Court Opinion

ID: 4879267
Source: CourtListenerOpinion
Date Created: 2021-08-26 21:05:18.141905+00
Date Added: 2024-06-11T08:12:39.256832
License: Public Domain

Filed 8/26/21
                        CERTIFIED FOR PUBLICATION

                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                               DIVISION ONE

                           STATE OF CALIFORNIA

CITY OF ESCONDIDO,                          D077549

       Plaintiff and Respondent,

       v.                                   (Super. Ct. No. 37-2016-
                                            00010237-CU-EI-NC)
PACIFIC HARMONY GROVE
DEVELOPMENT, LLC, et al.,

       Defendants and Appellants.

       APPEAL from a judgment of the Superior Court of San Diego County,
Jacqueline M. Stern, Judge. Affirmed.
       Blanchard Krasner & French, Steven M Silva, John F. Whittemore;
Morrison & Foerster, Benjamin J. Fox, Matthew E. Ladew, Mark C.
Zebrowski and James R. Sigel for Defendants and Appellants.
       Dean Gazzo Roistacher, Lee H. Roistacher, Scott Noya; Daley & Heft,
and Dennis W. Daley for Plaintiff and Respondent.

       Pacific Harmony Grove Development, LLC and Mission Valley
Corporate Center, Ltd. (Owners) appeal the judgment entered in a
condemnation case following the first phase of a bifurcated trial at which the
trial court resolved certain legal issues concerning how to value the
condemned property.
      The City of Escondido (City) sought to acquire by condemnation from
Owners a 72-foot-wide strip of land (the strip) across a mostly undeveloped
17.72-acre parcel (the Property) to join two disconnected segments of
Citracado Parkway, a major road that runs through portions of the City’s
industrial areas on either side of the Property.1 The City argued below that
the strip should be valued under the Porterville doctrine (City of Porterville
v. Young (1987) 195 Cal.App.3d 1260 (Porterville)), which values condemned
property at its undeveloped state (here, about $50,000) when the condemning
agency can establish that (1) it would have conditioned development of the
remainder of the property on dedication of the condemned portion, and
(2) such a dedication requirement would be constitutional under Nollan
v. California Coastal Commission (1987) 483 U.S. 825 (Nollan) and Dolan
v. City of Tigard (1994) 512 U.S. 374 (Dolan), which require that a dedication
requirement have an essential nexus and be roughly proportional to the
public interest that would be served by denying development approval.
      Owners argued the Porterville doctrine did not apply, and that the
court should instead apply the “project effect rule,” which disregards for
valuation purposes a condemner’s belated imposition of a dedication
requirement as a means to drive down the price of property the condemner is
likely to condemn. (See City of Perris v. Stamper (2016) 1 Cal.5th 576, 585
(Stamper); Code Civ. Proc.,2 § 1263.330.) Owners maintained the City
violated this rule by imposing dedication requirements on the Property long

1     We have appended to this opinion trial exhibits depicting the Property
and surrounding area. In exhibit 343, the Property is outlined in blue. In
exhibit 321.17, the Property is shaded.

2    Further undesignated statutory references are to the Code of Civil
Procedure.

                                       2
after it became probable that the City would condemn the strip to complete
the Citracado Parkway extension project. Thus, Owners maintained the strip
should be valued based on its highest and best use, without regard for the
dedication requirement (about $960,176).
      Owners also argued they were entitled to precondemnation damages
caused by the City’s unreasonable delay in pursuing condemnation
proceedings and other unreasonable conduct. The City countered that it did
not engage in unreasonable delay or conduct because it commenced
condemnation proceedings shortly after it annexed the Property from county
jurisdiction in 2015.
      After a four-day bench trial, the court issued a comprehensive
statement of decision ruling in the City’s favor on all issues. The parties then
stipulated to a judgment, which the court entered.
      Owners appeal, contending the trial court erred by finding the
Porterville doctrine applied, the project effect rule did not, and the City was
not liable for precondemnation damages. For reasons we will explain, we find
the City’s positions more persuasive, and affirm the judgment.
               PROCEDURAL AND FACTUAL BACKGROUND
                             Pretrial Procedure
      On March 23, 2016, the City adopted a resolution of necessity declaring
its intent to condemn the strip (and other portions of the Property not at
issue here).
      Two days later, on March 25, the City filed an eminent domain
complaint against Owners. The City deposited funds with the state treasurer
and took immediate possession of the strip.
      By stipulation, the trial court bifurcated the trial so it could determine
in the first phase whether the Porterville doctrine or project effect rule

