Garden Grove residents sue state over relocation costs

Jan. 1, 2015 -Chris Haire

http://www.ocregister.com/articles/residents-646604-city-state.html
A handful of Garden Grove residents are suing the states Finance Department to force it to release $1.9million
in former redevelopment funds to the city to, among other things, compensate the residents who were forced to
move to make way for the Great Wolf Lodge Southern California.
The lawsuit stems from a Superior Court decision in May that said Garden Grove is required to pay relocation
costs for about 30 families, build 80 affordable housing units and pay attorneys fees because the citys original
relocation package was not sufficient. The money was to come from the citys former redevelopment agency
funds.
Of the $1.9million, $141,540 would help reduce the cost of relocation for residents.
We fought hard to receive some assistance after we were forced to move from our homes, and now the state
wants to stop Garden Grove from paying us what they are obligated to, said Jose Sanchez, one of the former
Travel Country RV Park residents named in the lawsuit who says he is owed $3,079. Receiving these funds
would bring stability back to our lives.
In May 2003, the city began a years-long process to obtain 12 acres of land along Harbor Boulevard and bring
in the Great Wolf Lodge, which finally began construction last summer and will boast a 100,000-square-foot
indoor water park. The city estimates the 600-suite hotel and waterpark will generate $8million in revenue
annually.
At the time, the city offered a relocation package to residents of the RV park, including having the city pay the
difference between rent at the park and wherever residents moved to for up to 42 months.
But the residents did not think the offer sufficed and in 2009 as the project neared a groundbreaking date
(which was ultimately pushed back several more times) they sued Garden Grove.
The reasoning behind the May judgment was that the city essentially used eminent domain when it forced the
residents of the RV park to move and gave $47million to the developer to help finance the hotel.
In 2011, the state eliminated more than 400 local redevelopment agencies and the expenditure of remaining
funds now requires state approval.
Every six months, the citys successor agency created to manage the dissolution of its redevelopment
agency must submit an update to the state Finance Department on its schedule to pay any debts from the
former redevelopment agency. It included in its January-June update the $1.9million for the affordable housing
and relocation fees required with the judges ruling.
The state department denied the transaction.
The reasoning behind the denial, according to a letter from the state to Garden Grove, is that the department
considers the May decision a new authorization for money, which is not allowed because the redevelopment
agency has been dissolved.
The agency has no authority to enter into new obligations, the letters says.
The residents, represented by the nonprofit Public Counsel, have been granted an emergency temporary
restraining order against the Finance Department.

Last week, Sacramento Superior Court Judge Timothy Frawley prevented the Orange County
Auditor-Controller from disbursing about $936,000 in former redevelopment funds to other local agencies,
which was supposed to happen Friday. There will be another hearing then to decide whether to further extend
the restraining order.
The thousands of dollars these families are owed is a drop in the bucket compared with the cost of the water
park hotel, said Nisha Vyas, a Public Counsel attorney representing the eight residents named as plaintiffs in
the case. But it would make a huge difference in their lives.

Eminent domain abuse hurts America: Column

-Scott Bullock and Dana Berliner

As the economy improves, expect developers to demand more uprooted families.

