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HomeMy WebLinkAbout05 - City's Power of Eminent Domain0 • • CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT COUNCIL AGE DA NQ 5 5 -b� CCj=`4CIL f,,GEMDA Pt U. L/ (0 Agenda Item No. 16 (April 11, 2006) TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Robin Clauson, City Attorney ext. 3131, rclauson @city.newport- beach.ca.us Aaron C. Harp, Assistant City Attorney ext. 3131, aharp @city.newport- beach.ca.us SUBJECT: CONSIDERATION OF AN ORDINANCE LIMITING THE USE OF THE CITY'S POWER OF EMINENT DOMAIN ISSUE: Should the City adopt the proposed ordinance limiting the City's power of eminent domain? RECOMMENDATION: Consider the proposed ordinance limiting the use of the City's power of eminent domain and provide staff with direction regarding the proposed ordinance. DISCUSSION: Under the California Constitution and State law, the City is authorized to acquire property by eminent domain. One of the prerequisites to acquihng property through the use of eminent domain is that the property must be taken for a public use. Prior to moving forward with an eminent domain action, the City Council is required to adopt a Resolution which sets forth the public use and the necessity for eminent domain. In Kelo v. City of New London, the United States Supreme Court upheld a Connecticut State law that authorized the taking of private property for the sole benefit of another private person as a public use within the meaning of the Takings Clause of the Fifth Amendment. CONSIDERATION OF AN ORDINANCE LIMITING THE USE OF THE CITY'S POWER OF EMINENT DOMAIN April 11, 2006 • Page 2 Because the Kelo case did not interpret the California Constitution and State law, the impact of the Kelo decision is somewhat limited in California. However, based on the Kelo case, there are concerns that the interpretation of the term "public use" used in the California Constitution and State law may be broadened to include a.taking of private property for the sole benefit of another private person. As a result of the decision in Kelo, the State legislature is currently considering bills limiting the Kelo decision. Further, as set forth in the attachment hereto, several cities and counties are considering ordinances or other actions to limit the Kelo decision. To date, California Courts have not interpreted the term "public use" to allow the taking of private property for the sole benefit of a private person. Furthermore, in the redevelopment context, redevelopment agencies are prohibited from condemning property without a finding that the property is blighted. As set forth above, property owners already have a great deal of protection because the City Council must make a specific determination that the property is necessary for a public use prior to initiating eminent domain actions. This allows for a review of the specific facts related to the proposed taking prior to the initiation of eminent domain proceedings. Further, in the redevelopment context, the members of the redevelopment • agency must make an additional finding that the property is blighted prior to initiating eminent domain proceedings. If the proposed ordinance is adopted, the City and any City Affiliated Agency, such as a Redevelopment Agency necessary for the City to transfer the Santa Ana Heights Redevelopment Area to the City, would be prohibited from exercising the power of eminent domain to acquire any property without the owner's consent, if the purpose was solely to further private economic development. If adopted this ordinance could limit the City's ability to acquire property by eminent domain in limited situations where the City Council may find that acquisition by eminent domain is appropriate. For instance, in the future, property may need to be acquired by eminent domain and turned over to another person for private economic development as a result of natural disasters, environmentally hazards or blight. Environmental Review: Environmental review is not required under the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines. is • • • CONSIDERATION OF AN ORDINANCE LIMITING THE USE OF THE CITY'S POWER OF EMINENT DOMAIN April 11, 2006 Page 3 Public Notice: Public notice was provided in accordance with all applicable laws. Prepared by: SIGNATURE Aaron C. Harp, Assistant City Attorney Attachment: Proposed Ordinance Response to Kelo Submitted by: SIGN E Ro in Clauson, City Attorney ORDINANCE NO. 2006 = • AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, ADDING CHAPTER 1.35 TO THE CITY OF NEWPORT BEACH MUNICIPAL CODE LIMITING THE USE OF THE CITY'S POWER OF EMINENT DOMAIN WHEREAS, the City of Newport Beach ( "City ") is a charter city, governed by a charter adopted by the citizens of the City; and WHEREAS, the State of California Eminent Domain Law authorizes the City to acquire property through eminent domain for a public use; and WHEREAS, the