                                        3
applied, and whether the City was liable for precondemnation damages. In
the second phase, if needed, a jury would determine the amount of
compensation and precondemnation damages the City owed Owners.
                                Trial – Phase One
Overview
        The trial court heard the first phase of trial over four days in December
2018.
        To support its position that the Porterville doctrine applied, the City
presented evidence showing (1) the City would have required Owners to
dedicate the strip in exchange for approval to develop the Property because
(a) the city enacted an ordinance in 1993 generally requiring such
dedications, (b) the City’s long-term planning documents contemplated since
2002 that Citracado Parkway would eventually connect across the Property
via the strip, and (c) the City had required other landowners in the area to
make similar dedications to mitigate the impacts of industrial development;
and (2) the dedication requirement would have been constitutional because it
(a) had an essential nexus to mitigating traffic impacts caused by
development of the Property, and (b) was roughly proportional to the extent
of those development impacts as established by traffic studies and other
analyses.
        To support their position that the project effect rule applied instead,
Owners maintained (1) it became probable that the City would condemn the
strip in 2006 because the City entered into a development agreement that
year with a hospital district and obligated itself to connect the Citracado
Parkway segments; and (2) the City’s dedication requirement did not arise
until later, when the City amended its general plan in 2012 to restrict access

                                         4
to the Property from another road, thus requiring that primary access be
taken from the Citracado Parkway extension.
      Similarly, to support their claim for precondemnation damages,
Owners maintained the 2006 agreement with the hospital district constituted
the City’s formal announcement of its intent to condemn the strip, which the
City did not fulfill until 10 years later.
The City’s Case
      Witnesses
      The City called two witnesses, both of whom were designated as
percipient and expert witnesses.
      Julie Procopio is the City’s Director of Engineering Services and City
Engineer. Her duties include reviewing development proposals to ensure
they comply with City codes and standards, and to “evaluate the . . . burdens
associated with [a proposed] development and to weigh in on how those . . .
are mitigated to insure adequate infrastructure is provided.” This includes
assessing impacts on traffic, fire and life safety, utilities, drainage, and water
quality.
      John Martin is the City’s Director of Community Development. His
duties include implementing the City’s planning documents, reviewing
project submittals, and conducting environmental reviews.
      Development and Regulatory History
      Before 2015, the Property was within County of San Diego (County)
jurisdiction, not City jurisdiction. Thus, the City could not approve its
development or impose development conditions on it.
      Nevertheless, as early as 1988, the circulation element of the City’s
general plan showed Citracado Parkway running through portions of the
Property from north to south (though not in its currently proposed

                                         5
alignment). Procopio testified that a general plan is a long-range
development plan that the state requires each city and county to maintain.
All developments within a jurisdiction must either conform to the general
plan, or amend it to allow the proposed development. A circulation element
is the component of a general plan that shows existing and proposed street
networks “intended to support the long-term orderly development of a city.”
      In 1993, the City adopted an ordinance setting forth general dedication
requirements for property developers. The ordinance provided that “[a]ny
applicant who constructs any new building . . . shall also construct public
improvements across all unimproved or underimproved frontage and shall
grant necessary public dedication.” The ordinance defined “public dedication”
as “the dedication . . . of all easements and rights of way by the applicant to
the city, in conformance with the circulation element of the general plan . . . .”
The City amended portions of this ordinance several times, but none of those
amendments substantively altered these public dedication requirements.
      Procopio testified that when a developer seeks City approval of a
project, the City reviews the proposal for completeness and compliance with
City land use requirements. This includes enforcing the 1993 ordinance by
ensuring the proposed development dedicates and constructs sufficient
infrastructure to support the development and mitigate its impacts “in
conformance with the general plan.” Procopio testified that under the
California Environmental Quality Act (CEQA), “a project would have to show
that it can mitigate its impacts or . . . the city would be compelled to deny
that project.”
      Martin similarly testified that the City would ensure that “any
development proposal . . . was in conformance with [the] general plan before
[the City] would allow approval.”

