Masters of their Eminent Domain

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Posted October 3, 2007 in News

Across this expanse of concrete and desperation known as the city of Riverside, the signs of progress are everywhere. You see them in the glistening eyes of dark-suited investors as they gaze dreamily upon neighborhoods that were formed before the developers’ parents were even born. You see them on the sides of boarded-up buildings, row after row of them, on pasteboard signs heralding a promise of new and wondrous things to come.

“Coming Soon! Coming Soon!” the signs proclaim. “New shops and theaters and movie screens and fine dining! New town homes and loft-style condominiums! Come be a part of the New Riverside!”

North and south and east and west, from the hillsides to Casa Blanca to the riverbed to UCR and beyond, the air around you is heavy with the smell of money, while the earth beneath you trembles from the onslaught of heavy equipment. Riverside is a city on the move, and if you didn’t know it, you’d think that where it’s moving toward is a place previously untouched by civilization. It’s as if City Hall found a way to roll back a curtain to reveal hundreds of new acres of bright and unblemished land just begging to be built upon. And, in a sense, it did.

These are exciting, momentous times, if you’re young or new or fabulously wealthy, and it would all be perfect were it not for the perpetual whining of those other people, those revenants of the Old Riverside, who are neither young nor new nor wealthy. For those people, far more numerous than the city’s bought-off leaders would like you to believe, the changes happening all around them are not to be celebrated, but feared. Fear is another sign you see everywhere—on the faces of powerless merchants and lifelong residents as they gaze nervously at the bulldozers outside their door, as they look out from the shadows like those earlier Americans, who watched silently as the Conquistadors unloaded their ships upon supposedly virgin sands.

The Riverside City Council, from where all these new and wondrous changes emanate, has been bitten and bitten hard by the eminent domain bug. Over a three-year period, the Riverside Redevelopment Agency—really, just the City Council meeting at a different time of day, but with vastly expanded authority—filed 18 separate eminent domain lawsuits on property owners whose lands (and the businesses that sat upon them) the city coveted. The lawsuits commenced a process through which the owners would see their property taken from them, to be handed over later to complete strangers. While some owners have chosen to fight the suits, most simply packed it in and left.

 

 

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Under eminent domain, a government agency can seize private property by having the courts condemn it and force the owners to sell it to the agency at a supposedly fair-market price. The process was originally intended to allow the government to improve a blighted area—to avoid, for example, a scenario in which a single, agoraphobic shut-in’s unwillingness to move blocks efforts to clean up an entire slum. But over the years, the process drifted, with more and more municipalities using their eminent domain powers to make their already pretty towns even prettier.

The issue came to a head of sorts in New London, Connecticut, where the town fathers moved to expand its tax base by seizing private residences and handing the land over to Pfizer Pharmaceutical Corp. The residents sued, resulting in the landmark 2005 Kelo vs. the City of New London decision, in which the Supreme Court ruled that the benefits of economic growth was a good enough a reason for a city to seize private land for commercial use. But the Court left it to state and local governments to come up with their own eminent domain policies, and since 2005, states including Florida, Michigan and New Hampshire (and Orange County cities including Anaheim, Costa Mesa and Newport Beach) passed laws restricting the practice.

But while other government agencies were recoiling in horror from the Kelo decision, some cities, like Riverside, sensed an opportunity.

Sometime over the past three years, or perhaps earlier (it’s hard to say, because Riverside City Hall doesn’t talk much to the nonaligned press), the council got it in its head that nearly everything wrong with the city—its moribund downtown, its crime rate, its stunted tax revenue, its inability to attract and keep new businesses—was the fault, not of the council and its misguided policies, but of an unproductive constituency that simply refused to go away. This notion, lovingly nurtured by the sweet milk of out-of-town developers’ money, germinated into a working philosophy, which City Councilman Dom Betro expertly articulated when asked why the city condemned an entire downtown block for use by private developers.

“What you have here are long-term property owners who have done nothing to improve their properties, while their properties have appreciated 300 percent,” Betro tells the Weekly. Betro represents downtown Riverside, where most of these unhelpful owners once thrived. “These property owners are, in fact, a detriment to the downtown area, and these property owners have no interest in improving them.”

In other words, the council has seen the problem, and the problem is this crazy concept called private property. If those pesky property owners won’t take a hint and go of their own accord, the city will force them to go—the owners, that is. The properties themselves—well, the city would just take that and hand them over to interests more to its liking.

A handful of the city’s eminent domain lawsuits were true to the original spirit of eminent domain, such as the condemnation of rundown, seedy motels that have long been the bane of the Riverside Police Department. But most were simply the Redevelopment Agency wading into the real estate speculation game by kicking out the original businesses and replacing them with fancy new developments.

