Land Use of the Rich and Famous

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“And when I search a faceless crowd
A swirling mass of gray and
Black and white
They don’t look real to me
In fact, they look so strange”
— The Rolling Stones, "Salt of the Earth" - Beggars Banquet

Ready your tiniest of violins. The Hollywood Hills, they weep for such uncounted heads as actor Jennifer Aniston and former CEO of Ticketmaster Fred Rosen, who are both fighting against the encroachment of giga-mansions upon their reasonably-sized mega-mansions.

Jennifer Aniston lives in an 8,500-square-foot "home." Fred Rosen, former CEO of Ticketmaster, lives in what one can presume is a similarly palatial estate.  Mr. Rosen: "There's always someone with more. So that's not the issue. We just want a building that's safe." Ms. Aniston, through what we may presume are her $600-per-hour lawyers, has said, "The very idea that a building of 90,000 square feet can be called a home seems at the least a distortion of building codes."  Entertainment lawyer Joe Horacek describes the giga-mansion above his mere mega-mansion as a "total invasion of privacy" and bemaons the developer's "total disregard... for the building code..." The developer retorts Horacek can put in "shrub[bery]" to mitigate the view. 

 An ABC News, Nightline story gives the details. 

Massing, permissible building envelopes, height restrictions, and other zoning restrictions are important land-use issues I deal with in my practice. Practicing land-use law in Tucson has exposed me to similar battles on much smaller scales, and one thing that remains constant across land-use legal disputes of all sizes is the passions inflamed on both sides . 

Rich people - their land-use disputes are just like ours. We may just feel a little less sorry for them. 

 

May-June 2015 Updates - I, For One, Welcome Our New Legal Turk Overlords

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Do you really need a lawyer to represent you? Lawyers represent only a small fraction of litigants in the United States court systems - most people represent themselves. Will your "lawyer" of the future be a flesh-and-blood human being, or a telecomputation device, the Kunstler Law-Star 3000, say, spitting out Pareto-efficient settlements within minutes of filing your claim?

Has a heart - obviously not a robot lawyer.

Has a heart - obviously not a robot lawyer.

Before opening my own eminent domain law firm, I briefly contemplated making some walking-around money with Amazon's Mechanical Turk, an online-odd-job-matchmaking service. This modern service takes its name from an 18th-century hoax designed to trick viewers into thinking a machine was able to play high-quality chess. Amazon's Mechanical Turk, which is not a hoax, requires users to complete Human Intelligence Tasks (HITs) for micropay - such as $.03 per HIT, with many thousands of HITs available.

Being adept at the Human Intelligence Task of math, I quickly determined my best short- and long-term prospects laid in finding real work, but thinking about the possibilities Mechanical Turk offered was interesting, if not disquieting.

Which brings us to a new article in The Atlantic, "A World Without Work," and the more scholarly article cited therein from the Oxford Martin School, "The Future of Employment - How Susceptible Are Jobs to Computerisation?" These futurist examinations of labor trends evaluate the possibility that computerization and mechanization will eliminate entire labor sectors, with the Atlantic article delving into the social ramifications of such an outcome.

The most interesting information in either article, for me, is the chart at the end of the Oxford Martin School article listing, in order, the 702 jobs computers are statistically most likely to eliminate from 1 (least likely) to 702 (most likely). Number 702, most likely to be eliminated, is telemarketers, which sounds wonderful until you recall these are jobs in which computers are likely to replace humans.

Lawyers (115) are relatively low on the list. Judges (271) are low as well, but less so than lawyers, which I will try to remember the next time a judge rules against me (Your time will come, your honor...) Unfortunately, politicians are not ranked. 

Other legal jobs, paralegals and legal assistants (609), are likely to be computerized. Legal secretaries (672) are in worse danger. 

What does this mean for you? I believe this ranking of lawyers is too optimistic and computerization is already driving down legal costs for many people. We already have automatic-legal-form programs and websites that will spit out a simple will or deed for a fixed fee. Avvo offers a service where you may cheaply ask real lawyers simple legal questions, but the time will come when a computer will answer those questions. 

