CA Bullet Train and Eminent Domain

[Ben]

Looks like the CA bullet train people have made more blunders. Apparently they expected to pay high prices for San Fran and LA land, which they won't be buying for probably another decade, but figured they could get land in the Central Valley for a song. I guess they didn't take into account that available good farmland has been an incredibly scarce commodity. Most of the good open land is running $20K/acre on up, and if trees are in, you're looking at $40K/acre. There is very little for sale on the open market, and land with good soil and water sells quickly when it appears.

They've been offering farmers what appears to be well under current market value, and have been refused. They are now taking people to court under eminent domain to force sales at below market value. My guess is that the hundred or so that accepted deals might be sitting on land without water because of the drought. If they don't have $100K or more handy to drill new wells, the offers might have been their ticket to greener pastures as it were.

This is only the first phase of the track building and affects some 500 landowners. They'll be needing to buy a lot more land to extend the track to either side of the valley before they get to the big cities. I expect this will only get worse. I hope the landowners all have good lawyers and don't go bankrupt in legal fees fighting the eminent domain. Not just the landowners looking to get market value, but those who don't want to sell their land/home in the first place.

 http://www.foxnews.com/politics/2015/03/16/property-rights-battles-threaten-to-further-slow-california-costly-long-awaited/

[RoadKingLarry]

I need to open a killdozer franchise and sell kits.

[lee n. field]

I need to open a killdozer franchise and sell kits.

Boomhauer -- be an en-trooper-noor, and put the education to work!

[Cliffh]

I hope the landowners all have good lawyers and don't go bankrupt in legal fees fighting the eminent domain.

That is just wrong.  A man should not have to mortgage everything he owns in order to keep it. 

I've seen it happen to small businesses near a river that the city wanted to "fix".  The owners lost everything, at below market value.  If that's your only income, what the hell are you going to do?

[RoadKingLarry]

When they take away everything a man has to live for......

[Firethorn]

I tend to view eminent domain as a tool that's necessary for when you have that 'one stubborn holdout'.  NOT as a tool for the government to save money.

I'm reminded of the old idea - you declare what your land/property is worth to you.  That's what you pay taxes on.  However, if the government so chooses, it may purchase your land for the declared price.

If you're going to eminent domain, my 'normal' price is around 10% ABOVE market.  If it's your residence, add moving expenses on top of that.

10% above market, I think, is 'good enough' to compensate for the fact that they might not be looking to sell, but low enough for most people to not try to force eminent domain in order to get more money.

[T.O.M.]

I tend to view eminent domain as a tool that's necessary for when you have that 'one stubborn holdout'.  NOT as a tool for the government to save money.

I'm reminded of the old idea - you declare what your land/property is worth to you.  That's what you pay taxes on.  However, if the government so chooses, it may purchase your land for the declared price.

If you're going to eminent domain, my 'normal' price is around 10% ABOVE market.  If it's your residence, add moving expenses on top of that.

10% above market, I think, is 'good enough' to compensate for the fact that they might not be looking to sell, but low enough for most people to try to force eminent domain in order to get more money.

Way too much common sense here...pay what you say it was worth when you levied taxes on it.  Way too simple. Better get lawyers to screw it up...I mean help.

[Ben]

Way too much common sense here...pay what you say it was worth when you levied taxes on it.  Way too simple. Better get lawyers to screw it up...I mean help.

I usually don't disagree with Chris, but I will here. Actual value (at least in CA with prop13) is not always appraised value, especially with big market fluctuations. I'll use my condo as an example. I bought it in 1997 for $135K. In 2005, neighbors sold similar units for a tad over $500K. By 2010, I would be lucky to get $300K for it. With current rising values, if I put it on the market tomorrow morning for $425K, it would be gone by lunch in a bidding war.

My property tax statement shows the appraised value at $179K. That's what the government considers my "fair market value". I would be an idiot to sell it to them for that. Given, I live in a really hot housing market, and many places in the Central Valley are not. But most of that land is going to be worth much more than anyone who bought it 20 years ago paid, and again, high quality farmland is going for a premium. If I had a piece of undeveloped, alkaline laden land with no water, I might sell to the state at appraised value in a heartbeat. If I have production land with good groundwater that private parties are waving cash in my face to sell at $20K/acre, why would I sell to the state at an appraised value that might be equivalent to $10K/acre? Or why should I be forced to?

