutional rights.The council admitted that Ahmed Mesdaq's business is not in a blighted area, a requirement for condemning the property, yet condemned it anyway so Marriott can have its four-star hotel.
This is typical of our city's disregard for the small business owner and its kowtowing to big business.
Once again, Donna Frye was the only sane voice on our council.
TERRI OKERLUND San Diego Published on Greedy City Targets Grantville
By Joe Deegan, San Diego Reader, April 22, 2004
It was the winter of 1980, and the employees of the now-defunct Hafer Steel Company in Grantville had to go onto the roof. "A helicopter came and asked whether or not we wanted to be evacuated," says Ken Bernard, who now runs his own steel-reinforcement business several doors away. "We said no, because we knew that [the water] would be going down soon. It was five or six feet deep in the office."
Behind his office, Bernard shows me the cause of the flooding that for decades -- and as recently as last year -- has plagued the area not far from where Mission Gorge Road goes under Interstate 8. I climb onto a pile of clay to see water meandering between two banks of bamboo. It is Alvarado Creek, and on this sunny spring day, the stream is nothing but a trickle of water at the bottom of a tiny ravine. But when it rains, the creek rises and becomes a torrent. And should it rain half an inch or more in an hour, raging waters overflow the creek's banks and turn this site of several small industries into a lake. Bernard remembers the time he had an old 6000-pound station wagon parked on a slope leading up to one of the buildings; the waters lifted the car and it floated away.
Mission Gorge Road is built so high as it passes through Grantville that it acts as a dam on the southwest side of the site. A box culvert takes Alvarado Creek under the road and down toward Qualcomm Stadium, where it joins the San Diego River. "But the creek backs up," says Bernard. "The box culvert under Mission Gorge Road has two barrels, but it should have three to take care of increased drainage that has come about over the years." As land at higher elevations was paved over, drainage became heavier.
Near College Avenue, Alvarado Creek starts at Adobe Falls, whose waters originally come from Lake Murray drainage. Years ago the city of San Diego built a wide channel parallel to Interstate 8 below Adobe Falls to contain the water. Because of a sharp downgrade below College, water cascades rapidly through that channel during wet weather. The widely constructed channel suddenly ends in Grantville, right before it reaches the narrow ravine behind Bernard's business. Excessive water has nowhere to go but up and over the creek's banks.
Business owners in the low-lying area repeatedly asked the city for help. Then, in 1989, says Bernard, "The property owners here filed a suit against the city to clear up the situation. We lost the suit in superior court." The owners wanted the city to put another box culvert in the one link of the drainage system that had remained untouched since it was surrounded by farmland: the 600 feet of creek behind Bernard's business. Bernard says the estimated cost of the culvert at the time was $600,000.
And now, after refusing for years to lift a finger to help these Grantville business owners, the city is contemplating a redevelopment plan for the entire area. Redeveloping an urban area in California allows local officials to reclaim tax revenues that have been going to the state. In redeveloping Grantville, San Diego can look forward to receiving more sales and property taxes than the area now receives.
At its meeting on March 30, the city council allocated $635,000 for a Grantville redevelopment study. The first phase of the study determines whether the community has sufficient blight to justify a redevelopment plan. California's Health and Safety Code, which governs such matters, requires that an area be "blighted" before it qualifies for redevelopment.
Bernard drives me around Grantville and points out the small businesses, from light manufacturing and auto repair to fast food, financial services, and car dealerships. "To planners," he says, "having all these little businesses is inefficient as hell. 'Let's get rid of all this stuff and get something orderly and beautiful.' "
A few properties we see do look a bit slovenly. But as Bernard sees it, Grantville overall is hardly blighted. "Euphemisms," he says, "are the favorite tool of government."
The idea for redeveloping Grantville originated in the Navajo Planning Area, composed primarily of residents of Allied Gardens. Both Grantville and the more residential and populous Allied Gardens are part of San Diego's District 7. Jim Madaffer represents the district on the city council and has been behind the redevelopment plan from its inception.
What irks many Grantville business owners is that they learned of the redevelopment agenda for their area after the Navajo Planning Area had talked the city of San Diego into spending between $15,000 and $20,000 on a preliminary feasibility study. According to Bernard, the Navajo group did not invite the people most affected by the plan to their meeting.
But once the City of San Diego Redevelopment Agency commissioned Rosenow Spevecek Group, Inc., to do the feasibility study, Grantville business owners found out about the plan and founded their own group, Grantville Property and Business Owners Association. Philip Teyssier, whose property is a short distance from Bernard's company, leads the group of 53 business owners. Teyssier created and maintains a website (www.gpboa.com) to assist the organization's members.
The small-business owners' biggest fear is losing their properties to a new redevelopment district through eminent domain. "In eminent domain," says Bernard, "it's my appraiser against your appraiser, and no consideration is given to the legal costs you may incur in fighting the whole thing or even in engaging experts. The weakest suffer the most. And generally, they lose everything, because that's their life, that particular property -- whether leased, rented, or owned."
I inquire into the people behind the inception of the redevelopment plan for Grantville. "I don't know who's behind it. I'm not hurling any accusations," says Bernard, who nevertheless calls the actions a "stealth campaign." He does suspect that Kaiser Permanente -- which has a hospital, a major medical facility, and several other buildings in the area -- supports the plan. Philip Teyssier agrees, adding that H.G. Fenton Building Materials and the large area landowner Caster Development also support it.
On his website, Teyssier posts a letter he wrote to the city council on March 19 objecting to the Grantville redevelopment plan and "the covert manner in which the City has proceeded thus far." Included in the letter is a critique of the initial feasibility study by the Rosenow Spevecek Group. Among other complaints, the critique counters the study's assertion that 80 percent of the study area is urbanized (California's Health and Safety Code requires this percentage in order to qualify an area for redevelopment). To reach that percentage, according to Teyssier, the feasibility study included as "urbanized" a large sand-mining operation in Grantville. The reality, Teyssier argues, is that with the mining grounds, a golf course, and Mission Trails Regional Park, 65 percent of the proposed redevelopment area is not urbanized. "On this fact alone," writes Teyssier, "the study area does not meet the criteria for urbanization and therefore cannot be considered as a redevelopment area."
At further issue between the Grantville Property and the Business Owners Association and Jim Madaffer is the role of lot sizes and traffic congestion. Anyone driving along Mission Gorge Road before it reaches Friars Road is aware of traffic congestion. Teyssier and Bernard insist that redevelopment is already causing congestion in the area. They're referring to the recent building of Home Depot and Sav-on Drug stores right off the intersection of Mission Gorge and Interstate 8. Madaffer, speaking at the March 30 city-council meeting, implied that the redevelopment plan would eventually improve traffic conditions.
Regarding lot sizes, Madaffer contends that small parcels of land make economic growth in an area more difficult and contribute to physical blighting. But on his website, Teyssier writes, "A simple visual review of the proposed study area shows a large variety of parcel sizes, none of them being so ill-configured that [they] would constitute blight and prevent proper development." He also points out that Grantville is already "a very viable economic force."
"Redevelopment proponents minimize our concerns," says Teyssier. "They say that eminent domain is a last resort." They also maintain, he says, that it is not their intention to condemn properties. But a new Grantville redevelopment district may do it anyway. "And that threat of condemnation hanging over the owners' heads is intimidating," says Teyssier.
At the March 30 city council meeting, Teyssier gave a 15-minute PowerPoint presentation, and Ken Bernard spoke for two and a half minutes against the Grantville redevelopment plan. Afterward the council voted nine to nothing in favor of studying it further. "That's what happens," says Bernard, "anytime you have a councilman get behind a plan without consulting beforehand with the people the plan is going to affect."

Officials seeks to expand eminent domain, National City issue up for vote Tuesday
By Tanya Sierra, Union Tribune, February 19, 2005
NATIONAL CITY – City officials want to double the area where they can use their eminent domain authority, an option that might be key to their quest to revitalize the city with new homes and retail businesses.
In a joint meeting Tuesday, the Community Development Commission – made up of City Council members – will vote whether to expand the eminent domain area from National City Boulevard and the Harbor District to include Highland Avenue, the city's west side, East Plaza Boulevard, parts of the 8th Street corridor and parts of 30th Street and Sweetwater Road.
Several residents have spoken against expanding the city's eminent domain authority, which would ultimately allow the city to take over certain properties by court order if landowners do not want to sell their properties for redevelopment.
The city can use eminent domain to obtain property within its redevelopment area. Those properties include those zoned for commercial or industrial use and all vacant or abandoned properties regardless of their zoning designation, said City Attorney George Eiser.
Residential property will not be targeted, he said.
City officials seldom reach the point where a court order is necessary. Instead, they try to negotiate until the owner sells, said redevelopment director Ben Martinez.
Eminent domain authority lasts 12 years, then expires. If the expansion is successful Tuesday, the city can use eminent domain for another 12 years where it is already allowed and will add the new area for 12 years, as well.
When the proposal was first announced, about 250 residents showed up at city meetings in October and November to speak against it. They were concerned that with so much development, National City would lose its small-town feel and that small businesses would be forced out.
Martinez said previously, in response to those concerns, that "there are winners and losers in redevelopment," but he would "try to limit the losers" to businesses that don't fit with the city's plans to bring in more retail and improve its image.
The Constellation Property Group, for example, has offered to invest $130 million in a high-rise condominium and retail project on National City Boulevard between 11th and 12th streets.
The development would oust businesses on that block, including Lourdes Family Restaurant, the first Filipino restaurant in National City, according to owner Lourdes Barrera.
After 33 years in the same building, Barrera said she is negotiating with Constellation to reopen her business in the retail space on the first floor of the proposed 21-story building.
"As long as it's fair, I'm all for beautifying National City," she said. "It's time. For so long it's been stagnant."
Not everyone in the redevelopment area is as welcoming to developers. Some property owners have spoken at public meetings about being bothered by developers or their representatives who want to build on their property.
Daniel Ilko, who owns the property next to Lourdes restaurant, told city officials at a meeting this month that a real estate agent trying to acquire his land for Constellation harassed him and his family.
"They threatened us saying if we don't sell now, we'll lose the property," Ilko said during a Community Development Commission meeting. "They accosted my 9-year-old daughter."
Ilko wouldn't elaborate on his contact with Anthony Napoli, of Anthony Napoli Real Estate Group in Little Italy, who was representing Constellation. A message on Napoli's voice mail indicated he is out of the country, but representatives of Constellation said Napoli's behavior was not inappropriate.
"He was just trying to get the offers out," said Mark Astone, who is in charge of Constellation's marketing firm. "His intentions weren't to harass anyone. Two children answered the door with the maid. He just left the offer with the daughter. I don't think that's accosting."
City project manager Gerard Selby said Napoli's behavior was unprofessional.
"The behavior of the representative was overboard completely," Selby said at the meeting.
Barrera, who also dealt with Napoli, said she wasn't bothered by his approach.
"He has an attitude, but it didn't bother me because I threw back what he gave me," she said.
Condos in Constellation's project would sell for $400,000 to $750,000, according to a city report.
Tuesday's meeting is at 6 p.m. at City Hall, 1243 National City Blvd. Developer clashes with city over park
McMillin wants bonds issued for head start on NTC amenity
By Ronald W. Powell, Union Tribune, February 7, 2005
The developer of the former Naval Training Center does not want to start building a 46-acre waterfront park unless San Diego issues a repayment bond, which the city attorney is refusing to authorize.
Under the city's contract with Corky McMillin Cos., the developer must be reimbursed for constructing the park and other public improvements through city bonds, which property owners at the former boot camp will pay off.
McMillin is obligated to start the park work by January, but company officials say construction could begin in May, if the city would issue $15 million in bonds to repay the company now, rather than when the work is completed.
If the construction starts in May, the developer would build the park in two phases, completing it in 2008.
Without the bonds, the company would not start the work until December and would complete it in three phases, ending in 2012, said Walter Heiberg, McMillin's vice president.
That schedule follows the agreement the city has with McMillin for building the 361-acre Liberty Station redevelopment project west of Lindbergh Field.
Heiberg said the city's financial problems make the company hesitant to obtain private financing and get an early start on the park without the bonds.
"We want to be assured there is a refunding source," Heiberg said. "We want to work with the city in the current situation they're in, and to be a good partner. If we can start the park early, it will be good for us and the community."
Liberty Station homeowners are angry that the park work may not start early, because they already are paying the property tax assessment to cover the future bond debt.
The annual assessments for homeowners range from $2,138 to $4,307, depending on the size of their houses. The money goes into a fund collected by the county and administered by the city.
There is about $441,000 in the fund, which is expected to grow to more than $1 million by the end of the year.
The park is one of the few amenities that benefit the general public at the project, and residents and San Diego Councilman Michael Zucchet, whose district includes Liberty Station, believe it should be built without delay.
