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October 18-24, 2006

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Prop. 90 debate

Photograph by Felipe Buitrago
Two sides to every story: Whether or not Prop. 90 is the solution to homeowners' woes locally, it underscores that San Jose is very possibly Ground Zero in the state's eminent-domain debate. The two mayoral candidates have taken different positions, with Cindy Chavez voting to retain the city's right to use it; Reed voted against it.

Blight Club

The debate over Prop. 90 hits home as homeowners fight San Jose's power of eminent domain

By Vrinda Normand

PATTI Phillips remembers the aroma of Italian cooking wafting through her stately Victorian home in downtown San Jose. It was the during late 1950s, while she was attending SJSU, that she became particularly fond of the fresh raviolis her grandmother used to make from scratch.

Her grandparents, Domenico and Gaetana Campisi, had immigrated to the United States from Italy in 1892. They bought the Victorian on South Sixth Street in 1919, a stone's throw from where the new City Hall now stands.

The two-story, sea-foam-blue house became Phillips' permanent home after her grandparents passed away in the early 1960s. But it wasn't until a few years ago that she took a chance on her own cooking skills and hosted a ravioli-making party with over 30 relatives.

Once again, the smells of homemade Italian food filled the family's Victorian.

Around the same time, though, Phillips began to fear for the fate of her 111-year-old house, which is listed as one of the city's historical landmarks.

In 2002, her property was targeted for a redevelopment project called the Strong Neighborhoods Initiative. That's also the first time she learned her well-maintained, structurally sound Victorian had been declared a "blight" on the city.

The Gonzales administration has touted the SNI program as the best thing to happen to San Jose's neighborhoods in the past decade. San Jose Redevelopment Agency director Harry Mavrogenes says the idea behind SNI is to spread around the success of redevelopment, which has raised the height of downtown San Jose's skyline and made North San Jose a tech industry hub.

It was also a creative policy move to find the money necessary to pay for things like new community centers, streetlights and sidewalks through the Redevelopment Agency, a quasi-separate entity in charge of boosting the city's economic vitality. Toward this end, the City Council slotted 19 neighborhoods spanning nearly one-third of the city as "redevelopment project areas."

But these areas had to be declared legally "blighted" before Redevelopment Agency funds could be used. According to California law, blight means physical and economic problems so bad they place a serious burden on the community and cannot be helped by private enterprise or governmental action.

The Redevelopment Agency must step in as a last resort. But there's a controversial catch: the agency has the power of eminent domain to help "clean-up." This can mean forcibly buying property from private owners and handing it over to developers to build grander things like high-rise apartment and office buildings.

That's what scares residents like Phillips. Because her home has been slapped with the "blighted" label, the Redevelopment Agency has the right to use eminent domain to force the sale of her property.

Property owners statewide have expressed concern over the leeway given to redevelopment agencies. In fact, there's been enough support to get Proposition 90 on the November ballot. If passed, the new California law would curb the ability of government entities to use eminent domain.

Strong, Not Wrong

RDA director Mavrogenes says Phillips shouldn't be concerned because his agency has pledged not to use eminent domain over any single-family, owner-occupied homes in SNI areas. Most of the projects completed in the past four years, he says, have been improvements the neighborhoods wanted—not large-scale land-use changes.

In the same period, he adds, the agency hasn't used eminent domain on any properties in SNI areas. It has only acquired three parcels of land near the Diridon Train Station, which falls in the Burbank/Del Monte redevelopment district.

This land, home to a former meat processing plant and several old industrial and office buildings, was voluntarily sold to the agency earlier this year. It will most likely be used for high-density housing since San Jose's baseball stadium dreams have fizzled.

Many homeowners, however, say they don't buy the Redevelopment Agency's assurances.

For one thing, city leaders had the opportunity to relinquish their power of eminent domain in SNI areas when they adopted the plan in 2002.

At a hearing on June 11 of that year, in which 150 citizens took advantage of their two minutes of public comment, councilmembers got an earful about declaring a third of the city "blighted" and rendering it susceptible to redevelopment takeover. They received 205 letters and petitions with over 1,500 signatures opposing the use of eminent domain in neighborhoods.

Councilmember Chuck Reed, who is now running for mayor, was the only one to vote against keeping eminent domain in the SNI plan. He said it wasn't needed to carry out small-scale projects and "invites litigation."

Councilmember Cindy Chavez, who is running against Reed for mayor, took the opposite position. She said the SNI plan includes enough constraints, like an advisory committee of community representatives and special notification requirements, to make sure eminent domain is used carefully.

Chavez also said she didn't want to "have her hands tied" by giving up the authority to use it.

Mavrogenes says eminent domain was considered to be an important part of the city's "tool kit" when the plan was created. Now he says they "don't really need it."

Still, the agency's exemption policy noticeably leaves out rented homes, apartments, townhouses, duplexes and businesses. And he hasn't solidified his intentions by officially removing the provision. The RDA director says amending the SNI plan would take considerable time and money, and he's waiting to see what will happen with California legislation.

In the meantime, he's come out in opposition to Proposition 90 on the grounds that it will cost more for the agency to acquire and develop land.

