Many people decry the use of eminent domain by redevelopment agencies in California. I don't deny that there have been flagrant abuses of eminent domain authority over the years, but I also understand why well-meaning redevelopment officials grow frustrated with private property owners and resort to forced takings.
I spent a day in Suisun City last month reporting for the latest Local Watch story. Suisun City is unquestionably one of California's redevelopment success stories. A sparkling waterfront district has replaced one of the Bay Area's scariest slums. Still, when I visited last month, I was struck by the number of empty lots and vacant or obviously underused buildings on Main Street – even right across the street from the very pleasant waterfront promenade. In the window of one boarded-up, single-story building was a faded, hand-scrawled sign on a piece of corrugated cardboard inviting offers of "$750,000 and up" for the real estate. Yes, three-quarters of a million.
When I spoke with current Mayor Pete Sanchez and former five-term Mayor Jim Spering (now a Solano County supervisor), they expressed frustration with the situation. Both of them said the city had failed to get the Main Street property owners interested since the city shifted redevelopment into high gear during the late 1980s.
"That whole west side of Main Street is just as blighted as it used to be," an exasperated Spering said.
The situation is hardly unique, and it exemplifies why redevelopment agencies end up exercising their eminent domain authority.
The scenario usually goes about like this: In a run-down part of town, the city starts a redevelopment program. It does some infrastructure work and improves the streetscape. It acquires a few neglected properties from willing sellers and then either fixes up the property or turns it over to a developer for a project. Over a period of time, things start shaping up. Some people recognize the neighborhood is changing and begin investing in their property or business. This one of the primary goals of redevelopment – to generate private investment in a stagnant market.
Other people, however, see the redevelopment activity as their big chance to cash in. They put their dilapidated property on the market for an astronomical price, sometimes after shutting down a business or evicting a tenant. Naturally, no one bites. The property owner tries to interest the redevelopment agency, but even if the agency wants the property, it may not legally pay more than fair market value, which could be a small fraction of the asking price.
So nothing happens. The property sits there vacant or with some grungy second-hand store that pays enough rent to cover the property owner's minimal taxes. The property owner figures he'll wait it out.
The other scenario involves an owner who is motivated not by money, but by ideology. It's his property and he can do whatever he wants with it – paint the building florescent green, let the tenant erect obnoxious signs, rent to a biker gang or simply board up the windows and use the building for storage. The city can just go to hell.
A walk down Main Street shows that Suisun City has experience with both scenarios – 20 years after the city got serious about redevelopment, and more than 10 years after redevelopment was declared a success.
This is precisely why redevelopment agencies take properties. Recalcitrant property owners hinder not only the fancy plans of elected officials and bureaucrats, they hold back the entire community.
– Paul Shigley
