Court rejects suit by SLO hoteliers whose property was taken through eminent domain

Rose Garden Inn owners claim city underpaid them in eminent domain case

nwilson@thetribunenews.comAugust 24, 2010 

A pair of local hotel owners seeking more than $1 million in compensation for property the city of San Luis Obispo took through eminent domain lost a court appeal last week.

Wayne and Mary Jane Hanson filed an appeal to California’s 2nd District Court of Appeals after a local jury awarded them about $228,000 in 2008 for roughly a quarter-acre of land at the Rose Garden Inn taken by the city.

The Hansons’ property where they operate the inn consists of about 2.4 acres. The city also is required to pay up to $50,000 to build two driveways.

The Hansons sought nearly $1.2 million in “severance damages” to renovate the inn and make it attractive from the new road in addition to other improvements.

The city and property owners agreed the land taken by eminent domain is worth $140,000, according to the appellate court decision.

The Hansons filed the appeal on several legal grounds, including that Costco’s private benefit outweighed the public necessity of the new road.

Costco advanced the city the cost of purchase of the Hansons’ property as part of an agreement to build its nearby warehouse store and paid for the appraiser.

But the court ruled that evidence showed that a need for a new road had existed for years, before the eminent domain procedure, to avoid confusion, congestion and collisions.

The traffic problems had occurred because the Highway 101 southbound on-ramp previously overlapped with Calle Joaquin South.

The city decided to realign Calle Joaquin South to run behind the inn, away from the Los Osos Valley Road interchange.

“The city is glad that the court of appeal and trial court agreed with us,” said Todd A. Amspoker, the city’s attorney.

“We’re pleased all the city’s activities were vindicated.”

But the Hansons continue to believe they were treated improperly, according to their attorney, Michael M. Berger.

“I don’t think the compensation is adequate,” Berger said. “I don’t think the owners were dealt with (fairly).”

The city offered the Hansons $400,000 for the property before the trial in 2008; they rejected the offer, saying they deserved significantly more in compensation, according to the appellate court decision.

The court ruled that the inn’s front and rear remained the same after the new road was built and that no change in its appearance affected business.

The inn still is visible from the highway, the decision states.

Berger said his clients must make a decision within a few weeks to file an appeal to the California Supreme Court.

The approximately $228,000 the Hansons are owed by the city under the trial court award is being held in a deposit until the appeals process is complete, according to attorneys.

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