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City of Stockton v. Marina Towers LLC

February 13, 2009


APPEAL from a judgment of the Superior Court of San Joaquin County, Bob W. McNatt and Elizabeth Humphreys, Judges. Reversed with directions. (Super. Ct. No. CV022054).

The opinion of the court was delivered by: Butz, J.


California's eminent domain law permits acquisition of property only for "a particular use," to wit: a "proposed project." (Code Civ. Proc., §§ 1240.020, 1240.030.)*fn1 A public entity desiring to condemn private property must pass a "resolution of necessity" (§ 1240.040) that describes the proposed project and contains findings that the proposed project is necessary for the greater public good (§ 1240.030).

This is a case of "condemn first, decide what to do with the property later." Soon after its city council passed nondescript, amorphous resolutions of necessity approving the condemnation of two parcels of land abutting the Stockton Deep Water Channel, plaintiff and respondent City of Stockton (City) filed this eminent domain action to acquire the property, then owned by defendants and appellants Marina Towers LLC et al. (collectively Marina).*fn2

City obtained a prejudgment order for possession and acquired the property. Months later, while Marina was fiercely contesting City's right to condemn in court, City decided to build a parking lot and a baseball field on the property.

The case went to trial, where the trial court granted City's motion for non-suit and overruled all of Marina's right-to-take objections. It also denied Marina any compensation for precondemnation activities. At the compensation phase, a jury fixed the market value of the property at $1.97 million.

Marina appeals from the judgment, contending that the trial court erred in granting non-suit, in determining that the resolutions of necessity were not the product of a gross abuse of discretion, and in certain evidentiary rulings during the valuation phase of the trial.

We shall conclude that the project description in the resolutions of necessity was so vague, uncertain and sweeping in scope that it failed to specify the "public use" for which City sought acquisition of the property. This crucial defect precluded an intelligent inquiry into whether City had a legal right to condemn the property and fatally flawed the condemnation process. For this reason, Marina's challenge to the facial validity of the resolutions was meritorious and City had no right to take the property. We shall reverse with directions to order a conditional dismissal of the action. City will be responsible for Marina's litigation expenses, but it will have another opportunity to get it right.


The subject property consists of two parcels of real property on the North Shore of the Stockton Deep Water Channel.

The east parcel (APN No. 137-240-04; Resolution No. 03-0589) was unimproved;*fn4 on the adjacent west parcel (APN No. 137-250-20; Resolution No. 03-0588) was a vacant office building.

Marina purchased the property in January 2000. A year later it applied to City's planning commission to renovate the office building. Marina also entered into negotiations with the County of San Joaquin to lease the building for office space. Events leading up to the resolutions of necessity

In 1989, City adopted a Central Stockton Final Plan/Revitalization Plan. The plan presents itself as a visionary planning document for future development of the city center, with maps, charts and descriptions of possible development of the downtown area. In 1991, the subject property was added to the West End Redevelopment Project Area of downtown Stockton, and an environmental impact report (EIR) was certified for this purpose.

In 2003, City's Channel District Action Team (CDAT), consisting of staff representing various city departments and agencies, studied projects for redevelopment of the North Shore area, the most conspicuous of which was the Stockton Event Center, a multi-use complex that would include an arena, hotel, baseball stadium and residential apartments. These studies described the subject property as a "catalyst site" for City's revitalization efforts, to be assembled along with other city-owned properties. The planning boundary for the proposed event center was also expanded to include the west parcel of the Marina property and initial planning documents prepared by City staff designated the west parcel for high-density residential use.

By letter dated May 5, 2003 (all further unspecified calendar references are to that year), City notified Marina that it was considering acquisition of the property by eminent domain. In July, the city council passed a resolution adopting a preliminary site plan and authorizing the city manager to initiate applications for the Stockton Event Center. The resolution recites that an EIR for the project was currently being prepared. The draft EIR, as well as the proposed master plan for the event center project, called for a residential apartment complex on Marina's west parcel.

In August, City offered to purchase the subject property and served notice of intent to adopt resolutions of necessity. A hearing was held on September 30.

At the hearing, James Rinehart, project director of the CDAT, made the presentation. Consistent with the staff memorandum, Rinehart explained that City had been "preparing" this site for development, and described the subject property as within a "catalyst site" for North Shore revitalization.

