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Prop 90: Enriching the Rich, Making Us Their Bitch

Congressman John Campbell (R-Irvine Company) has signed on to support Proposition 90, the Taxpayer Trap Initiative (or Save our Homes, if you're gullible). This is no surprise; back in September 2005, Prop 90's main backers poured $120,000 into Campbell for Congress, the campaign committee formed to help Campbell seize the seat left vacant by Christopher Cox's appointment to the Securities and Exchange Commission.

Campbell's cash windfall came in a matter of days from over 850 separate donations from Club for Growth, a powerful PAC with Howard S. Rich on its board of directors and leadership council.

The aptly-named Mr. Rich is better known this election cycle for his leadership roles in Club for Growth State Action, Americans for Limited Government, and the Fund for Democracy as well as his association with Montanans In Action. Combined, these four groups have thrown over three million dollars into the Yes on 90 war chest—$3,320,000 to be precise, ninety percent of the committee's total of $3.7 Million.

It's nice to know that crazy rich folk in California can count on the help of filthy, filthy rich folk from New York, Chicago and Montana.

Rich isn't the only piggy bank greasing Prop 90's wheels; in fact, some of its main supporters are from right here in Orange County. Two notable names on the list of are Assemblywoman Mimi Walters, the resolution's co-sponsor (whose election committee has dropped $50,000 into the kitty), and OC supervisor candidate Pat Bates. Walters is honorary state chair of the "Protect our Homes Coalition". She is also one of the biggest cheerleaders for the extension of the 241 (Foothill South) toll road. The project, run by the Transportation Corridor Agencies, would pave through Donna O'Neill Land Conservancy, San Onofre State Beach and a Juaneno Indian burial ground. Bates markets herself as the only candidate for county supervisor who supports the extension of Foothill South.

What these women are either too oblivious to realize or too unfathomably cunning to admit is that Prop 90 and the toll road are contradictory. Oxymoronic, as it were. They contradict each other. If Prop 90 passes, the toll road would become dramatically more expensive to build, not to mention it would leave open the possibility for an endless tide of lawsuits. When rich landowners and state government fight, the only winners will be the lawyers.

Here's the rub – the Taxpayer Trap would rewrite Article 19, Section 1, subsection b of the California Constitution to reevaluate the costs of any regulatory action taken by the state.

Any property taken "shall be valued at the use to which the government intends to put the property". Which means the state has to compensate property owners as if their eminent-domain-invoking project was already built. If the government builds a toll road, for example, they would not only need to calculate projected land value once the road is in place, but the property owner could also argue that he/she deserve a portion of toll proceeds.

Also, property owners must receive "just compensation" for any taking. "Just compensation shall include, but is not limited to, compounded interest and all reasonable costs and expenses actually incurred." All reasonable costs? One man's reason is another man's flight of fancy, but here's the real kicker: "just compensation shall be defined as that sum of money necessary to place the property owner in the same position monetarily, without any governmental offsets, as if the property had never been taken."

Now what the hell does that mean? Technically it could mean the state is liable for a property owner's legal fees to negotiate any eminent domain dispute, the gas money to drive the owner to and from any relevant meetings, and why not throw in postage costs for any notices mailed back and forth? After all, these are costs incurred by the taking of the property, are they not? It must be fun being a lawyer.

I checked in with Lisa Telles, spokesperson for the TCA, on whether Prop 90 would in fact impact the project. She replied, "The consensus here is that under Prop 90, if we use eminent domain to obtain any of the right of way for Foothill-South, the right of way cost would be more expensive if the proposition passes." Short answer: yes. But that's only IF they use eminent domain, right? Let's check with the lawyers.

The TCA's pet law firm is Nossaman, Gunther, Knox, Elliot. One of their lawyers, John Murphy, leads the firm's Eminent Domain Practice Group. Recently he was listed among the Best Lawyers in America 2007; that particular press release cites his expertise across the eminent domain board: "His eminent domain and inverse condemnation work ranges from representing the TCAs in eminent domain matters, allowing for construction of the Orange County toll roads, to his recent successful work for a small handicapped church, the Calvary Deaf Church, against a state transportation department."

