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HomeMy WebLinkAboutCORRESPONDENCE - 75AApril 19, 2016 City Council Meeting Correspondence 75A - PUBLIC HEARING- RESOLUTION CONDEMNATION 1607 N BRISTOL ST. IMPROVEMENTS Date of Sender/Representative Agency Corresp. In opposition of item 1. 04/15/2016 Kevin A. Day Alvarado Smith Firm IMgendas2016 Agendas hibb 2016-Curtent Me ng12016-04-10 Exhibbs_Compondence 75kdmx Mitre -Ramirez, Norma From: Huizar, Maria Sent: Monday, April 18, 2016 1:49 PM Cc: Cavazos, David; Carvalho, Sonia R.; Mousavipour, Fred; Cortez, Robert; Gabriel, Jason; Flores, Alma Subject: AGENDA ITEM 75A - LETTER OF OPPOSITION Attachments: Resolution of Necessity Challenge Letter (April 15, 2016).PDF Categories: Correspondence Mayor and City Council, Attached for your review and consideration is a letterjust received from Alvarado Smith firm challenging City's recommendation on Agenda Item 75A. The letter has been entered into the record. From: Kevin Day [mailto:kdav@alvaradosmith.com] Sent: Monday, April 18, 2016 1:36 PM To: Sandoval, Jose <JSandoval@santa-ana.org>; clerk@ci.santa-ana.org Subject: Letter re Chavez Resolution Hearing Jose (and Ms. Huizar) — Attached is a letter regarding the Chavez resolution hearing (Item 75-A) for tomorrow's City Council meeting. Please ensure that this letter is either placed in the councilmembers' agendas, or distributed prior to the hearing. Thanks, and please call or email with any questions. Kevin A. Day Shareholder � kdav@alvaradosmith.com 2 (714)852.6800 2 Direct: (714) 852.6814 (D Fax: (714) 852-6899 ALVAUDOSMITH A PROFESSIONAL CORPORATION www.AlvaradoSmith.com 1 MacArthur Place, Suite 200, Santa Ana, CA Orange County • Los Angeles • San Francisco ABefore printing this e-mail - think if it is necessary. Think Green! NOTICE: CONFIDENTIAL AND PRIVILEGED INFORMATION - This email may contain confidential and privileged material for the sole use of the intended recipient(s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please contact the sender by reply email and delete all copies of this message. IRS CIRCULAR 230 DISCLOSURE: To insure compliance with requirements by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. �ALvaRaooSrniTH 1 MacArthur Place A PROFESSIONAL CORPORATION Los Angeles Suite 200 INCLUDING PROFESSIONAL CORPORATIONS 213.229.2400 Santa Ana, California 92707 City of Santa Ana Phone: 714.852.6800 San Francisco Fax: 714.852.6899 415.624.8665 w AlvamdoSmilh.com Kevin A. Day Raymond G. Alvarado, (714)852-6800 1936-2014 kday@AlvaradoSmith.com April 15, 2016 VIA EMAIL AND OVERNITE MAIL Jose Sandoval Maria D. Huizar Chief Assistant City Attorney City Clerk City of Santa Ana City of Santa Ana 20 Civic Center Plaza, M-29 20 Civic Center Plaza, Santa Ana, CA 92701 Santa Ana, CA 92701 Re: Bristol Street Improvements Project — Jeronimo Chavez 1415 N. Bristol, Santa Ana, CA 92706 — APN: 405-252-22 ITEM 75-A On The City Council Agenda Dear City of Santa Ana: This letter is intended as written challenge to the City of Santa Ana's potential adoption of a Resolution of Necessity to condemn Mr. Chavez's property located at 1415 N. Bristol, Santa Ana ("Subject Property") as a component of the Bristol Street Improvements Project ("Project"). The City's stated intent to use the power of eminent domain to acquire the Subject Property for the Project was clearly announced via letter from the City on October 1, 2013. The letter followed multiple pronouncements from the City regarding the acquisition of the Subject Property, to include clear statements that designated the property for a complete acquisition even before the scope of the Project was modified to demonstrate any public need or necessity for more than the 12 feet of right of way slated for actual use in the Project. This October 2013 letter included an offer to acquire the Subject Property at a claimed appraised value that was below market value at the time. Additionally, while the City offered to acquire Mr. Chavez's real property interests in October 2013, it did not provide any notice of eligibility for relocation of his operating business. As the City's October 2013, June 2014 and November 2015 offer letters sought to acquire the entirety of the Subject Property, Mr. Chavez would obviously be forced to relocate his business, and would qualify as a displaced person per Government Code §§ 7260 and 7262. As specifically set forth in Government Code §7262(a): "Whenever a program or project to be undertaken by a public entity will result in the displacement of any person, the displaced 4394867.2 --N1477.1 i ALVARADOSMITH April 15,2016 Page 2 person is entitled to payment for actual moving and related expenses as the public entity determines to be reasonable and necessary..." The definition of displaced person is found in Government Code §7260(c)(1): "'Displaced person' means both of the following: (A) Any person who moves from real property, or who moves his or her personal property from real property, either: (i) As a direct result of a written notice of intent to acquire, or the acquisition of, the real property, in whole or in part, for a program or project undertaken by a public entity or by any person having an agreement with, or acting on behalf of, a public entity. Mr. Chavez clearly qualified as a displaced person, and was entitled to relocation assistance and a notice of eligibility for the same. However, such a notice was not forthcoming. The October 2013 letter was not accepted by Mr. Chavez, and the specter of the Project remained as a cloud on title for the Subject Property since that time. Since 2013, Mr. Chavez has worked to develop information from the City's own files to demonstrate the flawed nature of this Project. The City's own actions have further clarified the flaws in the Project, yet the Staff Report and Proposed Resolution of Necessity neither fix the flaws or even address the issues. A public entity's right to exercise the power of eminent domain is restricted by two constitutional mandates: (1) the public entity's right to take the property at issue; and (2) the amount of just compensation to be awarded to the property owner for the taking. Cal. Const. Art. I, § 19; City of Anaheim v. Michel (1968) 259 Cal.App.2d 835, 837. Here, the first component is being challenged. The fundamental prerequisite to the exercise of eminent domain is that a public entity must hold a public hearing and adopt a proper resolution of necessity. Code of Civil Procedure §§ 1240.030; 1245.220; 1245.230(b). The resolution of necessity must establish the three requirements of § 1240.030: (a) The public interest and necessity require the project; (b) The project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury; and (c) The property sought to be acquired is necessary for the project. 4394867.2 -- N 1477.1 NOALVARADOSMITH April 15, 2016 Page 3 A properly adopted RON is clothed with a presumption of finality, meaning that the three required findings above are deemed to have been made by the public entity's enabling body during the public hearing. § 1245.250. However, a RON does not have the conclusive effect contemplated by § 1245.250 if its adoption or contents were affected by a "gross abuse of discretion." §1245.255(b); Redevelopment Agency v. Norm's Slauson (1985) 173 Cal.App.3d 1121, 1127. As noted in that case at page 1126: "Implicit in this requirement of a hearing and the adoption of a resolution of necessity is the concept that, in arriving at its decision to take, the Agency engage in a good faith and iudicious consideration of the pros and cons of the issue and that the decision to take be buttressed by substantial evidence of the existence of the three basic requirements set forth in Code of Civil Procedure, section 1240.030." [emphasis added.] Accordingly, a resolution of necessity not supported by "substantial evidence" is affected by a gross abuse of discretion, and is invalid. Id. "Substantial evidence" before a public body is "not synonymous with `any' evidence." Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873. Evidence that is not credible or not relevant does not constitute substantial evidence. Gentry v. City of Murrieta (1995) 36 Cal.App.4th 1359, 1400. Thus, a public body must be presented with credible evidence on each of the three necessity prerequisites in § 1240.030 to support the adoption of a proper resolution of necessity. The Resolution Of Necessity Is Flawed, Does Not Allow The Necessary Findin¢ Of Necessity Per Code of Civil Procedure §1240.030(a -c) And The Project Is A Pretext For An Illegal Redevelopment Proiect The City's Staff Report lacks any evidence to support the three necessity prerequisites, much less any credible evidence. The reasoning is simple — the road widening project is a pretext for the City to acquire these parcels, strip them of their operating businesses and improvements and then sell off the "remnants" to private developers to redevelop the area. The City's problem is that redevelopment was eliminated in Assembly Bill 26 in 2012. By way of background, the Project is masquerading as a street widening endeavor currently, but in its earlier phases was expressly based upon a 1989 redevelopment plan — the Bristol Corridor Redevelopment Plan, adopted on December 4, 1989 ("Redevelopment Plan"). The Redevelopment Plan declared the area surrounding the Subject Property as "blighted", 4394867.2 -- N1477.1 VALVARADOSMITH April 15, 2016 Page 4 which then allowed the City to create the Project, which, as noted in the City's materials' "is the only specific project proposed by the Redevelopment Plan". The City's Environmental Impact Report for this Project (in both past and current phases) was expressly based upon the Redevelopment Plan. To