Loading...
HomeMy Public PortalAbout19871208 - Agendas Packet - Board of Directors (BOD) - 87-29 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Meeting 87-29 OLD MILL OFFICE CENTER,BUILDING C,SUITE 135 201 SAN ANTONIO CIRCLE,MOUNTAIN VIEW,CALIFORNIA 94040 (415)949-5500 NOTICE OF SPECIAL MEETING BOARD OF DIRECTORS AGENDA Tuesday 201 San Antonio Circle Building C-135 December 8 , 1987 Mountain View, Ca (7 : 15) * ROLL CALL CLOSED SESSION (Land Negotiation and Litigation Matters) (7 : 30) PUBLIC HEARING Determination of Public Necessity for Proposed Stanford Property Addition to the Russian Ridge Open Space Preserve--C . Britton Resolution Finding and Determining That the Public Interest and Necessity Require the Acquisition of Certain Properties for Public Use, to Wit, for Public Park, Recreation and Open Space Purposes , Describing the Properties Necessary Therefore and Authorizing and Directing Its Retained Legal Counsel to Do Everything Necessary to Acquire All Interests Therein (Russian Ridge Open Space Preserve - Stanford et al . Property) CLOSED SESSION (Land Negotiation and Litigation Matters) ADJOURNMENT *NOTE: The Public Hearing portion of the meeting will begin at 7 : 30 P.M. Herbert Grench,General Manager;Board of Directors:Katherine Duffy,Robert McKibbin,Teena Henshaw,Edward Shelley,Nonette Hanko,Gerry Andean,Richard Bishop 1 A Meeting 87-29 lift MIDPENINSULA REGIONAL OPEN SPACE DISTRICT SUMMARY OF DECEMBER 8 , 1987 SPECIIAL MEETING Determination of Public Necessity for Prpp_g_qe-d Stanford Proper Addition to the Russiap, Ridge Open Space PreserveReport R-87- 181 of December 3 , 1987 The Board unanimously adopted Resolution 87-41 to exercise its power of eminent domain to obtain a 145 acre parcel of land adjacent to Russian Ridge and Skyline Ridge Open Space Preserves and jointly owned by Stanford University, Lick Wilmerding High School , and the Easter Seal Society of San Francisco. The Board also tentatively adopted the Preliminary Use and Management Plan recommendations contained in the staff report as amended, named the property as an addition to the Russian Ridge Open Space Preserve and indicated its intention to dedicate the property as public open space . Emma Johnson, Secretary J Aa - e ell ����J �� Z�� �—' � �-ter�-�._. � �..��,..Y�✓�� > 1 � p t� r P � �e � r v �� � � R-87-181 NoAA. (Meeting 87-29 e December 8, 1987) 0 MW MIDPENINSULA REGIONAL OPEN SPACE DISTRICT REPORT December 3, 1987 TO: Board of Directors FROM: H. Grench, General Manager RESPONSIBILITY AND PREPARATION: C. Britton, Land Acquisition Manager; D. Hansen, Land Manager; M. Gundert, Open Space Planner SUBJECT: Determination of Public Necessity for Proposed Stanford Property Addition to the Russian Ridge open Space Preserve Recommendation: I recommend that you adopt the accompanying Resolution Finding and Determining That the Public Interest and Necessity Require the Acquisition of Certain Properties for Public Use, to Wit, for Public Park, Recreation and Open Space Purposes , Describing the Properties Necessary Therefore and Authorizing and Directing Its Retained Legal Counsel To Do Everything Necessary to Acquire All Interests Therein (Russian Ridge Open Space Preserve - Stanford et al. Property) . I further recommend that you tentatively adopt the Preliminary Use and Management Plan recommendations contained in this report, name the property as an addition to the Russian Ridge Open Space Preserve, and indicate you intention to dedicate the property as public open space. Introduction: The Midpeninsula Regional Open Space District is currently considering exercise of its power of eminent domain to obtain a 145 acre parcel of land adjacent to and virtually surrounded by the Russian Ridge and Skyline Ridge Open Space Preserves. This proposed action culminates eight years of negotiations by open space entities with past and present owners of this vital parcel of open space land. The former owner of the property, Mr. Arthur Wynne, was contacted early in 1980 regarding the District' s interest in his property. Mr. Wynne indicated his intention to leave the property upon his death to Lick Wilmerding High School, which he attended in San Francisco, to Stanford University, and to the Easter Seal Society of San Francisco. He stated at that time that he did not want to see the property developed and hoped that the property could be purchased for open space with the money going to those institutions. Upon his death in 1983, the property was trans- ferred to the two schools and the Society. Peninsula Open Space Trust (POST) subsequently met and has continued to meet with the inheriting owners to negotiate a fair purchase price for the property. These negotiations, however, have reached an impasse. The owners of the property suggested a sealed bid auction to sell the land to the highest bidder. The value of the property is based upon the potential of R-87-181 Page two developing seven building sites, averaging 