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Discussion in 'Current Events' started by DKSuddeth, Mar 20, 2004.

  1. DKSuddeth
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    DKSuddeth Senior Member

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    http://www.contracostatimes.com/mld/cctimes/8236731.htm

    City declares desert land 'urbanized,' 'blighted' to take it over

    TIM MOLLOY

    Associated Press


    CALIFORNIA CITY, Calif. - When Hyundai needed land for a new auto testing track, officials in this remote, high-desert town were eager to oblige.

    They hoped the $50 million track would bring a wealth of property taxes for the struggling town, where the unemployment rate is twice the state average.

    Under a state law that allows governments to seize land designated as "urbanized and blighted," the city's redevelopment agency went to court and won permission to take more than 700 acres from private landowners, paying them what many in the area considered a fair amount.

    On the surface, the arrangement looked like a reasonable example of the government buying privately owned land for the public good. But four holdout property owners said if Hyundai wants the land it must be worth much more than what the city offered.

    They have sued over the city's argument for condemning their land, saying it is anything but "urbanized." The region lies 100 miles northeast of Los Angeles, set amid a lonely expanse of Mojave Desert dotted with Joshua trees and scrub brush.

    "You know how the desert looks when it's pristine and hardly anybody's out there and there's no tracks or anything?" said Barry Redfearne, who owns 20 acres. "That's how it looks. And it's been like that for hundreds of years."

    Redfearne and three other landowners have sued to stop the city from taking their properties, which total 60 acres, but a federal judge has rejected the landowners' request for an injunction to stop Hyundai from building on their land.

    Another landowner who is part of the lawsuit, Jim Swain, said he's sure Hyundai will eventually get the 10 acres owned by him and his sister.

    "I think they've already won," said Swain, a retired Disney film editor living in Burbank. "We know that they're going to get our property. It's just whether we're going to get any money for it."

    Those who own the rest of the 700 acres the city condemned have opted not to sue, with some negotiating purchase prices.

    The project's backers say the land meets the state's definition of "urbanized and blighted," even if it doesn't look that way to the naked eye.

    Todd Amspoker, an attorney for the city, said California Health and Safety Codes grant government agencies permission under eminent domain to take land made of "subdivided lots of irregular form and shape and inadequate size for proper usefulness and development that are in multiple ownership."

    Critics say the legal language was intended to describe slums and abandoned buildings, not open space.

    "The whole redevelopment scam makes a mockery of the English language," said Chris Norby of Orange County, a critic of such redevelopment actions and statewide director of Municipal Officials for Redevelopment Reform. "Blight would be slums that breed crime and juvenile delinquency. Blight would be overcrowded apartments and leaky plumbing. Blight would be places like the South Bronx or areas of Detroit. Blight would not be the Mojave Desert in California."

    Construction is under way at the track, although environmentalists also hope to halt it.

    They filed a lawsuit in federal court saying the project could destroy land that is home to the threatened Mojave ground squirrel and desert tortoise. Hyundai said it is protecting and relocating the species and hired Bruce Babbitt, President Clinton's former secretary of the Interior Department, to win permits for the project.

    For California City, the Hyundai track looks like the path to better days.

    Hundreds of speculators bought land in the area in the 1960s, drawn by a developer's false promise of an impending industrial boom.

    Today, the town is California's third-largest in size but one of the smallest in population. About 2,600 of the town's 12,000 residents are federal prisoners. The unemployment rate is 11.4 percent, and four-bedroom, two-bathroom homes sell for $150,000 - less than half the state's median housing price.

    California City's mayor, Larry Adams, said the landowners are blocking the town's progress. He said the track would create 100 new jobs and bring in $500,000 a year in property taxes for education, utilities, police and firefighters. He has little sympathy for the holdout landowners, none of whom live in the city.

    "I think it's a matter of one or two (who) probably are true believers in the freedom of mankind, blah blah blah, and they don't like eminent domain," he said. "Some have a sentimental attachment to the land they inherited. And some of them are just greedy."

    Hyundai spokesman Chris Hosford referred questions about the transactions to city officials.

    The company approached the city in late 2001, saying it wanted to build a 4,500-acre proving ground within a two- or three-hour drive of its design center in Irvine.

    California City annexed 29 square miles of unincorporated Kern County land suitable for the track and relinquished another 29 square miles to the county. Hyundai then bought almost 3,000 acres from Catellus, a real estate company that sells former railroad property.

