Hercules May Block Wal-Mart With Eminent Domain: CBS-TV5, San Francisco CA, 11/29/06

The city of Hercules [CA] is planning to file a lawsuit of eminent domain in Contra Costa County Superior Court in Martinez by the end of this week in an effort to take over a 17-acre parcel of land in central Hercules currently owned by Wal-Mart Stores Inc., according to City Attorney Alfred Cabral.

The city council voted unanimously Tuesday night in what might be a first for a redevelopment agency to invoke the city's eminent domain authority to acquire land from a commercial developer, Cabral said.

Historically, redevelopment agencies have used eminent domain to take over residential property to use for commercial development that will bring more revenue to the city, Cabral said.

The piece of land in question began as a 105-acre parcel of developable land that the city determined was blighted in 1983 when it formed its redevelopment agency.

The redevelopment agency entered into a development agreement with a Southern California developer called Lewis Operating Company in November of 2003.

The plan was for the development to take place in three parts, with two areas being used for residential housing, and the third, the 17-acre parcel, to be used to build a neighborhood shopping center.

According to Cabral, the city spent $500,000 planning the shopping center, which was designed to include a grocery store, a drug store and several smaller stores.

Wal-Mart bought the property from Lewis in November 2005.

In December 2005, Wal-Mart submitted an application to the city to build a 167,635 square foot store, which the city rejected.

In February 2006, Wal-Mart came to the city with a proposal for 100,000 square foot store with several smaller stores attached, Cabral said, which the city denied as well.

The city wanted a neighborhood shopping center and had zoned the property for that purpose, not for a big box store, Cabral said.

On Tuesday, the city council, which is also the redevelopment agency, adopted a resolution to file an eminent domain lawsuit to acquire the 17-acre parcel from Wal-Mart in order to build the shopping center they had originally planned. They also voted to extend their eminent domain authority for an additional 12 years.

After the first time the council passed the ordinance, Wal-Mart filed a lawsuit challenging the redevelopment agency's authority to invoke eminent domain on the property.

In a letter delivered to the city Tuesday, attorneys representing Wal-Mart claimed that the city's eminent domain authority expired in 1995. Once that authority has lapsed, the city no longer has any legal authority under California's Community Redevelopment Law to resurrect the authority, the letter claims.

Cabral, however, said that the city's redevelopment agency has a 40-year lifespan, during which time the city has the authority to invoke eminent domain rights.

The city has until late December to file a response to Wal-Mart's lawsuit, Cabral said.

In the meantime, the city is planning to file its eminent domain lawsuit by the end of the week to take over the property and Wal-Mart will have 30 days to respond.

Wal-Mart's attorneys have also argued that the city failed prove that the property is blighted, a prerequisite in invoking eminent domain authority.

The letter claims that since the city increased its offer to buy the property from $13 million to $14.5 million it has conceded that the land is not blighted.

"The agency's concession that the value of the property has increased 11 percent over the last six months is a clear admission that the property does not suffer from 'economic blight' - a statutory prerequisite for it to be taken by eminent domain," the letter claims.

Cabral, however, claimed that the property is in the same condition as it was in 1983 when the city found the entire 105-acre area to be blighted and formed its redevelopment agency.

"It's not producing revenue, it doesn't provide any houses or services," Cabral said. "Just because a property is blighted doesn't mean it doesn't have value."

Wal-Mart attorneys have also accused the city of not considering their newest proposal for developing the land, a plan they claims it submitted to the city eight months ago.

In the letter, Wal-Mart attorneys wrote that the proposed plan would include a much smaller Wal-Mart store - a 97,000 square foot store as opposed to a previously proposed 163,000 square foot store. The store would also sell groceries. Several smaller stores, outside eating areas and a drugstore are also in Wal-Mart's plan, according to the letter.

"Finally, the proposed Bayside Marketplace is consistent with the city's vision for the development of the property, as reflected in the city's general plan," Wal-Mart claims.

The city, however, wants the commercial development it set out in its general plan, and that development does not include a Wal-Mart.

"Cities always have the right to plan development within their community," Cabral said.

CBS-TV5, San Francisco CA: http://cbs5.com