The Right To Be Paid For Control Of Property

The PLF Liberty Blog, one of the leading proponents of property rights, is providing an amicus brief on the interesting Stamper case.

The reality is that a market participant, meaning an owner, has a specific control of the utilization of a certain adjacent property which increases the value of the individual owner’s property. This is part of the highest and best use of the property. Just compensation is required for the condemnation of that owner’s individual control of the utilization of adjacent properties.


Liberty Blog

In this case, Richard Stamper and Donald Robinson own 9 acres of land zoned light industrial that the City of Perris wants for a road extension. In order to attract a Lowe’s distribution center, the City decided it needed to take 20% out of the middle of the Stamper/Robinson property for a new road. The City argued that because it was going to require the owners to dedicate the land before they could build, the City only had to pay for the land valued at its current, agricultural use. The city also left open the possibility that in the future, the Owners might have to dedicate even more land to the City if they want to develop the rest of their property.

The landowners challenged this action and after four years in the California Courts, their case has finally reached the California Supreme Court. Our amicus brief makes two major arguments:

1) Local governments can’t avoid paying fair market value for property they take via eminent domain merely by amending their general plans. If they could do that, then all governments would diminish property values in that way to acquire land more cheaply.

2) In accordance with PLF’s 1987 Supreme Court victory, Nollan v. California Coastal Commission, government bears the burden of showing that a property owner’s development impacts justify dedication requirements. Therefore, the government can’t merely impose a dedication on land it wants. It must show that if the land were developed privately, the dedication would be necessary to mitigate for the impacts of that development on public infrastructure.


Support For The Missoula Water Condemnation

The co-founder of Missoula Water Now provided a letter to the editor of The Missoulian. It is interesting that the letter broaches the subject of Carlyle “taking” money from the State. Realistically, the citizens of Missoula could organize their own private water company. In all likelihood, Carlyle’s biggest savings is that there is no longer an extra layer of management, filing and administrative work that would otherwise exist for an individual water company because Carlyle owns a larger number of water companies throughout the United States.


As a co-founder of Missoula Water Now, I actively organized opposition to the sale of Mountain Water to the Carlyle Group in 2011. I was not surprised to hear that the Carlyle Group did not follow through with its “good faith” agreement with the city. The Carlyle Group is an investment firm that exists to purchase undervalued assets, add limited improvements and re-sell them to highest bidders. It exists purely to maximize profit for investors and, in the case of the Missoula Valley aquifer, take money from Missoula residents every time we turn on the tap. It then sends its approximate $2 million in yearly profits out of Missoula. What should be our water system now enriches investors across the world – many of whom would not even know where Missoula is, and would not care about the welfare of Missoula’s citizens.

Although I wish the city had listened, during the short pre-sale comment window, to the more than 1,200 citizens who spoke out against the administration’s agreement of support for Carlyle’s purchase, I must now support the city’s eminent domain proceedings. The facts of the situation follow: Carlyle will eventually sell the water system to another company; it will get the highest price possible for it; and local control vs. international corporate control of water resources is a serious social and environmental issue, becoming more serious as the world’s water scarcity makes resource control that much more attractive an investment. If the Carlyle Group follows its usual pattern of flipping assets, it is logical to assume the citizens of Missoula will never be able to afford its purchase.


Missouri Clean Line Opposition Increases

Originally, many Missouri couunties supported the Clean Line approach of bringing power through the State. Subsequently, after a lack of support from the local utility companies and those directly affected by the Line, many of the Counties have now registered opposition to the proposed Line.

In all likelihood, the decision concerning the Line will finally be made through a State Regulatory Commission hearing or the involvement of FERC in the licensing process.


The Maneater

If Clean Line Energy was granted Public Utility status, a very dangerous precedent would be established. After that, virtually any company that proposes a transmission line through Missouri without any proven benefit and necessity will likely get approved and Missouri will be crisscrossed with high voltage lines.

Due to overwhelming public opposition and lack of merit, eight of the original 14 counties with proposed lines have now rescinded the support they gave to Clean Line prior to its announcement to the general public. The six counties that have not yet rescinded their support are Buchanan, Livingston, Carroll, Macon, Randolph and Shelby.