"He stands to make a huge profit on this project," Liberty Station homeowner Greg Finley said of Corky McMillin, owner of McMillin Cos. "But now that it's showtime to build the park, there are excuses. I think he's morally obligated to get this park going right now."
Cynthia Conger, chairwoman of the Peninsula Community Planning Board, said the 62,000 residents of neighboring Point Loma are in dire need of park space and are eagerly awaiting the park at the former Naval Training Center.
Conger said McMillin stands to make a substantial profit on the development because the developer is receiving 81 acres for free. She said he should put the park on a fast track as a show of appreciation to the city's taxpayers.
"He's put very little of his own money into this project," Conger said.
City Attorney Michael Aguirre is refusing to sign the documents that would allow the bond issue, saying the city's financial picture is too cloudy. Aguirre said he cannot vouch for the city's fiscal health, as required in the documents, because the city does not have financial audits for fiscal 2003 and 2004.
Preparation of those audits is hampered by the city's admission of errors and omissions in financial statements provided to prospective investors in San Diego's bond portfolio. The omissions included an inaccurate accounting of the $3.2 billion San Diego City Employees Retirement System's deficit, which now totals nearly $1.4 billion.
The financial reporting problems have led to investigations by the Securities and Exchange Commission, the FBI and the U.S. Attorney's Office.
Without the audits, San Diego would have to pay exorbitant interest rates on any bond debt, which Aguirre said would be ill-advised.
A spokeswoman for Mayor Dick Murphy said the council cannot vote on the bond issue without Aguirre's approval that the action is legal.
"I have to sign opinion letters (involving the city's finances), and I can't sign them at this time," Aguirre said. "I won't do anything to put the city at further risk."
An undated draft memo from the City Manager's Office says the city would not be put at risk by issuing the bonds.
The memo, obtained by The San Diego Union-Tribune, says the city's bond counsel recommends the City Council issue the bonds because they are backed by property owner assessments – not the general fund or other revenues.
City Manager Lamont Ewell did not return calls Friday for comment.
Murphy said in a statement Friday that he believes the city should proceed with the bond issue.
"I think it's unfortunate that this bond is being held up," Murphy said. "I hope to speak with Mr. Aguirre and convince him to put his stamp of approval on this matter, especially since there is no obligation to the city. The public deserves to have this park built without delay."
With or without the bonds, the homeowners and Zucchet said McMillin should obtain private financing and start the park early.
They said McMillin readily obtained private financing to build the 349 houses outlined in the city's redevelopment plan. About 250 of them are occupied. McMillin also has financed and built two office buildings and has two more under construction. The housing and office buildings make money for the company, the homeowners and Zucchet said.
Liberty Station housing prices have ranged from about the mid-$400,000s to more than $1 million. McMillin sold one of the office buildings in June for $8.3 million. Rents in the other building, which the company owns, range from $2.35 to $2.45 per square foot.
Heiberg said demolition of former Navy buildings, the widening of Rosecrans Street, and the construction of houses, streets and other infrastructure all were started earlier than agreed upon by the company and the city.
If the bonds are issued, the company would like to do the same with the park, he said. The first phase would encompass 18 acres and include baseball fields, basketball courts, soccer fields, tot lots, restrooms, and hiking and biking trails.
Heiberg said the company would like to be told in writing why the bond issue is not going forward.
Aguirre said that since McMillin is obligated to build the park, it should proceed with private financing and expect repayment when the city obtains clean audits and is able to issue bonds.
"McMillin's financial statement is impeccable, and I'm sure (Corky McMillin) can go into the private market and get this financing done," Aguirre said. "We wish him the very best."
Dissension over the park construction looms as the largest public dispute at the redevelopment project since the council selected McMillin in 1999 to carry out the city's plan to convert the 75-year-old military property into a neighborhood. The 505-acre training center closed in 1997, and the Navy transferred title to most of the property to the city.
The project is to include 349 homes, two hotels, seven office buildings, an educational district, a civic, arts and culture center, and the 46-acre park.
Since the city did not have money to fix up the property, it selected McMillin to develop the property through private financing.
To sweeten the deal, the city gave McMillin 81 acres to develop and sell, including 37 acres for housing and 22 acres for offices. The company also was given 118 acres to develop and lease, including the two hotel sites, a 22-acre golf course and 60 acres for commercial use.
City officials expect taxpayers to derive economic benefit from the development. Room tax from the two hotels is expected to generate $4.8 million annually. Tax revenue from the developed property could bring in $2.4 million a year, including $750,000 annually for low-and moderate-income housing.
Since taking on the project, Heiberg said, McMillin has spent $60 million in upfront costs for demolition, street construction, hazardous waste cleanup, parking lots, landscaping and infrastructure improvements.
McMillin also provided $2 million in seed money to establish a nonprofit foundation that is responsible for operating the cultural center.
Heiberg would not disclose how much McMillin has invested in building the houses and office buildings or reveal how much profit the company is making.
Zucchet said he advocates McMillin developing the park early, even if the city can't issue the bonds in advance.
"My view is they're obliged to build the park no matter what their concerns are about the city's finances," Zucchet said.Face-lift urged for Midway, Panel recommends new sports arena, street fixes
By Angela Lau, Union Tribune, January 31, 2005
The San Diego Sports Arena anchors a 95-acre city-owned area that many say needs to be redeveloped.
The Sports Arena and Midway area has long needed a face-lift, but it may have to wait a little longer.
The future of the 95 acres of city-owned property anchored by the Sports Arena remains as uncertain as ever with another attempt to undo the blight in the Sports Arena and Midway area under fire.
A citizens' panel recently presented recommendations for improvement, but the proposals immediately drew criticism.
Differing redevelopment philosophies create some of the friction. So do concerns about a proposal to eliminate the 30-foot height limit in certain portions of the redevelopment area.
In 2002, the city solicited proposals from developers interested in redeveloping the land. But City Councilman Michael Zucchet halted the process and formed the Sports Arena Ad Hoc Committee.
The committee's recommendations included:
Building a new arena in another location when the Sports Arena is no longer competitive. The current facility could be demolished to make way for redevelopment or used for other purposes. Building a new arena in the present location would be unlikely because existing roads already are congested and would not be able to cope with increased traffic from a bigger facility.
Asking voters to decide whether to increase the 30-foot height limit to 85 feet for residential and commercial buildings in some of the redevelopment area. The rationale for the increase is that it could produce greater tax increments, which could be used to finance affordable housing, parks and infrastructure improvements.
Retaining Kobey's Swap Meet in the neighborhood. It currently leases space on the Sports Arena grounds.
Maintaining city ownership of the land and only selling individual parcels if it is proven to be beneficial to the public.
Easing chronic traffic congestion by re-establishing a street grid connecting the north and south sides of Sports Arena now broken by Rosecrans Street and limiting new intersections with Sports Arena Boulevard.
Retaining two affordable housing complexes, Stonewood Gardens and The Orchard apartments on Hancock Street and Midway Drive.
Excluding big-box super stores of more than 90,000 square feet.
Stifling the growth of adult entertainment businesses by building more residences, since city codes require adult entertainment to be located at least 1,000 feet from dwellings. The committee also recommended increasing the distance between adult entertainment and residences to 2,000 feet.
Developing parks.
The panel consisted of 11 representatives from planning boards, town councils and business organizations in the Midway area and the surrounding communities of Ocean Beach and Point Loma.
The triangular redevelopment area is roughly bounded by Sports Arena Boulevard at the intersection with West Point Loma Boulevard, Interstate 8 and Rosecrans Street. It is just minutes from San Diego Bay, accessible by major freeways and close to the San Diego Trolley in Old Town. It is also marred by haphazard planning and traffic congestion and surrounded by adult entertainment businesses.
"This is one of the most valuable pieces of land the city owns," said Zucchet, whose 2nd Council District includes the area. "It is one of the remaining large parcels of land . . . Developers are salivating over it."
No longer competitive?
Valuable as the land may be, it has produced little revenue for the city.
Last year, the Sports Arena, which is on 38 acres, netted $497,813 in rent, which was based on its revenue from parking or activities held in the parking lot and not on activities inside the arena, said Will Griffith, the city's real estate assets director. The Sports Arena lease, which expires in 2017, was negotiated before Griffith joined the city. Arena Group 2000, led by businessman and developer Ron Hahn, took over the lease in 1992. His son, Ernie Hahn II, was a member of the ad hoc committee and is the general manager of the Sports Arena. Arena Group 2000 also owns the Gulls hockey team, which plays at the arena.
The Sports Arena deal "is an example that we are not getting what we should be getting," the city's director of community and economic development, Hank Cunningham, said in an interview last year. "It is a lease that has been around for a long time."
The lease is a popular target for critics, among them some ad hoc committee members.
"It is not profitable for the citizens of San Diego," said Joe Mannino, the committee's chairman. "There are people who generate a half million dollars on a single building on one acre."
Three businesses recently built by Arena Group 2000 on the arena parking lot – Chili's, Arco AM-PM and Krispy Kreme – brought the city $44,057 in rent last year.
In all, the 95 acres – which includes 14 leases held by 11 tenants – generated $3.2 million in rent last year, Griffith said. Some of the other leases include Dixieline, Pier 1 Imports and Stonewood Gardens and The Orchard apartments, city officials said.
Community watchdogs, however, are wary that some of the committee's recommendations would change the face of the peninsula forever.
Chief among their complaints is the proposal to relax the height limit. The proposed change would be limited to 35 percent of a project's land mass and restricted to an area bounded by Midway Drive, Interstates 5 and 8 and Barnett Avenue and Witherby Street.
"People who live on the coast are determined not to break the height limit," said Jarvis Ross, one of the ad hoc committee's 11 members. Ross, who represented the Peninsula Community Planning Board, voted against the committee's recommendation to change the height limit.
"It was made solely to enhance the value of the lands owned and controlled by a majority of the supporters," wrote Ross and another committee member, Vance Spurrier, who represented the Ocean Beach Planning Board. They distributed a dissension document to counter some of the committee's recommendations.
Ross was referring to committee members like Ernie Hahn II, who has expressed great interest in redeveloping the 43 acres that Arena Group 2000 operates. That acreage includes the 38 occupied by the arena and an additional five in an adjacent shopping center anchored by the Black Angus restaurant. That lease is up in March 2006.
"We got involved (in leasing the arena) to make sure we got 43 acres of really good land we can redevelop over time," Hahn said. "The issue is looking at this land for the long term and figuring out how to address it.
"We can create an unbelievable tax-increment base, re-create and re-brand this area," he said. "This 43 acres will set the tone and priority for the whole area."
The 38-year-old arena is no longer competitive against new complexes such as Cox Arena and Coors Amphitheatre, Hahn said. He is looking for a new home for the arena.
Hahn, however, said he had the city's best interest in mind when he voted in favor of increased height limits, moving the arena and restricting the growth of adult entertainment businesses.
Mannino, who also is the executive director of the North Bay Association that represents businesses in the Midway and Sports Arena area, took issue with criticisms of the committee's work.
"Just because the community agrees with the positions of Ernie Hahn, it does not mean that he influenced the community, but maybe his opinion was consistent with that of the community's," Mannino said.
"It's easy for people to say 'Don't do anything' and complain about blight," Mannino said. "It's hard to come up with ways to make Midway a more livable, safer and cleaner community."
Jere Batten, who represented the Ocean Beach Town Council on the ad hoc committee and who voted against the proposed height limit change, said any increase could open the floodgates for future high rises. But she agrees that varied building heights accompanied by parks and open space could be aesthetically pleasing.
Contrary to popular belief, high-rises are not conducive to producing affordable units, said Dale Royal, a senior project manager for the Centre City Development Corp. He said buildings higher than four or five stories are constructed with steel and concrete, which cost more than wood frames.
Zucchet, a staunch supporter of the height limit, defended it again, although he said the committee's reasoning was "absolutely valid and cogent." "The 30-foot height limit has served the coastal zone very well. Exceptions should be few and far between," Zucchet said. "It is such a huge piece of property that if we do something dense and tall, there'd be tremendous impact. I don't think the area can handle it."
But Zucchet added that he supports many of the committee's other recommendations, such as retention of Kobey's Swap Meet, the development of residential and commercial projects, the attempt to stop the growth of adult entertainment businesses, the construction of affordable housing and the easing of traffic congestion.
With redevelopment inevitable, community watchdogs, such as the San Diego Coastal Alliance and Save Our NTC, cautioned San Diegans not to allow a repeat of what they characterized as a giveaway of city land at the Naval Training Center to developer Corky McMillin. The Naval Training Center, renamed Liberty Station, is being redeveloped.
"Sports Arena, we own it. They want it. Take a stand," stated a flier distributed in the community by the San Diego Coastal Alliance before an ad hoc committee meeting last year.
Because of clashing opinions among his constituents, Zucchet said he will not advocate wholesale changes.
Instead, he said, he is focusing on smaller improvements, such as changing the community's gateway on Rosecrans Street. He said plans are under way to build residences near Interstates 8 and 5 where adult businesses are currently located.
