BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Public Hearing to Consider Adoption of Resolution of Necessity Relating to Acquisition of Real Property Interests Located in the City of Milpitas, of Unknown Ownership, Necessary to Complete the Lower Berryessa Creek Flood Protection Phase 2 Project (Project No. 40174005).
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RECOMMENDATION:
Recommendation
A. Conduct a public hearing to consider adoption of Resolution of Necessity (RON) (Attachment 1) relating to acquisition of real property interests from unknown owner on property described and depicted in the plats and legal description included as Exhibit 1 (Attachment 2) and Exhibit 2 (Attachment 3) of the RON; and
B. Adopt the RON determining and declaring the Public Necessity for the Acquisition of Certain Real Property or Interests in Real Property by Eminent Domain for the Lower Berryessa Creek Flood Protection Project Phase 2 (Code of Civil Procedure Sections 1245.220, et seq.) by a two-thirds vote.
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SUMMARY:
The Lower Berryessa Creek Flood Protection Project (Project) provides flood protection from a one-percent chance event to the businesses and residents in Milpitas. The Project extends approximately 1.6 miles from its confluence with Lower Penitencia Creek upstream to Calaveras Boulevard. Phase 1 of the Project is approximately 2,200 feet long and extends from the confluence with Lower Penitencia Creek to downstream of the Abel Street Overcrossing. Phase 2 is approximately 6,400 feet long and extends from downstream of the Abel Street Overcrossing to Calaveras Boulevard.
On June 9, 2015, the Board awarded a construction contract to Brosamer & Wall, Inc., for Phase 1 of the Project. On June 28, 2016, the Board awarded a construction contract to Brosamer & Wall, Inc., for Phase 2 of the Project. The goal is to complete construction of the Project by December 2017, to avoid impacts to the opening and operations of the Milpitas BART Station and construction of the Upper Berryessa Creek Project by the U.S. Army Corps of Engineers (USACE). Phase 2 work elements include: raising and reconstruction of levees on the easterly side of the channel, channel widening through replacement of the westerly levee with floodwalls, raising of a pedestrian bridge, integration of maintenance roads adjacent to the floodwalls, construction of access ramps, and installing mitigation planting.
Acquisition of the Property Interests. To construct Phase 2, the Santa Clara Valley Water District (District) needed to acquire property that was previously utilized as Main Street and was abandoned by the City of Milpitas when the Abel Street Bridge was completed in 1976. Due to the uncertain ownership of the property, a professional title examiner, Pacific States Title Services (Pacific) conducted a record search. Even though the record search could not identify all the owners, the record search did ascertain that one known prior property owner was Ruth L. Curtner, who is now deceased. After exercising reasonable diligence, staff identified one probable heir, Crayton Jones, but was unable to obtain sufficient documentation confirming that he was in fact the current owner, and he was unwilling to initiate a quiet title action to confirm his ownership.
Unable to identify all actual owners, the District could not obtain title insurance for this property and could not reasonably offer to purchase the property from the identified possible owners. The District’s only recourse was to pursue acquisition of this property by eminent domain with service of process by publication. The condemnation action might not result in any determination of current ownership, but it would transfer ownership to the District while guarding against adverse ownership claims. The Board adopted a RON on October 13, 2015 to commence the eminent domain process.
Since adoption of the RON, the District’s Special Counsel filed the Complaint, completed service of process by publication, and obtained an Order Granting Motion for Prejudgment Possession (OPP) for this property, which was effective March 22, 2016. The OPP allowed and continues to enable the District to use this property to construct Phase 2 of the Project in a timely fashion. Crayton Jones is now deceased, but two purported heirs of Crayton Jones, Joan Jones, and Sandra Jones, filed an answer claiming ownership by inheritance.
During litigation, District staff discovered that the wrong legal descriptions and plats were provided to the Board and attached to the October 13, 2015 RON. This resulted from a single error in the plat map produced by Pacific. The report produced by Pacific correctly identified "Parcel One," the westerly half of Main Street, as belonging to the last known owner Ruth Curtner. However, the plat map prepared by Pacific mistakenly labeled the easterly half of Main Street as Parcel One. The District’s Land Surveying & Mapping Unit then used the erroneous plat map to prepare the plat map and legal description that were attached to the proposed RON that the Board eventually adopted on October 13, 2015. This important factual error contained in both the RON legal description and RON plat map have been incorporated in several key pleadings filed in the eminent domain litigation. This error must be corrected for the District to acquire the property needed for the Project.
The Pacific report identified Standard Realty and Development Company (Standard) as the sole owner of the easterly half of Main Street. Because the District mistakenly believed that Standard was the sole owner of the westerly half of Main Street that portion was not included in the October 13, 2015 RON. The District received two quitclaim deeds from Standard relinquishing any claim to the Main Street property. However, a subsequent title report prepared by Old Republic Title Company has raised questions about the ownership of both the westerly and easterly halves of Main Street. After diligent research, no current owners of either side of Main Street could be identified.
Because of this, the most prudent course of action is to pursue acquisition of the entire portion of Main Street located within the Project by eminent domain through publication of notice. Acquisition of both sides is necessary for this Project because the creek flows over both halves of Main Street, and the planned Project improvements will occupy both halves of Main Street. The condemnation action may not result in any determination of current ownership, but it will transfer ownership to the District while guarding against adverse ownership claims by unknown parties. Should the Board adopt this proposed RON, special counsel will seek leave of the court to amend the current litigation to include the entire portion of Main Street located within the Project.
This public hearing by the Board and the adoption of the RON are legal preconditions to the exercise of the District’s power of eminent domain and to special counsel's ability to amend existing pleadings to reflect accurately the property needed for the Project. Code of Civil Procedure Section 1245.230 requires that the Board make the following findings and that each be included in the RON:
1. The public interest and necessity require the proposed project. In order to provide one percent flood protection to properties along the Project in the City, the District must acquire the entire portion of Main Street within the Project to construct channel, floodwalls, ramps, and maintenance roads; and
2. The proposed project is planned or located in a manner that will be most compatible with the greatest public good and the least private injury. This project design necessarily impacts this private property because the property lies within the creek. The District is acquiring this property to provide the conveyance capacity necessary to reduce flood risk from the one percent flood event in the City of Milpitas. The District has considered other alternatives, but constraints from private structures on adjacent properties made consideration of those alternatives infeasible. This is the least intrusive project design at this location.
3. The property described in the RON is necessary for the proposed project. All property described in the RON is part of the existing creek. While likely owned by private parties, it is not usable for private purposes resulting in only nominal, if any, impact to private ownership. The property described in the RON will be used for the future channel improvements.
4. That either an offer consistent with the requirements of the Government Code has been made or that the owners cannot be located with reasonable diligence. Staff has worked diligently to identify the current owners of the property, but has been unable to do so with assurance. As a result, it was not possible to make a statutory offer of compensation.
FINANCIAL IMPACT:
The property acquisition costs will be funded from the Project’s budget for FY 2018. The District will be responsible for the appraised value of the parcel and any court ordered eminent domain costs. The appraised value for the real property interest to be acquired is $52,800.00. There is available funding in the FY 2018 budget for this project.
CEQA:
The District is the lead agency under the California Environmental Quality Act for this Project. The Board adopted the Final Environmental Impact Report on December 13, 2011.
ATTACHMENTS:
Attachment 1: Resolution of Necessity
Attachment 2: Exhibit 1 Plat and Legal Description
Attachment 3: Exhibit 2 Plat and Legal Description
Attachment 4: PowerPoint
UNCLASSIFIED MANAGER:
Manager
Ngoc Nguyen, 408-630-2632