Additionally, CA has the Williamson Act, which greatly reduces taxes on land that is dedicated to farming. The landowner is not allowed to subdivide or use the land for any purposes except agriculture in order to reap the tax benefits. I'd be curious to know how many of the properties in the way of the train are in the Williamson Act, and if the state is offering appraised Williamson Act value, or commercial land value?


ETA: Rereading both Chris' and Firethorn's posts, I think I'm actually in agreement with them regarding market value.

[KD5NRH]

I'm reminded of the old idea - you declare what your land/property is worth to you.  That's what you pay taxes on.  However, if the government so chooses, it may purchase your land for the declared price.

I'd rather see that one turned around; make a tax appraisal a binding offer.  If they value your $90k home at $200k, you should have the option of walking into the tax office the day taxes are due with the title and walking out with their full appraised value.

[AJ Dual]

Considering that California is roughly one year away from draining their remaining aquifer reserves, especially if they stick with the CA DWR and fed.gov EPA "pulse releases" of freshwater for maintaining ecosystems or whatever the reason is... maybe that farmland will get a lot cheaper real soon...

I wonder if "Californian" will become the new "Frenchman", in terms of being slang for a "really smelly guy", when bathing gets restricted.

[brimic]

I wonder if "Californian" will become the new "Frenchman", in terms of being slang for a "really smelly guy", when bathing gets restricted.

Nope they will make it a trend to be 'California smelly' which will sweep the nation, or will push for everyone to pay for 'water credits' in the country for excessive bathing.

[Phyphor]

Looks like the CA bullet train people have made more blunders. Apparently they expected to pay high prices for San Fran and LA land, which they won't be buying for probably another decade, but figured they could get land in the Central Valley for a song. I guess they didn't take into account that available good farmland has been an incredibly scarce commodity. Most of the good open land is running $20K/acre on up, and if trees are in, you're looking at $40K/acre. There is very little for sale on the open market, and land with good soil and water sells quickly when it appears.

You remember what kind of 'tards you're talking about, right? These people probably couldn't grow a chia pet successfully, much less understand the value of good farmland.

They've been offering farmers what appears to be well under current market value, and have been refused. They are now taking people to court under eminent domain to force sales at below market value. My guess is that the hundred or so that accepted deals might be sitting on land without water because of the drought.

Some of that land may also be alkali infested, too.  I remember seeing quite a bit of ground out there just choked with that crap.
Of course, that was quite a few years ago.

If they don't have $100K or more handy to drill new wells, the offers might have been their ticket to greener pastures as it were.

Land that ain't producing is land that's costing.

This is only the first phase of the track building and affects some 500 landowners. They'll be needing to buy a lot more land to extend the track to either side of the valley before they get to the big cities. I expect this will only get worse. I hope the landowners all have good lawyers and don't go bankrupt in legal fees fighting the eminent domain. Not just the landowners looking to get market value, but those who don't want to sell their land/home in the first place.

 http://www.foxnews.com/politics/2015/03/16/property-rights-battles-threaten-to-further-slow-california-costly-long-awaited/

Yeah, the valley has had an....interesting history with the practice of eminent domain, from what I can remember.  I can remember a family losing their home of more than a century, seeing it torn down, and then the project that took it just lawndarted, so the land just sits there empty to this day.

Not a big fan of eminent domain.

[Ben]

Some of that land may also be alkali infested, too.  I remember seeing quite a bit of ground out there just choked with that crap.
Of course, that was quite a few years ago.

It's still around, especially in the West, and has been getting worse ever since that Pelosi deal with the smelt. If I had land anywhere in that area and no groundwater at an affordable depth, I'd probably sell as soon as the state came knocking, to at least get some of my lost money back (that ironically, the same state lost me with the water diversion).

[Firethorn]

I'd rather see that one turned around; make a tax appraisal a binding offer.  If they value your $90k home at $200k, you should have the option of walking into the tax office the day taxes are due with the title and walking out with their full appraised value.