21 acres each. The land is highly desirable for open space, surrounded on three sides by lands held by the Midpeninsula Regional Open Space District , as well as for numerous trail connections, and is critical in terms of viewshed from adjoining District lands. In September 1986 , the District acquired the 520 acre former Peters property on the Russian Ridge Preserve, portions of which had been threatened by the development of 22 homesites . The former Peters property and the remainder of the Russian Ridge and Skyline Ridge Open Space Pre- serves overlook the Stanford et al . parcel . As the land is relatively undeveloped in this area along the south and west side of Skyline Boulevard, construction of seven large homes with appurtenant structures , roads, utility installation, etc. would severely impact the views of and from adjacent District lands . In addition, the property is an important link between the western portion of Skyline Ridge Open Space Preserve and the southwesterly slopes of the Russian Ridge Open Space Preserve. Currently, the lower portions of these Preserves are only accessible to visitors who can hike in and back out on the same trail. Acquisition of this parcel would enable the District to create loop trips by providing the necessary trail connections to link these two Preserves, and the trail system will eventually play a major role in the planned Skyline Scenic Corridor trail in this vicinity (see attached map) . A. Description of the Site 1. Size, Location and Boundaries The parcel is 145 acres in size and is located on the west side of Alpine Road approximately one mile southwest of Skyline Boulevard. District owned lands adjoin the property on three sides. Russian Ridge Open Space Preserve is located to the north and west, and Skyline Ridge Open Space Preserve is located across Alpine Road to the east. The property contains approximately one-half mile of Alpine Road frontage. Private property abuts the parcel to the south. 2. Topography, Geology, and Natural Landscape The property is comprised of a series of grassy ridges and wooded canyons. The highest point on the property is located in the northeast corner, situated at approximately 2453 feet above sea level . From this location unobstructed views in all direc- tions of public open space and other public and private lands can be enjoyed. Spectacular views westward of Mindego Hill, the lower ridge of the Russian Ridge Open Space Preserve, and the distant coastal ridges are magnificent. The property slopes generally southwesterly to its lowest point at 1840 feet eleva- tion which is located in the Mindego Creek canyon. The soils of the property derive from Lambert shale and Mindego basalt. Those soils formed from the Lambert shale are generally more susceptible to landsliding and are found in the steeper canyon areas. The soils formed from the Mindego basalt are generally shallow and stable, tend to restrict woody vegetation, R-87-181 Page three and are located on the open ridgetops . overall, the property is rated moderately high in susceptibility to landsliding. There are two southwest facing ridge systems on the property separated by the headwaters of Mindego Creek. Mindego Creek is located in the center of the parcel , exiting the property through the southwestern corner. the canyons are vegetated with such tree species as madrone, oak, bay, buckeye, big leaf maple, and Douglas fir. B. Planning Considerations Located within unincorporated San Mateo County, the parcel is zoned Resource Management (RM) . County regulations governing any develop- ment in the Resource Management Zone require that it go through a three phase review process. These three stages are: 1) Preliminary Concept Plan, 2) Concept Plan, and 3) Final Development Plan. Development density in the RM Zone is determined by a Matrix Analysis of various factors (slope, soil stability, geologic hazards , etc. ) . A slope density analysis performed by San Mateo County Planning Department on this parcel indicates that seven building sites are potentially supportable, each averaging approximately 21 acres . The property lies outside the District boundary but adjacent to the boundary and within the District' s Sphere of Influence. The District boundary wraps around the property to the north, east, and west. The property was not rated for suitability as open space in the original District Master Plan as it was outside the District boundary, but the adjacent section of the Russian Ridge Preserve within the boundary was rated in the highest composite category. C. Current Use and Development Three roads access the property from Alpine Road. The primary road enters the property at the southeastern corner, winding westerly approximately 300 yards before terminating at the site of a small house. A second road enters this same site several hundred feet to the north of the first road. It appears to be used minimally for access to a graded area