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SMART, land owners at odds over Petaluma station site

By LORI A. CARTER
THE PRESS DEMOCRAT

The owners of property identified as a future SMART train station in northeast Petaluma say the rail agency has driven them into foreclosure with unfair practices.

Aerial view of the SMART station site off Corona Road (BING MAPS)

The lawyer for longtime owners Patti and Clinton Gow and Robin and Larry Drew said they have lost several commercial tenants on the 6.5-acre site at Corona Road and North McDowell Boulevard.

“It’s been stated from beginning that it is going to be one of the locations” that SMART wants to acquire, said attorney Bob Oliker of Petaluma. “But SMART has never cut a deal, condemned the property, bought it or walked away from the property.

“They’re really holding the property owners hostage.”

Sonoma County Supervisor Valerie Brown, chair of the SMART board, said her agency didn’t cause the property owners’ financial troubles.

“I’m sorry that they put their eggs in that basket, but I think we have acted reasonably,” she said. “We are a public agency using taxpayer funds and want to make sure those funds are being used for the right thing.”

SMART and other public agencies own most of the planned station sites for the line, but not the Corona Road plot. SMART has promoted it as a station site since at least 2005. In May of that year, SMART representatives said the Petaluma site would be among the first land acquisitions.

Preliminary designs have been done for a Corona Road station, along with 13 others along the planned route from Cloverdale to Larkspur. Community meetings have been held in Petaluma on how the station should be designed.

Still, Brown said, the Corona station, which has been deferred as part of cost-saving measures, “isn’t even in the game” as far as real estate negotiations go.

“Even the details of the sites we’ve decided to include are still up in the air,” she said. “A lot of the particulars for every of those sites are still to be determined.”

Oliker said SMART has completed an appraisal of the property, but hasn’t entered into lease or purchase options with the property owners.

That has scared off existing and potential tenants because of the uncertainty of how long they would be able to operate there, he said.

The owners contend that they have lost more than half of their commercial tenants and have lost out on development deals for the property because SMART has discouraged potential partners.

“It is very common for these things to take time,” Oliker said. “Public agencies have a lot of leeway under the law to do their planning, and that’s appropriate and the property owners have to deal with it.

“But there is a time where it becomes unreasonable,” he said. “It’s been at least five years and SMART won’t commit to buy, but won’t let them sell or develop it, and that becomes unreasonable.”

The lost income has caused the owners, all longtime Petalumans, to fall behind on mortgage payments, said their lender, Jeff Mayne of Excel Mortgage Solutions in Petaluma.

The property fell into foreclosure this summer and was slated to be auctioned off last month.

According to Sonoma County records, the site has an assessed value of $824,069, while the he mortgage and interest due is $925,000, according to Redwood Trust Deed Services Inc. of Santa Rosa, which has been hired to conduct the auction.

The auction was canceled as the owners explored their options, Mayne said this week.

On Monday, Mayne sought help for the owners from the Petaluma City Council.

“They’ve been in contract several times with developers and each one of which has reached out to SMART and tried to cooperate in a development that would include a train depo,” he said. “According to at least one of those developers, they were rebuffed even after they offered a multi-story parking garage.”

Councilman Mike Healy, a former SMART board member, said, “We all recognize that SMART has its own financial constraints these days. But if the property owners are willing to enter into a lease option or purchase option, that might be something that would work for SMART.”

He said a deal could solve multiple problems. It would firm up the site and possibly give SMART room for a temporary storage and maintenance yard.

“And third, if there is a claim that they interfered with the property owners’ ability to do anything with it by identifying it as a station site for the last year and thus scared off potential purchasers, an agreement would solve that,” he said.

SMART authorized a bid for the property when it was scheduled for foreclosure auction on July 21, Brown said. Mayne said the opening minimum offer was $925,000.

Due in part to that knowledge, Oliker called SMART’s delays improper.

“For them to not work with the owners and then try to pick it up for a fraction of its fair value isn’t right,” he said. “They’re still out there looking as if they’re going to buy, but they are waiting to swoop down and pick it up at for as little as they can, and that’s not way government should do business.”

According to SMART documents, its property acquisition plan includes negotiating with property owners before ultimately moving to condemn the property under eminent domain laws.