Either way works, but it doesn't work as well for setting 'fair market value' when you're trying to purchase a large amount of property along specific tracts.

Take the rail project.  It may or may not go forward.  If you declare your property is worth $500k/acre, you'd be paying massively inflated taxes for years during the time they waffle around deciding when and were to build, the vagaries of congress, EPA, etc...  The project may be cancelled.  Meanwhile, you're paying the increased valuation.  So it's a risk.

Considering that California is roughly one year away from draining their remaining aquifer reserves, especially if they stick with the CA DWR and fed.gov EPA "pulse releases" of freshwater for maintaining ecosystems or whatever the reason is... maybe that farmland will get a lot cheaper real soon...

Bathing isn't realistically ever going to be a problem, at least outside of political protests.  Farming is the big 'waster' of water, because while industry is #2 behind farming for water usage, most of them can and are installing recycling systems that effectively make their production facilities a closed loop for water.  They might need a top off of a couple hundred gallons a couple times a year, but compared to current use that's insignificant.

[Angel Eyes]

Surprise, surprise:  a firm headed by Senator Feinstein's husband won a $985 million contract to build the first section of the HSR system.

http://www.capoliticalreview.com/blog/sen-diane-feinsteins-husband-wins-ca-rail-contract/

”The firms bid $985,142,530 to build the wildly anticipated first section of high speed rail track that will tie the megopolis of Madera to the global finance center of Fresno. Do the division, and you find that the low bid came in at a mere $35 million per mile.”

That would be funny if it weren't our tax dollars being wasted on this boondoggle.

[Brad Johnson]

Problem with using taxable value is that it rarely depicts an accurate fair market value. Thankfully most eminent domain statutes specify Fair Market Value for calculating reimbursements.

FMV is usually established by independent appraisal on the basis of comparable sold properties. Most states dictate that taxable value assessments cannot exceed FMV. Plus, the usual annual adjustment periods make taxable value assessments unresponsive to real-time market fluctuations. Taxing entities want some amount of liability protection so it's common for TVA to fall just just short FMV as a built-in buffer.

Where things get sticky is future value issues. Farmland is a good, if not perfect, example. The land itself may have an FMV of X, but the annual income from the land has a perpetual value of Y. This usually generates the biggest argument, and for good reason. If your family has, and could reasonably expect to always, depend on that income for you livelihood, then a finite limit on income considerations would seem wholly unrealistic, unethical, and potentially criminal. In places where land ownership rights are fiercly protected (like Texas) this has led to very real fisticuffs. Sometimes worse.

Brad

[just Warren]

I'm going to get mocked for this but a monorail has a smaller footprint than regular rail and requires no at-grade crossings so build one of those instead of a train.

Of course the point isn't to build a railway it's to siphon off tax money so it has to be done in the most expensive way possible if all the important people are going to be able to wet their beaks.

[Angel Eyes]

I'm going to get mocked for this ...

Yup. 

... but a monorail has a smaller footprint than regular rail and requires no at-grade crossings so build one of those instead of a train.

Have you been watching The Simpsons again?

[AmbulanceDriver]

Yup. 

Have you been watching The Simpsons again?

Apparently someone else saw that clip and thought the same thing....   :D   https://www.youtube.com/watch?v=sZBPoRwog00

[just Warren]

I like monorails. They are more flexible than at-grade rail and if done right, way less expensive per mile.

Problem is they can't be done right because the people running cities are most times corrupt idiots.

I believe it was Alweg, who in the 60's, offered to build a monorail system in Los Angeles for free with the only condition being they get to keep all the revenue. The city council turned them down.

These days it's all EIR this and unions that and light rail the other that makes it difficult to get anything built, but they are practical and outside of political and special interest interference could be built and operated at a profit.

But like I said above, at-grade rail is not about the the transport of people to their destinations it's about the transport of money from your wallet to the wallets of cronies. And for whatever reason monorail does not do that as well as at-grade rail.

[Ben]

”The firms bid $985,142,530 to build the wildly anticipated first section of high speed rail track that will tie the megopolis of Madera to the global finance center of Fresno. Do the division, and you find that the low bid came in at a mere $35 million per mile.”