adjacent to the house site where the current caretakers store a number of automobiles . This entrance to the property is across Alpine Road from the driveway leading to the former Bullis property portion of the Skyline Ridge Preserve. The third road entering the property is located in the northern or upper portion of the property. After entering from Alpine Road, this road wraps around a small knoll where it then branches at a junction into four separate, well established footpaths . Two of these foot- paths go northward, eventually entering the District ' s Russian Ridge Open Space Preserve and tying into the existing trail system. A third trail heads westerly along the grassy ridgetop, eventually terminating in the trees. The trail which heads to the east from this junction does so for a short distance, terminating at a fence line at a roadside pullout along Alpine Road. This entrance has been used for years by the public who either thought they were entering R-87-181 Page four the Russian Ridge Open Space Preserve or simply were lured up onto the hillside to enjoy the great views . There is roadside parking for approximately four vehicles in this vicinity. Two other trails and roads on the property warrant mention. The road which follows the lower Peters property ridge acquired by the District, cuts through the southwestern corner of the prop- erty. This road is accessible from Alpine Road by District staff for patrol purposes only, as there may be insufficient rights to use this as a public entrance. The trail which forks from this road, connecting the lower ridge with Russian Ridge, also cuts through the property for a short distance. The house, located at the end of the most southerly road, is a 1930 ' s vintage, wood frame structure with two bedrooms. The developed area also contains a garage with an attached cabin. Total square footage of the structures is estimated at 1650. The house is considered to be in fair condition; however, the following problems have been identified by a real estate appraiser: 1) sinking foundation, 2) leaking roof , 3) dry rot, 4) holes in the exterior siding caused by boring beetles, and 5) unstable electrical power. There are no additional structures on the site. D. Potential Use and Development Westward views from this property show off the recent Peters property addition to the Russian Ridge Open Space Preserve. As mentioned, the threat to develop 22 homesites on the ridgetop of Russian Ridge was eliminated with that acquisition. The District now has the oppor- tunity to preserve views from that ridge as open space and eliminate the potential for the construction of seven homes which would severely intrude on this unspoiled landscape. In addition to the importance of preserving viewshed integrity and the open ridges , the property plays a key role in the recreational plans for the region. Successful acquisition of this parcel will link two popular open space preserves , Skyline Ridge and Russian Ridge, and create the potential for major recreational trails utilizing the lower Peters ridge and the southwestern portion of the Skyline Ridge Open Space Preserve. The house and surrounding flattened area easily lend themselves to the potential for an informal staging area serving both preserves in this area. Staff has not closely inspected the house on the prop- erty, so a complete analysis will need to be conducted to estimate the costs of repair. Should the analysis indicate the structure is sound, it could make an ideal Ranger residence unit or caretaker residence. The flattened area next to the house site could be formalized into a parking area with relative ease. The close proximity of a District residence to such a parking area could be ideal in the management of such a facility. From this staging area the lower Peters property addition will be accessible with the construction of a trail winding down the Mindego Creek canyon to the lower Peters ridge trail. Skyline Ridge Preserve is also easily R-87-181 Page five accessible from the potential staging area. A crossing at the central road junction with Alpine Road puts visitors on the driveway to the former Bullis property. Approximately 500 feet up the driveway a trail heads northward around a knoll to reach Alpine Road immediately across from the northern road entering the subject property. From here visitors will be able to hike to Russian Ridge and Borel Hill , looping back to the staging area via the planned major north-south trail from Russian ridge to the lower Peters ridge. Visitors may also return through the Skyline Ridge Open Space Preserve via Old Page Mill Road and the trail up through the former Bullis property. E. Preliminary Use and Management Recommendations 1. Boundary plaques and wildland signs will be posted at the entrances to the property and along appropriate property boundaries. 