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PRIVATE PROPERTIES' FATE GOES TO VOTERS SEIZURE: BALLOT MEASURES WOULD LIMIT EMINENT-DOMAIN POWER.

Byline: Harrison Sheppard

Sacramento Bureau

SACRAMENTO -- The fate of billions of dollars worth of private property in California will be at stake this year in a political battle over how much power the government should have to seize homes and businesses for redevelopment.

With competing eminent- domain reform measures on the June ballot, the outcome will pit taxpayer groups against elected officials -- and business and developers likely against both of them.

"I think the local and state chambers will fight this tooth and nail," said Barbara O'Connor, director of the Institute for the Study of Politics and the Media at California State University, Sacramento, "because this is one way that they can 'mine' inner-city areas, which are often cheaper to develop and have large developments where they couldn't otherwise acquire property."

The fight comes as California's population is surging and a shortage of land is increasing pressure on governments to exert legal authority to seize private property for everything from traditional purposes, such as new schools and roads, to private developers' mixed-use retail, office and housing projects or sports arenas.

And in a state where Proposition 13 restricts hiking property tax rates, expanding the tax base through redevelopment has become increasingly attractive to local governments.

The ballot measures in June focus only on eminent-domain authority in private development and are a reaction to a court decision three years ago.

In that decision, the U.S. Supreme Court essentially confirmed government's right to seize homes whose owners don't want to sell them and hand the property over to private developers -- a decision that critics say has opened the floodgates for property seizures nationwide.

And national property-rights groups say California has one of the worst records for protecting private-property rights.

"California is one of the most notorious eminent-domain abusers in the country," said Jeff Rowes, an attorney with the Arlington, Va.-based Institute for Justice, a nonprofit group.

"There are massive cases of abuse. The two places you find eminent-domain abuse are scenic areas and the intersection of major transportation conduits. California has lots of interstates and lots of scenery. It has traditionally been a big abuser."

And because the areas that are most often targeted for redevelopment are those that experience blight and economic hardships, "eminent-domain abuse falls overwhelmingly on the poor and minorities, and California has lots of those," he added.

But government agencies and developers say eminent domain is a necessary tool for the economic rebirth of depressed areas.

In Los Angeles, eminent domain -- or simply the threat of it -- has been used to acquire properties in the redevelopment of Hollywood, the building of the Staples Center and revitalization projects in South Los Angeles.

"You have the ability to go into areas that are terribly downtrodden, with high poverty and high crime, and assemble enough property to make a block deal happen," said Bruce Ackerman, vice chairman of the Los Angeles city Community Redevelopment Agency and chairman of the California Association for Local Economic Development. "I've always seen it as a very positive tool."

But, he added, it's also a "tool of last resort," with cities strongly preferring to negotiate voluntary deals with property owners.

However, those who own properties facing condemnation often feel intimidated by the government's power and tactics.

Cruz Baca Sembello's family has lived in Baldwin Park for more than 60 years. Now, the city plans a massive redevelopment project on 125acres that could force out about 500 residential and commercial property owners. Sembello said her parents have owned their mortgage-free home there for about 40 years.

"Even if they did offer them market value, there's no way they could move or would want to move," Sembello said.

She said she might understand if the city needed the property to widen a road or build a school -- but not for a private developer.

"Where are my rights as an American?" she said. "Where does it stop?"

The Castle Coalition, sponsored by the Institute for Justice, says use of eminent domain for the benefit of private redevelopment has skyrocketed since the Supreme Court decision in 2005.

From 1998 to 2002, the group tracked 10,282 properties nationwide threatened or taken by eminent domain for the benefit of private parties.

In the year after the court decision, the group tracked 5,783 properties threatened or taken. Annualized, that's almost three times as many properties at risk after the decision.

In California, the group tracked 858 properties in the five years before the court decision; after the decision, 346 properties were at risk, or about double the annual rate.

But California authorities say the law was clear in this state long before the court decision. Local redevelopment agencies have always had the power to seize private property for private development, but only if the area is first officially designated as blighted.

There is often a strong economic incentive to declare an area blighted. Through a tool known as "tax-increment financing," the city can keep any additional tax revenue generated by the higher property values a redevelopment project creates.

In June, California voters will have the ability to restrict the government's power in some eminent-domain cases.

One measure, sponsored by the League of California Cities, is specifically focused on homes. It would prohibit government from seizing residential property and giving it to a private developer for commercial purposes.

A second measure, sponsored by the Howard Jarvis Taxpayers Association, would prevent the seizure of both homes and businesses and would also essentially end rent control in California.

This would be achieved through vacancy decontrol. Rent limits would remain in place for current tenants, but once an apartment is vacated, it could no longer be controlled.

The measure also would restrict government's ability to seize private property for water projects and would grant new compensations to owners when their property is taken.

Backers of the League measure said they tailored their effort to protect homeowners, and they think the Jarvis measure is too broad and includes matters that have little or nothing to do with eminent domain.

"From our perspective, this (Jarvis) measure is an attack on tenants and affordable housing and an assault on the environment," said Tom Adams, president of the California League of Conservation Voters.

But Jon Coupal, president of the Jarvis association, said he thinks the League's measure was placed on the ballot to "obfuscate" the issue for voters. With two similar competing measures on the ballot, voters may simply reject both out of confusion.

And, he said, the Jarvis measure was ultimately designed to give the strongest protections to property owners, including landlords.

"The initiative, first and foremost, reflects the policy that government should not take property away from one private interest to give to another," Coupal said.

"We do not impact the ability of government to take property for public use -- the traditional roads and highways and schools and dams."

And imposing rent controls is just another form of the government taking away value from property, he said.

"These rent regulations are as close to a physical taking as you can possibly get," he said.

John Matsusaka, president of the Initiative and Referendum Institute at the University of Southern California, said that after the 2005 Supreme Court decision, voters in nine states passed eminent-domain reform measures that were purely focused on limiting government power to take property.

But voters rejected similar measures that included "regulatory takings" clauses such as those in the Jarvis measure -- provisions under which governments have to pay property owners every time a zoning or environmental restriction might affect their potential income or property value.

"Based on historically how these eminent-domain measures have done, I think the voters will probably like the idea of protecting property owners," Matsusaka said.

"But when you get into this issue of having to pay people for regulations, it makes people nervous. They know (governments) are short of funds, especially in California. That changes the whole terms of the discussion."

harrison.sheppard(at)dailynews.com

916-446-6723

BALLOT MEASURES

THE CALIFORNIA PROPERTY OWNERS AND FARMLAND PROTECTION ACT

Supporters: Howard Jarvis Taxpayers Association, California Farm Bureau Federation, Apartment Owner Association of California, California Republican Party.

What it does: Prohibits government agencies from taking private residential or commercial property for private development. Ends rent control. Prohibits taking farmland or open space to sell natural resources.

More: www.yesonpropertyrights.com

THE HOMEOWNERS PROTECTION ACT

Supporters: League of California Cities, League of California Homeowners, tenants-rights groups.

What it does: Prohibits government from taking homes for the benefit of private development.

More: www.eminentdomainreform.com

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Publication:Daily News (Los Angeles, CA)
Date:Jan 20, 2008
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