Such was the case with the city’s acquisition of businesses on the downtown block bordered by Market and Mission and 1st and 3rd streets. In lawsuit after lawsuit filed November 2, the city moved to condemn a dozen parcels of land to make room for Raincross Promenade, a tony housing project by LA developer Mark Rubin. This action, one of the largest and, at an estimated $5.4 million, one of the most expensive condemnation efforts in the city’s history, resulted in dozens of merchants and their employees being forced to find work elsewhere.

Rubin, incidentally, is listed by Betro as a key endorser of his council re-election bid.

 

 

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Across the street, business owners—scared out of their wits by what any fool could clearly see coming—quickly sold out to Beverly Hills developer Alan Mruvka, who wants to build 125 residential and live/work units between 1st and 3rd streets along Market.

“We didn’t really have a choice, did we?” says Lee LeMunyan, the co-owner of Bader Motors, who sold his property to Mruvka and shut down the business in May. “The city doesn’t want older businesses here. They want new businesses for a new tax base—then they’ll be happy. Wherever we go after this, I can promise you it won’t be Riverside.”

Mruvka, incidentally, donated $500 to Betro’s re-election bid. A company called CityWorks, LLC—listed as the developer of Maric College in Riverside and holding the same post office box address as Mruvka—contributed $1,500 to the Betro campaign. Mruvka and CityWorks also donated a total of $1,000 to Riverside Councilman Steve Adam’s re-election effort.

LeMunyan wouldn’t disclose how much Mruvka paid for his property, but added that he believes the developer got a screaming hot deal. This raises the question of just how much money the city is compensating the property owners for their lands and businesses.

Under California law, cities are supposed to provide landowners fair-market value for their condemned properties and economic assistance in relocating their businesses. But a look at the eminent domain suits filed by Riverside Redevelopment shows the city acquired or is seeking to acquire condemned properties at prices that would make seasoned realtors salivate.

In the case of Riverside Redevelopment Agency vs. Steven Kovely, for example, the city is suing to acquire an 8,663 square-foot single-family home at 3159 Main St. for $170,000; a single-family home of the same size at 3167 Main for $230,000; a duplex of the same size at 3741 2nd St. for $340,000; and two used car lots totaling 28,800 square feet for $842,000. The case is still being fought.

Betro, however, sees nothing wrong with any of this.

“Every single one of these cases, we settled on a price with the owner,” he says. “In most cases, it’s a very favorable settlement. We pay all legal fees. In all cases, the property owner gets more for the property than its appraised value. This pays for legal fees involved, and they get tax benefits.”

Tell that Chol Sun Pak, former owner of a 21,263 square-foot storage and fast-food business at 3158-62 Main St. In RDA vs. Chol Sun Pak, filed November 2, the city paid $540,000 for the land and the improvements on it. Minus fees to one of his attorneys, Pak received a grand total of $218,500—payable to his other attorney. That remainder is less than a third of the $700,000 proposed asking price for just one of Mruvka’s residential units.

Betro says he doesn’t understand why the displaced property owners are so upset. The city, after all, paid them fair-market value for their land. It’s that kind of indifference to the plight of condemnation victims that sets state senator Tom McClintock’s teeth on edge. After the Kelo decision, the senator—a Republican who represents cities in north LA County—introduced legislation that would have prohibited the seizure of private property for commercial use. The bill never made it off the senate floor.

“Governments like Riverside will tell you ‘we very rarely take property by eminent domain,’ because the owners always settle,” he says. “That’s like saying a gun is very rarely fired during a robbery. But it’s the fact the gun is pointed toward your head that the property is given.

“What is your property worth to you? It’s worth what someone else is willing to pay for and what you’re willing to sell for. It’s based on a mutually agreeable price. It used to be that if a widow didn’t want to sell her home to developers, she didn’t have to and that was the end of the matter, unless the government sent a bunch of thugs in. Now, the government has become the thug.”

 

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The reaction among many Riverside residents over City Hall’s eminent domain craze was to literally go ape. Eminent domain was the hot-button issue in the ongoing council election campaigns, with Betro, Adams and Councilman Art Gage facing an upcoming runoff election against candidates who have put the issue front and center before the voters. A group called Save Riverside, founded by resident Paul Odekirk, regularly holds rallies around the city featuring a woman in a gorilla suit holding a sign reading ANYONE BUT BETRO.

“I lived in another city for about 12 years, and when I came back, I started looking for some of the old businesses I used to patron,” Odekirk says. “Many were gone, and the ones that were there, people were told they were going to be torn down soon. So I put together this group, to try to change what I could for the better. Once, I was handing out flyers for a meeting, and Betro came by and grabbed one and threw it on the ground, and called me an ‘outsider’ to my face. That just made it easier for me.”

City Hall has taken a decidedly “blow me” attitude toward the anti-eminent-domain crowd. When resident Ken Stansbury tried to put a charter amendment on the ballot restricting condemnation, the city sued him, claiming that eminent domain was a state issue. The suit so far has produced a win for the plaintiff at the county level, and a recent tentative ruling by an appellate court in favor of the city.

