I-5 Widening Upsets Many Landowners

The project to widen more of the Santa Ana Freeway could clear traffic running through Orange County, but it may clog the courts.

While 222 businesses will be partially or completely displaced by the current project, 139, about 63%, have rejected the state’s offer to purchase their properties, forcing Caltrans to initiate eminent domain eviction proceedings.

During construction of the region’s only other major freeway project in recent years--the Century Freeway in Los Angeles County--about 15%-20% of the 294 affected properties rejected the state’s offers, according to Cleave Govan, a senior environmental planner for the California Department of Transportation. Even lower percentages--about 10%--are common in other projects, he said.

Caltrans spokesman Albert Miranda said the number of condemnation proceedings on the Santa Ana Freeway project is “unprecedented” in Orange County, and he couldn’t point to any projects in the state in which so many people had fought eviction.

Besides the eminent domain cases Caltrans has filed, some property owners have sued the agency, according to private attorneys.

Only a handful have gone to trial, and in two cases, juries dramatically increased the amount the state must pay the property owner.

In one case, the jury last month decided that the state should pay the Church of the Foursquare Gospel $1.33 million instead of the $722,500 it had offered. In a second case, a jury increased Caltrans’ offer for a mobile telephone business from $16,000 to $285,000.

“There’s no nice way to pull a guy’s tooth or evict someone from their business,” said Art Garabedian, owner of Western Mobile Telephone, “but these guys are deplorable.”

Other business owners agree.

“It’s immoral,” said Chuck Hance, owner of Coast Corvette in Anaheim. “It’s highway robbery.”

According to eminent domain, the state can purchase property to make way for projects deemed to be in the public interest. The planning for the current project began eight years ago with the state’s gradual purchase of 310 single-family dwellings in the vicinity of the Santa Ana Freeway between the Garden Grove Freeway and Beach Boulevard. The project runs 9.5 miles through Anaheim, Orange, Buena Park and Fullerton.

The $1.1-billion project calls for the addition of a carpool lane and a mixed-flow lane in each direction as well as new onramps and offramps.

Construction began earlier this year and is expected to be completed in 2001.

“This is one of the most complex and difficult right of way projects this state has ever had,” said Brice Paris, the head of the Caltrans office in Orange County. “This is people’s livelihoods, and it’s very dear to them. Whenever you impact a business, you are hitting very hard.”

Many business owners, however, say the state has been hitting them in particularly painful ways.

To begin with, they say, by moving hundreds of residents out years before the project began, Caltrans created a blight that forced many establishments out of business without compensation. And when the agency finally began making offers on businesses, some owners say, many offers were unfair.

Hance’s Coast Corvette, for example, has sat on 1.3 acres at Vermont Avenue in Anaheim for 12 years. Caltrans officials decided they only needed his 3,231-square-foot parking lot. So they offered him $235,000 for the parking lot. Hance said he has spent $1.76 million on the property, and without the parking lot, he’s out of business.

Todd Cashman, owner of Bandwest Productions Inc., a recording and rehearsal facility in Anaheim, faces a similar dilemma. Located in a 16,480-square-foot building he estimates is worth about $2.6 million, Cashman’s company is in the path of a planned freeway onramp that is likely to generate traffic noise that will render his facility useless. Yet the onramp will touch only his parking area, which is why the state has offered him $87,792 for the land it will take.

“It will put me out of business,” Cashman said of the proposed improvements. “I’d probably just have to close my doors.”

Caltrans officials will not discuss specific cases.

The early removal of the 310 homes, Paris said, is unlikely to have created blight or forced anyone out of business because the properties, rather than being concentrated in one area, were distributed along the entire length of the 9.5-mile freeway corridor.

And in general, he said, Caltrans tries to fairly reimburse displaced business owners not only for the value of the property taken, but for any resulting loss in the value of the businesses themselves or of the real estate left behind.

Because real estate values have declined in recent years, he said, many business owners expect more than they get. “What they paid in the past is really irrelevant,” Paris said. “We pay fair market value.”

All owners have the option of accepting Caltrans’ initial offer for their property. If they disagree, they can take it before the California Transportation Commission. If the parties still are at odds, they can settle the matter in court, either through eminent domain condemnation proceedings initiated by the state or, in some cases, through countersuits filed by the property owners.

Although major highway projects often inspire litigation, Miranda said, this one has spawned more legal disputes than usual for several reasons.

Statistics compiled by Acxiom/DataQuick, a San Diego-based real estate information service, indicate that the value of commercial property in Orange County dropped 52%-55% from 1990 to 1994 and, despite recent upturns, is still about 30% below the levels of seven years ago.

And because the area is highly developed, experts say, the number of affected businesses is higher than usual.

“In most circumstances when public agencies do a construction of this size it’s in an undeveloped area,” said Mike Leifer, an Irvine lawyer who specializes in eminent domain cases and represents several of the businesses affected by the Santa Ana Freeway widening. “When it’s in a highly urbanized area such as this with many owners on a single parcel in some cases . . . it requires creativity and flexibility to avoid litigation.”

Instead, Leifer said, “I think the state is doing what it can to minimize the amount it pays.”

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In the Road’s Way

The 9.5-mile widening of the Santa Ana Freeway has displaced hundreds of homes and businesses as Caltrans claims property through eminent domain, a law that allows the state to take over property for what is determined to be just compensation. A closer look:

Houses purchased: 310

Businesses affected: 222

Lawsuits filed by state: 139

Recent jury award: Increased Caltrans’ offer for a mobile telephone business from $16,000 to $285,000

Source: Caltrans and court records

Researched by DAVID HALDANE / Los Angeles Times