Brea Acquisition Threatens Federal Highway Funds : Roads: Officials may deduct $1.9 million from future grants to the state because of the city’s improper methods of obtaining land for Imperial Highway widening.

Federal officials are threatening to deduct nearly $2 million from future federal highway grants to the state because Brea officials improperly forced some property owners to surrender more land than was actually needed for the recent widening of Imperial Highway.

Federal Highway Administration investigators said that the owners of some property near the intersection of Imperial Highway and Brea Boulevard should have been asked to sell the land on a voluntary basis, but were instead threatened with condemnation under eminent domain proceedings.

The findings are contained in a report sent to Caltrans and city officials on Friday. The report, a copy of which was obtained by The Times, confirms earlier findings by state and federal officials that some parcels had been wrongly taken by the city, but is harsher in its criticism.

The city attorney, mayor and city manager did not return phone calls Monday.

Since federal highway funds have already been spent for the Imperial Highway improvements, the Federal Highway Administration is asking its western regional office to withhold $1.9 million from the next federal road grant that goes to California, said Barbara Orski, the agency’s director of right of way in Washington.

The money could still be released, she said, if Brea and Caltrans, which administers all federal transportation money used in the state, follow recommendations made by federal investigators, including the rewriting of land purchase procedures to ensure that local public agencies know of federal acquisition rules.

Caltrans officials said Monday that a right-of-way team from Sacramento will arrive today to help draft a plan for corrective action designed to ensure continued federal funding.

The “excess” land taken by the city consists of so-called remnants. These are slivers of real estate too odd-shaped or small by themselves to have market value after a public works project’s actual right of way needs are met.

But the remnants can be useful if they can be packaged together as part of a bigger block of land eyed by developers. In one case, city records show, an entire lot was condemned even though only 10 feet were needed for the Imperial Highway widening.

The city has contended that it was entitled to take remnants under California law after securing appraisals saying they had little or no market value. The federal investigators said that state law may permit such actions, but conflicting federal statutes “apply to all parcels” on a federally funded project “regardless of whether or not there are federal funds (involved) in a particular parcel.” In addition, they concluded that some of the remnants do have market value.

The three-member team of federal highway investigators visited Brea in April and examined a 20-parcel sample of the area around Imperial Highway.

According to the investigators’ report, city officials--without authority--used the threat of eminent domain to acquire the excess land, which the city wants to attach to its redevelopment area.

But the failure to give the property owners a choice, the report states, is not “proper or consistent with (federal acquisition rules) or the Civil Rights Act. . . . Such actions can be construed to be coercive (and) arbitrary.”