Before you agree to hire a lawyer for a simple question or task, see if there are lower-cost options available. 

This trend towards computerization means also costs for actual lawyers should decrease as lawyers cut down on support staff.

This is occurring presently in Pima County. The Arizona Supreme Court mandated online electronic filing starting May 2015 for all civil cases in Pima County, which has cut out overnight the need for law firms to have runners physically take papers down to the courthouse for filing. The online filing system is so absurdly easy that most technologically-adept lawyers can file their own documents in five minutes, rather than hand them to a legal secretary for printing and filing.

Unfortunately, a utopian, completely lawyer-free society may well be far in the future. But computerization is sure to force lawyers - as much as any other workers - to continue to innovate and to prove their value over cheaper, more computerized options. 

Opinion Note

Arizona Court of Appeals, Division One - FIRST AMERICAN TITLE INSURANCE COMPANY v. JOHNSON BANK (June 30, 2015)

The Court of Appeals held the proper date of valuation to determine the loss in value to real property when an insured lender makes a claim on its own title insurance policy is the date of the lender's loan on the property, not the date of the foreclosure, if the foreclosure is the result of the very title defect giving rise to the insured's claim.

 

 

March-April 2015 Updates - Staying Up to Date as an Eminent Domain Lawyer

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Finding time to accumulate 15 hours of continuing legal education credit is sometimes harder than it sounds. Many CLE courses are two or three hours only or held in inconvenient locations. Add in the basic aridity common to all work-related seminars, and it is no wonder most lawyers are not overenthusiastic regarding this yearly requirement. 

Fortunately, this need not be so for condemnation lawyers. We have been fortunate to have dedicated eminent domain lawyers throughout the state who are willing to put on a six-and-a-half hour conference packed with focused eminent-domain-specific content. This is known as the Condemnation Summit, held twice a year.

I will be attending the Condemnation Summit on May 15th to make sure I stay on top of the developing trends in eminent domain law. Since it is a conference for right-of-way professionals and appraisers as well as attorneys, it is always a great place to gain a perspective on how all aspects of government takings work. 

February 2015 Updates

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Southern Arizona Public Works has not had a new post in some time; this is reflective of the author's increased burden running a successful new law firm.  My clients experienced some great successes in 2014, and I will continue providing dedicated and thorough service through the rest of the year. 

The United States Supreme Court heard oral argument in an Arizona-based case, Reed v. Town of Gilbert, on January 12, 2015. The case involves First Amendment issues relating to speech and religion centered around the Town of Gilbert's sign code. Full coverage of the case appears in many places; one of my favorites is scotusblog.com. 

As a lawyer who defends the property rights of private citizens against government intrusion, one issue of major concern to me is the public's access to the court system and government in general. I was majorly disturbed recently when I discovered the cost of appealing the decision of a zoning official in Pima County to the Pima County Board of Adjustment is $1,042. Appealing these decisions to the Board of Adjustment is a necessary step to eventually receiving a full hearing in Superior Court, so the fee is unavoidable in practice.  This chart shows how Pima County's fees compare to those in other Southern Arizona counties:

One non-Pima-County-planning-and-zoning official to whom I spoke stated he would like to see these fees increase for his county, so there is some room to argue Pima County is more appropriately charging user fees to the customers for government services. As you can see, though, Pima County's fee is higher than double any other County and is more than three times that of Maricopa County.

A cynic might think this is why Pima County Administrator Chuck Huckleberry can seem so cavalier regarding the zoning rights of county property owners; it is a good bet most people can't afford to challenge him. 

City of Tucson Moves Forward with Broadway Boulevard Widening

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On October 9, 2014, the Tucson City Council voted 5-2 to approve the recommendation of the Broadway Citizens Task Force and move forward into the design phase of the project for a six lane roadway including two mixed-public-transit lanes. The design phase is planned to take place in 2015 with construction beginning in 2016. 

The current planned alignment, while not final, is available at this previous post. 

