6/13/2006

Eminent Domain Case Hits Facility: Inside Self Storage, 6/06

By Jim Chiswell

Saying I told you so doesn’t make me feel any better. Four months ago, I wrote about potential problems for the storage industry with the Supreme Court’s decision on eminent domain. I concluded by saying, “I’ll climb down off my soapbox now, but I can’t remain silent in the face of such a looming crisis for real estate owners.”

There is no way I could have known that one month later, the city of Arcadia, Calif., would take its first step to seize Arcadia Self Storage, an established four-story, self-storage business on Huntington Drive, for the expansion of the local Mercedes Benz dealership.

The dealership’s owners had threatened the community with a not-too-subtle message: “If we can’t expand, we will be forced to move.” The city council voted unanimously to move on the first of five properties, the self-storage business. The city’s underlying financial motivation is clear: Mercedes Benz customers pay sales tax, while California self-storage customers do not. The dealership already accounts for 10 percent or more of the city’s total sales tax revenue, according to its manager.

California law requires the owners of eminent-domain condemned properties be paid a fair market value for their land and relocation expenses. Most eminent domain cases across the country typically produce a negotiated settlement. However, the potential for a major court case does seem possible.

At this point, storage building owners Gary and Dan Braun seem to be taking a wait-and-see attitude. In a local newspaper story, their attorney explained it could be “easier for his clients to negotiate with the city after a so-called resolution of necessity is adopted.”

The California legislature is already considering both legislation and constitutional amendments to limit the power to seize property. One unique feature being proposed is property would have to be sold back to its prior owners if the land isn’t used for the reason it was acquired. State Sen. Tom McClintock, one of the sponsors, stated in a local newspaper, “There are 6,000 public agencies in California that now have the power to seize your home, pay you pennies on the dollar for it, and then give it to somebody else for their own personal gain and profit.”

McClintock’s district includes the northwest corner of Los Angeles County, including the cities of Stevenson Ranch and Santa Clarita. The Ventura County portion of the 19th Senate District encompasses the cities of Thousand Oaks, Simi Valley, Moorpark, Camarillo, Ventura and Ojai. Santa Barbara County was recently added too.

I urge all California self-storage store owners and their employees to let Sen. McClintock and other elected representatives know they want legislation passed to protect private landowners from potential abuses by local units of government who will use the Supreme Court’s misguided decision to run rough-shod over private property rights.

The Institute for Justice, a civil liberties law firm started in 1991, has launched a website dedicated to fighting the eminent domain issue. If you should find yourself or your company facing a possible challenge, visit for information on obtaining assistance at www.castlecoalition.org.

The city of Arcadia is just one example. Don’t sit back and just hope you won’t be impacted. Get on the Internet and send a message to your state and federal legislators demanding they take action to protect us all.


Inside Self Storage: http://www.insideselfstorage.com