With the politicking already under way, another confusing campaign over eminent domain restrictions is likely to confront voters next year.

A coalition headed by the Howard Jarvis Taxpayers Association and the California Farm Bureau Federation is gathering signatures on an initiative that would prohibit the use of eminent domain for economic development. The measure would also prohibit rent control. And, according to initiative opponents, because of subterfuge or error, the measure would prohibit the use of eminent domain for public water projects.

The rent control provision and the argument about the impact on water projects could overshadow the issue of redevelopment agencies' use of eminent domain during the 2008 campaign.

At the same time, a coalition that includes the League of California Cities, the California Redevelopment Association (CRA) and the League of Conservation Voters is circulating a rival initiative that would bar the taking of owner-occupied, single-family residences for economic development and provide new safeguards for small business owners. The initiative is similar to ACA 8, which the same organizations are sponsoring. However, because it is a constitutional amendment, ACA 8 needs two-thirds approval in the statehouse before heading to the ballot. Thus far, the measure has no Republican support.

In 2006, California voters rejected Proposition 90, one of several "sons of Kelo" ballot measures around the country (see CP&DR, December 2006, August 2006). Proposition 90 would have prohibited the use of eminent domain for economic development. But it also contained far-reaching language that would have required government compensation for regulation that reduced a property's value. Opponents seized on these takings provisions, which became far more important than the eminent domain limitations during the campaign.

This time, rent control may replace takings as the tangential — yet dominant —issue. John Shirey, CRA executive director, noted that apartment owners and mobile home park owners are providing most of the money for the Jarvis group's signature-gathering effort. Those property owners have fought local rent control ordinances vigorously for decades.

Initiative proponents say rent control is a natural fit for the initiative because property rights protections are meaningless if the government can still regulate sales or lease prices.

In late August, the League and CRA trumpeted a legal opinion that said the Jarvis initiative would prohibit the use of eminent domain for water projects. The opinion was written for the organizations by Richard Martland, a former assistant state attorney general now with Sacramento's Nielsen, Merksamer, Parrinello, Mueller & Naylor. Martland pointed to initiative language that would prohibit the transfer of property rights to a public agency for the "consumption of natural resources."

"[I]f the ultimate purpose is to provide water for domestic use, such as drinking water, irrigation, commercial or industrial purposes, the use of eminent domain to acquire the land necessary to construct any feature of the project would be prohibited," Martland wrote.

The opinion generated headlines in Sacramento and some worried comments by a few Republicans. But Jon Coupal, president of the Jarvis association, said the opinion was simply a political ploy.

"On the merits of the legal argument, we're very comfortable and we wouldn't change a thing about our initiative," said Coupal, who laughed at the idea that the Farm Bureau would do anything to halt water projects. "The notion that the dozen or so water attorneys at the Farm Bureau Federation would miss this is silly."

Coupal said his initiative would provide "iron-clad protection for all property owners," which he said is a contrast with the more limited protections of ACA 8 and the local government-sponsored initiative.

The lack of protection for the owners of rental properties and churches was clearly at issue during an Assembly Local Government Committee hearing on August 22, when ACA 8 failed to get a vote from either Republican committee member — a sign that any GOP support is very unlikely.

"Do what's fair," Assemblyman Guy Houston (R-San Ramon) urged ACA 8 author Hector De La Torre (D-South Gate). "The rental property is real, real important."

---------------News Update---------------

On August 30, De La Torre amended his bill to prohibit the use of eminent domain for the taking of a church or house of worship for transfer of the property to another private party.


If ACA 8 supporters cannot round up all Democratic lawmakers plus two Senate Republicans and six Assembly Republicans, local government organizations must go the initiative route, which Shirey called "plan B."

At this point, it appears both initiatives could appear on the June 2008 ballot.

The Local Impact

The Arcadia Redevelopment Agency is painfully aware of what happens when a local government loses eminent domain authority. In Arcadia's case, it may mean the loss of the city's last automobile dealership and one of the largest sales tax generators, at nearly $1 million annually.

After the U.S. Supreme Court handed down its Kelo decision upholding the use of eminent domain for economic development purposes, Arcadia officials commenced the condemnation process to acquire three parcels so that the adjacent Rusnak Mercedes-Benz dealership could expand. The timing, noted Assistant City Manager Don Penman, could not have been worse.

One property owner, Manny Romero, the owner of the popular Rod's Grill, made clear that he had no intention of selling. As the Kelo backlash grew, Romero became something of a celebrity — a small business owner willing to stand up to both city hall and Mercedes-Benz. Romero became active in the Proposition 90 campaign and also helped qualify an initiative in Arcadia. Measure A would have prohibited automobile sales on the block where the city was attempting to help Rusnak expand.

The City Council countered with its own ballot measure, Measure B, which preserved land use authority but eliminated the redevelopment agency's ability to use eminent domain for the purpose of taking private property for private use. During a special election in May, voters by three-to-one ratios rejected Romero's zoning limitation and approved the council's concession of eminent domain authority.

The redevelopment agency has acquired one of the parcels and is in escrow to purchase the second, according to Penman. However, Romero will not sell and his mid-block parcel is essential. In July, Rusnak announced it would look out for a new location out of town.

Penman conceded that Arcadia is a conservative community. Still, he said, "It's tough to make things happen when you don't have the leverage."

John Shirey, California Redevelopment Association, (916) 448-8760.
Jon Coupal, Howard Jarvis Taxpayers Association, (916) 444-9950.
Don Penman, City of Arcadia, (626) 574-5414.