How nice of him to represent both the physically and the intellectually handicapped.

Comments (18)

  1. Alex Brant-Zawadzki says:

    Don't you profane my blog with links to the Reason Foundation. It's funded by Howard Rich.
    While his other gruops listed above (CFGSA, AFLG, FFD, MIA, and even Colorado At Its Best) provide 90% of Prop 90's backing money, Reason Foundation is fighting the war of public opinion by providing newspapers up and down the state with pro-90 editorials, which the "Save Our Homes Initiative" then cites in their TV ads as examples of journalistic support.
    It's enough to make me violently sick if only I deemed the Yes on 90 side worthy of even a drop of any of my precious bodily fluids.
    Also - the toll roads will NOT be safe. They will be dramatically more expensive due to both the "highest and best use" clause and the "valued at the use to which the government intends to put the property" clause. Dissembler.
    Oh, I deleted the gratuitous 2nd and 3rd references to the same link. All people have to do is click on your name.

  2. Brian Ilten says:

    Read the above link and decide for yourself what is 'right' and what is 'wrong.'

    Your toll roads would be safe, as they are for the 'Public Good.'

  3. Brian Ilten says:

    All of those who are on the NO side, gain $$ or funding from governmental agencies who enjoy the right to abuse eminent domain.

    The list of those against means nothing.

    The fact that the government can take one's private property for non-public use and the fact that government can devalue one's property at a whim is.

    Time to tell government, "enough is enough" - if they want private property as their plaything - it is time for them to pay.

  4. Brian Ilten says:

    Here's another good artcile - and this one comes from Ray Hanynes

    http://www.chronwatch.com/content/contentDisplay.asp?aid=23781&catcode=33

  5. Brian Ilten says:

    And respectfully Alex, you would be singing a diferent tune if it was your property they were taking.

    I used to think like you, that it could never happen to me. Hell, I bought this proerty 6 years ago for the specific reason of no one being able to tell me I have to move again.

    If you are a property owner this is a no-brainer. Unless, like I said earlier, you too are lining your pockets with $$$ from agencies who like to abuse the power of eminent domain.

  6. Alex B-Z says:

    Brian, hard cases make bad law. So sayeth Oliver Wendell Homes. I'm sorry La Mirada is threatening to take your business, and if there's any way I can help just let me know, but that doesn't mean we should pass Prop 90.
    And Ray Haynes, bless his dimwitted heart, could not be more wrong in your article.
    "if the initiative was poorly written, [government bureaucrats] wouldn't care if it passed. There would be loopholes in it for them to exploit." That's what Haynes says.
    What a cynical, simplistic thing to say. The danger is that lawyers will exploit the enormous loopholes that do certainly exist in Prop 90.
    Lots and lots and lots of property owners are vehemently opposed to Prop 90 - just read the list of contributors to the No on 90 Campaign. You'll notice that most of their money comes from Californians, not wealthy out-of-state financiers backing groups like "Colorado At Its Best" with a mailing address in Waukegan, Illinois.

  7. Brian Ilten says:

    I will still disagree with you. The City of La Mirada is currently using the 'threat' of eminent domain to take my business, because they would rather have houses here.

    It is time to take back the 5th ammendment of the US Constitution and it is time to tell government it is not 'ok' to take private property just because they think they have a better use for it (that isn't public use to begin with).

    Any property owner that knows how to read, and reads the text of that proposition should vote for it. The only reason not to - your pockets are being lined by the government by their abuse of eminent domain.

  8. Alex B-Z says:

    Brian:
    Who gains money or funding? Stop generalizing and get into some specifics please.

    Prop 90 isn't about 'taking' property, it's about COMPENSATING FOR ANY DEVALUATION of property. I believe if the government takes your property you ought to be fully and thoroughly compensated. But 90 does FAR more than that. It'll allow any and every person whose property is even remotely involved in infrastructure improvement to sue for perceived devaluation of their land/house/business.

    The No on 90 supporters include many California Native American tribes, concerned about infrastructure around reservations and sacred sites off reservations; they include all SORTS of housing, homeowner and community groups. And, in a distinct difference from the Yes on 90 crowd, the majority of the money comes from inside California.