                                        6
      In the early 2000’s, Owners purchased the property directly east of the
Property (Pacific Oaks Place). In exchange for City approval to subdivide
this property into nine lots, Owners expanded Harmony Grove Road on the
property’s northern frontage, and dedicated and built a new interior
industrial classification road within the property.
      In 2002, the City approved development of “a high quality
industrial/business park,” commonly known as the Escondido Research and
Technology Corridor (ERTC), north of the Property. The City thus amended
its general plan and circulation element to reflect Citracado Parkway
running through the ERTC and eventually extending southward across the
Property in its currently proposed alignment. In exchange for development
approvals from the City, another developer in the ERTC area dedicated
portions of its properties and built portions of the northern segment of
Citracado Parkway.
      In 2006, the City entered into a development agreement with Palomar-
Pomerado Hospital District (PPH) allowing PPH to construct a new hospital
at the northern end of the ERTC. In one section of the agreement (§ 1.4.2),
the City agreed that it “shall complete, with the substantial financial support
of PPH, and subject to compliance with [CEQA], the construction and
improvement of Citracado Parkway . . . .” In another section (§ 5.6.2), the
City agreed that it “shall complete the Citracado Parkway” extension within
10 years of obtaining necessary funding (then estimated at $19 million) from
specified sources. One of those sources was “Third-Source Funding,” which
included “reimbursement from other developers who stand to benefit from the
completion of the Citracado Parkway” extension. PPH agreed to contribute
$13 million toward offsite traffic improvements.

                                       7
      Also in 2006, the City began working on an environmental impact
report (EIR) for the Citracado Parkway extension project.
      In 2007, Owners purchased the Property, which was still within County
jurisdiction. Procopio testified that the County’s “circulation element
show[ed] the same alignment” as the City’s for Citracado Parkway across the
Property. The Property was zoned for low-density residential use, and was
improved with one small house served by a dirt driveway. Owners’ general
partner, Richard Dentt, an experienced real estate developer, acknowledged
on cross-examination he conducted due diligence and was “aware before
[Owners] purchased the Property that the [City’s] circulation element of the
general plan . . . showed Citracado Parkway going through the [Property].”
      In 2009, in anticipation of the City annexing the Property into its
jurisdiction, Owners submitted a tentative map to the City proposing to
subdivide the Property into 10 lots for use as a business park (similar to what
they had done next door at Pacific Oaks Place). Owners’ proposed tentative
map showed them dedicating the strip to the City to extend Citracado
Parkway across the Property. Owners ultimately abandoned this proposal.
      In 2012, the City certified the EIR for the Citracado Parkway extension
project. The related traffic study anticipated the extension project would
generate approximately 19,400 new average daily trips.
      Also in 2012, the City amended its general plan to specify that all non-
residential properties in the southern portion of the ERTC planning area
(where the Property is located) take their primary access from Citracado
Parkway. Although this plan generally still allowed these properties to take
secondary access from Harmony Grove Road, it prohibited such access for
non-residential properties west of the proposed Citracado Parkway extension
(including the portion of the Property west of the strip). Procopio testified

                                       8
this amendment was necessitated by “feedback from the County that [such
access] needed to be prohibited,” and “because things happened” between