    The remaining acres Hyundai wanted were divided into lots owned by 246 owners. An appraiser hired by the city's redevelopment agency estimated the land's value at about $1,000 an acre. Many of the landowners sold to the agency, some after negotiating the price up to $1,400 an acre, Amspoker said.

    The agency went to state court, asking to take the remaining land under eminent domain, arguing it fit the definition of "urbanized and blighted."

    The judge awarded possession to the agency, which then gave it to Hyundai. The agency will have to pay the fair market value for the land, which will be decided by a jury, Amspoker said. The automaker is reimbursing the agency for its costs.

    Some locals say the landowners should take what the agency's offering. California City real estate agent Katy Gagnon said she recently sold 102 acres in a better location for $1,000 an acre.

    The four holdout landowners say Hyundai should have approached them directly. Redfearne said if Hyundai plans a $50 million project, his land should be worth at least $435,000 to the company - not the $18,000 he said the city has offered.

    "It's a matter of principle," said Redfearne, a retired business owner who lives in Prescott, Ariz. "I don't need the money. But the problem is, I don't like to have anything stolen from me."
     
  2. jimnyc
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    jimnyc ...

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    $18,000???????

    I don't even think you can buy one of them stinking Hyundai's for that!
     
  3. DKSuddeth
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    DKSuddeth Senior Member

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    while thats probably true, that wasn't the intent of my posting.

    The eminent domain law needs to go away. Its one of the most abused government vices I've ever seen.
     
  4. acludem
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    acludem VIP Member

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    Wow, Jim, we agree for once! This is a scam job for sure. These people ought to be paid fair market value for their land, and the last time land was that cheap was when Napoleon sold the U.S. the Louisiana Territory. And I agree, DK, I've seen that in my own community - our city likes to allow Wal-Mart to steal land from citizens.

    acludem
     
  5. jimnyc
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    jimnyc ...

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    Yes, we do!

    I don't understand business well enough to comment on what it takes to take over owned but unused land. But it's absurd if they are expected to be ripped off in return. They should be compensated top dollar, not with pocket change.
     
  6. Moi
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    Moi Active Member

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    As someone who's actually in the real estate business, may I suggest that the eminent domain law is a valid resource for the local/state/federal government to create development that will assist in economically changing a location.

    Without it, there are many places where communities who are in desperate need of reformatting their landscape cannot. Take it from me, the abuses are small compared to not having it. Ghettos would not be redeveloped to allow for proper housing; swamps could not be replaned; areas of cities which are just plain ghost towns would not be redeveloped. Eminent domain will allow the authorities to create areas where jobs, housing and living standards will increase. That's a good thing.

    However, anything taken to an extreme is wrong. Using eminent domain strictly for usurping citizen's rights is wrong. There must be a greater good" element. In this case it appears that there is greater good - 100 jobs and several hundreds of thousands in taxes. Is that enough to outweight the individual freedoms of the landowners? To be honest, the article doesn't give enough detail to figure that out. Clearly, the most important factor in considering fair market value is: what is the assessed value of the land that the people were paying taxes on the day before the plan was announced? The fact is that just because Hyundai wants the land, when no one else appears to, is not a reason to completely reset FMV. The definition of FMV is that on the open market without constraints what it's worth. It is certainly constrained if only one person (Hyundai) wants the land. These land owners are risking a great deal - if Hyundai decides not to do this, the landowners would get just what they got the day before. That amount is the true FMV.
     
  7. DKSuddeth
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    DKSuddeth Senior Member

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    http://www.austinchronicle.com/issues/vol17/issue19/pols.bush.html

    Governor Deadbeat
    by Robert Bryce


    Gov. George W. Bush and the other owners of the Texas Rangers are deadbeats. Rich deadbeats, but deadbeats nevertheless. Last week, Bush and his partners hit what can only be described as a towering home run by selling the Texas Rangers to Thomas Hicks for $250 million. Bush, in particular, made a killing. For his 1.8% share of the club, which initially cost him $605,000, Hicks will pay the governor between $10 million and $14 million. That is a return of up to 23 times Bush's original investment in less than nine years. (His contract included an accelerated equity clause.) But even though Bush and his cohorts are raking in the dough, making nearly three times what they paid for the club in 1989, they still haven't paid the $7.5 million they owe the city of Arlington.