“SMART will make every effort to acquire property rights through a negotiated agreement with mutually acceptable terms, and avoid future litigation,” the guidelines state. “If both parties cannot resolve the terms of an agreement through a negotiated settlement, SMART will complete the acquisition by eminent domain to further advance the project toward completion.”

Oliker said he is exploring legal options under a property-rights precedent set by the state Supreme Court.

“If a public agency acts unreasonably in dealing with a parcel it intends to acquire, it can be liable for damages,” he said. “It appears to me that SMART has not acted reasonably with these property owners.”

Brown disagreed.

“Corona wasn’t even in our picture,” she said. “It was certainly put in a place a long time ago, but it wasn’t something we were actively thinking about until this foreclosure came up.”





18 Responses to “SMART, land owners at odds over Petaluma station site”

  1. A. Shibboleth says:

    What makes the powers steering this SMART thing becoming a pipedream of a concoction so smart? I have to guess? What are these tracks for, people or freight, what is the priority, gravel or people?

    I can’t figure it out. Is it going to be a slow moving, fast polluting disaster.

    Aww yes I remember now, the priority of this single track train to nowhere is not for people. But people’s tax money is required for the fairy tale freight hauling abilities of a washed out set of train tracks.
    There is the problem! No stated reason for the single tracks. If this were a BART say fer instance, then we would know exactly what the tracks are going to be for, right now we don’t really know if SMART wants or does not want this property for freight warehouses or people boarding stations.

    Hahaha.

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  2. Dan says:

    Sounds like Val Brown is quite the vacillator: Smart is not interested, but yes we are, unless of course we aren’t.

    Thumb up 7 Thumb down 1

  3. Chuck H. says:

    Response to Barry Buckley: You’re actually making more of a case why this is shaping up as a bad faith deal. Property in the surrounding area should be attractive due to this possible development but these poor folks are seeing their value decline and not entirely due to the economy. SMART wants their land. Why would I want to put a business in a place where I would have to possibly relocate in 1-2 years?

    I had a friend in L.A. that was facing Eminent Domain on his house when they were planning the Century Freeway. He sold his house to the county without feeling under duress because they made a fair market offer. SMART is getting a bargain because they created the conditions for the bargain. A fair offer on this property should be in order rather than being the Alpha Vulture at the foreclosure auction they’ve helped arrange.

    Barry, imagine waking up and reading in the PD that SMART was now planning to take your house and property within 5 years and see if the real estate agents flock to your door in this economy. You’d think we’ve come a long ways from 19th century robber barons when it comes to a land grab for trains but maybe not…

    Thumb up 24 Thumb down 2

  4. Common Sense says:

    Who would rent, invest in re-development or buy a track of land that has been documented as a future depot sight? No one, period. SMART has been publically asserting that this spot was on it’s list for years. They know they are in a position of strenght and they have used it to devalue the property and obtain it by the cheapest means possible. But, since it’s for the public good, it’s somehow justified or ok. Really, why is that? Especially, for a project that quite frankly isn’t necessary, or sustainable for even funded at this point. Either buy or let them have it.

    Thumb up 23 Thumb down 1

  5. John Parnell says:

    Val Brown makes two very disturbing comments in this article, which I hope everyone in her district remembers at the ballot box.

    1.) “I’m sorry that they put their eggs in that basket” – what basket is that – that they bought land? Yes, it is too bad that these two couples bought privately-owned land, which Ms. Brown was able to take from them. Maybe we should eminent domain Val Brown’s house?

    2.) She says this property “isn’t in the game”, which is a blatant lie. Didn’t SMART just announce that they were going to spend $1 million on it at the foreclosure auction? It’s been in the plan for how many years? How many people have they scared away, because they said that they were going to take it.

    It was bad enough when Val Brown said the other day that she didn’t care about 30% of her constituents. But I tend to think that the issue above is going to cost her the rest of her constituents. And if it doesn’t, it really should, because people like Val Brown should not be elected to represent us in any office, because it is quite obvious she doesn’t represent anybody but herself & SMART.

    Thumb up 27 Thumb down 1

  6. Barry Buckley says:

    I remember reading comments to the SMART draft EIR from these property owners stating their wish to resolve the development issues with regard to this property back in 2005. However, SMART had no authority to make a deal before the fall of 2008. In the meantime, they’ve had quite a lot on their plate.