1990 and 2012 “that made that language necessary.”3 Procopio estimated
this 2012 amendment affected about 10 properties in the ERTC planning
area.
        In 2015, the City annexed the Property and several neighboring parcels
into City jurisdiction. As part of the annexation, the Property was “up zoned”
for industrial use. Procopio testified it was the fact the circulation element
provided for the Citracado Parkway extension through the Property that
made annexation and up zoning desirable and possible. Procopio testified the
City would have proceeded with the Citracado Parkway extension project
even without the annexation because of the project’s overall benefit to the
region.
        In 2016, when Owners still had not developed the Property, the City
commenced this action to condemn the strip. Martin testified he had not
initially anticipated having to resort to condemnation because Owners’ 2009
tentative map proposed dedicating the strip to the City.
        Rough Proportionality Analysis
        To establish under the Porterville doctrine that the City could
constitutionally have required that Owners dedicate the strip as a condition
of developing the Property, Procopio testified at length about the
Nollan/Dolan rough proportionality analysis she performed to compare the
burden to Owners of the dedication requirement against the impacts caused
by their hypothetical development of the Property. She described several
methods she used for comparison.

3     Procopio did not elaborate on the “feedback from the County” or the
“things” that “happened” between 1990 and 2012.

                                         9
      First, Procopio examined the impact that developing the Property
would have on the extension project. Using a SANDAG table of traffic-
generation estimates for developments in the San Diego region, Procopio
determined that developing the Property for a typical industrial use would
generate about 3,500 average daily trips.4 This constituted about 18 percent
of the 19,400 new daily trips the Citracado Parkway extension project was
expected to generate. Applying that 18 percent to the total project cost of
about $34 million dollars, Procopio concluded that industrial development of
the Property would result in a burden to the City of about $6 million.
Procopio opined this was “the low end of what you would expect based on the
anticipated uses,” which also included medical offices that were expected to
generate 8,500 new daily trips.
      Second, Procopio compared “the proportional length” of the extension
project on the Property (about 950 feet) with the total length of the extension
project (about 5,350 feet between the two existing segments of Citracado
Parkway). This also amounted to about an 18 percent, or $6 million, burden
to the City.
      Third, because the Property is zoned for industrial use, Procopio
determined how much it would cost Owners to build the 72-foot-wide
industrial classification road the City would require as a condition of allowing
any industrial development of the Property.5 She calculated the cost using
two methods.

4     Procopio testified she “looked at the potential list of land uses and
evaluated what . . . roadway improvements or classification would be needed
in order to serve those land uses.”

5     Procopio explained that, regardless of traffic volume, the City requires
that certain classifications of roads have certain widths so they can
                                      10
      In one method, Procopio took the City’s $5.9 million cost of constructing
the 92-foot-wide extension project from the existing northern segment of
Citracado Parkway to the southern boundary of the Property, and prorated it
to 78 percent, or $4.6 million, to reflect the fact the City would require
Owners to construct only a 72-foot-wide industrial road (72 feet is about 78
percent of 92 feet).
      In the other method, Procopio looked only at what it would cost Owners
to build a 72-foot-wide industrial road entirely within the Property
boundaries (i.e., not connecting to either existing segment of Citracado
Parkway). She opined this would cost about $2.38 million, which would
represent the “fair share” the City would ask a developer to contribute
toward construction of the extension project across the Property.
      Procopio described how the City’s construction of the extension project
would benefit the Property, including by: providing environmental,
biological, and cultural mitigation for which Owners would otherwise be
responsible when developing the Property; relocating water lines from an
easement on the Property into the extension project’s right-of-way, thereby
“giv[ing] [Owners] more developable land”; connecting water lines and
building fire hydrants; and providing better visibility and connectivity to the
transportation network. More generally, the City was prepared to build at its
own expense a road that it would otherwise require a developer to build as a
condition of developing its land.
      Procopio testified there were several reasons why the Property could
not take its access from its existing northern frontage along Harmony Grove
Road. First, the “narrow two-lane road” was already too congested under the

accommodate underground utilities, surface drainage, pedestrians, and
delivery truck and firetruck access.