Ten years ago this week, Justice Sandra Day O'Connor engaged in an exchange in the now infamous case of Kelo
v. City of New London that would not only surprise her you could tell by the expression on her face but the rest
of the listeners in the Court, as well:
Justice O'Connor: "For example, Motel 6 and the city thinks, well, if we had a Ritz-Carlton, we would have higher
taxes. Now, is that okay?"
Attorney for City of New London: "Yes, Your Honor. That would be okay."
Four months later, five members of the Court endorsed the city's position in its landmark ruling. The nation was
shocked. The Court held that the city could take the homes of Susette Kelo and her neighbors to hand over to a
private developer in the mere hope that new development project could raise tax revenue and improve the
economy.
Writing in her dissenting opinion, Justice O'Connor recalled her exchange with the city's attorney: "The specter of
condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a
Ritz-Carlton, any home with a shopping mall, or any farm with a factory."
The outrage that swept the country after the Court's decision quickly transformed into nationwide reform efforts, and
the results in the past decade have been striking. In response to Kelo, 44 states changed their laws. Of those 44,
eleven states changed their state constitutions. High courts in three of the six non-reform states increased
protections against takings for a private use. Thus, a grand total of 47 states increased protections for property
owners in some way since Kelo was handed down.
Despite this progress, however, there is still no meaningful federal constitutional protection against eminent domain
abuse. Accordingly, people in some states have strong property rights, some weak, and some none at all. For
instance, the use of eminent domain in New York before and after Kelo sounds like a parody of eminent domain
horror stories. Yet, the New York state legislature and its Court of Appeals refuse to do anything to rein in the power.
For example, since Kelo, New York courts have upheld the taking of private property for the expansion of private
universities, for the Brooklyn Nets arena, and even allowed a developer's extortive demand for $800,000 in
exchange for not condemning someone's property and when that owner refused, condemnation papers were filed
the following day.
Like the First Amendment's protection for free speech and the Fourth Amendment's prohibition of unreasonable
searches and seizures, the public use provision requiring that land taken through eminent domain be put to a
public use is an explicit part of the Bill of Rights. The Supreme Court would not stand for First and Fourth
Amendment rights not having meaningful levels of protection for all Americans regardless of the state where they
happen to reside. The same should apply to property owners under the Fifth Amendment when they face abuse of
the eminent domain power.
Although the justices have had several opportunities to reconsider questions of public use since the Kelo decision,
the U.S. Supreme Court has rejected each in turn. Hopefully, at some point in the near future, the Court will take the
opportunity to correct its monumental constitutional error.
There is one other important albeit sad lesson from the Kelo case. Ten years after the Court's decision, 15 years
after the approval of the city's development plan, and over 17 years since it was first proposed, there has been no
new construction in the Fort Trumbull neighborhood of New London where the condemnations occurred. The homes
and businesses have long since been bulldozed. The once tight-knit, blue-collar neighborhood that was home to

dozens of families and businesses is now a barren, overgrown field home only to feral cats and migratory birds. New
London is the latest and most prominent of the string of government-directed urban renewal debacles stretching
back more than 60 years.
That is the legacy of eminent domain abuse. When cities propose projects, they have a built-in incentive to make
extravagant claims about the benefits that will result. Promises are easy to make, and if the promises were
overblown or even outright lies, there are no penalties for the people who made the failed promises. There are
consequences, however, for the people whose businesses are ruined and whose neighborhoods are torn apart.
In the wake of Kelo, Americans got a brief respite from this cycle of abuse. Politicians were afraid to use eminent
domain, and, in the wake of the financial downturn, developers were not engaged in much development. Now, as
the commercial real estate market picks up and politicians and business interests are once again tempted to abuse
eminent domain, hopefully they and their constituents will remember the failure of the New London project and so
many others like it. But that is a thin reed upon which to rest private property rights. Until the U.S. Supreme Court
takes up this issue again, the reforms passed in the wake of Kelo must be preserved and strengthened. And, in
places like New York, they must be implemented for the first time. The homes and small businesses of modest
Americans hang in the balance.
Scott Bullock and Dana Berliner are attorneys with the Institute for Justice. Mr. Bullock argued the Kelo case before
the U.S. Supreme Court and Ms. Berliner argued the case before the Connecticut Supreme Court.

Kelo v. City of New London, Conn.

Summary
In a 5-4 opinion by Justice Stevens, the Supreme Court ruled that the public use requirement of the Takings Clause of the
Fifth Amendment permitted the City of New London to exercise its eminent domain power in taking property from
homeowners and transferring it to another private owner as part of an economic development plan. Following precedent
from previous cases, the Court broadly interpreted the public use requirement to mean public purposethe city was not
intending to open the condemned land for use by the general public, but a public purpose would be served through the
benefits that the economic development plan would have on the community.

Analysis
This case is activist because the court strained the plain text of the Constitution to achieve their apparent desired ends,

bending terms to the point of breaking. The Takings Clause in the Fifth Amendment was enacted to prevent the government
from infringing on the private property rights of citizens, a right which was fundamental to the American Founding. Thus the
words public use limited the governments power to the taking of private property only when the land desired would be used
by the general public. Roads, schools, or libraries would be permissible grounds for public takings under this original
understanding. The Court abused precedent, reinforcing grave errors by extending the misinterpretation of public use as
being the equivalent of public purpose, which not only displaces the language of the Clause, but invites limitless

infringement on one of our most fundamental rights. As Justice OConnor states powerfully in her dissent, Under the banner
of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so
long as it might be upgradedi.e., given to an owner who will use it in a way that the legislature deems more beneficial to the
publicin the process.

http://www.heritage.org/initiatives/rule-of-law/judicial-activism/cases/kelo-v-city-of-new-london-conn