2. A hiking stile will be installed and the existing fenceline repaired at the roadside pullout along Alpine Road. 3 . Staff will investigate the suitability of the residence as a caretaker unit or Ranger residence. The study will be conducted and recommendations for disposition of the house will be con- tained in the next Use and Management Plan for the entire site. F. Dedication I recommend that you indicate your intention to dedicate this property as public open space. G. Name I recommend that you name the property as an addition to the Russian Ridge Open Space Preserve. H. Terms District interest in the former Wynne-Offerman property dates back to the initial District purchase for Russian Ridge Open Space Preserve in December of 1978 . At that time the District completed the first of four separate transactions with the Frank Crist, Sr. family. As mentioned earlier in this report, District staff contacted Mr . Arthur Wynne in January of 1980 and personally met with him towards the end of that year. At the time Mr. Wynne wanted the property to remain undeveloped, but already had plans to leave the entirety of the property to the three current institutional owners. He expressed a desire to see the property sold to the District, with the proceeds of the sale to accrue to his designated heirs . Unfortunately, Daisy Offerman, the other owner, died in April of 1981, and Mr. Wynne died not too long after that. Since the most substantial interest holder in the property was Stanford University, Peninsula Open Space Trust (POST) offered to negotiate a purchase of the property on behalf of the District. This was done because POST had very close ties to R-87-181 Page six Stanford and felt they could best negotiate the purchase. Robert Augsburger, former Executive Director of POST and other POST representatives contacted Stanford staff members , including Dick Blois of the Development Office and Ellen Smith of the Real Estate Office over the period from 1982 to mid 1986 . Although no appraisal had been completed at that time, cash offers were tendered and eventually rejected. Offers were also made to the School of Mechan- ical Arts during that period, which were also rejected. At this point Stanford and the other institutions sought appraisal and planning advice. The Density Matrix as calculated by San Mateo County at the time, was for five residential units; however, a possibility for greater density was possible if certain geological conditions on the property were not severe. A geologist was hired by the owners, and subsequently the Density Matrix was recalculated to indicate a density of seven possible residential sites . At this point the owners commissioned an appraisal, which was completed in April of 1987 . Peninsula Open Space Trust recontacted Stanford and was told that the purchase price would be $870, 000. After further inquiries , the appraisal was released to POST and the District disclosing the estimate of the fair market value to be $800, 000 for the property. A thorough review of the appraisal was conducted by District staff , and it was determined that a purchase price of $575, 000 was indicated based upon an analysis of the assumptions in the appraisal . Although this offer was rejected by Stanford, POST continued discussions with the District and direct negotiations with Stanford over the months of July, August, and September of 1987 . After many discussions and further negotiations, the District reluc- tantly agreed that it would pay as much as $800, 000 to acquire the property through POST. In early October this offer was conveyed to Stanford and verbally accepted. However, approximately one week later, apparently the other institutional owners would not accept the offer and an alternate proposal was made, as follows : 1) the minimum price would be $850, 000, 2) the property would be sold to the highest bidder over that amount with a deadline of October 30, 1987 , and 3) mineral rights and rights of entry for mineral extraction would be retained. The District had already offered an amount that was felt to be over the true fair market value estimate of the property and could not justify paying more for the property, let alone participate in an open-ended auction to complete the acquisition. Peninsula Open Space Trust was later notified that the property was being "sold" and was no longer available. This extensive narrative has been provided because the lengthy negotiations and final impasse over price have extended over many years and have involved the District negotiating directly with the former owners, but only indirectly through POST with the current institutional owners . R-87-181 Page seven It is interesting to note that the District currently provides open space lands which in part accommodate certain needs of two of the institutional owners of the property. Stanford University has a communications facility under no-cost lease on Black Mountain, which is up for renewal next year, and the District worked closely with the Easter Seal Society at the