                                       11
City’s rating system. Although Harmony Grove Road was currently meeting
the City’s general plan policy goal of operating at level C (relatively free-
flowing), the City projected that—apart from any development of the
Property—other approved and pending projects in the area would cause the
road to operate in the near-term at level E (“substantial congestion”), and in
the long-term at level F (“essentially gridlock”). By contrast, the Citracado
Parkway extension was anticipated to operate “[j]ust under [level] B.”
Moreover, Procopio opined it would be more efficient and less costly for
Owners to provide access to the Property via the Citracado Parkway
extension than to acquire the extensive additional land necessary to provide
industrial road access via some alternate route.
      Second, Procopio testified the Property’s “frontage is so minimal on
Harmony Grove Road” that it would not be “feasible to build an industrial
project” on the portion west of where the strip dissects it. And although the
portion east of the strip might have sufficient frontage, “that site would be
challenged by only having one access point.”
      Third, Procopio explained that the City’s 2012 general plan provided
that Harmony Grove Road could provide only secondary access to the
Property; primary access had to come from the Citracado Parkway extension.
      Procopio distinguished the Property from another development on
Harmony Grove Road that Owners claimed was comparable (the Exeter
project). Whereas the Property was largely unimproved and the circulation
element had long shown the Citracado Parkway extension running through
it, “the Exeter project [was] in a completely different situation” because its
site was already “largely improved” (because the previous owners had
dedicated and improved the roadway along the site’s frontage) and “the

                                        12
circulation element . . . didn’t show a . . . roadway down the center of the
property.”
      Additionally, even though the Exeter project site had no frontage on the
Citracado Parkway extension, the City determined the Exeter project’s
212,000 square foot warehouse would contribute 256 new daily trips to the
extension, for which the developer’s fair share contribution toward
constructing the extension was approximately $150,000 (about $590 per new
daily trip). Procopio explained that although the Property’s fair share
contribution rate would be higher because the Exeter site was already largely
improved, even applying the Exeter project’s lower $590 rate to the
Property’s projected 3,500 new daily trips on the extension would result in a
fair-share contribution exceeding $2 million.
      By any of Procopio’s Nollan/Dolan metrics, the impacts of developing
the Property exceeded the burden to Owners of dedicating the strip to
mitigate them.
Owners’ Case
      Owners’ general partner, Richard Dentt, denied the extension would
benefit the Property, and testified he “would have preferred to not have
Citracado on there and have a parcel . . . with no road going through.”
      Dentt maintained Owners could develop the Property merely by
widening Harmony Grove Road because the Property already had water and
sewer service, and Owners had done the same thing for the neighboring
Pacific Oaks Place project. He acknowledged, however, that Owners also had
to dedicate and build a 72-foot-wide interior industrial road there.
      Dentt explained that Owners’ 2009 tentative map proposal showed
them dedicating the strip only “because it was by dictate of the City.”
Owners ultimately abandoned their 2009 proposal because the City “would

                                       13
not allow [them] to process a development on the site without Citracado being
built,” and “the City didn’t have the funding nor the plans nor the
environmental approvals to build Citracado.”
      Dentt testified Owners received an unsolicited offer in 2012 to build a
12,000 square foot corporate headquarters and 140,000 square foot
warehouse on the Property. He stated the deal fell through after he told the
prospective tenant that the City was “still not to a point where [it] could
guarantee the building of Citracado.”
      In 2016, before the City filed this action, Owners began negotiating
with a brewery to lease the Property for warehouse, packaging, and delivery
truck purposes. Dentt maintained such a development could take its access
from Harmony Grove Road, and would not require “having an industrial
classification road bisecting the property.” Dentt testified that the brewery
also preferred that the extension not cross through the Property. However,
they ultimately (after this suit was filed) entered a lease “dependent on
Citracado Parkway being built.”
      Dentt opined this type of “build-to-suit with a major corporation on a
long-term lease was definitely the highest and best use” of the Property.
However, another principal of Owners testified through his deposition that if
the brewery deal went away, Owners “would just be doing whatever the
market determined that they wanted, and it could have been medical office
buildings or just about anything else.”
      Dentt estimated the strip’s value, when put to its highest and best use,
was about $960,176.
      Although Dentt believed the Property could be developed in various
ways that allowed access via Harmony Grove Road, he never addressed the
City’s evidence showing that the road was already too congested.