Broadway Boulevard Citizens Task Force Recommends Alignment

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The Broadway Boulevard Citizens Task Force (CTF) has recommended an alignment for the widened Broadway Boulevard. The recommendation is to widen Broadway to six lanes with two of those lanes (one each direction) including a mix of public transit and private automobile traffic. This, in the parlance of the CTF, is the "6-Lane Including Transit" alignment.

The CTF's recommendation does not include a definitive statement regarding the final right-of-way width, although CTF documents generated contemporaneously with the recommendation suggest a preference for a final width of 118 feet, which could like something like this:

This is the report analyzing the seemingly preferred 118-foot width versus the seemingly less-prefered 96-foot width. You click the following to see the impact of the 118-foot width on properties along the east and west portions of the corridor.

The CTF will present its recommendation to the Tucson City Council on Thursday, October 9, 2014, time to be determined. The meeting will be open to the public.

Third Quarter Pima County Planning and Zoning Boards Update

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Pima County Seal

This is a now-quarterly report of action taken at the meetings of the Pima County Board of Adjustment, Hearing Administrator, Design Review Committee, and Planning and Zoning Commission. This report also includes important Pima County Board of Supervisors actions relating to land use and zoning. This previous post explains the functions of each county board.

The Pima County Board of Supervisors voted on September 16, 2014 to continue until the meeting on October 7, 2014, a vote on the recommended amendment to the Major Streets and Scenic Routes Plan.

The Importance of Expert Witnesses and Lawyers Who Know How to Use Them in Eminent Domain Litigation

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A recently decided California case illustrates the vital importance of having the right expert witnesses and lawyers who know how to use them to support a property owner in condemnation litigation. The property owner in San Diego Gas & Electric Company v. Schmidt received a jury award of $8,034,000 - over eleven times the $712,000 the utility company claimed was appropriate.

San Diego Gas & Electric (SDG&E) was taking a portion of the Schmidts' property to build a transmission line. The taking would split the property, which was vacant land, down the middle. SDG&E's appraiser felt "residential development or habitat mitigation [open space purchasable as an offset to development in other areas]" was the highest and best use of the vacant property. The Schmidts presented a convincing case the highest and best use of the property would be for eventual aggregate mining (aggregate mining is the mining of construction materials like sand a gravel).

The impressive element of the case, and the reason it is noteworthy, is the synergy that the Schmidts' lawyers achieved between two experts - one mining expert, Mr. Warren Coalson (his actual name), and Mr. Orell Anderson, an experienced mining appraiser. It takes some doing to convince a jury that the value of vacant property should reflect its highest-and-best-hypothetical use as a mining operation, but that is exactly what Coalson, Anderson, and the Schmidts' lawyers did.

How did they do it?

The first and most obvious hurdle Schmidt had to clear is one of the oldest tricks in the condemnor's playbook, the "You Could Never Use That Property For Anything" defense: SDG&E claimed county authorities would never permit a mining operation on the Schmidt property, thus the mining value of the property had already been lost long ago when the county instituted mining permit regulations in the 1980s. See? Your property has no value. The government took it away long ago when it decided you could never use your property for anything.

Pima County is notorious for using this tactic - particularly when it comes to the numerous floodplain regulations and prohibitions on construction within watercourses. The City of Tucson likes to use their Major Streets and Routes Plan (which sometimes places desired-future-roadway widths deep into private property) to contend the City already owns most of the frontage around town anyway, so why should the City have to pay for the mere formality of transferring title to itself?

Fortunately, the Schmidts' lawyers were prepared. Coalson had completed a market study of construction aggregates and concluded supply did not match anticipated future demand, making the county likely to permit more mining operations in the near future. Anderson conducted an empirical study of mining permitting in the county and found mining operations had been permitted at a rate of 71.4%, and therefore concluded the likelihood of the Schmidt property being permitted for mining was reasonably probable. First hurdle: cleared. 