Picchetti Ranch area to provide at no cost the horseback riding ring adjacent to Camp Costanoan in Lower Stevens Creek County Park. In summary, negotiations are at an impasse and POST feels they have done everything they can to attempt to complete this acquisition project. The property has reportedly been "sold" and the asking price appears to be far in excess of the property' s fair market value. Since the property is "on the market" and price is really the only question, the condemnation process is seen as an ideal forum for resolving the question of value. It is my opinion that this proposed action is the only method left to acquire this critical parcel of open space land. I. Eminent Domain Policy According to your Policies Regarding Use of Eminent Domain, as adopted on April 23, 1986 , Section 3 reads as follows: 3 . Improved, subdividable property Except as provided in Section 5 (Trails) below, eminent domain may be used to acquire all or any part of an improved property which is susceptible to further subdivision only when the Board has determined at a public hearing that the property is clearly threatened by development or degradation of natural resources, or if mo.L". than 50% of the fee interest of the property is held by institutional or commercial entities (emphasis added) . This property is subdividable and improved with an older single family residence and cabin which are currently tenant occupied. Stanford has informed the District that this tenancy has been terminated and that process was commenced prior to direct District involvement in negotiations. Therefore, since this property is 100% owned by "institutional or commercial entities , " your policies pro- vide for the use of eminent domain subject to the general limitations of the opening policy statement: It is the desire of Midpeninsula Regional Open Space District to acquire open space from willing sellers. Eminent domain may be used only within the planning areas designated in the District ' s Master Plan in those instances where all reasonable attempts at voluntary negotiations fail and the property in question is necessary to the open space program of the District; and where there are no feasible current or prospective alternate acquisitions that would achieve the District' s objectives . R-87-181 Page eight As to the question of the property being located outside the District boundaries, but within the Sphere of Influence, the following section of the general policy statement is applicable: Properties within the District ' s sphere of influence outside the District' s boundaries shall be treated as being in the planning areas designated in the District ' s Master Plan. This provision shall remain in effect until the District' s Master Plan has been amended to include or exclude such properties from such planning areas . Therefore, passage of a Resolution of Necessity to acquire this parcel falls fully within your policy criteria. o r 4 CAL TRANS � . <:;.��� : ����<:: .��:. •Y::•'TIS':1• 00\ Y Q• � VISTA S T P =.�� A 0 I NT •.. v: o� � . , -., .,•. •f �v ,::'.y'• •:r•. /�'.is;�;i.;;t•:'' . • , gin,+h • :••.•"�:.• . jJ PAGE MILL RUS S I AN RIDGE O. S . P . 157 PROPOSED ADDITION �' o o �-` PLJLLOL -�` ( 145 ACRES) a 245_ 1 OWN"&.•--••EXISTING ROADS AND TRAILS SKYLINE RIDGE PROPOSED ROADS AND TRAILS LA PORTOLA STATE MILE + PAR K ROAD f o l' ss •a7irF!•..•.•'••. RESOLUTION NO. RESOLUTION OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT, FINDING AND DETERMINING THAT THE PUBLIC INTEREST AND NECESSITY REQUIRE THE ACQUISI- TION OF CERTAIN PROPERTIES FOR PUBLIC USE, TO WIT, FOR PUBLIC PARK, RECREATION AND OPEN SPACE PURPOSES, DESCRIBING THE PROPERTIES NECESSARY THEREFORE AND AUTHORIZING AND DIRECTING ITS RETAINED LEGAL COUNSEL TO DO EVERYTHING NECESSARY TO ACQUIRE ALL INTERESTS THEREIN (RUSSIAN RIDGE OPEN SPACE PRESERVE - STANFORD ET AL. PROPERTY) WHEREAS, the Board of Directors of the Midpeninsula Regional Open Space District is authorized to acquire property for public purposes, pursuant to Division 5, Chapter 3, Section 5542, of the Public Resources Code, State of California, and WHEREAS, the property, rights , and interests described in Exhibit "A" attached to this resolution and incorporated herein by reference (the "property" ) are necessary for public park, recreation, and open space purposes , said purposes consti- tuting a public purpose, WHEREAS, the Offer of Just Compensation required by Section 7267 . 