                                        14
      A civil engineer hired by Owners to develop a specific plan for the
Property testified there was sufficient frontage along Harmony Grove Road to
allow industrial development. He also believed it was feasible to widen
Harmony Grove Road to an industrial classification road along the Property’s
frontage. However, the engineer did not address whether Harmony Grove
Road had the capacity to handle additional traffic generated by development
of the Property.
                           Statement of Decision
      In lieu of closing arguments, the court directed the parties to submit
proposed statements of decision with citations to evidence and legal
authorities. Based on the parties’ submissions, the trial court issued a
comprehensive 15-page statement of decision, ruling in the City’s favor on all
issues.
      The court found the Porterville doctrine applied and, thus, the strip
should be valued at its unimproved state. First, the court found it was
reasonably probable the City would have required Owners to dedicate the
strip to the City as a condition of developing the Property because the City’s
1993 ordinance generally required such dedications, and Procopio testified
the City routinely enforced this ordinance, including by requiring that other
property owners in the ERTC area make similar dedications. Second, the
court found the dedication requirement would be constitutional under Nollan
and Dolan because it (1) had an essential nexus to the public purpose served
by denying development (mitigation of traffic congestion caused by the
development); and (2) was roughly proportional to the impact that
development of the Property would cause, as “established by evidence of
existing traffic levels and congestion on adjacent Harmony Grove Road, as

                                      15
well as estimates of the increased amount of traffic that would result from
commercial or industrial development of the property.”
      The court also found the project effect rule did not apply. Even
assuming it was probable that the City intended to condemn the strip in 2006
when the City agreed with PPH to complete Citracado Parkway, the court
found that the City’s 1993 dedication ordinance and 2002 circulation element
fixing the extension’s location established that the City’s dedication
requirement predated the probable inclusion date by several years. Thus, the
court found it “clear that the dedication was not put in place to drive down
the value of the property but was a preexisting requirement to mitigate the
traffic burdens created by development of the Property.”
      Finally, the trial court found Owners had not shown they were entitled
to precondemnation damages. First, the court found the City did not
unreasonably delay bringing the condemnation action because the City filed
suit two days after adopting its resolution of necessity stating its intent to
condemn the strip. Second, the court found the City’s delay in commencing
the extension project was not unreasonable because the Property was not
even within the City’s jurisdiction until 2015, Owners cited no authority
establishing the City had a duty to act more quickly, and Owners had not
pursued their 2009 proposal—or any other proposal—in the meantime.
Lastly, the court found the City caused no diminution in value because
Owners had not pursued any development opportunities between the 2015
annexation and the 2016 commencement of the condemnation suit.
                                   Judgment
      After the court issued its statement of decision, the parties stipulated
to entry of judgment awarding Owners $580,000 for all parcels identified in
the City’s complaint.

                                       16
                                DISCUSSION
I. The Porterville Doctrine Applies—The Project Effect Rule Does Not
      Owners contend the trial court erred by finding the Porterville doctrine
applies and the project effect rule does not. We disagree.
                            A. Legal Principles
      The measure of value in a condemnation case “is the fair market value
of the property taken.” (§ 1263.310; see Stamper, supra, 1 Cal.5th at p. 598.)
The Porterville doctrine and project effect rule are alternative methods for
determining fair market value when the condemned property is (or could
become) subject to a dedication requirement.
                        1. The Porterville Doctrine
      The Porterville doctrine provides that “when a city would lawfully have
conditioned development of property upon the owner’s dedication of a portion
of the property” to mitigate the impacts of the development, “the fair market
value of that portion in a subsequent condemnation action is its value in its
undeveloped, agricultural state,” rather than in its highest and best
developed state. (Stamper, supra, 1 Cal.5th at p. 599; see Porterville, supra,
195 Cal.App.3d at pp. 1267-1269.) The rationale for this rule is that because
the owner could not develop the portion of land subject to dedication, no
willing buyer would purchase that portion for more than its undeveloped
value; thus, nor should the city pay more than that. (Stamper, at p. 599.)
      For the Porterville doctrine to apply, two criteria must be met. First,
the dedication requirement must be constitutional under Nollan and Dolan.
(Stamper, supra, 1 Cal.5th at p. 600.) These cases hold that a dedication
requirement “must have an ‘essential nexus’ to the valid public purpose that
would be served by denying the development permit outright and must be
‘ “rough[ly] proportion[al]” ’ to ‘the impact of the proposed development’ at