Another redevelopment, a residential complex of up to 170 condominiums, also is being planned. It will be adjacent to Sharp Cabrillo Hospital, said Peter Fagrell, vice president of land planning and development for Lennar Homes of California.Legal Plunder
By Doug Bandow, Published 1/4/2005
Abuse of Power:, How the Government Misuses Eminent Domain
by Steven Greenhut (Seven Locks Press, 311 pages, $17.95)
For more than two decades the Michigan Supreme Court's decision in Poletown Neighborhood Council v. Detroit allowed governments in that state to take most any property they wanted to transfer to most anyone they wanted for most any reason they wanted. The U.S. Constitution's "public use" restriction was satisfied, the court ruled, even when Detroit seized an entire ethnic neighborhood to hand over to General Motors for a new factory.
Alas, this case was no anomaly. As Steven Greenhut, an editorial writer for the Orange County Register, observes in his timely new book, Abuse of Power: How the Government Misuses Eminent Domain, "governments increasingly use eminent domain to take property from one private owner in order to give it to another private owner." A small home owner or businessman then "must surrender his home or business because a wealthy developer -- perhaps a big campaign contributor and mover and shaker in the community, or an out-of-town corporation promising an expanded tax base for the city -- has bigger and better plans for it."
The abuses are legion. But sometimes property owners -- "ordinary heroes," Greenhut calls them -- fight back and beat city hall. Today they often do so with the aid of the Washington-based Institute for Justice, which has made protection of property rights one of its most important objectives.
So rank have been the outrages that in July the Michigan Supreme Court expressly overruled its Poletown decision "in order to vindicate our constitution, protect the people's property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law." The new case, Wayne County vs. Hathcock, barred use of eminent domain to construct an industrial and office park. Michigan may no longer seize private property for "economic development," that is, to hand to new private owners who might pay more in taxes.
Although the case has no formal legal force outside of Michigan, it reflects a slow renaissance of judicial respect for property rights. The Poletown decision was oft-cited by other courts as they ruled that public officials could take land at their pleasure. Wayne County will help shift legal currents in the other direction.
Indeed, all legal eyes now fall on the U.S. Supreme Court, which is considering a case involving the city of New London, Connecticut. The Connecticut Supreme Court, relying upon the reasoning of Poletown, upheld the plan by the New London Development Corporation to take scores of modest riverfront homes and businesses to build luxury houses, expensive office space, and a hotel. "How come someone else can live here, and we can't," asks Susette Kelo, one of the dispossessed landowners.
It's a good question, and Steven Greenhut's answer is that someone else gets to live there when local officials decide to engage in social engineering for fun and profit. Not always, of course -- sometimes eminent domain is used for traditional purposes as road-building.
But increasingly government deploys eminent domain in an attempt to create "high-valued," meaning taxable, development. That goal often supplements the desire to benefit local elites, usually with the connivance of the usual civic boosters, including the media. Greenhut dissects how journalists routinely fail to question even the most obvious eminent domain abuses.
THE HEART OF GREENHUT'S book is a series of examples of government's routine misuse of power. There's abundant bad news. Public officials typically favor the wealthy and influential because they are wealthy and influential. But Greenhut also found good news: though property owners often lose, increasingly they are fighting back and winning.
For instance, the city fathers of Garden Grove, a working class community south of Los Angeles, decided to turn a tidy neighborhood of 400 into a theme park. Explains Greenhut: "There was no developer in mind, just an idea in the head of the city's top planners and bureaucrats. They were going to do what they had been doing on a smaller scale across the city: play land developer by condemning property, then trying to market the acquired tracts to some big out-of-town development company."
Officials attempted to deny the obvious, while treating the neighborhood as blighted. No normal person would have thought that but, writes Greenhut, "Blight, as advocates of redevelopment and eminent domain often point out, is a legal term rather than a descriptive term."
Happily, homeowners organized effectively and forced the city to back down. Garden Grove removed the neighborhood from its "redevelopment" area, while proceeding with similar efforts elsewhere.
Equally outrageous was the attempt by Cypress, another southern California city, to seize Cottonwood Christian Center in order to transfer the property to Costco. Churches don't deliver much in the way of property or sales taxes, a black mark in the view of city councilmen dedicated to the old principle of tax, spend, and elect.
In Cypress, writes Greenhut, "City officials did not dress up what they were doing in legalistic language. They were brazen in their goals. They ridiculed church members at public meetings. They bragged about their ability to use eminent domain for whatever reason they chose, and they made it clear that the government's desires should take precedence over the desires of ‘a narrow special interest,' which is how city officials repeatedly referred to the church."
The 4,500-member interdenominational congregation fought back, aided by the Becket Fund, which specializes in defending religious liberty. To its credit, the church rejected an offer by Cypress to trade for the property next door -- which the city would seize from its owner through eminent domain. Eventually, Cypress, which lost a preliminary court ruling, agreed to a voluntary land swap which yielded the church more room for its new worship center.
Adverse publicity helped derail an abusive taking by Atlantic City. Vera Coking, a widow, was unfortunate enough to live across from Donald Trump's casino. He asked the local redevelopment agency to take her property for a limousine parking lot for high rollers. With the help of the Institute of Justice, Coking won: the term "blight" could be most accurately applied to Trump's enterprise, which has veered towards bankruptcy.
EMINENT DOMAIN WAS LONG thought to be justified for a genuine "public use," that is, something used by the public. That's why the framers of the Constitution included a limited power to take property in the Fifth Amendment. Yet today the public use requirement has almost disappeared, as officials, with judicial approval, regularly take property from Peter to give to Paul. Only if officials forget to invoke an alleged public interest could it be stopped.
Although the courts have been more willing to enforce the provision requiring payment of compensation, they too often have allowed governments to take advantage of property owners. Moving expenses, business goodwill, advantageous locations, as well as real values often are lost or minimized when figuring compensation.
The result would still be rank injustice even if the property was taken for a real public purpose. Instead, more often than not eminent domain is now used as a form of corporate welfare, intended to enrich billionaire retailers like Costco and millionaire real estate moguls like Donald Trump. Other favored beneficiaries are owners of hotels, race tracks, and sports franchises. Its "legal plunder," Greenhut writes, just like the historical experience of mercantilism, which featured "a powerful central state that worked in concert with established, private interests."
Greenhut's worthy call to arms concludes with a practical primer on how individuals, families, churches, and communities can fight back. Most important is an aroused citizenry prepared to defend their rights. "Ordinary heroes" helped create this nation more than 200 years ago. They helped preserve America through many difficult trials in peace and war. They can help restore life to constitutional provisions that were meant to protect all of us from government misuse of its power of eminent domain.Cities Use Eminent Domain To Clear Lots for Big-Box Stores
DEAN STARKMAN, Staff , WALL STREET JOURNAL, Dec. 8, 2004
Big-box retailers have a message for local landowners: Move.
And the command has the force of law, much to the dismay of Darrell M. Trent, a part-time developer in Pittsburg, Kan. Mr. Trent thought he scored a coup this year when he leased part of a seven-acre parcel his family had owned since the 1960s to a local plumbing supplier.
But the city took the property this spring through its powers of eminent domain and handed it to a developer with a different tenant: Home Depot Inc.
Says Mr. Trent: "After having carried it all this time, for them to step in and take it away from me -- it really denies me my corporate livelihood," Mr. Trent says.
Desperate for tax revenue, cities and towns across the country now routinely take property from unwilling sellers to make way for big-box retailers. Condemnation cases aren't tracked nationally, but even retailers themselves acknowledge that the explosive growth of the format in the 1990s and torrid competition for land has increasingly pushed them into increasingly problematic areas -- including sites owned by other people.
The village of Port Chester, N.Y., is clearing an entire business district -- including a marina, a housewares importer, an antiques store and several other businesses -- to make way for Costco Wholesale Corp., Bed Bath & Beyond Inc. and others. Costco took over another site after the city of Cypress, Calif., condemned a vacant lot as a "public nuisance" to stop a Christian group from building a religious center there. After a public uproar, the city found another site for the church , which says it is satisfied with the ultimate outcome.
The township of North Bergen, N.J., moved to condemn a store in a shopping center occupied by Kmart Holding Corp. in favor of a developer who plans another Home Depot. When the city of Maplewood, Mo., invited retailers to compete for a chunk of choice land, developers for Costco and Wal-Mart Stores Inc. fought a nasty legal and political battle. Wal-Mart's developer won -- and 150 homes and businesses were condemned.
Next spring, Costco will face its second shareholder resolution in two years asking the company to "adopt a policy for land procurement and use that incorporates social and environmental factors," particularly, the wishes of local property owners and community groups. The resolution was brought by Christian Brothers Investment Services Inc., New York, which says its concerns include "reputational risk" from eminent-domain use. "If the company continues to operate in this manner, with the amount of publicity and protests, this could end up impacting shareholder value," says Julie Tanner, a Christian Brothers spokeswoman.
Property-rights advocates say the use of condemnation for big boxes is an abuse of government power that subsidizes big retailers at original landowners' expense. "They're the new generation of robber barons, like the railroads of the 19th century" says Gideon Kanner, a professor emeritus at Loyola University Law School in Los Angeles. "They look upon this as the new way of doing business."
The U.S. Constitution and most state constitutions allow the government to take private property, with compensation, for a "public use." But courts over the years have allowed cities and towns to stretch the definition to include economic-development projects, on the principle that one private owner can better create jobs and increase tax revenue than another.
Retailers say they're doing nothing wrong. Costco, based in Issaquah, Wash., is the most outspoken of the big retailers in defense of the practice. In a candid letter to a concerned shareholder two years ago, the company's senior vice president for legal and administrative affairs, Joel Benoliel, acknowledged that "probably dozens" of its projects involved eminent domain "or the threat of it." He wrote that if Costco didn't do the deals, "our competitors for those sites, like Target, Home Depot, Kmart, Wal-Mart, BJ's, Sam's Club and many others, would ... and our shareholders would be the losers."
Mr. Benoliel says the practice doesn't violate laws or any rules of the free-market economy and rejects as "simplistic" libertarian arguments that condemnations should be confined, as some property-rights advocates argue, to roads, bridges and purely public uses. He says communities, balancing their fiscal needs against the rights of a few, often clamor for a Costco store. "We are viewed as a solution to a problem," he says.
Whether condemnees get full value for their property is a matter of bitter debate. Property owners invariably complain they are strong-armed into accepting low-ball offers. In New York's Port Chester, a working-class city on Long Island Sound, developer Bart Didden says that village redevelopment officials this year offered him $250,000 for a lot that a separate local taxing authority assessed last year at $560,000. He is challenging the village's condemnation in federal court in White Plains, N.Y.
John Watkins, a special counsel for the village, says all offers were based on "highest approved appraisals," as required by state law. He says he understands Mr. Didden's reaction, but adds that tax assessments and appraisals serve different functions -- "apples and oranges," as he puts it.
Also in Port Chester, property owners and tenants alleged in several suits filed since 2000 in state court in White Plains, N.Y., that G&S LLC, the town-appointed developers, tried to prod them into settling pending condemnation suits by, among other things, removing sidewalks in front of a restaurant and filling its parking lot with rubble; tearing out street lights around an antiques store and shearing off the roof of a still-operating coin laundry.
Doug Riley, a partner with closely held G&S, Port Chester, says the allegations are both untrue and "100% frivolous." He says that under its agreement with the town, the firm was required to proceed with the project, while working around certain properties still the subject of litigation. "We were proceeding in due course with the project as we were required to do by the village," he says. Suits involving the restaurant, the antiques store and laundry are pending.
Lately, cities' power to condemn property has come under increased legal scrutiny. In August, the Michigan Supreme Court reversed a landmark 1981 ruling, widely cited by other states, that effectively barred condemnations for purely economic purposes in that state.
Then, in September, the U.S. Supreme Court agreed to hear a suit brought on behalf of New London, Conn., property owners challenging the city's plan to clear nonblighted homes and businesses to make way for an office-and-research park. The case, brought by Institute for Justice, a Washington, D.C., property-rights law firm, is the first the high court has heard on economic-development condemnations since the 1950s.
Last year, a federal judge sharply criticized Target Corp. for its role in a condemnation of a St. Louis site. The case began after Target, which was already renting a store on the site, asked its landlord for permission to knock down the store and build a larger one. When the landlord asked for higher rent, Target never called back and turned to a local alderman, who started condemnation proceedings, according to an opinion by Judge Charles A. Shaw in U.S. District Court, St. Louis.
Judge Shaw also found that Target "falsely" threatened the city that it would abandon the store if the condemnation didn't take place. He also found that the Minneapolis retailer and the city commissioned a "blighting study" that found the store's electrical and heating systems had indeed deteriorated -- but failed to note that Target itself was responsible under the lease for keeping the systems up. Finally, the judge found, when the city scheduled a public hearing on the condemnation, in November 2002, it sent notice to Target, but not to the landlord -- a trust representing the Aaron family of New York and others -- which didn't learn of the hearing until a month later.
