Court OKs First Eminent Domain Seizure for High-Speed Rail Project

Monday, December 16, 2013

It was not, perhaps, the sort of milestone the California High-Speed Rail Authority was looking for to mark its progress in construction of the first 29-mile stretch of track between Madera and Fresno.

But on a beleaguered $68-billion project—facing immense financial and political challenges—this will have to do.

The State Public Works Board (SPWB) voted 3-0 Friday to let the agency use eminent domain to make the first seizure of property it needs for the bullet-train. It won’t be the last. It has been estimated that 20% of the 370 or so parcels the state needs to obtain will end up being taken via this last resort. 

The 2.5-acre parcel includes a 20,000-square-foot warehouse that is leased to the California Department of Corrections and Rehabilitation. Rail officials told the Associated Press they first made an offer on the property in May but never heard back from the owner. Its value was pegged at $2.3 million by Fresno County.

The agency got the go-ahead in January from the board to begin negotiating for properties. It didn’t purchase its first until early November, but the pace will probably pick up. The agency state told AP then that it was negotiating with most of them and would close 30 deals within a month.

The state can use eminent domain for the rail project because it’s a public use conferring a public benefit. It’s pretty tough to block and is ultimately decided by a court. The state is supposed to offer fair market value for the property and compensate for moving and other expenses. Many of these negotiations are contentious, as the route zigzags through established farms, ranches, businesses and home sites.

Back in January, Anja Raudabaugh, executive director of the Madera County Farm Bureau, which opposes the project, told the Los Angeles Times that agricultural land prices had skyrocketed and that property the rail authority expected to pay $8,000 per acre for now costs $28,000.

Property owners are beginning to make way for a project that may not get built.

At the end of last month, Sacramento County Superior Court Judge Michael P. Kenny barred the state from selling $9 billion in rail bonds approved by voters in November 2008 because the Rail Authority’s finance committee failed to explain its reasons for authorizing the offering. The Los Angeles Times said it may be the first time in the state’s history that a judge refused to validate a bond sale.

Judge Kenny also ordered the state to come up with a new strategy for raising the estimated $68 billion needed to complete the system. The law required that the state know where it was going to get a significant amount of the money before it started, but the present plan is already tens of millions of dollars shy of financing just the first leg. Kenny wants the old plan rescinded and a new one drawn up.

The legal decisions have put a hold on using state money and raised questions about the use of federal funds under these conditions.

–Ken Broder


To Learn More:

Board Approves Eminent Domain Move for Train (by Juliet Williams, Associated Press)

California's High-Speed Rail Meets Opposition over Eminent Domain (by Isabel Angell, Marketplace)

Judge Puts Two Roadblocks in the Way of High-Speed Rail Project (by Ken Broder, AllGov California)

In the Path of the High Speed Rail: An Overview of the Eminent Domain Process (by Matthew R. Dildine and Gregory J. Norys, Dowling Aaron Inc.)

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