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
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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
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R-87-181
NoAA. (Meeting 87-29
e December 8, 1987)
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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.
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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