Judge Shaw issued a temporary order halting the taking. Earlier this year, the Eighth Circuit U.S. Court of Appeals reversed the order, ruling the case should have been heard in state court. Edward M. Goldenhersh, a St. Louis lawyer for the landlord said the family was disappointed with the appeals-court ruling because the court "ducked the issue." The two sides settled afterward.
A Target spokeswoman declined to comment. A spokesman for Mayor Francis Slay didn't return telephone calls.
Mr. Trent, the Kansan, had a special hardship fighting his case: When it was filed, he was serving as a U.S. ambassador with the Coalition Provisional Authority in Iraq. He says the case began after he rejected a "low-ball" offer from Home Depot's developer, then flew to Baghdad. His lawyer tried to fend off the taking, but a state court in Pittsburg let it go forward this spring. Mr. Trent is challenging the compensation. That case is pending.
Allen Gill, Pittsburg's city manager, says Mr. Trent was well compensated, receiving more than $1 million for his property -- a large sum for rural Kansas. He also says Mr. Trent and another owner's opposition blocked a badly needed project that has already sparked other development in town.
"Does the greater good outweigh the inconvenience to the two?" Mr. Gill asks.
In a statement, Atlanta-based Home Depot said the project would bring "good paying jobs and economic development," adding that "the City of Pittsburg identified this site as an area in need of redevelopment, and the Home Depot was receptive to working with the developer who was negotiating with the city."Supreme Court to hear eminent domain case important to San Diego
By KEVIN CHRISTENSEN, The San DiegoDaily Transcript, 9/28/04
The U.S. Supreme Court has agreed to hear a case that will help establish the legality of whether cities can use eminent domain to condemn land for economic purposes.
Local experts believe the ruling will have important consequences for the city of San Diego, where numerous properties were condemned to construct a new ballpark and, more recently, a private property was taken in the Gaslamp Quarter and given to a hotel developer.
The court will hear an appeal by a group of Connecticut residents that allege the city of New London tried to condemn their property to make way for a five-star hotel, luxury condominiums and office buildings near a facility operated by Pfizer Inc. (NYSE: PFE).
The city claims it is trying to reverse decades of economic decline.
The case could have a nationwide effect on what some are calling a problem where financially strapped cities are condemning private properties for sale to private companies or other economic interests that promise more tax revenues.
The U.S. Supreme Court ruled in 1954 that government agencies could condemn a blighted property so long as they compensate the owner. A subsequent ruling cleared the way for municipalities to take property to break up an oligopoly on land ownership.
The New London residents' appeal centers on the U.S. Constitution takings clause, which requires government agencies to pay just compensation when they take over private property.
The 15 Connecticut homeowners contend in their appeal that the takings clause also requires a public use and that the government must do more than simply point to the possibility of economic revitalization.
The ruling could affect San Diego because the City Council recently approved a 12-year extension for the use of the eminent domain by its Redevelopment Agency.
The San Diego Centre City Development Corp., which serves as the liaison to developers, has played an important role in the successful redevelopment of downtown and designating properties for condemnation.
David Allsbrook, manager of contracting and public works for CCDC, said that eminent domain has been a "vital tool in implementing the development plan" and bringing new life to downtown San Diego.
Bruce Beach, attorney for Best Best & Krieger LLP and counsel for CCDC, said that this ruling will not apply to downtown San Diego because it is a redevelopment area and one of the explicit purposes is to remove blight.
Other local experts believe that the ruling may have a major consequence on the city's ability to use eminent domain.
"It could have serious repercussion if the court decides that (cities) do not have the right to take the properties," said Roscoe Keagy, an attorney specializing in eminent domain for Asaro, Keagy, Freeland, McKinley & Bartz.
Dick Freeland, also an attorney with the firm, said that the city could lose the right to condemn even in development areas.
"It would certainly be troublesome," he said.
CCDC has recommended that the City Council use its eminent domain powers 14 times since the city began redeveloping downtown San Diego in 1992, according to a list of projects supplied to the council in March.
The largest application of condemnation power occurred to make way for Petco Park, when 56 condemnation cases were filed for the ballpark, which opened this year. Forty-nine cases settled out of court, one is still pending and six cases proceeded to trial.
Earlier this year the San Diego City Council followed a CCDC recommendation to condemn the Gran Havana Cafe and Cigar Factory to give the property to GRH LLC, a private developer.
The owner of the cigar shop, Ahmed Mesdaq, operated the shop at that location for nearly three years and about 10 years in another location on Fifth Avenue.
The city planned to sell the property to make way for the construction of the $70 million Marriott Renaissance hotel that will include 334 rooms, about 8,500 square feet of retail space, and a 13,000-square-foot ballroom and meeting space.
The council approved condemnation on an 8-1 vote in April 2004, with Councilwoman Donna Frye opposing.
Mesdaq has since filed a number of lawsuits in an effort to block the condemnation.
Vincent Bartolotta, counsel representing Mesdaq, said this case strikes at the heart of the Mesdaq case.
"In this particular case, the use to which the property is going to put is not for public benefit, it is going to a private owner that is going to make a profit," Bartolotta said. "It's going from a little guy to a big guy."
Gregory Garrison, an eminent domain attorney for Garrison McInnis LLP, said that this case could either lie to rest all of these lawsuits or open up a lot of old wounds and hold the potential for more lawsuits.
"It will end a lot of litigation if the Supreme Court says (a city) can do whatever they want to," Garrison said. "But it will start a lot of litigation if they say the city can't do it."
Related Article:
Supreme Court asked to review use of eminent domain (Jul. 27, 2004)
The Associated Press and Daily Transcript staff writer Catherine Macrae Hockmuth contributed to this report.
State says fairgrounds might fetch $1.4 billion, But report doesn't call for sale now
By Ed Mendel, Union Tribune, November 6, 2004 SACRAMENTO – A new report estimates that the cash-strapped state of California could sell the Del Mar Fairgrounds, 407 acres of prime coastal real estate, for as much as $1.4 billion.
The report, issued by a unit created by Gov. Arnold Schwarzenegger to recommend ways to improve state government, says the fairgrounds are "perhaps the state's most valuable commercially used property."
But the report this week from the California Performance Review, which also estimates the value of two blocks of state-owned land in downtown San Diego at nearly $30 million, does not call for the immediate sale of the fairgrounds.
Instead, the report recommends a planning and economic analysis to determine the "highest and best use" of the fairgrounds and whether part of the property could be redeveloped for other uses while continuing current operations.
The Del Mar Fairgrounds is one of about 50 state properties listed in the report on "high-value urban properties," including the Los Angeles Coliseum, San Quentin Prison near San Francisco and the State Fair in Sacramento.
"Based on our preliminary assessment, redevelopment or disposition of these properties would unlock $1.6 billion to $4.3 billion in value, depending on future zoning and entitlement provisions," said the report.
The report said that some of the state property, including fairgrounds, are of "questionable relevance to the core functions" of state government and should be evaluated for consolidation or sale.
In addition to fairgrounds in Del Mar and Sacramento, the report listed state-owned fairgrounds in Orange, Ventura, Santa Barbara, Napa and Contra Costa counties.
The state began backing fairs a century ago to promote agriculture.
The Del Mar Fairgrounds, operating with a board appointed by the governor, is the home of a major horse-racing track and a number of year-round events.
A history on the Del Mar Fairgrounds Web site says that a $500,000 federal WPA grant obtained in 1936 paid for building construction after the state acquired the first 184 acres for $25,000, and an additional 57.2 acres for $10,868.
The operation of the Del Mar Fairgrounds provides no revenue now for the state general fund, said Steve Lyle, a spokesman for the state Department of Food and Agriculture.
But he said a study done for the department by the KPMG accounting firm concluded that operations at the Del Mar Fairgrounds in 2002 had a $250 million impact on the local economy.
Lyle said state records show that the fairgrounds had revenue of $45.4 million in 2003 and expenses of $41.4 million, producing an operating profit of about $4 million.
A spokeswoman, Linda Zweig, said the fairgrounds are self-supporting and use profits for improvements and maintenance. She also said the fairgrounds sales taxes are one-third of total sales tax revenue for the city of Del Mar.
But the state pays no property tax on the fairgrounds, which are a large part of Del Mar.
The state report said that during the summer months, the Del Mar Fairgrounds "generates tremendous traffic, which has resulted in significant local concern."
Del Mar's assistant city manager, Joe Hoefgen, said one problem is that traffic for the horse races tends to arrive and leave all at once. He said better management seems to have reduced complaints recently.
Hoefgen said the city's only fire station is on the fairgrounds. And on occasion, he said, part of the fairgrounds has been flooded by overflow from the nearby river.
Assemblywoman Christine Kehoe, D-San Diego, elected this week to a state Senate seat that includes Del Mar, said that when she toured the fairgrounds with the state Coastal Commission several years ago there was interest in creating an open-space buffer to protect wetlands on the site.
"It's worthwhile to examine how valuable these properties would be," said Kehoe. "But developing them for maximum financial benefit may not be the highest public good."
Kehoe said it might be easier to evaluate the sale of the state property in downtown San Diego, two adjacent blocks that include a vacant building, a garage and the State Building at 1350 Front St.
The report said that, given the "unprecedented" demand for downtown residential development, the three parcels on the two full blocks might have a total value of $30 million.
For San Diego County, the report also lists the Escondido National Guard Armory on a 5.1-acre site, worth as much as $1.4 million; a Caltrans maintenance station in El Cajon on a 1.2-acre site, worth up to $800,000; and a San Diego DMV field office at 3960 Normal St. on a 2.48-acre site valued at up to $1.9 million.
The full state report, "High-Value Urban Properties in the State's Inventory," is available on the Internet at www.cpr.ca.gov.

IN THE SHADOWS OF GIANTS, Rethinking the 30-foot height limit
by Craig Tenbroekc, City Beat, 10/20/0k
Thirty-two years ago, San Diegans approved an ordinance limiting construction of buildings west of Interstate 5 to 30 feet in height. Today, the city is staring down the barrel of an affordable-housing crisis, and some are questioning whether the North Bay, a hard-edged industrial zone, should be held to the same standards as San Diego’s “real” beach communities.
In June, San Diego City Councilmember Michael Zucchet formed an ad hoc committee to establish a vision for the redevelopment of 95 acres of public land anchored by the Sports Arena property. The group, which is composed of 11 community representatives, has spent the past few months debating seven specific policy issues, including superstores, infrastructure concerns, and—you guessed it—the 30-foot height limit.
It’s a question of priorities, said Joe Mannino, the committee’s chair. Eventually, the community will have to decide how much they value the 30-foot height limit when it’s stacked up next to some pressing community needs.
“If we’re to say that we want, for instance, housing or affordable housing, there does seem to be… a tradeoff,” Mannino said. “When you’re limiting the height in a development, you limit the economic benefit. Therefore, there’s less economic benefit to spread around to get more open spaces and affordable housing.”
Some committee members, like Ernie Hahn, a lessee of the Sports Arena, argue that making the occasional exception to the height limit would help alleviate some of the community’s most egregious ills, especially adult entertainment.
His logic is this: adult enterprises must be at least 1,000 feet from residences, schools, churches, parks and social-service facilities. If the district were to make housing more profitable (by allowing developers to go higher), the area would attract more residents, reducing the number of locations where adult venues could set up shop.
Other members of the committee, like Jarvis Ross and Jere Batten, aren’t buying it, and it certainly won’t be easy to convince a public still suffering the pangs of a Naval Training Center hangover.
“The community has been brutalized by NTC, in terms of traffic, in terms of the giveaways, the big developers, the fact that so much of it took place behind closed doors. The public was excluded, and now we’re paying the price,” said Gregg Robinson, vice president of the Peninsula Community Planning Board. “It’s the once-burned, twice-cautious phenomenon. That’s why you get a very vitriolic and emotional response around the height limit.”
Given the scarcity of affordable housing in San Diego, dealing with a height restriction in the Midway area is a source of some frustration for Richard Lawrence, coordinator for the San Diego Housing Coalition. “There was a point, I guess, when that site was seen as one of those for which you really needed to protect the view,” Lawrence said. “Well, there isn’t any view there now.”
The 30-foot barrier restricts most residential development to three stories. When you start talking about mixed-use—stacking residences atop of businesses—you’re usually limited to two, because most businesses will balk at an 8-foot ceiling.
While affordable housing can still be profitable within the constraints of a 30-foot height limit, Lawrence said, a 40-foot ceiling would offer the most bang for the buck.
“If I could build four stories, we could do some really very creative things with the way we design affordable housing in San Diego,” Lawrence said. “But people don’t want to see four stories.”