create the foundation for the prior "blight" finding that is still the basis for the Project, the City's baseline documents note that businesses like the Subject Property are "older" uses that are disjointed and unappealing in character, with little resources to invest as a "local" business serving Hispanic customers who primarily walk to purchase goods and services. The City's documents further note that the Redevelopment Plan and Project will remove older business to attract new private sector development to the area. The stated goal of the Project is to acquire the remnant parcels from the Subject Property and its neighbors to put new zoning in place to encourage private development. This goal is explicitly illegal, but nonetheless, the City has put forward the Resolution of Necessity for the Subject Property to accomplish the redevelopment goals that spur this Project onward. Therefore, the basis for the Resolution of Necessity is flawed, and the specific necessity findings that must be made in order to adopt the Resolution are entirely lacking. First, the public interest and necessity do not require the Project. Code of Civil Procedure §1240.030(a) The Project is an illegal redevelopment Project, and because the City is acquiring more than the property necessary for the road widening, the Project is not a valid public purpose, and the public interest and necessity do not require it; instead, the economic motivations of the City are driving the acquisition of private property not for a public purpose, but rather to benefit private development, an illegal end. Redevelopment Agency v. Norm's Slauson (198 5) 173 Ca1.App. 3d 1121; Santa Cruz Redevelopment Agency v. Izant (1995) 37 Ca1.App.4'11 141; City of Stockton v. Marina Towers, LLC (2009) 171 Cal.App.4l 93; San Bernardino County Flood Control v. Grabowski (1988) 205 Cal.App.3d 885 Second, the project is not planned or located in the manner that will be most compatible with the greatest public good and the least private injury. Code of Civil Procedure § 1240.030(b). The City's RON lacks any discussion of this element, rendering any potential finding of necessity capricious, lacking evidentiary support and a gross abuse of discretion. The City cannot show that the injury to the Subject Property (from a full take) was considered in any way. The consideration in assessing the injury to the owner of the Subject Property is the very discretion and weighing of facts and evidence that is discussed in. Norm's Slauson, supra, at 1127. The public body must acknowledge the impact on the property owner from the Project, This quotation is taken from the City's Bristol Street Corridor Specific Plan Amendment, which was publicly circulated and on the brink of being considered at a public hearing of the City's Planning Commission until challenged by my firm on behalf of the Bristol Street Coalition. 4394867.2 -- N1477.1 QBALVARADOSMITH April 15, 2016 Page 5 and not just the public benefit. In reality, this consideration is the only stopgap measure protecting the constitutional rights of the property owner because the weight of the purported public good from a project will always seem to be of more import to a greater group of people than the injury to a single property owner. However, the check on the exercise of the power of eminent domain is the consideration of the private injury. In the seminal right to take cases, Norm's Slauson, Dusek and Izant, the focus has always been on the impact of the public entity's project (or the adoption of a RON) on a single property. This is lacking here, stripping any necessity. Third, and the most obvious failing in the Resolution of Necessity and staff report, is the lack of any description of the amount of property the City actually needs for the road widening. As a result, the City cannot show that the entirety of the Subject Property is "necessary for the project". Code of Civil Procedure §1240.030(c). Based upon the environmental documents, Project plans and the completed portions of the earlier phases, the City likely needs approximately 12 feet in width along the frontage of the Subject Property to widen the road. Accordingly, the amount of property potentially "necessary" is this small strip of the frontage. However, the City wants to acquire the entire parcel, an additional 120 feet of depth. Obviously, the City is using the small frontage strip as an anchor to acquire the entire parcel to accomplish its redevelopment goals. However, not only does it lack a public purpose to acquire the entire parcel, the City failed to even follow the statutory scheme in its attempt to do so. The portion outside of the road widening project area is known as a "remnant" parcel, and is more accurately described as "excess condemnation". Code of Civil Procedure §§ 1240.150; 1240.140-1240.430. However, like all condemnation, the authority to condemn