United States Supreme Court has ruled that cities and redevelopment agencies may utilize eminent domain laws to take private property for the sole benefit of another private person; and WHEREAS, the City finds and declares that the arbitrary use of eminent domain by local government agencies for the benefit of other private property owners hampers economic development; and WHEREAS, the City finds that adopting a clear policy limiting the City's • use of eminent domain to public use, will provide certainty for City property owners and encourage economic investment; and WHEREAS, the City desires to remove impediments to vibrant economic growth within the City and to also remove the threat of eminent domain occurring in arbitrary circumstances where private parties are the beneficiaries of the City's use of eminent domain. NOW THEREFORE, the City Council of the City of Newport Beach, California, hereby ordains as follows: SECTION 1: Chapter 1.35 of the Newport Beach Municipal Code is hereby added to read as follows: CHAPTER 1.35 EMINENT DOMAIN Sections: 1.35.010 Definitions • 1.35.020 Limitations on Use of Eminent Domain • 1.35.010 Definitions As used in this Chapter, the following terms shall have the following ascribed meanings: "Owner" means the owner of the fee title interest in the property to be acquired, as shown on the last equalized assessment roll, or other more current proof of vesting the City may have. "Property" shall mean any interest in real or personal properi:y otherwise subject to acquisition through the use of eminent domain. "City- Affiliated Agency" shall mean the City of Newport Beach and/or any other entity possessing the power of eminent domain, the governing board of which is solely composed of, or is solely appointed by, the members of the City Council of the City of Newport Beach. 1.35.020 Limitations on Use of Eminent Domain The City of Newport Beach and /or any City - Affiliated Agency shall not exercise the power of eminent domain to acquire any property from the owner of the • property, without the owner's consent, for the sole purpose; of transferring the property to another person to further private economic development. SECTION 2: If any section, subsection, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional. • SECTION 3: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the same to be published once in the official newspaper of the City, and it shall be effective thirty (30) days after its adoption. SECTION 4: This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the _ day of 2006, and adopted on the _ day of 2006, by the following vote, to wit: AYES, COUNCILMEMBERS NOES, COUNCILMEMBERS 2 ABSENT COUNCILMEMBERS m ATTEST: CITY CLERK 3 n U r 1 U • Response to Kelo • Anaheim - Mayor Curt Pringle is attempting to put a measure on the ballot that would modify the city charter, prohibiting the use of eminent: domain for private development. Chula Vista - The City Council voted unanimously to place an eminent domain measure on the June ballot. The measure would limit condemnations to public use and require the City of Chula Vista to keep properties it acquires for at least 10 years. Dana Point - The City Council voted unanimously in October 2005 to put the issue of eminent domain for private development on the ballot. Residents will vote in November 2006. Encinitas - City Council Member Jerome Stocks proposed an ordinance that would require a 2/3 majority on a public ballot for every taking of private property for private redevelopment. On July 13, 2005, the City Council unanimously agreed to draft an ordinance titled the Encinitas Property Rights Act to be introduced this fall. Orange County - In February 2006, the Board of Supervisors voted to let Orange County voters decide on June 6, 2006 whether to prohibit the County • from using eminent domain for private commercial development. Riverside - In September 2005, City of Riverside officials declared that homeowners who live in one of the seven redevelopment project areas can obtain a written guarantee from the City that it will not seize their house for economic development purposes. The Redevelopment Agency is also proposing to amend the plan for the La Sierra /Arlanza project area to declare that it will not use eminent domain to acquire owner- occupied single - family houses. A group has also launched a petition drive for a possible June 2006 referendum to ban the Redevelopment Agency's use of eminent domain for private development. San Diego - On September 12, 2005, the Government Efficiency and Openness Committee, chaired by City Councilwoman Donna Frye, recommended that the full City Council limit the government's ability to take property and adopt other policies that protect property owners. San Diego County - County Supervisors, led by Bill Horn and Ron Roberts, ordered an immediate review of the county's eminent domain policies on July 26, 2005. •