My mind still boggles that this first section was chosen only because it would be the cheapest part of the whole track. Also that everyone bought off on it. It's like none of them have been to Madera or Fresno before.

Honestly, how many business people would take the train to either place, only to have to expensively cab it after they got off the train because of how sprawled out both cities are? Poorer people couldn't afford a cab, and even if buses went where they might need to go to work (like a farm field), it'd take them another hour to get to work after they got off the train.

Not that anything about this project makes sense, but something like Sacramento to San Fran would have made a little more sense as the first section. At least some people would use it. The Madera to Fresno stretch is going to be a ghost train if the whole project doesn't blow up long before.

[Boomhauer]

Butbutbuthighspeedrail...Like Japan and EUROPE! WE MUST BE LIKE EUROPE! They set the standards for how everything should be everywhere else

[MechAg94]

I would agree on elevated trains.  Houston put in a commuter train.  They had a couple dozen vehicle accidents while doing testing before any people were allowed to ride.  Now they are working on installing more trains that no one will ride.

I like monorails. They are more flexible than at-grade rail and if done right, way less expensive per mile.

Problem is they can't be done right because the people running cities are most times corrupt idiots.

I believe it was Alweg, who in the 60's, offered to build a monorail system in Los Angeles for free with the only condition being they get to keep all the revenue. The city council turned them down.

These days it's all EIR this and unions that and light rail the other that makes it difficult to get anything built, but they are practical and outside of political and special interest interference could be built and operated at a profit.

But like I said above, at-grade rail is not about the the transport of people to their destinations it's about the transport of money from your wallet to the wallets of cronies. And for whatever reason monorail does not do that as well as at-grade rail.

[Hawkmoon]

I tend to view eminent domain as a tool that's necessary for when you have that 'one stubborn holdout'.  NOT as a tool for the government to save money.

...

If you're going to eminent domain, my 'normal' price is around 10% ABOVE market.  If it's your residence, add moving expenses on top of that.

10% above market, I think, is 'good enough' to compensate for the fact that they might not be looking to sell, but low enough for most people to not try to force eminent domain in order to get more money.

The whole principle on which eminent domain is legal is that the .gov is supposed to pay fair market value, not cut people's throats to get the land. A number of years ago a nearby small city recognized that with regard to some apartment buildings the city wanted to tear down to make room for commercial development. Being run by good Democrats, the city did what any scheming government would do: they basically eliminated all municipal services to the affected properties in order to drive the "fair market" values into the dungeon.

Decades ago, the State of Connecticut built a monorail from downtown Hartford (the capitol) to Bradly "International" Airport -- which is midway between Hartford and Springfield, MA. I have no idea how many millions of dollars it cost to build -- and it never carried a single passenger. It sat unused for years, and then they tore it down to make room for airport expansion and urban redevelopment.

"Your tax dollars at work." Sheesh.

[Phyphor]

My mind still boggles that this first section was chosen only because it would be the cheapest part of the whole track. Also that everyone bought off on it. It's like none of them have been to Madera or Fresno before.

ARG!! You said the F word! You bastitch!

Honestly, how many business people would take the train to either place, only to have to expensively cab it after they got off the train because of how sprawled out both cities are? Poorer people couldn't afford a cab, and even if buses went where they might need to go to work (like a farm field), it'd take them another hour to get to work after they got off the train.

That and the tweekers in this area would find ways to screw the damned thing up.  "Hey, dude....there's a lotta copper in that thing, let's steal it!"

(KMPH 10:00 News: "Tonight, 2 men under the influence of meth electrocuted themselves and burst into flames at the monorail track...... " )

Not that anything about this project makes sense, but something like Sacramento to San Fran would have made a little more sense as the first section. At least some people would use it. The Madera to Fresno stretch is going to be a ghost train if the whole project doesn't blow up long before.

I'm betting it'll blow right up.  The people around here are generally just too damned *BROKE* to afford to use such a thing, in any case.
They're also trying to service people who generally just don't need it.  Hell, we couldn't even properly keep AMTRAK running in the valley, it still exists, but it's not exactly making money hand over fist.... (And they have an Amtrak station in friggin CORCORAN.  CORCORAN of all places.  WTF?!?)