If you are on the proposed transmission line route, you probably have received a certified letter from Clean Line Energy. We advise that you do not allow them to coerce you into signing an easement agreement. They are not a Public Utility and have only just applied to become one about two weeks ago and the process could take several months. There is no advantage in signing an easement agreement now. We should all be vigilant to protect our elderly relatives and neighbors from being taken advantage of by conniving land agents. We strongly advise that no one ever signs anything regarding Clean Line Energy Partners' Grain Belt Express without an attorney.


Railroad Properties Revert To Owners

Under a recent U.S. Supreme Court decision, many railroad properties will now revert to the adjacent property owners. Most jurisdictions maintain an easement is simply that, an easement for a specific purpose. When the purpose for the easement terminates, the easement terminates.

The legal status of one of the area’s most prized natural treasures – the Illinois Prairie Path – is in question after a recent U.S. Supreme Court decision.

On March 10, the court ruled in the case of Marvin M. Brandt Revocable Trust et al. versus the United States. By an 8-to-1 vote, it determined that land given to now-defunct railroads under government easements must be returned to the original property owners....


The Problem With Assessed Value

Assessed value is often not related to fair market value. Frequently, communities under assess and use a higher multiplier in order to capture taxes. At other times, assessments are “capped”, thereby limiting increases in the assessed value.

To purchase a piece of property at assessed value, as is apparently being contemplated in a Portland, Maine, condemnation, is simply not fair. The property has other uses outside of being used as it is presently being used. Frequently, assessed value relates to the existing use only.

Reliance on assessed value in eminent domain cases is fraught with danger.

Portland Press Herald

Sprague said he wants Eimskip to succeed in Portland, so he supports the terminal expansion. He traveled to Iceland to assure Eimskip he would cooperate and later altered the design of his boatyard – after it had been approved and permitted by the city – to accommodate the transaction.

However, the state is offering less for the land than what it will cost for him to acquire additional land for his boatyard, Sprague said.

“My only issue is that I get paid fairly for the land they take,” he said. “They’d have to pay Portland rates for the land. And land on the Portland waterfront is expensive.”

The U.S. Constitution requires “just compensation” for taking property by eminent domain. The value is determined through an appraisal process that considers the fair market value of the property being taken and “severance damage,” or loss of value, to the remaining parcel, according to the MDOT’s “Landowner’s Guide to the Acquisition Process.”

According to the Portland Assessor’s Office, Sprague paid about $875,000 for the 15 acres he bought from Pan Am in 2012. No sale price is listed for the seven acres he bought from Unitil, and Sprague would not disclose the price.


TxDOT Challenged Lack Of Fairness

Some Departments of Transportation have a uniform policy. They do not buy property, no matter what the consequence or whether the properties will be developed in the very near future.

Texas jumped at purchasing certain properties, which raised the ire of the local commissioners.

Was this a conflict of interest?

The potential criminal investigation of a former Texas DOT official raises some important issues.

Most governmental agencies require a “cooling off” period from the time someone is employed by an agency and the time the former employee utilizes special knowledge obtained against the agency previously worked for.

Texas may have no rules on this potential for conflict of interest. But as can be noted from the attached article, serious questions are raised when this potential conflict arises.


Dallas News

TxDOT also used options in 2010 and 2011 when buying at least 19 acres from two Dallas real estate men who had bought and flipped the properties to the state for a large profit. TxDOT paid the men more than $20 million for the properties, which it said it needed to widen Interstate 35E in Dallas and Denton counties.

But some people including a Denton County commissioner have questioned whether the expensive I-35E land deals were in taxpayers’ best interest. Others grumbled that they weren’t given such offers.

Similarly, Bill Mote, a commercial real estate broker, questions why TxDOT bought land only from Hillwood for its future Loop 9 highway.

TxDOT says it needed to acquire the properties early to stop Hillwood from developing the land, which is adjacent to existing development. Buying it later would be more expensive, Hillwood said.