    The Rangers owners owe the money because of a court judgment against the Arlington Sports Facilities Development Authority (ASFDA), the entity set up by the city to condemn land for, and administer, the Ballpark at Arlington project. In May of 1996, a Tarrant County jury found that the ASFDA had not paid a fair price for 13 acres of land it condemned; the court subsequently awarded the owners of the land, the Mathes family, more than six times what the city had agreed to pay for the land. That $5 million award then sat in escrow with interest accruing at a rate of about $1,800 a day. A year after the jury's decision, the city finally decided not to appeal the verdict and paid the judgment. That's where the Rangers' obligation comes in.

    When the Rangers and the city signed their deal in 1990, the Rangers agreed to pay any costs on the Ballpark at Arlington project that exceeded $135 million. The city of Arlington's position has been and continues to be, that the $7.5 million judgment should come from Bush and the Rangers.

    Two days after Hicks' purchase of the Rangers was announced, Arlington city attorney Jay Doegey told the Chronicle, "We have a contract with them that says they will pay anything over $135 million. The costs in the condemnation case are over that amount." But Doegey has not sent a letter to the Rangers demanding payment, and it appears that Arlington city officials are reluctant to irritate the Rangers' ownership.

    Tom Schieffer, the president and general partner of the Rangers, says of the $7.5 million, "It's not our debt. That's the position we have taken. And that's consistent with what the master agreement says." But now that he and Bush are cashing in their chips with the Rangers, wouldn't it be a nice gesture to make good on the debt? "I'm sure we will work out something," said Schieffer.

    While Arlington waits for its money, Bush is laughing all the way to the bank. Asked about the Hicks buyout, the governor told the Fort Worth Star-Telegram last week, "I think when it is all said and done, I will have made more money than I ever dreamed I would make."

    He's making millions because the Ballpark at Arlington is a gigantic cash machine. Last year, Financial World magazine named the Ballpark as the most profitable venue in baseball. Hicks didn't buy the Rangers because he wants Juan Gonzalez's autograph; he bought them because he can make a lot of money at the stadium that Bush takes credit for building.

    In 1993, while walking around the stadium, Bush told a reporter from the Houston Chronicle, "When all those people in Austin say, `He ain't never done anything,' well, this is it." But Bush would have never gotten the stadium deal off the ground had the city of Arlington not agreed to use its power of eminent domain to seize the property that belonged to the Mathes family. And evidence presented in the Mathes lawsuit suggests that the Rangers owners -- and remember that Bush was the managing general partner at the time -- were conspiring to use the city's condemnation powers to obtain the 13-acre tract a full six months before the ASFDA was even created.

    In an Oct. 26, 1990, memo to Schieffer from Mike Reilly, an Arlington real estate broker and part owner of the Rangers,Reilly says of the Mathes property "in this particular situation our first offer should be our final offer... If this fails, we will probably have to initiate condemnation proceedings after the bond election passes."

    That memo suggests a sharp contrast between Bush's personal profiteering and his public stance in defense of property rights. While running against Ann Richards, Bush said, "I understand full well the value of private property and its importance not only in our state but in capitalism in general, and I will do everything I can to defend the power of private property and private property rights when I am the governor of this state." Where was that concern when it came to the Mathes family's personal property?

    But let's forget about Bush's philosophical problems when it comes to property rights and the Ballpark deal. And let's set aside the notion that he may have earned exorbitant amounts of money on his investment. Instead, let's focus on the facts of the deal: Bush and his partners used the city's powers to condemn the land for the stadium. They relied on taxpayers to repay the bonds sold to build the ballpark, thereby getting what amounts to a direct $135 million subsidy. Now, after tripling the amount they paid for the Rangers, Bush et al are refusing to pay the city a measly $7.5 million. Talk about a debt to society.

    On the very first day of his campaign in 1993, Bush said that "the best way to allocate resources in our society is through the marketplace. Not through a governing elite." By selling the Rangers, Bush and his fellow sports moguls demonstrated the power of the market place. By refusing to pay their debt to Arlington, they are also proving that the governing elite live by a different set of rules than the rest of us.
     
  8. Moi
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    Moi Active Member

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    Unless I see the actual contracts, court decisions, etc. I couldn't possibly form an opinion about eminent domain in this case. Besides, the city/state ultimately paid a fair market value, didn't it? Such leads me to believe that the real beef isn't the fact that FMV had to be determiend by arbiters (not uncommon in real estate transactions, by the way) but that GWB was somehow connected.

    Again, having not seen the legal agreements, it seems like there's a dispute as to what the costs are/were. Clearly, reasonable men have the right to disagree, don't they? That's the entire reason for contracts.

    How old is this article...these events are from the early 1990's- has there been a resolution yet?
     

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