2 of the Government Code has been made to the owners and/or owners of record by and through their representatives , Ellen Smith, Donald H. Maffly, Esq. , and Claire H. Springs, Esq. , by letter dated November 20 , 1987 . NOW, THEREFORE, BE IT RESOLVED that the Board of Direc- tors _of- the Midpeninsula Regional Open Space District does hereby - find and determine that the public interest and necessity require the acquisition of the property for public park, recreation, and open space purposes; BE IT FURTHER RESOLVED that acquisition of the fee (unless a lesser estate is described in Exhibit "A" ) is necessary therefore;_ and - BE IT FURTHER RESOLVED that the Board of Directors of the Midpeninsula Regional Open Space District does hereby find and determine that said property is located so as to be most compatible with the greatest good and cause the least private injury; and 4 BE IT FURTHER RESOLVED that the General Manager be and is hereby authorized and directed to cause to be negotiated and/or prepared all appropriate applications to governmental agencies for grants of funds or property, legal documents and related instruments for acquisition of title to the property by gift and/or purchase, all upon terms and conditions discussed by or presented to this Board at its meeting this date or customary to this District in like transactions; provided, however, that each such application, document and instrument shall be subject to approval as to form and content by this Board prior to its execution or delivery on behalf of the Midpeninsula Regional Open Space District; and BE IT FURTHER RESOLVED that the law firm of John H. Tallett, Attorney at Law, be and the same is hereby retained, instructed and directed to do everything necessary to acquire all interests in the property described in Exhibit "A" , and they are further authorized to prepare and prosecute such condemnation proceedings in the proper court having jurisdiction thereof as 4 are necessary for such acquisition, including the obtaining of an order for immediate possession to prevent the development and/or destruction of such property, pursuant to the Code of Civil Procedure Sec. 1255.410 et seq. 't i All that Certain Real Property situate in the County of San Mateo, State of California, described as follows: That Northwest f of Section 21, Township 7 South, Range 3 West, Mount Diablo Base and Meridian. Excepting therefrom all that portion of said property lying East of the center line of Alpine Road, as conveyed to Howard Black and Anges W. Black, his wife, by Deed dated November 9 , 1934 and recorded January 12, 1935 in Book 639 of Official Records of San Mateo County at Page 376. APN 080-281-010 EXHIBIT loose of i MIDPENINSULA REGIONAL OPEN SPACE DISTRICT TO: Board of Directors FROM: H. Grench, General Mana-er SUBJECT: F.Y.I. DATE: 12/8/87 LAW OFFICES OF CHANDLER, WOOD, HARRINGTON & MAFFLY E DWARD G.CHANDLER FORMERLY ROBERT R.WOOD III SUTTER STREET, SUITE 1900 ATHEARN,CHANDLER RICHARD HARRINGTON 6 HOFFMAN DONALD H. MAFFLY SAN FRANCISCO, CALIFORNIA 94104 _ WENDELL H.GODDARD JAMES O.PAWLIK TELEPHONE ROBERT ELLIOTT December 4, 1987 (41S) 421-5484 CLAIRE OSBORN-WRIGHT TELEFAX (415)42I-0464 Mr. Herbert Grench, General Manager Midpeninsula Regional Open Space District Old Mill Office Center, Building C, Suite 135 201 San Antonio Circle Mountain View, CA 94040 Re: San Mateo County Assessor's Parcel No. 080-281-010 on Alpine Road in Palo Alto, CA -- Letter in Opposition to Determination of Public Necessity Dear Mr. Grench: We are attorneys for the California School of Mechanical Arts. This letter is written on behalf of our client and on behalf of Leland Stanford Junior University and the Easter Seals Society of San Francisco, who jointly own the above- referenced real property. This letter is sent in response to a letter dated November 19, 1987 from Mr. L. Craig Britton to Leland Stanford Junior University with copies sent to the other two owners. That letter states that it is a formal notice that the Midpeninsula Regional Open Space District will consider the adoption of a resolution of necessity to acquire the above- referenced property. This letter shall serve as written notification under Code of Civil Procedure S1245.235(b) (3 ) that the owners request to appear and be heard at the hearing to be held December 8, 1987 at 7:30 p.m. Please arrange for the distribution of a copy of this letter to each member of the Board of Directors of the District prior to the hearing. �I 1. Background about negotiations with Peninsula Open Space Trust and other potential buyers of the subject realty The owners of the property have made substantial and expensive preparations to offer the property for sale during the last three years. They have obtained reports from a civil engineer and soil engineer, have applied for and obtained a f Mr. Herbert Grench CHANDLER,WOOD, HARRINGTON & MAFFLY December 4, 1987 Page 2. density analysis from the County of San Mateo, and have obtained appraisals on the property. After these preparations were completed, the property was offered for sale during the summer of 1987. The Peninsula Open Space Trust (hereinafter "Trust" ) was immediately informed that the property was on the market. On or about October 6, 1987, Kenneth and Sherrilynn Fisher (hereinafter "Fishers" ) submitted a written offer to purchase the property for $800,000. On or about October 8, 1987, the Trust submitted a written offer to purchase