Will TxDOT review its procedures for early acquisition of right of way given these controversies? It’s unclear. We’ve asked the question and we’re still awaiting an answer.

Dallas News

In the TxDOT case, Bollman and Blackburn formed several business partnerships to buy properties along I-35E in Denton County and downtown Dallas since 2009. They then sold multiple parcels to TxDOT early in the state’s right-of-way acquisition process. The News identified at least 19 acres, using available public records.

Records show TxDOT paid Bollman and Blackburn at least $22.2 million over roughly a five-month period in 2011 for the Denton County parcels. It is not known how much the men originally paid for the property because real estate sales prices do not have to be disclosed in Texas.

The pair retained the services of Travis Henderson, a former TxDOT right-of-way official in the Dallas district who said he was hired to help them research real estate.

Henderson, 57, formed a consulting business after he retired from TxDOT in mid-2011. He told The News last year that the consulting work he has done for Bollman and Blackburn did not involve any of the projects he worked on as a TxDOT employee.

Since then, Henderson has declined to comment. But his attorney, Arnold Spencer, said last week that his client had no conflicts of interest based on his current and past work.


The Detroit Free Press Covers Private Water Issues

The recent Detroit Free Press article about conversion of the Detroit Public Water Department to a private entity reviews the potential that the system will be sold.

There seems to be an assumption that the Water Department is somehow “bloated” causing the overpricing of water. This may no longer be true. The number of employees is down over 60%. The political appointees are long gone.

The real issue with water is not simply one of cost per se but costs for clean water per se. The question is one of whether the City can obtain Clean Water Act funds from the Federal government in a less expensive and in a more timely fashion. Realistically, the private water companies, being effectively national in nature, may have a better understanding of how to process the applications and obtain the Federal funds which may be available.

Privatization is being sought in Detroit, while other Cities are seeking to acquire their privately owned water companies. This conflict raises questions about the best way to proceed.

Frankly, there is no simple answer.

Detroit Free Press

The world of private water management is dominated by a handful of global companies with billions in annual revenue that dwarf Detroit’s annual budget.

The industry also is poised for growth in the U.S. because municipalities are increasingly dealing with strained budgets and are looking for ways to save money.

Across the U.S., about 15% of water systems are investor-owned or are privately operated systems, said Curtis of the American Water Works Association. However, a large number of those privately operated systems are small housing subdivisions or golf courses and few are large metropolitan cities. About 5% of municipal waste water systems are publicly operated.

“If (Detroit’s) process moves past the request for information, it could be the largest such outsourcing deal in the history of the U.S. water sector,” said Global Water Intelligence, a trade publication that writes about the industry.


Willets Point Brawl Continues

The Willets Point property owners, mostly low-end repair shops and auto collision facilities are fighting for their economic lives. The problems of relocation are infinite. The owners see no reason why a shopping center is a better use than these facilities which provide them an opportunity to exist and work. The problem is that the shopping center will have far more employees, and the tax dollars earned by the sales will offer the community an opportunity to obtain tax funds otherwise arguably not available. Yet, the people who will be shopping at a proposed Willets Point shopping center very likely would have shopped in a nearby commercial district in their own neighborhoods.

New York Daily News

Today, the threat of redevelopment and eminent domain seizure has already driven out many of the businesses that once thrived in the Willets Point neighborhood. Few of the displaced businesses have successfully relocated.

For this reason 33 owners of Willets Point businesses filed suit in February 2014 against the EDC, Sterling Equities, The Related Companies, and the Queens Development Group. The lawsuit alleges that “there was no lawful relocation plan for current commercial tenants,” that “the relocation assistance has been ineffective,” and that the city’s failure to implement a legitimate relocation plan is a violation of federal law.

Eliminating taxpayer support for a billionaire’s boondoggle like the Willets Point Project will not make much of a dent in the level of extreme inequality in New York City. But it would make a statement that it is time to take a stand and help the working poor defend against the depredations of the rich.