Lawrence would support a revision of the 30-foot limit “on a case-by-case basis, where economics requires it.” He does, however, make an important caveat: “I wouldn’t want to encourage densities that are any higher than those that are required in order to make affordable housing work.”
For many in the community, it’s an issue of trust, rather than practicality. “If we’re looking merely at affordable housing as the issue, we should increase the height limit so we can get in a full three stories and still have businesses underneath,” Robinson said cautiously. “But a lot of people, even on [the committee], are interested in using affordable housing as a battering ram to open up the height limit.
“That’s the thing we have to be aware of,” he added. “I’m strongly supporting affordable housing, but I’m not doing it with my eyes closed.”
The committee will release its recommendations soon; so far, the height limit has been the most contentious issue. That a strictly advisory body with no authority to make decisions is having difficulty reaching any sort of compromise proves the extent to which the ordinance has become San Diego’s sacred cow.
The height limit is “one of the few victories that people who are trying to preserve open space and view corridors have been able to win,” Robinson said. “There is a general fear that if you back down on this, it’s going to open the gate.” Eminent domain hearing gets rowdy, Overflow crowd forces suspension of meeting
By Elizabeth White, Union Tribune, Sept. 23, 2004 NATIONAL CITY – The city's public hearing on eminent domain grew a bit rowdy Tuesday when an overflow crowd got upset that it couldn't hear the testimony.
About 100 people who couldn't fit into the City Council's chambers stood in the hall and yelled, "This is not democracy," and "We can't hear anything." The hearing's chairman, Councilman Ron Morrison, stopped the meeting and two officers from the National City Police Department were brought in as a precaution. There was no violence and no one was arrested.
The meeting will resume Oct. 5, when it will be held at the Martin Luther King Jr. Center next door to accommodate a crowd. Tuesday's meeting was cut short after just six of more than 20 anticipated speakers.
Morrison was in charge of the meeting because Mayor Nick Inzunza and Vice Mayor Frank Parra had a conflict of interest. They own property that could be affected by the city's proposed expansion of its eminent domain authority.
"I do appreciate the 95 percent of the people who were respectful," Morrison said during the council's regular meeting after the hearing, reminding those who hadn't left that the eminent domain amendment is only a proposal at this point.
The expanded eminent domain authority, if passed, would allow the city to acquire commercial or industrial property west of Interstate 805 for redevelopment. The amendment specifically excludes any type of residence, unless it is abandoned.
"Eminent domain is a really big issue," said Councilman Fideles Ungab. "Let's be rational. Let's debate it and then let's make a decision on it."
Once a full joint public hearing of the City Council and Community Development Commission is conducted, likely on Oct. 19 but perhaps as early as the Oct. 5 meeting, the amendment will receive a first vote, said Oliver Mujica, a CDC consultant.
At the following meeting the amendment will get a second reading. The city's expanded eminent domain powers can take effect 30 days later. The voting members of the council and CDC are the same, and the groups usually meet separately.
"There is a process. It's a rather lengthy and complicated process to complete," Mujica said. "I truly believe that in many cases there's misinformation that's disseminated through the community. There haven't been any discussions about acquiring people's residences."
Of the six people who spoke Tuesday night, four expressed concern about the implications of the proposal on their businesses, one worried about a mobile home park and another simply cautioned the council to weigh the issues carefully.
"I think for those that do understand," Mujica said, "it's an opinion that they don't want government to have the authority to acquire their property."
But Mujica said eminent domain is rarely used and that since 1995, when National City gained the authority over some parts of the city, it has only been used once – to build the Wal-Mart.Landmark Eminent Domain Abuse Decision Michigan Supreme Court Halts Eminent Domain For "Economic Development"Court States Poletown Was "Erroneous" 7/31/04 Washington, D.C.
-In a case with nationwide implications to halt the abuse of eminent domain, the Michigan Supreme Court last night reversed its infamous Poletown decision, which had allowed the condemnation of private property for so-called "economic development." In a unanimous decision in County of Wayne v. Hathcock, issued at 9:30 p.m. on Friday, July 30, the Court decisively rejected the notion that "a private entity's pursuit of profit was a 'public use' for constitutional takings purposes simply because one entity's profit maximization contributed to the health of the general economy."
In the 1981 Poletown decision, the Michigan Supreme Court allowed the City of Detroit to bulldoze an entire neighborhood, complete with more than 1,000 residences, 600 businesses, and numerous churches, in order to give the property to General Motors for an auto plant. That case set the precedent, both in Michigan and across the country, for widespread abuse of the power of eminent domain. It sent the signal that courts would not interfere, no matter how private the purpose of the taking.
But in Hathcock, the Court called Poletown a "radical departure from fundamental constitutional principles." "We overrule Poletown," the Court wrote, "in order to vindicate our constitution, protect the people's property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law."
According to Dana Berliner, an attorney with the Institute for Justice, which filed a brief in the Hathcock case, the case has profound nationwide implications. "Poletown was the first major case allowing condemnation of areas in the name of jobs and taxes. It is cited in every property textbook in the country. The Court literally rewrote the book with this decision," said Berliner. The use of eminent domain for private development has become increasingly common throughout the United States. According to Public
Power, Private Gain, authored by Berliner, there were 10,000 properties either taken or threatened with eminent domain for private parties in the U.S. between 1998 and 2002. And state supreme courts from Nevada to Connecticut have relied on the Poletown decision when upholding the condemnation of land for private parties.
"The Court made an exception in Poletown because of the supposedly enormous benefits of the GM plant," said Berliner. "Instead, the exception swallowed the rule."
The application of Poletown in Michigan produced disastrous results.Michigan courts tended to forbid small condemnations for private parties, but when the city and developer claimed the project would have a significant economic impact, lower courts upheld the takings. "Poletown gave cities and developers an incentive to make outrageous, wildly inflated predictions of the impact of the project," explained Scott Bullock, senior attorney at the Institute for Justice. "It was the worst possible incentive. The Poletown project itself also didn't come close to living up to the promises. In all likelihood, it destroyed more jobs than it created."
The Michigan Supreme Court also decided another important eminent domain case, although one that has received less attention. In Detroit Wayne County Stadium Authority v. Alibri, the Stadium Authority told Frida Alibri it would condemn her property if she didn't sell "voluntarily." It promised, among other things, that it would not be given to a private party.
After the sale, it was indeed transferred to a private corporation. At that point, Alibri sought to get her property back, because the Stadium Authority didn't have the power to condemn for that purpose, and it had told her that the purpose was not transfer to a private party. The trial court agreed with Alibri; the appellate court, however, agreed with the Stadium Authority. The Michigan Supreme Court returned the property to its rightful owner-Mrs. Alibri.
"Most people end up selling under threat of eminent domain, rather than spend years in court fighting it, so these two decisions truly prevent the government from taking property for private parties," according to Berliner.
"The government can't convince people to sell by telling them their property will be used for a public use, then turn around and transfer it to a private party."
"The Poletown decision gave cities the green light to take property for private parties," said Chip Mellor, president and general counsel of the Institute for Justice. "It was a terrible mistake. Now, the Michigan Supreme Court has restored the rights of all Michiganders to keep their homes and businesses, even if another, politically connected private business wants them. This is a great day for property rights nationwide."
The Institute for Justice and the Mackinac Center for Public Policy filed a friend of the court brief in the Hathcock case, co-authored by George Mason Law School professor Ilya Somin and IJ Senior Attorney Dana Berliner, discussing the disastrous effects of the Poletown decision in Michigan and the country, as well as the failure of the Poletown project to live up to its promises. The Institute for Justice also filed a friend of the court brief in the Alibri case.

The Hathcock decision is available at:
http://courts.michigan.gov/supremecourt/Clerk/Opinions-03-04-Term/124070.pdf

Supreme Court asked to review use of eminent domain
By CATHERINE MACRAE HOCKMUTH, San Diego Daily Transcript, 7/27/04
The U.S. Supreme Court has been asked to consider the constitutionality of a widespread municipal practice: using eminent domain for economic development.
The U.S. Supreme Court has been asked to rule on whether local governments may use eminent domain for economic development when the property being taken is not blighted.
In a July 19 petition, the Washington, D.C.-based Institute for Justice asked the court to review a recent Connecticut state Supreme Court ruling that approved the taking of non-blighted homes for economic development. Officials in New London, Conn., want to take 15 homes and businesses owned by seven families and give the land to a private developer to create facilities to complement the nearby Pfizer (NYSE: PFE) research center.
If the Supreme Court agrees to hear the case it could resolve an issue that has divided the states as more localities, including San Diego, use eminent domain powers in the pursuit of increased tax revenues and jobs. At question is when does a city's appetite for revenue and jobs crash head on with the constitutional rights of a private property owner?
"If jobs and taxes can be a justification for taking someone's home or business, then no property in America is safe because anyone's home can create more jobs if it is replaced by a business and any small business can create greater taxes if it is replaced by a bigger one," said Dana Berliner, senior attorney with the Institute for Justice.
The Fifth Amendment allows the government to use eminent domain to take private property for "public use." Institute for Justice lawyers are asking the Supreme Court to clarify the definition of public use, which historically has included amenities such as public roads, schools and parks. In a 1954 decision in Berman v. Parker, the U.S. Supreme Court approved the use of eminent domain to remove blight and for urban renewal.
The issue is pending in court here as Ahmed Mesdaq, owner of the Gran Havana Cafe and Cigar Shop in the Gaslamp section of downtown, fights city efforts to condemn his newly renovated property. The San Diego City Council voted 8-1 on April 27 to condemn the shop in favor of a new $70 million, 334-room Marriott Renaissance Hotel.
A Nov. 19 trial date has been set for the condemnation case brought by the city, according to Mesdaq's attorney, Catherine Richardson, a partner with the firm Thorsnes Bartolotta & McGuire. Richardson is also representing Mesdaq in a lawsuit against the city because it refused to consider his own development plans prior to the condemnation, and a separate federal claim to prevent the city from condemning the property.
"Before, cities were using redevelopment to clean up blighted areas," Richardson said. "Look at the Gaslamp district and Mr. Mesdaq's property, it's not blighted in any sense of the word."
Hotel developer Ramin Samimi, principal owner of GRH LLC, has agreed to cover the city's condemnation costs. Samimi has acquired nine parcels of land along Fifth, Sixth and Island avenues and J Street since the 1990s. Mesdaq has operated the cafe at its current location at the corner of Fifth and J Street for nearly three years and about 10 years in another location.
Mesdaq has plans to add 10 loft condominiums to the property and claims he did not know of the hotel development plans when he purchased the land. The city approved an $800,000 renovation of the property shortly after it was purchased.
The cafe is not blighted, but it is in an area that has been defined as such under the city's redevelopment plan, which includes about 1,500 acres of land in the downtown area, according to David Allsbrook, manager of contracting and public works with the Centre City Development Corp. (CCDC).
State redevelopment guidelines allow local governments to condemn property and pay its owner market value. The city may then sell the parcel to a developer or use it for public use such as a park or road.
CCDC has recommended that the City Council use its eminent domain powers 14 times since the city began redeveloping downtown San Diego in 1992, according to a list of projects supplied to the council in March. In four separate projects, eminent domain was used to take homes or businesses in favor of a larger private development, while the rest were taken to relieve a blight or nuisance, or for public use. The biggest use of this power resulted in the development of Petco Park. According to the CCDC's accounting, 56 condemnation cases were filed for the ballpark, which opened this year. Forty-nine cases settled out of court, one is still pending and six cases proceeded to trial.
The document states that the redevelopment has generated significant taxes for the city and an "unpredicted physical transformation" of downtown.
"We've used the power of eminent domain, I think, judiciously since the plan was adopted," Allsbrook said July 27.
A national problem
But cities like San Diego all across the country are taking their power too far, and too often at the behest of developers peddling convention hotels or national retailers like Costco (Nasdaq: COST) and Target (NYSE: TGT), according to Scott Bullock, a senior attorney at the Institute for Justice. He called the relationship an "unholy alliance" that frequently results in the developer paying for blight studies and condemnations.
In a 2003 report titled "Public Power, Private Gain," the institute found that between 1998 and 2002 there were more than 10,000 filed or threatened condemnations that involved private-to-private transfers of property in 41 states.
California is among the most active states that have condemned property for the benefit of other private parties, with San Jose listed among the "worst" cities engaged in the practice, according to the report.
Bullock said the trend began in 1981 with the landmark decision in Poletown Neighborhood Council v. Detroit by the Michigan state Supreme Court. The ruling allowed Detroit to condemn a Polish neighborhood so that General Motors (NYSE: GM) could develop a plant there. The city argued at the time that the plant would help turn around its deteriorating economic condition.
The state court is reconsidering that decision and is expected to issue a ruling July 31.
The Institute for Justice hopes the Supreme Court will be compelled to hear the case because of numerous conflicting appellate court decisions on the issue. Bullock said the court is likely to make its decision in October.
