Many large redevelopment projects on hold: Fresno (CA) Business Journal, 6/9/06

Forest City, other developments in limbo because of eminent domain initiative

By Adrian Rodriguez

Forest City Enterprises is not going to bring forward plans for the south stadium project while a proposed initiative takes shape that could effect private developers’ ability to develop private property.

The city council had asked Forest City to submit alternative site plans for their proposed 85-acre mixed-use project in downtown Fresno, in a project area south of the Grizzlies Stadium. Forest City was due to present those plans at the end of this month, but because it appears one initiative will make the state ballot in November, Forest City won’t make its next move until after that time, said Marlene Murphey, director of Fresno’s Redevelopment Agency.

An initiative to amend the California Constitution is being proposed that would bar state and local governments from condemning private property for private projects or uses.

The initiative also would limit the government’s authority to adopt certain land use, housing, consumer, environmental and workplace regulations, unless “regulations are adopted to preserve public health or safety, or comply with specified land use planning and property rights limits.”

Supporters will need to gather 598,105 signatures by July 7 in order to place the initiative on the November ballot. State Senator Tom McClintock (R-Northridge) and the Howard Jarvis Taxpayers Association have teamed up for the campaign and have formed a political action committee. An up-to-date listing of contributions to help pass the initiative was not available at press time.

Murphey said the uncertainty has put many proposals, such as Forest City’s, in question.

Dave Spaur, executive director of the Economic Development Corporation serving Fresno County, said that large redevelopment projects are on hold – not just in California, but across the United States.

“The International Economic Development Council is following eminent domain very closely,” he said. “Nobody has to wait, but developers are putting everything on hold because it’s created a huge question mark.”

Spaur said some of the proposals winding their way through the legislative process may be “bad apples” that have likely spoiled many deals already.

“It’s just this legislation hanging over people’s head,” he said. “It’s a national story, and then it’s a state story, and you have several large redevelopment agencies in the state, [that] have millions tied up in redevelopment.”

While Spaur said that Fresno has been “fairly prudent” about its redevelopment projects, cities such as Los Angeles, San Jose, San Diego and Anaheim have multiple projects with multi-year timelines.

San Diego and San Jose in particular are beyond the point of no return, he said.
Spaur said eminent domain has been a national issue since cases in other states, such as New Jersey and Arizona, put a spotlight on the practice. In Arizona, the City of Mesa had proposed to use eminent domain to acquire a bike shop and transfer the land to a privately owned hardware store so that it could move to the more desirable location.

In October 2001 the bike shop’s owner filed suit, asserting that Mesa was abusing its power of eminent domain, according to the Institute for Justice, which represented the bike shop owner.

This is just one case of many, Spaur said.

Fresno Business Journal: http://www.thebusinessjournal.com