Wal-Mart sues Hercules over eminent domain technicality: San Jose CA Mercury News, 11/8/06

By Tom Lochner

In what could be the first of a series of legal challenges, Wal-Mart has sued Hercules over the city's decision to invoke eminent domain to strip the retail giant of a Central Hercules lot near the waterfront.

The suit, filed in Contra Costa Superior Court in Martinez on Tuesday, argues that the City Council's May action authorizing the taking was illegal because of a technicality. It challenges the Hercules Redevelopment Agency's authority to invoke eminent domain at all, against any owner on any grounds, contending that authority lapsed in 1995, 12 years after the approval of the original redevelopment plan for the so-called Dynamite Project Area in December 1983.

But in September, the Hercules City Council, by ordinance, extended the redevelopment agency's eminent domain authority by 12 years. Wal-Mart wants a judge to declare the ordinance invalid.

"Defendants' after-the-fact attempt to resurrect the Agency's power of eminent domain is factually unsupported and legally improper," Wal-Mart's attorneys argue in the suit.

"Once it's expired, it can't be resurrected - that's their argument," Hercules City Attorney Mick Cabral said. "Our argument is, that's absurd."

"We can extend or revive the eminent domain authority at any time before the redevelopment plan itself terminates."

That will not happen before about 2031, Cabral estimated.

Wal-Mart owns the future Bayside Marketplace, a 17-1/4-acre lot off John Muir Parkway roughly midway between San Pablo Avenue and San Pablo Bay. A 2003 development agreement with the Lewis Group, which owned the property until it sold it to Wal-Mart late last year, sets a store size limit of 64,000, the city contends.

Wal-Mart has said the 64,000-square-foot figure is merely a guideline and that its project, which calls for other stores on the parcel, would fall within the total store space limit of 168,000 square feet for the entire parcel.

Earlier this year, Wal-Mart filed its latest, scaled-down application for a 99,000-square-foot big-box store and other smaller structures.

"Wal-Mart does not want to submit a plan that conforms with the development agreement we signed with Lewis," Cabral said. "They want to do it Wal-Mart style."

Wal-Mart also challenges the city's contention that its property is in a condition of "blight," a legal requirement for a decision to invoke eminent domain.

Cabral said the property is as blighted now as it was in 1983 at the time the redevelopment plan was approved.

Blight can be physical or economic in nature under state redevelopment law. The city contends Wal-Mart's property is economically blighted, in essence for lack of any economic activity.

"This is the first of what I believe will be many legal actions Wal-Mart will take in order to force its way into Hercules," Cabral said.

No court date has been set for the suit.

Steve Kirby of Friends of Hercules, a good-government advocacy group that opposed the Wal-Mart proposal, said he is not surprised at all that Wal-Mart sued.

"I think the city pretty much knew Wal-Mart was going to do this," Kirby said. "It's part of Wal-Mart's modus operandi. They'll argue a technicality. They'll spend millions of dollars. They'll drag it on. That's what Wal-Mart does."

Wal-Mart spokesman Kevin Loscotoff rejected the notion that Wal-Mart is unwanted in Hercules, except by "a vocal minority that's opposed."

"Hercules residents drive to our stores in Martinez, Vallejo and Fairfield every day," Loscotoff said. "They appreciate the savings that Wal-Mart brings to working families. We continue to be bolstered by those residents that want low prices, new jobs and sales tax revenues."

Commenting on the lawsuit, Loscotoff said, "It's unlawful to pass an ordinance to retroactively extend their authority to use eminent domain to seize our land."

San Jose CA Mercury News: http://www.mercurynews.com