Seven state supreme courts have upheld the right of cities to take non-blighted property for economic development, while eight states forbid private-to-private transfers where there is no blight. Another three are preparing to rule such condemnations unconstitutional, according to the institute's petition to the court. California is not included in any category.

Let There Be Blight
The Wall Street Journal, April 22, 2004
And, lo, the city fathers looked upon a choice piece of property and declared, "Let there be blight." And there was blight.
And it was good too -- at least for the Ohio businessman who wants that land for a $125 million development, and for the city of Norwood, which wants that developer for the new tax dollars it hopes he'll bring in.
There's just one hitch: A handful of small businesses and homeowners don't want to sell. Earlier this week, with the help of the Washington, D.C.-based Institute for Justice, they took their case to state court, arguing that the designation of their neighborhood under the city's blight ordinance was a sham. It sure didn't help Norwood's case that even the author of the study used by the city to justify that finding conceded in court that it would not be "reasonable" to describe the area as "blighted" or "deteriorated."
Alas, this abuse of eminent domain is part of a larger pattern across America. We've written about some of these cases before, most recently the effort by a California city (rightly thwarted by a federal judge) to condemn land purchased by a church so it could be sold to Costco. Last month in Connecticut, the state's high court narrowly upheld the city of New London's right to transfer its powers of eminent domain to a private corporation for economic development. In New Jersey, owners of oceanfront property in the shore town of Long Branch are fighting city efforts to take their homes and replace them with condos and townhouses.
And yesterday Michigan's Supreme Court reconsidered a controversial 1981 decision -- a landmark case in eminent domain law -- that saw the blue-collar neighborhood of Poletown condemned and delivered on a platter to General Motors. Notwithstanding the millions in taxpayer subsidies GM received, and the razing of 1,200 homes, the plant ended up delivering only about half the number of jobs promised.
Notice anything similar about all these cases? Whereas years ago the "public use" provision of the Fifth Amendment meant invoking eminent domain for, say, a highway or school, expansive court rulings now allow local politicians to seize private property from Citizen A and hand it over to a Citizen B they believe will prove a better class of taxpayer.
The slippery slope here is obvious. Because businesses will always pay governments more than homeowners (and large businesses will yield more than small), it's no coincidence that governments tend to invoke eminent domain powers on behalf of the rich and politically well-connected at the expense of the mom-and-pop shop or the family that simply wants to keep the home it's lived in for generations.
We grant that in Norwood's case all but a handful of holdouts have agreed to sell their land to the developer. We might even concede that the city, now swimming in red ink, would do better fiscally with the Crate & Barrel it's hoping to entice to the spanking new mall it has planned. But the thing about Constitutional property rights -- the reason we have a Fifth Amendment -- is that they're not supposed to be hostage to what the majority wants. To the contrary, the Founders wrote the right to property into the Constitution not only to secure a citizen's right to his home and livelihood but to serve as a check on government power.
At the very least, shouldn't the burden be on those who would take the homes and businesses of others rather than on those who want only to keep what's theirs?
Eminent Domain, San Diego Union Tribune, May 2, 2004
Your April 27 editorial "Fair, reasonable" makes a case for eminent domain when it involves acquiring land for public use. Note the words "public use." To use the threat of eminent domain against the Gran Havana Coffee and Cigar Lounge for the benefit of a Marriott hotel is unconscionable. Will this hotel be owned by the public, the citizens of San Diego? Regardless of the hotel rooms (the need for which is debatable) or the additional revenues the city may receive, the project remains a private project – not unlike Gran Havana and the investment its owner has made in his building and local community.
In theory, we live in a democracy where justice prevails and all parties are equal under the law. In reality, we have government agencies eager to contort the laws to benefit big business at the expense of small business under the guise of revenue enhancement for the city.
This is not a public project by any stretch of the imagination.
ROBIN WEBER, Normal Heights
Do you think you own your home and business?
That property you purchased and into which you invested blood, sweat and tears is really yours? Think again. The San Diego City Council has now established a precedent whereby it can swoop in, take your land and give it to your neighbor if it feels your neighbor would produce a larger tax revenue ("City to condemn shop in Gaslamp to clear way for 4-star hotel," News, April 28).
No longer is eminent domain reserved for activities like freeways and public infrastructure. Now it is applied to the almighty dollar. Does anything else show a more flagrant disregard for the foundations of freedom and capitalism?
If the developer cannot afford to purchase the property legitimately, it should find another lot instead of turning to the council to solve its inability to properly develop a business.
The council's reprehensible support of such predatory practices is one more example of poor leadership in our city.
JARED JURGENSMEIER, San Diego

City Council extends CCDC eminent domain powers for 12 more years
By KEVIN CHRISTENSEN, The Daily Transcript, March 24, 2004
After passing a 12-year extension of the city's redevelopment agency powers of eminent domain on Tuesday, City Council members sought to look into ways to quantify and fund more public services downtown.
Eminent domain was widely credited by staff of Centre City Development Corp., the city's redevelopment arm, for the renaissance of downtown, including Horton Plaza and most recently Petco Ballpark.
"Eminent domain has been a very important tool," said David Allsbrook, public works manager for CCDC.
Recognizing that its downtown vision is not complete, council voted 7-1 to support its extension for another 12 years. Councilwoman Donna Frye opposed and Councilman Jim Madaffer was absent.
Supplied with a list of instances when CCDC used its powers of eminent domain, Councilman Michael Zucchet said that the powers were used "sparingly."
"It's rarely used," he said, but "it's also a very important tool to have in order for a redevelopment agency to function as a redevelopment agency."
Zucchet, whose district contains center city, also noted that the power can be revoked.
According to CCDC's original charter, the power of eminent domain was set to expire on May 11, 2004. With the extension, the agency reserves the power until May 11, 2016.
According to the state's redevelopment guidelines, eminent domain allows CCDC -- with approval of City Council -- to condemn land and pay market value for the property, and sell the parcel to a developer or use it for a public facility such as a park.
Leadership of downtown organizations touted its effectiveness for the development of downtown, including
the Downtown Partnership and the East Village Association.
The Gaslamp Quarter Association and its land use committee supported the extension under the condition that its use be limited to public use improvements, non-conforming uses, facade easements and other limited circumstances, according to Jeremy Cohen, chairman of the committee.
Donald Cohen, director of the labor think tank Center on Policy Initiatives, sought a nine-month extension.
During that time, concerns from social service agencies, historical preservationists, small businesses and low-income downtown residents and workers could be addressed, Cohen said.
Small business owners, like David Duea, showed up en masse to speak against the extension, each with horror stories of their experiences with the redevelopment tool.
Duea said that his corporation, after selling its property to JMI, allegedly at the suggestion of CCDC, was not eligible for tax shelters because he sold to a private entity. "I would not wish eminent domain on anyone," he said.
Duea said the agency "should be up-front with people it's trying to coerce."
Others businesses claim that the money provided by CCDC for relocation does not cover all the costs for moving.
Typically CCDC pays market value for the property and a sum for the cost of relocating a business.
The CCDC payment does not account for the time the company is out of business or the costs of retrofitting a new building, said Frank Hartung, owner of Grah Safe and Lock Inc., in a separate interview. Hartung's business was moved from a location at 1044 Island Ave. for a parking lot near the ballpark.
Another problem cited is when relocating businesses for the ballpark, portions of the properties contained high levels of lead, Hartung said.
Upon leaving the properties, relocated owners were forced to pay for the remediation of the land. In most instances, the money taken directly from the settlements paid by CCDC, Hartung said.
Reacting to earlier comments from Councilwoman Frye concerning downtown's disproportionate growth in population and the lack of growth of its public safety, the council requested three reports from CCDC.
The first is a study on developer impact fees that are waived for developers in the redevelopment area.
Developer impact fees (DIFs) are a charge paid by developers to mitigate the effects of the new
construction on the areas such more police and fire department personnel, park space and traffic infrastructure.
The DIFs are typically waived in a redevelopment area to attract developers to an otherwise unattractive area.
Currently downtown residential redevelopers pay about $400 per unit in DIFs, while builders pay more than $7,000 per unit in other parts of the city.
That report will appear back before council in 90 days.
Councilman Brian Maienschein requested that CCDC appear before council with a study outlining how the agency is assessing new public service and capital improvement needs in light of the new development.
Maienschein noted that CCDC could work with the city manager's office to identify these needs. "The time for coordination is now," he said.
Zucchet also expressed concern that large buildings are being approved in the East Village without appearing before council.
"It's not appropriate that a 500-foot building is approved without approval from this agency," he said.
Zucchet's motion included directing CCDC to investigate the possibility of City Council design review before final approval.
These two reports will appear back before council in 120 days.City to open discussions on 12-year extension of eminent domainCity Council approves hotel, rattles eminent domain saber at cigar shop
By KEVIN CHRISTENSEN, The Daily Transcript, March 31, 2004
The fate of the Gran Havana Cafeand Cigar Shop in the Gaslamp Quarter appears to be doomed.
The property, owned by the Cafeoperator, must make way for a 334-room Renaissance Hotel following a series of San Diego City Council decisions on Tuesday.
The council approved the design of the proposed hotel and authorized the city's Redevelopment Agency to move forward with a Development Disposition Agreement (DDA).
The DDA authorizes staff to work with the hotel developers to purchase whatever properties are needed to build the hotel.
The agreement is necessary because hotel developer Ramin Samimi, principal owner of GRH LLC, has assembled nine parcels in a block bounded by Fifth, Sixth and Island avenues, and J Street, but needs one more property. Samimi has been acquiring the land needed to construct the $70 million Marriott Renaissance Hotel since the 1990s.
All that stood in the way of the hotel development was the Gran Havana Cafeand Cigar Shop and its owner Ahmed Mesdaq.
Mesdaq has operated the shop at that location for nearly three years and about 10 years in another location on Fifth Avenue.
The council directed the Redevelopment Agency to take a last crack at buying the property on the now very desirable corner of Fifth Avenue and J Street from Mesdaq.
"I would strongly encourage both sides to try and try again," said Councilman Michael Zucchet.
While the action from council does not automatically mean that the cafe will be condemned using eminent domain, it moves it closer to that possibility, Zucchet said. "It sets a course of action where the threat intensifies," he said.
According to the state's redevelopment guidelines, eminent domain allows the city's redevelopment agency to condemn the land and pay market value for the property, then sell the parcel to the developer or use it for a public facility such as a park.
The hotel will include 334 rooms, about 8,500 square feet of retail space, and a 13,000-square-foot ballroom and meeting space.
The corner of the Fifth Avenue of J Street currently housing the Gran Havana Cafeand Cigar Shop is slated for a restaurant/bar.
Mesdaq and later Samimi's lawyer, Cynthia Eldred, appeared before council on Tuesday, both telling different stories about what was known about the development of a hotel when the property was acquired for the Gran Havana Cafeand Cigar Shop in January 2001.
Eldred said that the point is crucial because if Mesdaq knew that CCDC and her client were working on developing the site, he knew that losing the property was a possibility.
The developers have spent $2 million over the past six years on the project, Eldred said.
Mesdaq claims he did not know about the hotel project.
He also said that CCDC approved an $800,000 renovation of his building shortly after the purchase.
"If they knew about this hotel, why was my project approved?" he asked.
Mesdaq said that the issue strikes at the very core of the misuse of eminent domain rights claiming that it is unfair to take a property and give it to another developer.
"If you are not going to protect me from the abuse of eminent domain, then who will?" Mesdaq asked.
The developers have presented Mesdaq with alternatives, including purchasing his property and leasing it for less than market rate until construction begins; or offering to move the shop farther down Fifth Avenue and allow for Mesdaq to develop loft condominiums as part of the hotel project, Eldred said.
The offer will expire in the beginning of April, she said.
However, Mesdaq has repeatedly asserted his commitment to keeping his Fifth and J Street location and have the hotel project built around it.
The corner of Fifth and J Street, just blocks from the new ballpark, is increasing in value almost by the minute as a result of Petco Park.
Other critics of the plan said that the structure does not have enough parking.
"It can't handle users and workers," said Gary Smith, spokesman for the Downtown Residents Group. "Every parking (lot) in the Gaslamp is full, it's not going to work."
Urging a no vote, Marsha Sewell, member of the Historical Resource Board, pointed out that two historic buildings will be destroyed or significantly altered to make room for the hotel and there has been mitigation put in place.
Wilmer Cooks, vice president of the San Diego Convention Center Corp., said that there is currently a shortage of hotel rooms in the Gaslamp and the region is in danger of losing tourist dollars to other cites.
"We need to develop this hotel in order to stay competitive with other conventions centers," Cooks said.
Since 1999, the convention center has lost 44 conventions because of lack of hotels, he said.Across the nation, there is growing resistence to eminment domain.
Contributed by Bryan Conn, Source: USA Today, Mar 31, 2004, Nation.