    Care to explain why, if Prop 90 is so great for Californians, all its money comes from out of state? Or people like Howard Ahmanson Jr.? The two Howards, Rich and Ahmanson, tally up fully 95% of Prop 90's backing money. Explain that please, Brian. And if you are full of respect, which I'd like to believe, please address my arguments rather than brushing them off and saying they mean nothing.

  9. Brian Ilten says:

    So if I am reading you right, you believe that ultimately, the government should be able to do whatever it wants to accomplish its preceived need, even if it affects the value of one's personal property negetively?

    That smacks of socialism if you ask me.

    The 5th ammendment was included in the US Constitution because George III felt the same way.

  10. Alex B-Z says:

    Explain to me how an even moderately intelligent person could extrapolate that from what I said.

    Oh, and while you're at it, explain your original erroneous assertion that the toll road will be "safe". You never did that.

  11. Brian Ilten says:

    Do you own any property? If the government does ANYTHING to devalue my property they darn well should pay for it.

    If they aren't expected to pay for it, what is to keep them from running amok??

    And please don't try to tell me I should trust our government.

  12. Alex B-Z says:

    Brian;
    You should trust our government. The government is wise and good. All hail the mighty government.
    I'm kidding.
    I'm not saying govt. shouldn't pay, but there's a limit to how much.
    Prop 90 goes a lot further than devaluation. It's so poorly written that owners can litigate for POTENTIAL devaluation.
    What about the "highest and best use" and "use to which the government intends to put the property"? Why should a property owner be compensated for MUCH more than the value of their open space or delapidated land, just because the government's willing to pay for a sanitation plant or highway or toll road or hospital?
    And by the way, the real loser here isn't the government. It's the TAXPAYER. You. Because more of your money will have to go towards compensating miserly property owners with cunning lawyers.
    Who told you all this crap about Prop 90?

  13. Alex B-Z says:

    Brian;

    You've been lied to. Even the people building the toll road (the Transportation Corridor Agencies) acknowledge it will make the road more expensive, for all the reasons cited above. Perhaps prohibitively expensive.

    According to Prop 90 there is NO SUCH THING as PROPER eminent domain use. It's a plan to bankrupt the government. Instead of paying Rancho Mission Viejo for the value of the open-space land for the toll road, the TCA will have to pay then the value of the land AS IF THE TOLL ROAD WAS BUILT. Not only that, but conceivably RMV is entitled to a percentage of the tolls as well.

    As per your property - what if the government does NOTHING to devalue your property, simply passes a regulation that makes it impossible to INCREASE the value of your property at the expense of the environment? Do you deserve to be compensated for potential property value? I say no.

  14. Brian Ilten says:

    The toll road is a legitimate 'public use'. Prop 90 does nothing to jeopardize PROPPER eminent domain uses.

    It seeks to stop the 'stealing' of private property which is in turn sold (or more likely given) to private developers who will profit from it.

    It also seeks to assure that if private property is taken that those who lose their property will be made WHOLE.

    As far as your concern over devaluization, if I purchase property and it is valued at 'X' and then the government does something to devalue that property, shouldn't it be within my right to be compensated for that?

    Anything less is absurd, and yes, smacks of socialism.

  15. Brian Ilten says:

    No one told me... I read it, applied it to my beliefs and became a proponent of Prop 90.

    What happend with the SCOTUS and the Kelo vs New London, CT verdict rocked this country far deeper than I think you (or any of the governemental agencies who support eminent domain) realize.

    Oh yeah... it isn't going to hurt me the taxpayer, because the governement will have to actually think twice before they just arbitrarily take or effect private property... As it should be.

  16. Alex B-Z says:

    You're wrong and this is the last I'm going to say on the topic.

    Most of the protections you seem to think Prop 90 embodies are already present in California, in various statutes and resolutions - just not state law.

    Sit back for a moment and consider the possibility that the government agencies in question have the familiarity and resources to study this matter better than you or I. If you so thoroughly distrust the government that you don't believe it is capable of understanding such a grave issue or acting in the taxpayers' best interest, even just a little bit, what are you doing in this state? In this country?

