The California High-Speed Rail Project was authorized by the State Legislature and signed by Governor Arnold Schwarzenegger on August 26, 2008. The bill was submitted to California voters and approved.
The first phase of the Project was to link San Francisco with Los Angeles and Anaheim. Up tot 24 stations were authorized. Phase 2 was to extend north from the Central Valley to Sacramento and east from Los Angeles through Inland Empire and then south to San Diego. The total system length would have been approximately 800 miles.
The Project ran into huge problems. The voters approved what was supposed to be a $33 billion railroad completed by 2020. The cost exploded to an estimated $77 billion and the current completion date estimate is 2033.
Hundreds of lawsuits over environmental concerns and the rail authority’s condemnations have jammed court dockets for years.
The State Public Works Board adopted 192 resolutions declaring a public need to use eminent domain or condemnation to acquire about 425 acres of land in the Valley. The State followed up by filing more than fifty eminent domain law suits against property owners.
The California High-Speed Rail Authority now owns more than 1,272 parcels over a 119-mile corridor of abandoned commercial buildings, vacant lots, dying orchards, boarded up homes and construction sites. It has been called an eyesore and a magnet for criminal activity.
According to an article in the Los Angeles Times, the “Bullet Train” land acquisitions are moving very slowly.”
There appears to be but one Judge assigned to hear the eminent domain claims. He is 85 years old and was previously retired and hears cases once a month. He reported that he was originally told that it may take a year, “now I think it may take a lifetime.” The land is fertile farm land used for walnut, almond and grape cultivation. The Authority estimated it would cost $332 million to acquire the route spanning the Central Valley’s orchards, vineyards, and dairies. The budget is now $1.5 billion. And, there are still open claims.
In a New York Times article dated February 25, 2019, the Times posed the question, “Can America Still Build Big? A California Rail Project Raises Doubts.” California’s new governor, Gavin Newsom, announced that the Project, which was expected to connect the Central Valley to Silicon Valley, would be dramatically scaled back because of exorbitant costs. The train would begin and end in the Central Valley with no connection to the coast, where most of the region’s people and opportunities reside. The Project was troubled by repeated delays and cost overruns. The overall cost, estimated at around $45 billion, has now swelled to $98 billion.
To make things worse, the U.S. Transportation Department said it will cancel $929 million in federal grant funds awarded by the Obama administration for the Project and is “actively exploring every legal option” to seek the return of $2.5 billion the State has already received.
What happens to the property already condemned? According to California eminent domain expert, Edward G. Burg, Esq. of Manatt, Phelps & Phillips, LLP, in California, the property owner can object to an abandonment if it has irrevocably changed its position. And there is the repurchase right of first refusal in favor of the former owner if the property has not been used for the Project after 10 years. Mr. Burg noted that with regard to the Bullet Train Project, there was no property condemned outside the “nowhere to nowhere” range that will be built.
In New York, Section 406 of the EDPL provides that if the condemnor abandons the project within ten years of acquisition, it is to be offered to the former fee owner who has a right of first refusal to purchase the property at the fair market value at the time.