"The use of eminent domain is meeting growing resistance in courts,
legislatures and neighborhoods from Connecticut to Ohio and Colorado. The criticism targets local governments' efforts to spur economic growth by transferring land from homeowners and shopkeepers to developers or corporations," USA TODAY reports. "Local governments are using eminent domain to acquire land for Wal-Mart, Target and other retailers that need big sites for stores. Land also is being taken for manufacturing plants,
hotels, condominiums and parking lots." The use of eminent domain is a despotic power, even when just compensation is paid. Eminent domain should be used sparingly and only for a truly public use -- broadly enjoyed by
all, rather than by some narrow part of the public. For the federal government it means for a constitutionally authorized use. More precisely,
it means for a use that is owned and controlled by the public.
Condemnation, after all, transfers title -- either in part, for a regulatory taking, or in whole, for a full taking. If the condemnation transfers title from one private party to another, it is simply illegitimate.
Full story: Pushing the limits of 'public use':
http://www.usatoday.com/news/nation/2004-03-31-eminent-usat_x.htm
City Council broke law on meetings, suit alleges Closed-door sessions illegal, activist says
By Jonathan Heller, Union Tribune, March 1, 2004
A government watchdog has sued the San Diego City Council and the board of directors of Centre City Development Corp., the city's downtown redevelopment arm, over what he alleges are illegal closed-door meetings.
Mel Shapiro, who successfully sued the City Council in 2002 for meeting in private illegally, filed the new lawsuit Tuesday, saying that the development corporation's board violated the Ralph M. Brown Act several times since 2003 when it met privately with attorneys for the City Council to discuss eminent domain proceedings.
The board advises the City Council on downtown redevelopment matters. The council, sitting as the San Diego Redevelopment Agency, then makes the final decisions.
The board's attorney, Helen Peak, said members did nothing improper or illegal under the Brown Act, which is the state's open-meeting law.
Shapiro alleged that the board violates the law when it meets in closed session with the council's attorneys to act as a party in eminent domain litigation. Shapiro said only the council can do that.
Shapiro also alleged that the board failed to make its meeting agendas available to the public 72 hours before meetings, as required by the law, and failed to post sufficient information in agendas about closed session topics.
National City Eminent Domain Threat Spreads East to 805
By Ted Godshalk
On March 2, 2004, the City Council of National City, acting as the Community Development Commission (CDC), was prepared to expand its power to use eminent domain on all properties in all commercial and industrial zones in the city. By means of an amendment to the National City Redevelopment Project Area. Eminent domain is simply the city‚s use of the court system to condemn property and remove residents from their homes against their will. This new power would possibly affect the lives of residents in over 900 homes in the redevelopment areas extending from the San Diego Bay east to Interstate 805.
Concerned residents and homeowners from National City's Old Town presented the CDC with the signatures of thirty-seven residents on a petition declaring: No Eminent Domain and No Community Development without Community Involvement.
Ruben Rubio de Old Town National City spoke at the CDC meeting. He described how the people of Old Town have fought the battle to save their homes many times since the middle of the last century. In the 1950s, Rubio helped form the Home Protective League to campaign for their rights. Rubio added that the city uses scare tactics and that he gets very worried every time the subject of home condemnation comes up. Another homeowner and petition signer, Linda Aguirre, pointed out that if someone was forced to sell their home they would not receive enough money to buy another home, especially so close to the bay. She made it clear she wants to stay in her home in Old Town.
One of National City Mayor Inzunza's ten visionary goals is the promotion of neighborhoods we can all be proud of, complete with new housing opportunities. The residents of Old Town National City already have a sense of pride, which is felt by people like Ruben Rubio and Maria Avalos, a resident and homeowner for 80 years. The pride of Old Town is felt by the young students of Kimball Elementary, by the many parishioners of St. Anthony‚s Church, and by many other residents. It is their pride, their history, and their deep sense of community that moves them to defend their homes.
But what is in store for National City and what do the residents what? If new housing is to be built in their neighborhood, the residents want to play a role in the planning process. If new commercial enterprises want to locate in the city, the residents want them to be environmentally safe and respectful to the surrounding neighborhood. These are reasonable wishes, common to all communities. People resent the plans of developers and city government when the plans are presented in the "final" form. All good urban planning is born from community input.
In the last two years National City has seen an increase in new redevelopment. In fact, redevelopment now seems to have a run-away momentum unchecked by community input. Three new projects illustrate this. Wal-Mart hit town the behemoth it is with a new store on Highland Avenue. Whether you agree or not with Wal-Mart‚s corporate policies, it is hard to dispute there are changes set in motion when this big-box store comes to town. One change everyone recognizes is that small neighborhood stores face an even tougher uphill struggle to survive. Second, Costco is proposing a new store near Plaza Bonita. The third example is a plan in the works to renovate Plaza Boulevard as a "Filipino Village" shopping district. The question is: how will this fast-paced redevelopment, unchecked by community input, serve our community needs?
All redevelopment projects require CDC approval and some project require CDC financial assistance. In the future, the mayor and city council will exercise their power to sell municipal bonds of a value from $30 million to $100 million and use the money to condemn and purchase properties through eminent domain. The debt from the bonds may strain city funding of needed services. Will this serve our community needs?
National City is not a collection of parcels on a map, divided up in zones to be bought and sold with government subsidies to developers. It is much more. This city is made up of real people, some from long established families and others recent immigrants. This city is not a coal mine where business people can come in, have an audience with a politician or staff member and be granted right to go out and capture resources. When the CDC staff wants t use our tax money to drive homeowners out of their homes it is a sickening and discouraging comment on our city government. When a property owner holds out, refusing not to sell at any price, then the city needs to be more creative with their approach to urban renewal. Bad planning is not an excuse for more power; it is a reason for a limit on power and a call for more community involvement.
In the face of the delivered petitions and the speakers‚ passionate defense of their homes, Councilman Ron Morrison said, "it‚s obvious people have lost their trust... I don‚t think the confidence nor the need is there." Morrison made a motion to exclude any and all single-family owner occupied residences in all zones from the threat of eminent domain. Councilman Luis Natividad seconded Morrison‚s motion and noted that he was in the trenches with Herman Baca and Ruben Rubio when the battle for Old Town was fought in the 1960s and 70s. Natividad promised, "I don‚t blame you for being concerned. I will never take out a house as long as I am in here. You don‚t need to worry."First-term councilman Fideles Ungab added, "I feel for you."The mayor and council members sitting as the CDC voted unanimously to exclude single-family, owner-occupied homes from the Redevelopment Plan‚s eminent domain powers in their amendment.
Mayor Inzunza was silent during the discussion period of the meeting. While he voted in favor of Morrison‚s motion, it is not clear how he feels. Maybe he will add another goal to his vision for National City. Residents of Old Town think he needs to add: I will honor and respect the people who live in National City and I will ask them for their input before I sell out to real estate and development interests.
Redevelopment Law in California has given local government many powers over private property; however, the voters still have a role to play in public policy. National City is an example of this. All people of National City –not just those in Old Town– you need to keep your ears to the ground. Listen for the early rumble of the redevelopment machine. Watch for hearing notices and access the city‚s website at www.ci.nationalcity.ca.us <http://www.ci.nationalcity.ca.us/> for agendas and minutes of the CDC, City Council, and Planning Commission. Demand that the city adopts policies for notifying property owners of meetings with much more than the minimum 24 hour notice required. Attend your Neighborhood Council meetings and bring your neighbor. If you don‚t have a Neighborhood Council in your area, you are welcome to come to the Old town Neighborhood Council at Casa de Salud (1408 Harding Avenue) on the fourth Thursday of every month at 6:30 pm. Be vigilant and work together to ensure city staff and elected politicians know what you want for the future of National City. Set the record straight, with a loud voice and as often you can. Let city government know that you have plans for the future that you want to see come to fruition. Settings goals if important too. Community Involvement in all Community Development is a good goal for everyone to start with. Ted Godshalk can be contacted at paradisesecreek@mac.com.
The $1.3 billion solution
The Orange County Register, February 4, 2004
Instead of taking money from local governments, use redevelopment funds.
By CHRIS NORBY, Orange County fourth district supervisor
Gov. Arnold Schwarzenegger proposes taking $1.3 billion in property tax revenues from local governments to balance the state budget. These funds would be transferred to the Educational Revenue Augmentation Fund (ERAF) for use by California's public schools. This would assure education its minimum funding as required by Proposition 98.
City and county officials have attacked this proposed shift as a raid on revenues for essential public services. We all support schools, but we must not fund them on the backs of cities and counties. If this current tax shift follows the past ERAF formula, counties will lose $915 million, with Orange County being cut by $62 million. California cities will lose $189 million.
[] Instead of complaining, however, county and city leaders should find the governor the money he needs without cutting vital local services. And the money is there, right in front of us: It's in the $2.5 billion in annual property tax revenue given to California's redevelopment agencies. This huge outlay is not funding any vital public services.
Redevelopment agencies were originally created to alleviate "blight" but have become cash cows subsidizing private development. Stadiums, auto dealers, hotels, movie theaters, big-box retailers and even casinos have all received massive public grants.
Costco alone has received $30 million in redevelopment subsidies just in Orange County. Statewide estimates range up to $300 million in total agency handouts for the giant retailer. In San Diego, $36 million has been paid to the Chargers for a ticket-sales guarantee. In Los Angeles, the failing Hollywood/ Highland Mall took $98 million, while Staples Center got $50 million - all from public funds.
By law, redevelopment money cannot be used to pay police officers, firefighters, code enforcers, librarians, public health workers or for any local operations or maintenance. Redevelopment funds can only be used for development projects and to pay off the bonds that finance them.
Far from alleviating blight, redevelopment is merely subsidizing development that would ordinarily be privately financed - or shouldn't be built in the first place. City officials may defend redevelopment as a tool to attract sales-tax-generating businesses, but retail giants and team owners are pitting city against city for more public handouts. Cities often give away future tax revenues in the form of rebates and land write-downs. The resulting fiscalization of land use has subsidized a vast overbuilding of commercial development.
We can and must restore these public funds for public use.
The math is simple: Redevelopment agencies annually consume $2.5 billion in local property taxes. Their current annual bond payment obligation is $1.2 billion (principal plus interest). That leaves $1.3 billion in discretionary spending.
This is the $1.3 billion the governor can use to fully fund education, without touching city or county budgets.
Some may claim that diverting this money will jeopardize redevelopment projects. But where is public money better spent? For Costcos or classrooms? For Wal-Marts or fire stations? For new malls or to fix our streets? To raise pro football salaries or pay police officers?
Redevelopment agencies were never intended to be permanent. When an agency is created, by law it is supposed to exist for 30 years; this is so when the blight is alleviated, the agency would shut down. But few agencies actually do shut down. Instead, they continue to be extended indefinitely, and continue to divert property taxes into private development schemes.
Even without subsidies, malls, auto dealers and hotels still will be built by private investors - if there is a market for them. That is a private, not a public, responsibility.
If redevelopment is to relieve blight, we can use it now to end California's budgetary blight. By using this $1.3 billion in available redevelopment revenue, the governor can fully fund the schools - and do so without adding to the fiscal problems facing cities and counties.
Sports Arena panel member is penalized, Fine over delay in filing fiscal reports
By Caitlin Rother, Union Tribune, February 19, 2004
A member of the redevelopment committee for the Sports Arena area has agreed to pay a $300 fine to the San Diego Ethics Commission for failing to file two years' worth of economic disclosure reports on time.
When Leslie Sanguinetti filed the forms last week, they were 316 days late.
Sanguinetti, who was elected to the North Bay Project Area Committee in October 2001, didn't respond to repeated efforts by city officials to discuss her failure to file required annual reports for 2001 and 2002, according to a settlement agreement the commission released last Thursday.
The City Clerk's Office sent her a letter last February, asking her to file the required report by the April 1 deadline. When she didn't, the clerk's office sent her another letter, requesting she file it immediately.
In October, the commission began an investigation into why Sanguinetti still had not filed her report. According to the settlement, the commission sent her certified letters in October and December, asking her to file a report for 2002 and an amendment to her 2001 report. Commission staff also left four phone messages at her office.
City records show Sanguinetti filed a report for 2001 on Dec. 12, 2003. It was not labeled as an amendment.
On Feb. 10, she filed the correct forms after the commission published her name on the agenda for its meeting last Thursday and scheduled a hearing on the matter for April 16.
The forms list her as "owner-partner" of Seacoast Video Productions in Point Loma, which she describes as a sole proprietorship worth between $100,001 and $1 million.
Sanguinetti said she didn't want to discuss the investigation.
"It's nobody's business," she said. "I have no comment."
She is the only person other than former Councilman Byron Wear whose investigation reached the hearing stage before ending with a settlement agreement.
This is the fifth fine the commission has issued since it began investigating complaints in spring 2002. The heaviest penalty was a $5,000 fine against Clear Channel Outdoor Inc. for reporting failures related to a campaign billboard.
