California Eminent Domain Report

When Governor Brown eliminated California’s redevelopment agencies with one swipe of his pen (OK, fine, he had a bit of help from the California Supreme Court as well), one of the things that got a bit lost in the ensuing chaos is the fact that California’s redevelopment law had evolved over the decades, becoming hopelessly intertwined with any number of other laws.

One such law is the Polanco Act, Health and Safety Code sections 33459 et seq.  The Polanco Act provided the government with tools to clean up contaminated property.  More specifically, it allowed the government either to force property owners to clean up their properties or to clean the properties themselves and then charge the owners for the clean-up costs, along with attorneys’ fees.  But there is a bit of a problem.

The act generally referred to as the Polanco Act is technically called the Polanco Redevelopment Act.  What’s the big deal, you ask?  Well, the big deal is that redevelopment agencies were the only ones empowered under the Act to implement it.  But now we have no redevelopment agencies and, as a result, while the Polanco Act is still on the books, there is no agency empowered to do anything to use it. 

This is where AB 440 comes into play.  The law, signed by Governor Brown last month, essentially creates Polanco Act 2.0 by providing that other government agencies can implement most of the original Act’s provisions.  There are a few twists, however. 

On the one hand, local agencies seeking to implement AB 440’s provisions do not have the power to acquire the contaminated properties, as redevelopment agencies could do in the past.  Rather, agencies are limited to a right to enter onto those properties in order to facilitate clean-up efforts.  In other words, agencies under AB 440 don’t have quite the power redevelopment agencies had under the original Act.

On the other hand, under the original Act, redevelopment agencies could only act with respect to properties falling within a designated redevelopment area.  Agencies using AB 440 face no such limitation.  Instead, agencies can implement AB 440’s provisions with respect to any property the agency declares to be blighted.  And much like many of the complaints concerning redevelopment, the legislature’s definition of blighted is subject to a fair amount of interpretation.  Blighted properties are those with the presence or perceived presence of a release or releases of hazardous material that contributes to the vacancies, abandonment of property, or reduction or lack of property utilization of property. 

One other key feature of AB 440 is that it provides immunity for agencies, subsequent property owners, and their lenders, from environmental liability once a clean-up effort is approved by the Department of Toxic Substances Control (DTSC) and/or Regional Water Quality Control Board. 

The law takes effect January 1, 2014.