Legislation proposed by Assemblyman Hector De La Torre will have little impact.

Assemblyman Hector De La Torre of South Gate has recently introduced another bill to supposedly restrict the use of eminent domain in California.

On the surface this new legislation sounds good, but it has some significant loopholes that local governments will be able to walk through with ease.

For the homeowner this new legislation would provide some relief, as California governments would be prohibited from using their eminent domain powers to acquire owner-occupied homes for shopping malls or other private development.

For the business owner, this new legislation would provide little to no relief, with a hole big enough for virtually any City Council to walk through. The new legislation would prohibit the transfer of small businesses acquired through eminent domain to private parties unless the taking is part of a comprehensive program to eliminate blight. And therein lies the loophole…

The "blight" provision in the section for business owners can be walked around, through or under by simply using a very broad definition of the term "blight". In San Jose, the courts allowed an area to be considered "blighted" because there were wet leaves on a private tennis court. In other areas, any building that isn’t up to the proposed standards after revitalization has been determined "blighted" by default.

Of course the new legislation allows small business owners to avoid the mandatory sale of their properties by agreeing to make physical improvements as part of the revitalization project, but many areas are already following this rule. Make your building pretty and up to snuff with the revitalization plans, and we’ll let you stay… and why not, since the City would not have to incur any additional costs this way?

There are also provisions in the new legislation regarding the compensation of businesses that are forced to move, but again these aren’t granting anything that isn’t already available in most areas. They would receive "fair market value" for their properties if relocated, or 125% of their business value if relocation was not deemed to be a viable option. Either of these are subject to abuse, since both valuations are arrived at by non-scientific means and are thus easily abused. Take it from a CPA who’s done business valuations before: This is not an exact science! And relocating businesses would be granted up to $50k in relocation costs, which in many cases won’t be sufficient to cover all of the costs of relocating.

So what’s NOT covered by this new legislation? Farms, churches, rental housing, second homes, investment property and businesses with more than 25 employees. With weak legal definitions, such as for the term "blight", which is defined so vaguely that "any property can be taken" through eminent domain proceedings according to Tim Sandefur of the Pacific Legal Foundation, there’s really not much protection at all until the definition of "blight" is changed as well.

So, once again, a lot of pomp and circumstance about some proposed legislation, but in the end it will be meaningless… Ho hum…

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