Jeff Major appeared on behalf of Marina. He expressed Marina's willingness to work with City on developing the property and objected to adoption of resolutions of necessity. Major asserted that the public interest and necessity did not require the taking of Marina's property, explaining that Marina was in negotiations with the county to lease the vacant building. Major stated that the only project plans he had seen for the property called for private apartments. He questioned how condemnation could benefit the public when the intent appeared to be to take the property from one private owner and give it to another. Despite Major's assertion that there was no defined project that necessitated the taking of Marina's property for public use, no one at the hearing identified a specific public project that was the object of the proposed taking.

At the conclusion of the September 30 hearing, the city council unanimously passed resolutions of necessity for both parcels. The resolutions contain identical language. After identifying the subject property, the resolution recites that

(1) the "Proposed Project" consists of acquisition of additional land on the North Shore of the Stockton Deep Water Channel; (2) City already owns approximately 20 acres on the North Shore and "has been preparing this site for development"; (3) the North Shore is a "catalyst site" consistent with redevelopment of a portion of the West End (Central Stockton) Redevelopment Project Area; (4) assembling the North Shore parcels, including this property, into a single parcel will eliminate irregularly shaped and undersized lots, permitting development of a larger and economically feasible use; and (5) the "Proposed Project" will complement other revitalization efforts and City will be a direct beneficiary of such efforts. Therefore, the city council resolved to take the property "pursuant to the authority granted by Sections 37350.5, 37352, 37353, 37501, and 54031 of the Government Code, and Sections 1240.010, et seq. and 1240.610, et seq. of the Code of Civil Procedure." These statutes represent a comprehensive list of public uses for which private property may be taken.

The resolutions recite that the project is "covered" under the EIR prepared for the West End Urban Renewal Project in 1991, but that "[f]urther environmental review will be required for any subsequent specific project that may be developed on this site."

Litigation and Postresolution Events

On October 6, less than a week after the resolutions were passed, City filed a complaint in eminent domain to acquire the Marina parcels, relying on the two resolutions. City also obtained a writ of immediate possession.

Marina answered, raising a number of affirmative defenses, including the defense that the proposed project was not a public use and that City's true intent was to transfer privately held land into the hands of a private developer. The answer also alleged the resolutions of necessity were defective on their face because they "fail to sufficiently identify the public use for which the property is to be condemned."

Marina moved to stay the order for prejudgment possession of the property. The court denied the motion, finding that Marina had not established a probability of prevailing on its objections.

In the months following the filing of this action, the event center project quickly gathered momentum. A series of agreements were entered into between the city council and the Redevelopment Agency to develop the Stockton Event Center on land that included the condemned parcels. In December 2003, three months after the resolutions were passed, an EIR for the Stockton Event Center was approved by the City Council. It called for a ball park on the east parcel and residential apartments on the west parcel of the Marina property. The City even issued a conditional use permit to build a 72-unit apartment building on the west parcel.

On January 13, 2004, while this litigation was pending, the city council adopted a new resolution, designating the west parcel to be used for public parking. On March 2, 2004, City issued another supplemental resolution, designating a ballpark as the public use for the east parcel. By the time trial had commenced on Marina's objections to the right to take, these projects had been built.

Trial and Judgment

Trial on Marina's right-to-take objections commenced in April 2005. In its opening statement, counsel for Marina outlined a number of defenses she expected to be established by the evidence including (1) the acquisition did not serve a public purpose because City's true intent was to turn the property over to a private developer; only after litigation arose did City abandon the idea of transferring it to a private party; (2) the resolutions were invalid on their face because they did not identify a defined public use for which the property was to be condemned; (3) City violated the California Environmental Quality Act (CEQA) by condemning the property before completion of an updated EIR; and (4) City acted unlawfully by condemning property located in a redevelopment zone without complying with Community Redevelopment Law.

City moved for non-suit at the conclusion of the opening statement. The court granted the motion. When Marina pointed out that the non-suit motion did not address Marina's defense of gross abuse of discretion based on the administrative record, the court took the matter under submission. It subsequently issued a written decision rejecting Marina's claim that the city council abused its discretion in adopting the resolutions of necessity.

The court granted City's motion to bifurcate the issues of Marina's entitlement to precondemnation damages (see Klopping v. City of Whittier (1972) 8 Cal.3d 39)*fn5 and the valuation of the property.

After a bench trial, the trial court rejected Marina's claim that it was entitled to damages by virtue of City's ...

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