the property for $800,000. On or about October 12, 1987 the Fishers submitted a written offer to purchase the property for $870,000. The owners then submitted a proposed form of option agreement to the Fishers and to the Trust, requesting each to state the respective party' s best offer for the property. The Trust informed the owners that it would not raise its offer to any amount over $800,000. In early November 1987, the Fishers executed an option to purchase the property for $870,000. The owners were prepared to accept the Fishers' offer at that time. However, because the Fishers submitted a technically deficient document in that it bore a photocopy of their signatures rather than their original signatures, the owners redrafted the option to incorporate certain minor technical changes and resubmitted it to the Fishers for signature on or about November 11, 1987. Before the Fishers had an opportunity to execute the revised form of option agreement, Mr. L. Craig Britton, Land Acquisition Manager of the District hand delivered to Ms. Ellen Smith, Manager of Gift Real Estate of Stanford, a letter dated November 20, 1987, which informed the owners that the District has a "very serious intent in acquiring" the property at issue. That letter enclosed the November 19, 1987 notice of hearing to consider the adoption of a Resolution of Necessity referred to above. It also enclosed the District' s Statement of Just Compensation regarding that property which states that the District' s appraisal of the realty resulted in a valuation of $595,000. At the time that Mr. Britton hand delivered the documents discussed above to Ms. Smith, he indicated to her that the District did not like the "bidding situation" and did not like the stipulation that the offers must be in excess of $850,000. The owners notified the Fishers of the District's actions by sending them copies of the documents that had been hand delivered by Mr. Britton to Ms. Smith. In view of Mr. Herbert Grench CHANDLER,WOOD, HARRINGTON & MAFFLY December 4, 1987 Page 3. the threat that the property may be taken by the District pursuant to the eminent domain power, the Fishers have declined to sign the revised form of option or a contract of sale regarding the property. 2. Observations about conduct of Trust, District and its officers The owners make the following observations regarding the conduct of the Trust, District and its officers in connection with the Trust' s attempts to purchase the property and the District' s actions with respect to the potential use of the eminent domain power to take the property: 1. The owners do not dispute that the District has the power to take property by eminent domain. However, the owners are entitled to compensation equal to the fair market value of that property from the District. The fair market value of that property is $870,000, not $595,000 as offered by the District. 2. The Trust (a private nonprofit organization) and the District (a public district of the State of California) appear to act hand in glove with respect to the acquisition of private lands on the Peninsula for use as open space public land. 3. The owners afforded the Trust a full and fair opportunity to purchase the property in competition with other potential buyers. The Trust in fact did offer $800,000 for the property but declined to offer a higher amount. The owners chose to deal with the Fishers because they offered $70,000 more for the property than did the Trust. 4. At precisely the moment when the owners were near consummation of a sale of the property to the Fishers for $870,000, the District chose to express "dissatisfaction" with the conduct of the owners regarding their attempts to sell the property. The District at that time also chose to threaten to exercise the eminent domain power by noticing a hearing to consider the adoption of a Resolution of Necessity to acquire the property. The District also at that time informed the owners that it was prepared to pay only $595,000 for the property, which is substantially below its fair market value. 5. As a direct result of the District's actions, the Fishers have declined to proceed with the purchase of the property for $870,000 or for any other price. It appears to us that the activities of the District and its officers constitute an intentional interference with the prospective contractual relations between the Fishers and the owners. Mr. Herbert Grench CHANDLER, WOOD, HARRINGTON & MAFFLY December 4, 1987 Page 4. 6. In view of the close collaboration of the Trust and the District and the sequence of events stated above, the owners infer that the District has acted upon the advice and at the request of the Trust. The owners infer that the District intended to threaten the use of its eminent domain power in order to discourage the Fishers from purchasing the property and to drive down the value of the property, thus allowing the District to acquire it at a price substantially below fair market value. As stated later in this letter we believe this conduct constitutes a taking under the Fifth Amendment to the United States Constitution. 