When residents Yolanda Gardner, Marjorie Von Pohle and former council candidate Letitia Pepper tried to talk about eminent domain at a council meeting in February, the council promptly kicked them out of the room. No more telling image of the council’s disdain for the opinions of its residents can be found than that of Von Pohle, a community activist who, at 89, is often referred to as the “Grand Dame of Riverside,” being escorted out of council chambers by Riverside police.

When the Weekly asked city spokesman Austin Carter for a meeting to discuss the proposed Riverside Renaissance, a citywide building program that promises to bring about yet more condemnation lawsuits, Carter initially responded with, “That depends on the questions you’ll ask.” He later called to say that no one in the city was available to discuss the $1.2-billion plan. When we called for comment on this story, he replied, “We read your “Code Red” article [on Riverside code enforcement abuse, archived at ieweekly.com]. We don’t comment to the Weekly.”

 

 

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Such an astonishingly arrogant attitude has served only to increase the fears of residents. Web sites like Riversidelandgrab.com and political forums on Craigslist.com positively boil with paranoia, as locals fill in the gap left by the city’s unwillingness to dialogue by trading conspiracy rumors. Some of the rumors, such as the city tweaking municipal law to make code enforcement another path to condemnation, may ultimately prove accurate. Others—such as Betro being merely the puppet of five angry lesbians who live in the hills—are just nutty.

Still, Betro sees nothing amiss. When we asked him about the appropriateness of the city taking private property for commercial use, he insisted—enthusiastically insisted—that all this talk of eminent domain was a lot of hooey.

“First of all, we have gone as far as we can possibly go to say that we in the city of Riverside will not take a privately owned residence under any circumstance,” he says. “You need to separate that out, the private home, which is what most citizens are concerned about. We passed a resolution of necessity—we have about 20 properties that we passed a resolution of necessity on. We said we want this property; we want to enter into negotiations with the owners. If the negotiations fail, we’ll go into court to get it. Every single one of those has sold. We have not had to go to court to enact an eminent domain decision. We do not have one property that has been taken as a result of legal court action.”

Respectfully to Mr. Betro—who at least had the courage to return our call—but that’s absolute bullshit.

Yes, in Betrospeak, the city passed its “resolution of necessity,” as he claims—but the city also filed a whopping 18 separate eminent domain lawsuits over a three-year period, an extraordinarily high number when eminent domain is supposed to be the last resort for a city to take. How about the single-family homes mentioned in RDA vs. Kovely, under the heading “NOTICE OF DEPOSIT—ACTION IN EMINENT DOMAIN?” How about the 17 other cases we found—rather easily found, as they were each titled “COMPLAINT IN EMINENT DOMAIN?” Or were those all one big clerical error?

Maybe Betro believes that since the property owners settled with the city, they weren’t really sued after all. Maybe he assumed we wouldn’t know where to look for the lawsuits. Or maybe, just maybe, he was simply too busy counting all his money from developers to pay attention to what he was saying.

According to his April 30 campaign finance statement, Betro took nearly $20,000 from developers, realtors, and attorneys specializing in real estate law. His council colleague, Steve Adams, took more than $25,000. That’s nearly a third of all Betro’s campaign donations for the filing period, and more than half of Adam’s donations. That, of course, isn’t even counting more than $88,000 Adams received from the development community during his recent state Assembly run. But it is counting the donations from companies like Mruvka, Turner Development of Newport Beach, Palm Desert Development Co. of Palm Desert, LM Powell Development Co. of Anaheim, and so on.

Asked about the appropriateness of taking so much development money at a time when residents are convinced the city is gunning for their homes, Betro gets defensive.

“If you analyze my statement, you’ll see I have donations from 300 individuals. To single out one category from all the contributions, that’s probably a very narrow perspective. I understand what you’re saying, but people should look at my track record. Before I came in, the way it was all done was all sole-sourced. I restored competition, where we put out requests for proposals and people got to compete.”

Word to Betro: Perhaps suggesting we look at your track record isn’t the best defense for having accepted so much out-of-town development money at a time when your constituents are freaking out about eminent domain.

But Betro does make a strong point when he mentions those 300 individual donations:  The guy’s got a lot of support in the city, particularly in some of the more upscale neighborhoods where residents are perfectly content to see those ugly old shops go away to make room for the lofts and boutique shops. At any rate, voters will get a chance to decide who best represents their interest when the city holds its runoff election November 6.

State Sen. McClintock has a definite idea what voters should keep in mind when they enter the ballot booth.

“Every person needs to watch very carefully how their local officials are voting on these (eminent domain) thefts,” he says. “I will absolutely guarantee you that if your city councilman is willing to seize your neighbor’s property, that same councilman is perfectly willing to seize yours as well.”

 

NEXT WEEK: Why you won’t read about any of this in the Riverside Press-Enterprise.

 

 

 

 


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