Local advocates for redevelopment reform have mixed feelings about Prop. 90 because they say it tries to do more than just limit eminent domain. [See Metro's endorsement.]

Phillips believes her house could likely get in the way of the agency's ambitions to make downtown a high-density, 24-hour attraction. Towering luxury apartment buildings are sprouting up all around her.

"They [the RDA] say they're not going to use eminent domain," Phillips says, "but they say a lot of things. We don't trust them."

Takeover Attempts

Local suspicion of the Redevelopment Agency began brewing before SNI, when city leaders hatched a dramatic plan to revive downtown. The 2001 fight against the "40-sites" operation turned a number of residents into advocates for redevelopment reform.

In one of the largest takeover attempts by the Redevelopment Agency, over 100 properties were chosen for 40 sites of high-density housing projects meant to feed a growing downtown with consumers.

But the grandiose plans of then-RDA director Susan Shick didn't hold up to the determination of angry residents. Property owners posted "Not for Sale" signs in front of their houses and lobbied city leaders until they got their way. By the end of the summer, council members agreed to back off.

Less than a year later, the Gonzales administration unveiled the SNI plan, which CRR leader Loraine Wallace Rowe calls a euphemism for more redevelopment.

"SNI sounded like motherhood and apple pie when they put it out," she says, "I thought it sounded like a good idea, too."

No one is opposed to building more parks and fixing up neighborhoods, but the premise behind the plan rubbed some community members the wrong way. Dozens of residents in the downtown area asked to have their neighborhood removed from SNI—not because they didn't want new streetlights, but because they didn't want the word "blight" showing up on their property deeds.

In fact, San Jose attorney William Brooks believes the entire SNI plan is built upon a misinterpretation of redevelopment law.

When city leaders were forming SNI, they included a commercial section of downtown near St. James Park to expand an existing redevelopment area called the Century Center. The Mitchell family, which owned a chunk of the targeted land, hired Brooks to help them resist getting sucked into the redevelopment zone.

The Fight Over Blight

Brooks presented a 38-page letter to the City Council when it was hearing public input on the SNI plan in 2002. He opposed the Century Center expansion and SNI by challenging the definition of blight that city leaders used to establish the proposed redevelopment areas.

He argued that the city's consulting firm, Keyser Marston Associates (KMA), simply did not produce evidence of real blight in its cursory surveys of city streets.

Three years later, Superior Court Judge Joseph Huber would agree with Brooks. He said that KMA stretched the definition of blight to cover areas that could not otherwise be proven to pose any real threat to health and safety. For example, KMA surveyors made up their own category called "deferred maintenance" to qualify minor glitches like garbage and peeling paint. The consultants walked through city streets and declared roofs and foundations defective merely by glancing at buildings from the sidewalk.

Surveyors even called one building blighted because it was vacant—an exaggeration that led the judge to call their logic "flawed." He attacked their "superficial" and "overbroad" observations of dilapidation and concluded that the "'find-blight-as-you-go' approach employed by the consultant and endorsed by defendants SJRDA and City of San Jose is not in the spirit of the CRL [community redevelopment law]."

Judge Huber invalidated the Century Center expansion and the city removed it from the redevelopment project area.

Ironically, Brooks' victory didn't carry over to SNI. After the City Council received his detailed letter in June of 2002, they made the Century Center a separate redevelopment proposal. So Brooks withdrew his objections to SNI in order to focus on the plan that included his client's land. But in doing so, he gave the city a technical flaw to hide behind when they later defended SNI in court.

Taking On SNI

A local property owner named Elaine Evans objected to SNI the same way Brooks did—by challenging the methods of KMA, the same consultants, by the way, who produced reports for the city's ill-fated attempt to take over the Tropicana shopping center in east San Jose.

But Evans failed in Superior Court and in the 6th District Court of Appeals because the judges said she did not exhaust her administrative remedies. In other words, her objections to SNI came too late. They were sent in July, one month after the council closed public comment and approved the ordinance. Evans couldn't rely on Brooks' earlier letter because he had transferred it to the Century Center plan.

Brooks says city leaders knew that his critique of KMA applied to SNI and calls their behavior "municipal mischief." After reading Brooks' letter, Councilmember Chuck Reed warned his colleagues that KMA's survey might not be legally sound. But he was the only dissenter.

To this day, Mavrogenes defends KMA and says he disagrees with Judge Huber. "We feel that they [KMA] have done a good job, that they're very competent professionals and that they understand what blight definitions are," he says.

He responds to critiques of SNI by mentioning all the good things the program has done over the past four years.

"Residents get to have better neighborhoods," he says, "without having to move."

Indeed, some neighborhoods are actually trying to get included in SNI. Don Gagliardi, a representative from the 13th Street SNI district, says, "I don't care that my house or neighborhood is called blighted. It's an empty designation."

Gagliardi adds that the "minute risk" of eminent domain is "nothing to lose sleep over."

Even the mayor, however, has suggested that neighborhood improvements can be done without the Redevelopment Agency. During his State of the City speech earlier this year, he proposed expanding the SNI model to the entire city—without relying on RDA funds or blight designations.

"I think the basic concept of redevelopment is good," Brooks says, "But I object when it is misused."

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