Rutgard v. City of Los Angeles and CCP § 1245.245 (Part 1): Requirement to Use Property and Buyback at Present Market Value

The Eminent Domain Law allows a property owner to challenge the right to take property on grounds that the agency will not likely devote the property to the stated purpose within seven years.  (CCP § 1250.360(d))

The recent case of Rutgard v. City of Los Angeles (2020) Cal.App. LEXIS 709 is a good reminder that property owners get a second bite at this apple.   The agency has ten years to put the acquired property to the public use stated in the resolution of necessity.  If that has not occurred, the agency must sell the property back to the original owner, unless the agency has either reauthorized the original resolution or adopted a new resolution authorizing a different use for the property within that same ten-year period.  (CCP § 1245.245)

The Rutgard court added a further wrinkle to this rule.  In determining precisely when the ten-year period begins to run, the Rutgard court held “a resolution is ‘finally adopted’ [and the ten-year period begins to run] once the city council has enacted the resolution and it has either been (1) approved by the mayor, or (2) vetoed by the mayor, but overridden by the city council.”

This is particularly important for agencies which have adopted a multiple-step process related to the adoption of the resolution of necessity.  These steps often include, among other things, preliminary findings by less than the entire council, a waiting period after the resolution is adopted, and/or concurrence by the mayor after the resolution is adopted. 

Until Rutgard, there has been little to no court review of the rule set forth in Section 1245.245 since it was adopted over thirteen years ago.  In my next post, I will discuss some of the ambiguities surrounding this portion of the Eminent Domain Law.

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