    To blame SMART is ridiculous. SMART is not run by people who are trying to maximize a return on a private investment. As a matter of fact, you could argue that SMART would be negligent to overpay for something they can get at a bargain. And if I were being forced into a business deal by the threat of a lawsuit, I would be very reluctant to participate.

    The property value did not go down because of the possibility the site would be obtained by eminent domain. It went down, just as every other piece of property did, because of the economy. In the long term, the value of that whole part of town will go up significantly due to the traffic a rail station will generate.

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  7. Pearl Alquileres says:

    “A government big enough to give you everything you want is a government big enough to take from you everything you have.”

    Thumb up 24 Thumb down 2

  8. Joyce Garcia says:

    @ elroy “We have waited a long time for SMART to start and now this. We need to stand up for our beloved project. We have paid the money.”?????

    What about those people who are losing their homes they worked for? Your beloved project is more precious than you neighbor? Than people?

    Like I said people…the time to stand up is NOW! There are others who are working hard and making progress, but they can not do it without you! Stand up against the mindset of people like Elroy and Valerie who believe fruitless projects like this is worth more than you!

    http://www.facebook.com/StopSmart

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  9. Rosa Koire says:

    This is a potential ‘Klopping’ case, so-called after Klopping v. City of Whittier. Whether there was a ‘firm intention’ of acquiring the property for the station is a matter to be determined by the court. The County of Sonoma has placed the taxpayers in a vulnerable position with their actions concerning this property.

    “the court concluded that in order to prove inequitable precondemnation activities, the city must have either instituted eminent domain proceedings, or be acting with the “firm intention” of doing so. Only then does the rule from Klopping v. City of Whittier, 8 Cal.3d 39 (1972) kick in, and the city becomes liable if it either delays instituting the condemnation, or commences and abandons condemnation proceedings:

    As Klopping made clear, to assert a claim for inverse condemnation under its rationale, the plaintiff must establish first, that the public entity engaged in unreasonable activity, either by excessively delaying initiation of an eminent domain action or by other oppressive conduct; and second, that the offensive conduct was a precursor to the entity’s condemnation of the plaintiff’s property for a public purpose.

    “In short, a claim for precondemnation damages under Klopping “is not akin to a court-created private right of action enabling property owners to collect damages whenever a [public entity] acts ‘unreasonably.’” (Redevelopment Agency of San Diego v. Mesdaq (2007) 154 Cal.App.4th 1111, 1135.) Rather, there must be a finding of “unreasonable precondemnation activity . . . before liability can be imposed on the basis of Klopping.” (Briggs v. State of California ex rel. Dept. Parks & Recreation (1979) 98 Cal.App.3d 190, 206.)”

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  10. Joyce Garcia says:

    “We are a public agency using taxpayer funds and want to make sure those funds are being used for the right thing.”

    If Valerie really wants to make sure those funds are being used for the right thing, she would make sure the “Community meetings” actually have people from the community in attendance! I attend these so called “Community meetings” where it may seem like a success, until you realize a majority of people who are there have some kind of stake in the project. It’s a scam and it is coming apart at the seams.

    If Valerie really wants to do the right thing, she would fight for these people who are in danger of losing their homes and their property rather than dismissing and disrespecting them with statements like, “I’m sorry that they put their eggs in that basket…”

    Start paying attention to what is going on in your backyard! Quit waiting for someone else to do something about your outrage. Don’t wait until this happens to you, your family member, friend or neighbor. Our neighbors are losing their homes and life’s work because of the agenda of the heartless elitist’s who have convinced the sheep to go along with the lies and trickery because the can be bought for promises of a title!

    If Valerie really wants to do what is right, she might consider a different line of work.

    What a piece of work!

    Thumb up 29 Thumb down 1

  11. John Hudson says:

    I know one of the owners. He told me that SMART notified the tenants on the property that SMART was going to take it over for a station and that they should move. He is not my client.

    Thumb up 27 Thumb down 2

  12. elroy says:

    We have waited a long time for SMART to start and now this. We need to stand up for our beloved project. We have paid the money.

    Thumb up 3 Thumb down 31

  13. David says:

    “I’m sorry that they put their eggs in that basket, but I think we have acted reasonably,” she said. “We are a public agency using taxpayer funds and want to make sure those funds are being used for the right thing.”

    If Valerie Brown really believed this, she would stop all work on the DUMB train!

