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Sacramento Eminent Domain

Posted on February 10 2015 by Gabriela Ocampo

One of the major news stories in Sacramento revolved around the fight to build a new Kings arena on a piece of land that was formerly a Macy’s department store. The current owners; CalPERS and C-111 Asset Management were unable to agree on the price that the future owners, the Sacramento Kings offered. Due to their ongoing and unproductive price negotiations, the City of Sacramento initiated an eminent domain lawsuit to take control of the property and keep the arena project on schedule. While CalPERS didn’t fight the city wanting to take control of the property, the mortgage holders (primarily U.S. Bank) did. Lawyers representing the group claimed the city had undervalued the property and hadn’t followed proper legal procedures. The city offered $4.35 million for the property and the owners had recently valued it at $10 million on the property tax rolls.

Ultimately, a superior court judge ruled in favor of the city’s eminent domain suit and it allowed the city to take possession of the property. As a result of the city taking possession of the property, a jury had to decide what to value the parcel of land at and offer the owners as compensation. The fight between the City of Sacramento and the owners then began. Over the course of a few months and behind closed doors, the city and the owners negotiated a settlement that both could agree upon. Deliberations continued even after the city had demolished the Macy’s structure that had been on the property, the owners fought for a suitable dollar amount. One of the property owners, C-111 Asset Management, asked for $21.75 million in compensation for its share of the land. CalPERS had its part of the property valued at $12.85 million in court documents. However, the city had appraised the property at a much lower value then either owner group was asking for at $6.3 million.

Finally, after the closed door meeting of the Sacramento City Council and the owners, both came to an agreement. The Sacramento Kings were required to pay CalPERS $5 million for their part of the property and C-111 Asset Management $7 million for their part. The outcome of this agreement meant the Kings paid a total of $12 million, $2 million more than the property taxes had the property valued at. Both owners were able to receive more than the city’s initial offer. A settlement had finally been arranged and all parties involved were happy with the outcome.

In this case, the City of Sacramento took control of a piece of private property via the eminent domain law so that it could be demolished for public use. This was only done after months of court battles between the current and future owners bore no results or agreements. Even though the city had possession of the property, the current owners still had the ability to fight for a fair compensation, even against the first offer. Eventually, an agreement was reached and both owners were compensated with more than they had been offered to begin with.

Having an experienced lawyer who is well-versed in eminent domain law can get you the same positive outcome, even after eminent domain has been granted. If you want fair compensation for your property in an eminent domain suit, contact Century Law Group for legal assistance.