Fair market value? Water district invokes eminent domain

Tree farm owner seeks nearly $40,000 for his 1/4 acre; NID offered $9,400
By: Lien Hoang Journal Correspondent
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Robert Hane and his Christmas tree farm got an unwelcome gift Wednesday from the Nevada Irrigation District The water agency board voted 4-1 in favor of eminent domain to build a water pipe through his property. “There was no way during the meeting that we could reach a compromise,” Hane, 65, said. Both parties said litigation has become the only option now that negotiations have sputtered to a halt. On one side is Hane, who owns the Pine Valley Ranch Christmas tree farm in Auburn and wants nearly $40,000 for the quarter acre that would be affected. Approximately $19,000 of that was the land’s market value, based on a 2009 appraisal, and another $19,000 represents the revenue he’s losing because he can’t plant trees where the pipe would run. On the other side is the NID, which offered $9,400 to mitigate the drop in property value — rather than the entire property value — once the pipe is in place. The $9,400 figure is derived from a second appraisal conducted in March. Though some members were sympathetic to Hane’s revenue loss, the NID board of directors ultimately rejected his request to be compensated for it. “He definitely has a legitimate complaint there,” said director Jim Bachman, who represents the district where Hane owns land. “But the appraisers did not recognize that ... and we’re bound by the appraisals.” Director Nancy Weber agreed with the complaint; she voted against the eminent domain resolution. “I was concerned that we were not adequately reimbursing Mr. Hane for the loss of the use of his property,” she said, referring to his “inability to plant trees.” She cited a letter by the county’s agricultural commissioner, Christine Turner, who wrote to the board in April, “Reasonable compensation for the loss in future production that NID’s easement represents to Mr. Hane is only fair and just.” Her position doesn’t mesh with the second appraisal, which states that “typically no loss in value is considered for trees which have not been planted.” But Hane said he didn’t go through with plans to plant trees because in 2007 the NID told him of the impending irrigation project. As the first appraisal said, “in the after condition Christmas trees would not be permitted within the take.” Fundamental to the predicament is which ruler to use in measuring the remuneration Hane deserves. The NID is sticking to the first appraisal’s note that “compensation is measured as being the difference between the value of the whole property before the take, and the value of the remainder after the take” - in other words, the final offer of $9,400. Conversely, Hane insists the NID pay the California Code of Civil Procedure’s definition of fair market value, “the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing ... and a buyer, being ready, willing, and able to buy.” The board refused to pay market value - after all, it is not purchasing the land, but seeking an easement, to use it under his name. As the second appraisal describes it, “The District and landowner will have shared stewardship of the easement area. The landowner (Grantor) retains all the normal responsibilities of ownership, ie., property taxes, insurance, maintenance and management.”