    Thumb up 24 Thumb down 1

  14. Get Off the Train says:

    If the Chairman of the SMART Board, Valerie Brown, was concerned about spending taxpayers dollars she would have voted to shutdown SMART years ago.

    These SMART Board members are the most unsmart politicans I have ever heard. With Brown watching taxpayer funds at SMART and the Board of Supervisors, we taxpayers have been in trouble for a long time. It is no wonder the budgets at both agencies are overspending and underestimating costs.

    This whole Petaluma Corona Road train station has become a typical SMART fiasco, saying one thing and doing something else. Think a train running from Cloverdale to Larkspur. Or train service starting in 2014.

    Politicans can’t keep their mouths shut or their brains in gear. That is certainly the case for our not so SMART Board.

    Thumb up 25 Thumb down 1

  15. Chuck H. says:

    Valerie Brown needs to be careful with her oratory on this one or she could get the SMART board in a big heap of trouble here.

    SMART and their station site intentions have been on public record and in the papers for a long time. I’m sure a smart (no pun intended) attorney will simply count the number of articles that the board has mentioned the site to make people aware of the seriousness of their possible selection of it. If these intentions have truly been around for 5+ years then the property owners will have some teeth in moving forward with a bad faith claim.

    Talk publicly at length about taking over a property, chase off possible suitors which devalues the asset then buy it later on the cheap when it goes into foreclosure. The Mafia must even be impressed with such a shakedown. And SMART should think long and hard before buying this property now.

    Thumb up 35 Thumb down 4

  16. BigDogatPlay says:

    The property owners are in the middle of a classic freeze out. No one will rent because of SMART being able to seize the land (who knows when) through eminent domain, and since they’ve no income potential the owners can’t pay the mortgage.

    Supervisor Brown’s patina of transparency is not covering the agency’s BS one iota on this issue.

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  17. Phil Maher says:

    Wow! Again Valerie Brown opens her mouth and shows her arrogance and lack of empathy for all who might stand in the way of SMART. I have no reservations about calling her and her ilk mean-spirited and dangerously self-serving. SMART needs to go, quickly followed by the likes of people who demonstrate time and time again that they have no qualms about ruining whatever and whoever they please. This should not ever be considered some twisted version of the “right thing” or politics as usual, and we should not ever expect them to stop until we stop them. How many of our fellow citizens and how much of our money has to be sacrificed for us to realize this? Do we now measure the successes of our leaders by how much of the damage they created they can capitalize on, or by how big a stick they carry? Is the end justified by the means of reliance on thuggery and bullying in order to get what you want?

    “I’m sorry that they put their eggs in that basket, but I think we have acted reasonably,” she said. “We are a public agency using taxpayer funds and want to make sure those funds are being used for the right thing.”
    What basket, Valerie? Do you mean the one in which they thought that SMART would negotiate in good-faith, or is it the one in which they were foolish enough to dare to own a piece of property that they rightly hoped to develop or sell in order to make a living, but that SMART wanted to tie up for their own purposes?
    And then there’s this- “Corona wasn’t even in our picture,” she said. “It was certainly put in a place a long time ago, but it wasn’t something we were actively thinking about until this foreclosure came up.”
    I disagree. The Corona Rd station site was the only piece of property that SMART doesn’t own, and, as SMART is so fond of pointing out themselves, sometimes these types of projects take time, as does facilitating someone’s ruination. No Valerie, this parcel on Corona Rd is still very much in the plan http://www.sonomamarintrain.org/index.php/stations/petaluma. All that’s changed is that it was “deferred” because it didn’t fit into the TOD requirements for the MTC bailout and it took a little time to beat the owners and their prospective suitors into submission. If SMART really doesn’t have any immediate interest in, or need for the property, simply walk away and let these people exercise their property rights in a way that serves them best, then come back to it when necessary. All you would be doing is giving them the same benefit of the doubt that SMART has asked all of us for so many times over the years. And in case it escaped you, that’s what most of us call the “right thing” to do.

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  18. Steveguy says:

    “Corona wasn’t even in our picture,” she said. “It was certainly put in a place a long time ago, but it wasn’t something we were actively thinking about until this foreclosure came up.”

    Classic double-speak.

    SMART took this property hostage, and have done harm to the owners. I wouldn’t enter into a long term place for a business with the property being bandied about for Eminent Domain, etc.

    I can almost hear the paper shredders at SMART working overtime.

    Thumb up 38 Thumb down 4

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