The Wind Energy Balancing Act

An Iowa article has presented an interesting topic, describing the benefits of the available non-fossil fuel source of wind, but also the harm caused by the extension of transmission lines through farms in States near Kansas. In the related St. Louis Post-Dispatch article, the notion that the transmission company “might” use eminent domain offers humor. Quite clearly eminent domain will be required unless every owner along the path is satisfied.

Iowa Farmer Today

The idea is supported by environmental groups claiming it is an opportunity to move forward with an energy source that could reduce the nation’s reliance on fossil fuels and cut air pollution. Clean Line has four other transmission line projects in the works in the West and Midwest.

All five still require regulatory approval. If all goes right, the Kansas-to-Indiana line — called the Green Belt Express Clean Line — could be operational by 2018, said Mark Lawlor, director of development for Clean Line.

Clean Line says the project will be an economic boon, with all four states seeing new jobs for construction and local companies providing things like parts and concrete. Lawlor said consumers would benefit, too, from lower electricity costs.

Kansas figures to benefit the most. Clean Line projects that more than $7 billion of new wind projects will be needed to meet demand created by the line, potentially creating thousands of jobs in Kansas and making the state a hub of wind energy.

St. Louis Post Dispatch

Its proposal has stirred controversy among some farmers in the state, who worry that the entity might use eminent domain to acquire land for the route. Some local governments fearful the route would run through their boundaries sent letters to the PSC opposing the project, citing residents' concerns over the use of eminent domain to acquire property.

A hearing in front of the PSC has not been set, but Grain Belt in January informed the regulators it would ask for authority to build the transmission lines.


The Coos Bay Challenge Continues

The U.S. Department of Energy has provided a conditional approval for the Coos Bay project, which will now allow the exportation of natural gas for years into the future. The locals continue to fight, but it is clear that the economic pressures will allow the exporters to prevail.

Mail Tribune

In the meantime, "my clients are doing a variety of things: educating lawmakers both at the state and the federal level, they have been engaging the state and federal regulatory agencies, outreaching to members of the public and conducting public education," Brown said.

Violations of landowners' rights, proposed and potential environmental impacts of the facility and pipeline and a staunch disagreement with the practices of the industry backing the project are overlapping concerns of those opposing the development at Jordan Cove.

Many of the groups also argue that there are flaws in the federal economic research pushing Jordan Cove and similar projects forward, and that it is based too much on a recent boom in the domestic supply of gas.

"If you happen to be concerned about the impact of fracking and impact of methane emissions relative to the climate, well the more domestic gas you rush to export the more of this you get. ... I believe that it's wrong, and I believe that it is a fight worth fighting and a fight that we'll continue," said 70-year-old Bob Barker.


Federal Court Of Appeals Buys Deference to FERC

In a recent challenge to a proposed pipeline eminent domain proceeding, the U.S. 8th Circuit Court of Appeals affirmed precedent. The FERC certificate which a City attacked, may only be challenged in front of the Federal Energy Regulatory Commission, not through the judicial process. Any appeal to a FERC decision needs to be properly appealed from the FERC decision, not in a later eminent domain proceeding.

Petroleum News

The Smiths challenged the FERC certificate in the condemnation action. The federal district court and the court of appeals refused to allow the collateral attack on the administrative certificate. While indicating that it would not rule on the issue, the court of appeals did note that the Smiths received notice of the FERC application. “Perhaps the Smiths, as an elderly couple in rural North Dakota, should not be charged with notice of the Federal Register. But their counsel in the state court proceeding to enter and survey their land (who also represents the Smiths in this proceeding) can claim no such lack of notice,” wrote the appellate court.

The Smiths’ attempt to challenge the procedure used by Alliance in the condemnation action also was unsuccessful. North Dakota state law provides for a jury trial to determine the value of condemned land; however, the court of appeals found that the federal rules superseded state law.


Missoula Montana Is All Wet With Water Acquisition

Attached is a copy of the Complaint filed by the City of Missoula in condemn its privately-owned public utility water company owned by Mountain Water Company.