  17. Brian Ilten says:

    Wow. Socialism is alive and well in California.

  18. Bob Blue says:

    In the Democratic spirit of presenting both sides to an issue, I wanted to share with you my position on Proposition 90. I encourage you to vote on Tuesday even if you decide against Proposition 90.

    Short Summary:

    I am supporting Proposition 90 from the perspective of a small-business owner and a Democrat. The real beneficiaries will be those who are least able to afford legal representation and those without political influence.

    Under the status quo in California, the City of Arcadia was allowed to condemn a clean-functioning restaurant to transfer it over to a luxury car dealer and the City of Cypress was allowed to condemn a Church to provide land for a Costco

    Eminent domain also affects non-property owners, including tenants, small businesses with leases and their employees.

    Proposition 90 addresses fairness issues by giving small home and business owners the same protection as those who are accused of violent crimes -- a jury trial. After all, the only crime that a small business or homeowner committed was being in the way of a wealthy developer. Finally, Proposition 90 allows for public uses of eminent domain, provides for health and safety exemptions and will be interpreted by the California state legislature, which will prevent any of the "chicken little" scenarios that are described by the opponents.

    Expanded Analysis:

    I am one of the original signers of Proposition 90. I support Proposition 90 from the perspective of a small business owner and an active Democrat who no longer has any personal or financial stake in the outcome of this Proposition. Because I have been involved in a challenge to the use of Eminent Domain for Private Development, I have met with and sometimes even employed some of the best Eminent Domain attorneys in California. I have sought out their expert advice on Proposition 90 early. These attorneys only stand to lose business if Proposition 90 passes and yet they are supporting it. I was also part of a 5 city, nationwide study on Eminent Domain conducted by the non-partisan General Accountability Office this year as reported in the Los Angeles Times. (1)

    A Yes vote on Proposition 90 will reform the use of Eminent Domain by restoring the original meaning of property ownership, fundamental due process, and re-establishing equality without raising costs to tax payers or hindering development.

    Proposition 90 will also protect non-property owners such as tenants, small businesses with leases, and their employees who are also forced out when Eminent Domain is used by local government in the context of Private Development.

    Property ownership is a core fundamental right both in the US and California Constitutions. But like any core Constitutional right or legal protection, the real beneficiaries are those least able to afford legal representation and those without political influence.

    The basic enforcement of these rights helps to somewhat level the playing field between the privileged and politically connected and those with less. It also establishes confidence and predictability that makes our economy work.

    Without this enforcement, we wind up with a reverse Robin Hood where the government intervenes to confiscate property without permission of the owner and transfer it over to another private owner with more money. It is counterintuitive to any sense of Justice and Equality and is ripe for corruption.

    KELO v. NEW LONDON, CT
    Assoc Justice Sandra Day O'Connor pointed out this very fact in her dissenting opinion on the Case of Kelo v. New London:

    "Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result."

    Proposition 90 is very simple. It is a little over one page long. I encourage you to read for yourself both the actual language of the Proposition and Justice Sandra Day O'Connor's dissenting opinion in the Kelo case.

    FOLLOWING THE MONEY
    The core opponents of Proposition 90, the CA League of Cities, the California Redevelopment Association, and their Platinum partners the development community (Developers, Bond Firms, Consultants, and Builders) have followed the play book from the "Wizard of Oz" and have put out some very honorable groups as their face of the opposition and have provided them with talking points.

    The Yes on 90 side is being out spent 5 to 1 as is by only side being heard in TV, radio ads, and money. The main seed money for the Yes side came from Howard Rich a New York developer and Libertarian who has no real estate assets in California.

    I would like to address some issues raised during the debate on Proposition 90.