excess property or remnants is limited by the constitutional requirement of a valid public use. Id. The City's prior Resolution of Necessity (set to be adopted in March 2016) lacked any discussion of a remnant parcel or the required statutory citations. Following the receipt of my objection letter, the City has corrected the citation error, but the resolution still suffers from the same failing — the Project is clearly a pretextual path to allow the City to use twelve feet of frontage depth for road widening purposes while acquiring the remainder parcel so as to be joined together and sold to a private developer. The City cannot acquire private property in the guise of a "public project" for an illegal purpose, however that is precisely what is occurring with the proposed Resolution of Necessity. Accordingly, the City cannot show that the entire parcel is necessary for the Project, and even if such an attempt had been made, the City cannot invoke the statutory power to condemn the remnant portion of the parcel. Thus, the City's Resolution of Necessity does not comply with Code of Civil Procedure § 1240.030(c). In summation, the Resolution of Necessity and staff report lack the materials, specific facts and other information necessary to make any showing of necessity. The Resolution is 4394867.2 -- N1477.1 V ALVARADOSMITH April 15, 2016 Page 6 flawed as a result, and its adoption could only be the result of an arbitrary, capricious or grossly abusive exercise of discretion. The City Failed To Conduct The Requisite Environmental Analysis Another failed perquisite to the exercise of the power of eminent domain here is the completion of environmental analysis as required by the California Environmental Quality Act ("CEQA"). City of San Jose v. Great Oaks Water Co. (1987) 192 Cal.App.3d 1005. Here, the City's Resolution claims that the CEQA analysis of the Project was completed in 1989, with the addition of "subsequent addenda". This statement is false. The Project has significantly changed in the vicinity of the Subject Property since the 1989 EIR, which again was based upon redevelopment. Moreover, the City circulated and was on the precipice of adopting an Addendum to the Final Bristol Street Corridor Specific Plan EIR in 2014 and 2015. This addendum dealt explicitly with the Project and its environmental impact, yet contained lengthy recitations to the blight findings and redevelopment components of the Project's earlier phases. When we were forced to challenge this Addendum before the City's Planning Commission, the Addendum was suddenly withdrawn. However, the very preparation and circulation of the Addendum in 2014 and 2015 demonstrated that the environmental impact of the Project was still underway and incomplete at that time. The Project's environmental review was never finished as a result, yet the City is now trying to adopt this Resolution. As a result, the City's Resolution of Necessity lacks the CEQA review, analysis and mitigation measures to be adopted, and any attempt to do so is further evidence of the gross abuse of discretion posed by the promulgation of the RON for the Subject Property. Great Oaks, supra; Burbank -Glendale Pasadena Airport Authority v. Hensler (1991) 233 Cal.App.3d 577. The City's Offer Is Lacking And Does Not Comply With Government Code &7267.2 The City's offer is far below the statutorily mandated "just compensation" for the Subject Property. The Subject Property has frontage on Bristol Street, a busy arterial corridor (with a recent traffic count of 41,200 cars per average day). The Subject Property's location is key as it boasts a stable demographic profile, little to no development area available and good access. Locations similar to the Subject Property vie for limited product in such location, and as such represent a value "premium" paid by niche participants for well -located buildings. The City's offer for the Subject Property was based upon an appraisal and offer letter from November 2015, more than five months old at this point and hardly reflective of the current real estate market. More importantly, the sales used in the underlying appraisal date from 2014 and mid -2015, with the majority outside of the Santa Ana market. Thus, the offer is based upon a flawed evaluation consisting of non -comparable properties violative of Evidence Code §816. 4394867.2 -- N1477.1 i ALVARADOSMITH April 15, 2016 Page 7 In conclusion, the prudent course of action here is to not adopt the Resolution of Necessity for the Subiect Property. The Resolution of Necessity lacks the required findings of necessity, as do the supporting materials. The Project is a pretextual taking based upon an outdated and illegal purpose, and should not even be considered as a valid public use. Very truly yours, ALVARADOSmim A Professional Corporation Kevin A. Day Kevin A. Day KAD:ck 4394867.2 -- N1477.1