REDEVELOPMENT AGENCY OF CITY AND COUNTY OF SAN FRANCISCO v. DEL CAMP INVESTMENTS INC (1974)

Court of Appeal, First District, Division 1, California.

REDEVELOPMENT AGENCY OF the CITY AND COUNTY OF SAN FRANCISCO, Plaintiff and Respondent, v. DEL-CAMP INVESTMENTS, INC., Defendant and Appellant.

Civ. 30753.

Decided: January 25, 1974

Robert E. Burns, Crimmins, Kent, Bradley & Burns, San Francisco, for defendant-appellant. Rogers, Vizzard & Tallett, San Francisco, Henry F. Davis, San Francisco, for plaintiff-respondent.

Defendant Del-Camp Investments, Inc., appeals from a judgment based on a jury's verdict in a condemnation action brought by the plaintiff Redevelopment Agency.

The subject real property is a sever-story hotel building, with ground floor spaces rented for stores and similar purposes. It is located in San Francisco within the Yerba Buena Center Project of the Redevelopment Agency. Public announcement that the property was within the project's boundaries and would be condemned was made sometime around 1961. The action was commenced March 28, 1968, and the trial started June 29, 1970, which was the ‘valuation date’ of the property.

At the trial defendant endeavored to prove that the long standing public knowledge of the property's impending condemnation had the effect of greatly depressing its value. It sought a ruling, and appropriate jury instructions, that the award should be an amount equal to what the property's fair market value would have been, but for that depressive effect. The trial court, faced with inconsistent authority on the subject, ruled that the evidence would not be allowed and the instructions would not be given.

Following the trial, and while defendant's appeal was pending, the state's high court decided the case of Klopping v. City of Whittier, 8 Cal.3d 39, 104 Cal.Rptr. 1, 500 P.2d 1345. Resolving the decisional conflict to which we have adverted, the court (p. 50, 104 Cal.Rptr. 1, 500 P.2d 1345) agreed ‘in principle’ with the following language of Buena Park School Dist. v. Metrim Corp., 176 Cal.App.2d 255, 258–259, 1 Cal.Rptr. 250, 252: ‘This classic definition of market value contemplates, of course, the price which the property would have brought at the time of valuation had it then been placed upon the market and had it then been available for sale. It is obvious that in determining that value the trier of fact must disregard the fact that at that time because of the filing of condemnation proceedings the property was not actually salable. It is a matter of common knowledge that a purchaser would not buy property in the process of being condemned except at a figure much below its actual value. It follows, therefore, that in arriving an the fair market value it is necessary that the jury should disregard not only the fact of the filing of the case but should also disregard the effect of steps taken by the condemning authority toward that acquisition. To hold otherwise would permit a public body to depress the market value of the property for the purpose of acquiring it at less than market value.’

The Klopping court announced (8 Cal.3d at p. 52, 104 Cal.Rptr. at p. 11, 500 P.2d at p. 1355):

‘[W]e hold that a condemnee must be provided with an opportunity to demonstrate that (1) the public authority acted improperly either by unreasonably delaying eminent domain action following an announcement of intent to condemn or by other unreasonable conduct prior to condemnation; and (2) as a result of such action the property in question suffered a diminution in market value.’

It will be seen that the trial court's rulings were contrary to the holding of Klopping, and therefore erroneous.

We are unable to say that the error was harmless under the standards of article VI, section 13, of the state's Constitution. Accordingly, the judgment must be reversed.

For the reason that its resolution will probable affect the retrial of the action, another of defendant's assertions of error should be considered.

It is contended that the taking of defendant's property was for a use not permitted by law. Reliance is upon Code to Civil Procedure section 1241, providing: ‘Before property can be taken, it must appear: 1. That the use to which it is to be applied is a use authorized by law; . . .’

The Yerba Buena Center Project is a community redevelopment plan designated and approved by the city's board of supervisors under the Community Redevelopment Law which is codified as Health and Safety Code sections 33000–33714, inclusive. It covers about 25 acres, the acquisition of which, by condemnation or otherwise, was authorized by the plan and permitted by sections 33342 and 33391. The public use contemplated by the plan was the redevelopment of the area. It follows that the public use for which defendant's property was sought was community redevelopment, a use concerning which defendant suggests no illegality.

Section 33500 provides: ‘No action attacking or otherwise questioning the validity of any redevelopment plan, or the adoption or approval of such plan, or any of the findings or determinations of the agency or the legislative body in connection with such plan shall be brought prior to the adoption of the redevelopment plan nor at any time after the elapse of 60 days from and after the date of adoption of the ordinance adopting the plan.’

Defendant's attack on the public use proposed by the redevelopment plan, made several years after adoption of the ordinance, is barred by Health and Safety Code section 33500. Upon ‘the elapse of 60 days from and after the date of adoption of the ordinance adopting the plan’ without an adverse action having been brought, the legality of its proposed public use was conclusively determined; the effect was similar to that of a final adjudication of a court of record.

We note that the instant contention is based on a 1969 brochure of the Redevelopment Agency which, under the title ‘Development Opportunities,’ suggests that a hotel (located in another area of the project) which will have over 800 rooms and other conveniences ‘is a major development opportunity is itself.’ Such a ‘hotel use’ of a portion of the project's area, defendant insists, is contrary to law and therefore contravenes Code of Civil Procedure section 1241.

We are unpersuaded by the argument.

As we have indicated, the public use for which defendant's property was to be taken was community redevelopment, not the construction of a hotel. If such a hotel is planned somewhere in the project, and if its construction is contrary to law, adequate remedies are obviously available. Further, we observe that defendant's claim of ‘hotel use’ illegality is based upon the absence of express consent thereto by the board of supervisors and the appropriate federal agency. The Redevelopment Agency's brochure's suggesting a hotel complex opportunity is not inconsistent with a purpose to secure such permission upon receipt of a related suitable development proposal.

We find it unnecessary to consider other contentions of defendants, since the circumstances upon which they are founded will probably not recur at the retrial.

The purported appeal from a nonappealable order denying a motion for a new trial is dismissed. Appellant will recover its costs of appeal.

The judgment is reversed.

ELKINGTON, Associate Justice.

SIMS and BRAY,* JJ., concur.