7. The three owners of the property are nonprofit charitable organizations that have expended considerable amounts of money and effort for appraisals, density analysis and attorneys' fees, and in marketing the property. The District and its agents waited until the owners were on the verge of consummating a favorable sale to threaten exercise of the eminent domain power. A court could well conclude that this activity was an abuse of authority, oppressive, malicious and in bad faith. 3. Liability of the Trust, District and its officers for intentional interference with the prospective contract between the owners and the Fishers. A defendant is liable for inducing a breach of contract. Imperial Ice Co. v. Rossier, 18 Cal.2d 33, 37 ( 1941 ) ; Remillard-Dandini Co. v. Dandini, 46 Cal.App.2d 678, 680 ( 1941 ) . A defendant is also liable for interfering with prospective contractual relations or prospective economic advantage even where no legally binding agreement exists. As stated in Buckaloo v. Johnson, 14 Cal.App.3d 815, 827 ( 1975) : " [T]he mere fact that a prospective economic relationship has not attained the dignity of a legally enforceable agreement does not permit third parties to interfere with performance. " Neither a public entity nor its officers are protected from exposure to liability for such acts by sovereign immunity or governmental privilege. H & M Associates v. City of El Centro, 190 Cal.App.3d 399 ( 1980) . We believe that the activities of the Trust, District and its officers constitute intentional interference with the prospective contractual relations between the owners and the Fishers within the meaning of these cases. If a court were to find that the actions of the Trust, District and its officers Mr. Herbert Grench CHANDLER, WOOD, HARRINGTON & MAFFLY December 4, 1987 Page 5. were wilful, oppressive, malicious, and in bad faith, the owners would be entitled to recover punitive damages as well. The conduct of the District appears to constitute the type of unreasonable pre-condemnation activities that constitute a taking under the Fifth Amendment, thus entitling the owners to recover their damages and attorneys' fees in an inverse condemnation action. See Klopping v. City of Whittier, 8 Cal.3d 39 ( 1972 ) . 4. The owners are entitled to damages for loss of value of their property resulting from inequitable pre- condemnation activities by the District and are entitled to attorneys' fees if a condemnation action is initiated. Under California law, owners are entitled to compensation from a public entity for the full fair market value of their property prior to pre-condemnation activities. Code of Civil Procedure S1263.330. Therefore, if the District condemns the property, it must pay the owners the full fair market value of $870,000 even if the market value has since declined as a result of the District' s activities discussed above. Even if the District does not initiate condemnation proceedings, or if it initiates a condemnation action and later abandons that action, the owners are still entitled to compensation from the District for loss in value to their property in view of the District's unreasonable pre- condemnation conduct. Klopping v. City of Whittier, 8 Cal.3d 39 ( 1972); People ex rel. Department of Public Works v. Peninsula Enterprises, Inc. , 91 Cal.App.3d 332 ( 1979 ) . Therefore, if the District's activities deprive the owners of their expectation of selling the property to the Fishers for $870,000, the District will be liable to the owners for the difference between $870,000 and the lesser amount that the owners are able to get for the property. If the owners file an action for inverse condemnation they will be entitled to recover their costs and attorneys' fees. Code of Civil Procedure S1036. 5. Conclusion Based upon the foregoing analysis, we believe the District, its officers, and the Trust are exposed to liability for general damages in the amount of $870,000 plus punitive damages and the owners' attorneys' fees. In view of this substantial exposure, the owners urge the District not to adopt Mr. Herbert Grench CHANDLER,WOOD, HARRINGTON & MAFFLY December 4, 1987 Page 6. a resolution of necessity and thus allow the owners an opportunity to mitigate their damages by attempting to rehabilitate the proposed sale with the Fishers. Since�y-yaur , andler, Wood, Ha ringt n & Ma Donald H Maffly ttor s for th lifornia Sc ool of Mechanical Arts DHM/klh cc: Mr. L. Craig Britton, Land Acquisition Manager for the District Ms. Audrey C. Rust, Executive Director, Peninsula Open Space Trust Edmundo Moran, Esq. , Leland Stanford Junior University Clare Springs, Esq. , Attorney for the Easter Seals Society Ms. Ellen Smith, Manager, Gift Real Estate, Leland Stanford Junior University CSMA/ltrgre