The second hurdle Schmidt had to clear was properly valuing a vacant piece of property at its highest-and-best use as a mining operation when few comparable sales of such property existed. Appraisers use three approaches to valuation: the comparable sales approach (find other properties sold recently similar to the subject property and use those sales prices to extrapolate the subject property's value), the cost approach (vacant land value + depreciated cost to reconstruct improvements = subject property's value), and the income approach (present value of income stream realizable from subject property = subject property's value). Since the comparable sales and cost approaches were not feasible, Anderson conducted an income approach.

Using the income approach in eminent domain cases is tricky. First, in California and Arizona, the appraiser should show that the comparable sales approach is not viable for the subject property. Anderson did this. Then the appraiser must avoid two traps the courts prohibit: using estimated business profits as a proxy for income and extracting the value of the land from the profits from a hypothetical sale of the hypothetically developed property. The income approach must reflect value as extrapolated from the income derived from the real estate, not the income derived from the business on the real estate. 

Presenting a quality opinion of value using the income approach is where the synergy between Coalson and Anderson shone through. First, Coalson testified that mining companies pay landowners a royalty rate on the materials the mining company extracts, which Coalson stated would be 15 percent for the Schmidt property. This was based on Coalson's supply/demand analysis. Coalson also provided a CALTRANS-sponsored study for which Coalson was on the technical review panel that stated the future price for the mined materials would be $15 per ton.

Unlock large jury verdicts with the right expert witnesses and lawyer.

Anderson reduced Coalson's $15 per ton rate to $11 per ton to reflect the uncertainty of securing the proper permits. Anderson then took the 15% royalty rate, $11 per ton, and 2 million ton per year capacity of the Schmidt property and determined the Schmidt property aggregate mine would result in a $3.3 million per year income stream to the property owner. Then, to arrive at a final value, Anderson used an 8.5% discount rate (reduced yet again to account for more uncertainty with the permitting process) to determine the present value of a $3.3 million per year income stream. The final value of the property, or, in other words, what a person would pay for a property with a potential income stream of $3.3 million per year, was $10,359,000. 

The jury believed Coalson and Anderson and found SDG&E must pay $8,034,000 of the $10,359,000 for taking the Schmidts' property. Second hurdle: cleared.

Getting the valuation problem right in an eminent domain case is vital. If you have the right expert witnesses, even the thorniest valuation issues can go very smoothly. However, if your lawyer does not understand what is required or if the expert witness presentation is missing a key piece, the jury can struggle to find its path to a large verdict. San Diego Gas & Electric Company v. Schmidt is a good reminder to check to be sure all of the expert testimony you will present forms a coherent whole that makes it easy for the jury to justify a large award. 

August 2014 Updates - Implied Easements and Easement Disputes: A Success Story

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In July, I successfully defended two property owners against an interesting claim their neighbor made for an implied easement by way of necessity over their properties.

In Arizona, as in most states, an implied easement arises over the portion of an original parcel that retains access to a public street if the original parcel is split in two and the split results in one parcel losing access to the public road network. The slideshow below demonstrates the concept using three parcels instead of two. Note that these properties are for example only; they are not the properties involved in the litigation:

 
 

In the litigated case, the owner of the landlocked parcel (similar to Parcel B in the above example) claimed an implied easement over properties that had once been held in common ownership (such as Parcels B and C in the example). However, two important subsequent transactions had occurred that made this litigation more interesting than the typical implied easement case. The owner of the landlocked parcel subsequently purchased adjacent property having access to the public road network, but then, for unknown reasons,  sold that adjacent property, leaving the parcel again landlocked. This slideshow illustrates the two further transactions:

 
 

I was successful in arguing on summary judgment the Pima County Superior Court should apply the same logic an appeals court in Florida used in a similar case to hold that an implied easement by way of necessity disappears if the landlocked parcel subsequently gains access to the public road network and again loses it. A landlocked parcel owner should not be able to "reinvigorate" implied easements arising out of necessity if the landlocked parcel owner had previously solved his or her access issue but subsequently recreated the same problem of his or her own free will.

Implied easements present an interesting land use issue that arises more often than one would think. Having an experienced real estate attorney whom you trust can help resolve these disputes favorably before the litigation gets out of control.