Each violation of the municipal code carries a fine of up to $5,000.
A bit of good news on '60 Minutes', By TIBOR R. MACHAN, Oct 4, 2003, Freedom Way, YumaSun.com
 Often I am told that my observations are negative, and that‚s true. I protest the loss of liberty. But behind that lies my most positive idea, namely that free men and women are better at solving problems than those in chains š even in chains that are quite long.
 This time, however, there is some good news. Mike Wallace surprised me with a segment on the Sept. 28 episode of "60 Minutes" on CBS. The segment exposed without much mercy the dastardly way governments make use of eminent domain. This is the legal provision governments use to take private property for public use, one, however, that‚s been grossly abused over the years.
  "Public use" would normally mean building courthouses, police stations, military bases and a few other bona fide public projects, ones supposed to benefit everyone as citizens. That‚s what "public" is supposed to mean in a free society. I argued this in my book, "Private Rights and Public Illusions" (Transaction Books, 1995).
Nowadays, however, zealous politicians and bureaucrats have perverted the meaning of the term "public." Now what they use it to mean is anything that someone in government deems to be of benefit to more people than the owners provide. Thus, if you own a home š a perfectly decent, clean, livable home š but the mayor of your town believes that someone else‚s having it would make more money for the city, eminent domain may be used to take it and transfer it to another private owner.
 Courts throughout the country have been ambivalent about this, what with the idea of "the public" having become terribly ambiguous.
  Just imagine: You decide that your neighbor‚s car is just not being used to its full value, so you take it. After all, the neighbor is using it only on and off, whereas you could make so much better use of it, driving all around town, getting all kinds of worthy things done with it. Or, say, the neighbor has a radio but rarely uses it, so you take it because, well, you would make so much more use of it, seeing how you love listening to music and news and everything.
 The idea, voiced by the various bureaucrats Wallace interviewed, was no different from this. They believed the public would benefit from taking the property, for redevelopment and such. To build more expensive homes that would result in higher property taxes. Or give the property to a business that promises to hire more people who will, then, spend more money in town and, of course, pay more taxes than the displaced modest establishment did.
 And, mind you, this isn‚t simply put forth as a rationale by government officials, people who certainly rarely show any respect for the right to private property. No, other persons, including people who own businesses, are often completely complicit in such schemes. As "60 Minutes" showed, an Ace Hardware store owner was egging on city officials in a town to take away the property on which someone else was conducting a perfectly solvent operation. But because the existing establishment didn‚t yield the level of taxes the new one was likely to, the city should use eminent domain laws and take it.
What was so clear about the process is how corrupt it is.

Builders Seek Restart of Sports Arena Redevelopment
BY MANDY JACKSON, San Diego Business Journal, Dec. 8, 2003
 Negotiations with the San Diego Chargers and other pressing city issues may be delaying a redevelopment project involving another city-owned sports venue.
 Just as the San Diego City Council was set to pick a developer to rebuild 95 acres between Sports Arena Boulevard and Interstate 8 around the San Diego Sports Arena, the council voted in closed session June 10 to end the process.
At that meeting, the council was scheduled to select a developer for the project. The city had asked developers to submit their qualifications for the project in October 2002.
 Bill Witte, principal of the Related Cos. in Orange County, said, “It was down to us and another team. The council directed staff to put us on ice.”
 Witte suspected the City Council put the project on hold for two reasons.
First, he said, 2nd District Councilman Michael Zucchet sought to avoid involvement in any court battles over the project since Zucchet and fellow councilmen Ralph Inzunza and Charles Lewis were already fighting allegations that they took money from owners and employees of the Cheetahs strip club in Kearny Mesa in exchange for loosening regulations on adult entertainment.
Witte also believes the council wants to avoid negotiating on another sports facility while in the middle of the controversy surrounding negotiations over the Chargers’ lease at Qualcomm Stadium and the team’s request for a new football stadium.
 Zucchet said the redevelopment was put on hold mainly because the process for seeking developers was misguided.“My predecessor (former Councilman Byron Wear) and the previous council used a request for qualifications for that site that was controversial. It was a confusing, odd process,” he said.
 Community members were concerned about the process as well as building heights that might be allowed.
 Future Of Sports Arena In Doubt
Ernie Hahn III, general manager of the Sports Arena, has suggested building a new arena as part of the Chargers’ plan to redevelop the 166-acre Qualcomm Stadium site in Mission Valley, but the football team has rebuffed that plan because of its cost.
 Arena Group 2000, the company that operates the Sports Arena, is part of North Bay Village Partners LLC, the other development group under consideration to redevelop the area.
 The City Council was concerned about what would happen to events if the Sports Arena was torn down, Hahn said.
“We could build a new arena on the Qualcomm site and then start redevelopment of the Sports Arena,” he said.
However, the arena may be excluded from the 95-acre redevelopment plan.
“It may not be up to a developer to decide what to do with it,” Zucchet said.
He thinks the city will probably seek proposals again early next year, but he didn’t know when the City Council and community members would be able to reach consensus on what kind of construction developers should be proposing.
When the city initially asked for proposals, it did not indicate whether the Sports Arena would be razed. It said a developer would be selected in March and the project’s design would begin in June.
 The city asked in vague terms for mixed-use, transit-oriented development with affordable housing and retail.
“We were more focused on a team to develop it, not what to develop there,” said Will Griffith, real estate assets director for the city.
 Witte said the Related Cos. still wants to be involved. The developer builds affordable housing as well as high-density luxury homes, including mixed-income and mixed-use projects.
“It’s embarrassing that a big project like this and the process was cut off at the knees,” Hahn said. “We control the lease (of the Sports Arena) for another 14 years. We would like to redevelop it over time.”
 Arena Group 2000 has invested at least $6 million in the Sports Arena. The company and its partners spent hundreds of thousands of dollars on their redevelopment plan, which included residential and retail components, according to Hahn.
Arena Group is in the middle of new construction in the arena’s parking lot. Krispy Kreme has opened, and another restaurant and a gas station are under construction.
Neighbors voice concerns over YMCA expansion
By Angela Lau UNION-TRIBUNE, Nov. 9, 2003
 As the Peninsula YMCA celebrates millions of dollars in donations for a long-awaited expansion, neighbors are expressing concerns about increased traffic and a lack of parking.
 Cynthia Conger, chairwoman of Peninsula Community Planning Board, said residents have been complaining about fears of YMCA patrons gobbling up parking on the streets. The board advises the San Diego City Council on planning and growth in Point Loma.
 Some residents also are concerned that an agreement between the YMCA and neighboring Correia Junior High School in Point Loma to use some of its parking spaces to accommodate the Y's increased membership would endanger students as they walk near traffic.
 The school has agreed to let YMCA patrons use 49 spaces, said Steven Baratte, spokesman for San Diego City Schools. In return, the school would use one-half of the gym for physical education.
 Alfredo Velasco, the Y's executive director, said his organization has been a good neighbor and will continue to be.
 For instance, the Y has moved its summer camp from the Valeta Street facility to nearby Cleator Community Park to reduce the traffic from children being dropped off and picked up at camp, Velasco said.
 He said the 6,600-square-foot YMCA, built in the 1970s, is overcrowded. Its hallways are used for teen gatherings, physical therapy and community meetings.
 The building is so much in demand that residents sometimes use Ocean Beach's recreation center, where people can have to wait in line to get on the basketball courts, said former San Diego City Councilman Byron Wear, whose district included Point Loma.

Bay-to-bay proposals presented, Price might be $250 billion-plus
By David E. Graham, Union Tribune, 9/11/03
 City officials and consultants last night described possible scenarios for an approximately $250 billion park to link Mission Bay to San Diego Bay. Many in attendance doubted the practicality and affordability of such a project.
 The City Council authorized a study in January 2002 that suggested three versions of such a park: one connecting the bays by a network of park lands; another with a canal loop that wouldn't link the bays; and a third that would include a deeper, more complicated, navigable canal that would connect the bays.
 The study was described last night at a Holiday Inn in the Midway area during the fifth public meeting on the subject. The recommendations will be given to the Community and Economic Development Department for possible consideration by City Council.
 The cost estimates for acquiring land and building the projects range from $215 million for the one having only a land link to $296 million for some version of the smaller canal and $455 million for the navigable link.
"Where's all the money coming from?" interjected one man in the audience.
 Some questioned whether a project of this kind would add to already congested traffic in the Midway area and Point Loma. Several people in the audience of about 40 said they thought the project showed "vision."
 It would probably take a minimum of nine years to acquire land and build it, a consultant said.
 The notion of connecting the bays has been pondered since the 1920s. The mayor and council in the mid-1990s resurrected the idea of establishing a recreational link. The council approved $250,000 for the study that was presented again last night.
 The presentation by consultant Laura Burnett of Wall Roberts & Todd Inc. was intended to give three possible scenarios for a so-called bay-to-bay park.
 She explained how a swath of land area parallel to Rosecrans Street could be a key feature. A more expensive park with the canal loop could allow for small boats while the avoiding potential environmental problems of linking the two bays. The linkage choice might pose a threat to indigenous habitats by introducing new species and by slicing through the San Diego River and perhaps precariously mix salt and fresh water and runoff water from land.
 The plans also would alter the directions of some streets, probably avoid the landfill at Mission Bay and take into account underground utilities, Burnett said.
 Some said they believe a project could hasten redevelopment and improve the area.
Qualcomm Stadium's bad? Gee, USA Today has it No. 1, DIANE BELL. Union TribuneSept.. 6, 2003
 Someone had better clue in USA Today  to San Diego's best-kept secret. Doesn't it know that Qualcomm Stadium is antiquated, lacking in amenities and substandard?
 Apparently not, because a photo of our stadium filled up most of the top of a page in the national newspaper's weekly Destinations travel section yesterday, accompanied by gushing commentary. The headline stripped across the page read: "10 Great Places to Get a Kick Out of Football." Qualcomm isn't relegated to low man on the top-10 totem pole. It ranks No: 1, the best  of our country's "modern-day cathedrals known as stadiums." The newspaper's listing was compiled with the help of ESPN sports analyst Chris Berman, who elaborated on his favorite places for watching gridiron grit. Qualcomm "boasts 52 concession stands, three restaurants and 113 executive suites. It has hosted the Super Bowl twice." (Three times, really.) Actually, says Berman, "The Super Bowl needs to be in San Diego every  year." A lot of San Diegans will agree – and, rest assured, some stadium backers will deliver framed copies to San Diego Chargers headquarters – and maybe to NFL Commissioner Paul Tagliabue's office as well.
Winning some, losing some on the bayfront
Union Tribune, By Welton Jones, (former UTcritic-at-large) 7/16/03
 They're coming at our waterfront like hustlers who smell rich suckers not paying attention.
Second only to the priceless climate, San Diego's beautiful and largely uncluttered bay is a treasure both spectacular and taken for granted. But just as the weather needs protecting against polluters, so must the water's edge be handled for the benefit of the majority, not the profit of the speculators.
 Right now, the score looks about even. There doesn't seem any way to rescue the priceless property given away to Corky McMillin when the city acquired the Naval Training Center. Given enough courage, the present City Council may be able to resist paying even more into McMillin's obscene profits. But the dream of a second Balboa Park is long lost in the fumes of bulldozers.
 And even though the Navy has finally bowed to political pressure and agreed that the dead hulk formerly called Midway can be propped up against a downtown pier as it continues to rust away, there remains some hope that the sheer expense of this fiasco may yet give the taxpayers protection not offered by its craven city establishment.
(The continuing irony of the Midway lunacy is the nearly universal contempt in political, museum and even Navy circles for the potential of this undistinguished, high-maintenance Cold War hybrid of a ship never fired upon in anger as some sort of tourist curiosity. Yet few feel it worth the effort to speak out. The Navy, actually, has been the most responsible party in the whole business, forcing the backers through hoops of reality.)
 There may still be hope for regaining reality instead of Seaport Village. Port commissioners have asked for a design competition to see what architects and planners think might be done with the area just north of Seaport Village, that plastic tourist trap with only 15 years left on its lease.
 The commissioners seem to agree that the historic San Diego Police Headquarters building should be left more or less intact and that there should be a generous proportion of public greenery. Maybe the winning plan will help turn the commercial area into something more California than New England. It's worth the delay.
And surely the city has enough gumption to resist the loony plan now being floated to build a waterfront fountain array featuring a heroic statue of the Greek god Neptune. Fortunately, schemes like this have a way of gently dissolving like the night-and-morning-coastal-low-clouds of summer.
 But if this motley scorecard suggests anything, it is that eternal vigilance is the price of the wise stewardship this era owes to future generations. Every decision every day is potentially crucial.
 After all, one day we will have to decide what to do with Lindbergh Field.Landmark Eminent Domain Abuse Decision Michigan Supreme Court Halts Eminent DomainFor "Economic Development"Court States Poletown Was "Erroneous