    OPPONENTS CLAIM THAT REFORM IS NEEDED BUT ARE ON RECORD TO OPPOSING ANY REFORM MEASURES
    The opponents to Prop 90 claim that the use of Eminent Domain for Private transfers needs reform, but that Prop 90 goes too far. This is quite hypocritical and disingenuous because the CA League of Cities is on record opposing each and every Eminent Domain reform measure proposed at the State level including by Democrats Kehoe and Torlakson. Kehoe proposed tightening up the definition of blight. But the CA League of Cites weakened Kehoe's original proposal. The CA League of Cities and the California Redevelopment also sided with the City of New London against homeowner Susette Kelo when the City sought to transfer her property so that housing and commercial property could be built to support Pfizer Pharmaceutical.

    MEAURE 37 (OREGON 2004) FALSE CLAIMS OF PAYOUTS:
    The opponents refer to a law passed in Oregon in 2004 called Measure 37. They say that it cost Oregon taxpayers millions and extrapolate the costs based on population to California saying that Prop 90 will very costly to California taxpayers. However the opponents left out several important facts:

    1. Even though hundreds of claims were filed, it never resulted in payouts according to Bob Stern from the non-profit, non-partisan Center for Governmental Studies and was featured on KCET's Life and Times coverage of Prop 90.(2) Mr. Stern also said that based on his analysis, Proposition 90 would not cost tax payers much money. (He did imply that it would make Cities more cautious to zone changes)

    2. Proposition 90 is different from Measure 37 in that Prop 90 is prospective, not retroactive. No claim has been filed to any zone changes made after the passage of Measure 37 in Oregon.

    GOVERNMENT HAS THE BURDEN OF PROOF FOR PUBLIC USE
    RIGHT TO TRIAL BY JURY
    Under current California Redevelopment law, there is presumptive conclusion that the government is right even when a Redevelopment zone is twenty years old and the area is booming. This defies the 14th Amendment to the US Constitution that provides basic Due Process protections.

    Why shouldn't innocent property and small business owners be afforded that same legal protection that is granted to those accused of violent crimes? A trial by a jury of your peers and the burden of proof being on the government, not the accused is a basic right in all other parts of the law. After all, the only crime that a small business or homeowner committed was being in the way of a wealthy developer.

    IF THE PROPERTY CEASES TO BE USED FOR THE STATED PUBLIC USE, THE FORMER OWNER SHALL HAVE THE RIGHT TO REACQUIRE THE PROPERTY FROM THE GOVERNMENT FOR FAIR MARKET VALUE
    This addresses a real world situation that recently occurred in South Los Angeles. Vaughan Benz is a furniture manufacturer that was forced by the city to sell its property to make way for an animal shelter, only to see the city propose instead to sell the site to a competing furniture maker.(1)

    NARROWS THE MEANING OF PUBLIC USE. PROHIBITS TAKINGS EXPECTED TO RESULT IN TRANFERS TO NON-GOVERNMENTAL OWNERS ON A ECONOMIC DEVELOPMENT OR TAX REVENUE ENHANCEMENT GROUNDS…
    This is the direct Eminent Domain Reform that corrects existing California Redevelopment Law and addresses issues raised in the Kelo decision as described in Assoc Justice O'Connor's dissenting opinion.

    GRANDFATHERING, FAIRNESS, AND THE REAL WORLD
    The idea of grandfathering is a well established and makes the process fair and stable for the small property and business owner. Ironically, the core opponents of Proposition 90, the California League of Cities and the Development Community are pushing for "up-zoning" throughout the State to absorb predications of increased population.

    PROPOSITION 90 HAS PROTECTIONS FOR THE TAXPAYER AND THE GOVERNMENT
    Proposition 90 specifically allows for the Public Use of eminent domain. It also allows for health and safety exemptions. Proposition 90 will be interpreted by the California State Legislature, which will prevent any of the "chicken little" scenarios that are described by the opponents.

    IMPORTANT SUPPORTERS OF PROPOSITION 90
    The Black Chamber of Commerce.
    League of United Latin American Citizens, Region 7 (Long Beach)
    National Federation of Independent Business (Small business group with 600,000 members)
    Hollywood-Highlands Democratic Club

    Footnotes:
    1. "U.S. Targets L.A.'s Seizure of Property," Los Angeles Times, June 14, 2006
    2. KCET – Life and Times, "War Over Land Rights," November 2, 2006 broadcast date.

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