One would think that the issue of an eminent domain acquisition relates to the size of the Carlyle Group rather than the legal aspects of Montana law. If the citizens of the City of Missoula read the allegations in the Complaint, they will wonder whether the basis to acquire privately owned property is premised upon the wealth of the owner rather than the need for the property.

If investors and privately-owned public utilities read the Complaint, Montana communities may find themselves with no private investors who will fund infrastructure improvements in the State.

The author of this blog discussed his thoughts on the matter when interviewed by NBC Montana.

Eminent Domain Missoula Complaint


Forced Pooling Has A New Meaning

“Unitization” has been legislated in many States. These States generally include a specific pooling area.

Most recently, because of the availability of fracking and horizontal drilling, the “pool” has expanded dramatically from what used to be 40-acre units.

If the statute has historically been deemed constitutional, it is likely that the changing technology may provide for forced pooling if the statute originally contemplated the activity.


E & E Publishing

Forced, or compulsory, pooling is common in oil and gas producing states. Typically, it happens when a driller already has leases with a group of property owners but can't contact or reach an agreement with a minority of owners. The state has the power to allow the driller to produce oil or gas from beneath the holdout's land, although there's typically a hearing to make sure that the owner's rights are protected and states generally have a mechanism to make sure the owner is paid.

Proponents argue that forced pooling allows for drilling to be done in the most efficient manner with the fewest well sites and the least disturbance to the surface. It also prevents a single landowner from holding up drilling on surrounding property.

As the shale boom brought drilling to new areas, the idea became more controversial. Shale drilling, with its long horizontal wells, requires larger units, so more owners face the prospect of pooling. Some fields, like Pennsylvania's Marcellus Shale, are in areas that don't have a history of drilling, and landowners sometimes object to it on moral and environmental grounds.

Those objections led Pennsylvania to drop the idea of forced pooling provision in Act 13, the law that governs production in the Marcellus Shale.


Damages To The Remainder Must Be Considered In Easement Takings

The controversial Peregrine pipeline directly affected a substantial property. Eagle Ford Land Partners have been fighting the acquisition because of substantial interference with the use of the remainder.

An appraisal requires a determination of whether the remainder is affected. Here, Peregrine simply missed the valuation, and in a very substantial way.



Attorneys for Eagle Ford Land Partners, based in Dallas, argued that the landowner should be compensated for the reduced development value of surrounding land, not just the acreage taken by the easement, according to court records. The case entails about 400 acres at the intersection of Texas 360 and U.S. 287, said Luke Ellis, an Austin attorney for Eagle Ford Land Partners.

While there are natural gas wells on the property, Peregrine’s pipeline does not serve them, Ellis said.

An attorney representing Peregrine could not be reached for comment, but the company has indicated it will appeal, d Ellis said.

According to court records, Peregrine sought a 6,400-foot-long easement across a parcel owned by Eagle Ford Land, which Ellis said is a partnership of the heirs of the original landowner. When the two sides could not agree on an easement value, Peregrine condemned the 20-foot-wide strip of land under eminent domain.


Energy Tax Break And Eminent Domain Powers For Michigan Oil Companies

The recent legislation allowing the transport and use of carbon dioxide for fracking raises a number of those persistent issues complained of by so many individual citizens. First, the pipelines will have a power to acquire land. This will create tremendous anger for those who have the carbon dioxide pipeline entering their properties. At the same time, a legislator was correct when he stated that “this is a great economic boom for the State”.

The safety issues are paramount. Hopefully the State will initiate appropriate protections for the public while allowing the economic activity in what has been a “slow growth” State to warm up at least a little bit.


Shale Daily

"The bottom line is that this is about energy security, environmental protection and Michigan's economy," said state Rep. Aric Nesbitt (R-Lawton). CO2 reused in deep extraction projects could be stored underground rather than released into the atmosphere, he told his colleagues on the House floor Wednesday.

Another incentive for producers is a bill to allow operators to condemn property through eminent domain to secure rights of way for oil, gas or CO2 pipelines. Although it passed both houses, the bill received some blow back by Republicans and Democrats concerned that operators would be able to ram through pipeline projects with little regard for property owners.


M Live