City of Escondido v. Pacific Harmony Grove Development, LLC

Facts: A local agency adopts an ordinance requiring the dedication of a portion of a parcel for construction of a road. The owner does not develop the property. The local agency takes the portion of the land by eminent domain for the construction of a road. The local agency values the property at its current undeveloped condition as the price they pay to the owner for the taking.

Claims: The owner seeks compensation based on the highest and best use valuation, claiming the local agency by ordinance imposed dedication requirements on the development of the property after the city determined a road through the parcel was necessary.

Counterclaim: The local agency claims the basis for the value of the land taken is its undeveloped condition since the local agency determined a road was to be constructed on the parcel before taking it by eminent domain.

Holding: A California appeals court holds the price due the owner for the taking is its value as an undeveloped portion of a parcel of property since the agency intended the parcel was to contain a road before the agency took the property by eminent domain proceedings to construct the road. [City of Escondido v. Pacific harmony Grove Development, LLC (2021) 68 CA5th 213]

Editor’s note — When a dedication requirement arises before the date of probable inclusion (the date it becomes reasonably probably the city will acquire the parcel by purchase or condemnation rather than by dedication to mitigate development impacts), valuing the land in its current undeveloped state applies; when the date of probable inclusion arises later, the land is valued at its highest and best use.

Read City of Escondido v. Pacific Harmony Grove Development, LLC in full here.

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Legal Aspects

Chapter 1: California real estate law