                                       17
issue.” (Stamper, at p. 585; see Nollan, supra, 483 U.S. at p. 837; Dolan,
supra, 512 U.S. at pp. 390-391.) “No precise mathematical calculation is
required, but the city must make some sort of individualized determination
that the required dedication is related both in nature and extent to the
impact of the proposed development.” (Dolan, at p. 391; see Stamper, at
pp. 591-592.)
      Second, “it must be reasonably probable that the condemner would
actually impose the dedication requirement as a condition of development.”
(Stamper, supra, 1 Cal.5th at p. 600.)
                         2. The Project Effect Rule
      The project effect rule prohibits the fair market value of condemned
property from being influenced by the project for which the property is being
condemned. (Stamper, 1 Cal.5th at p. 600; § 1263.330.)6 Thus, for example,
“if the government is condemning property to build a reservoir, it need not
pay lakefront prices for the property. And if the government is condemning
property to build a sewage plant, it does not get a discount because its project
renders the property less desirable.” (Stamper, at p. 601.)
      Because a municipal zoning law has the potential to affect the value of
property being condemned, it will fall within the project effect rule if it was
“explicitly or implicitly enacted for the purpose of suppressing property
values before an intended taking.” (Stamper, supra, 1 Cal.5th at p. 602.)

6     The rule is codified in section 1263.330, which states: “The fair market
value of the property taken shall not include any increase or decrease in the
value of the property that is attributable to any of the following: [¶] (a) The
project for which the property is taken. [¶] (b) The eminent domain
proceeding in which the property is taken. [¶] (c) Any preliminary actions of
the plaintiff relating to the taking of the property.”

                                         18
When this occurs, the effect of the zoning law must be disregarded when
valuing the condemned property. (Ibid.)
       3. Interplay Between Porterville and the Project Effect Rule
        There is an inherent tension between the Porterville doctrine and the
project effect rule. The former allows a city’s dedication requirements to
depress the value of condemned property, while the latter prohibits it. The
California Supreme Court resolved this tension in Stamper, supra, 1 Cal.5th
576.
        The Stamper court held that “the date of probable inclusion” of the
condemned property in a public project is the dividing line between when the
Porterville doctrine and project effect rule apply. (Stamper, supra, 1 Cal.5th
at pp. 602-604.) If the dedication requirement arose before the date of
probable inclusion, the Porterville doctrine applies; if it arose after, the
project effect rule applies. (Id. at p. 603.)
        The date of probable inclusion is triggered by two requirements. First,
the city must be “engaging in a ‘project’—that is, a public work the
government intended to pursue—for which it intended to acquire property by
purchase or condemnation, if necessary, as opposed to a contingent plan to
mitigate possible development on adjacent property through dedications.”
(Stamper, supra, 1 Cal.5th at p. 603.) Second, it must be “probable [that] the
property at issue would be included in that project.” (Ibid.)
        Of particular relevance here, the Stamper court observed that when a
city’s general dedication ordinance and circulation element, in tandem,
require that a strip of land be dedicated for a roadway if the larger parcel is
ever developed, the “designation of the strip in the . . . circulation element
[does] not, in itself, establish that it [is] probable [upon adoption of the
circulation element] that the [c]ity would condemn that strip.” (Stamper,

                                         19
supra, 1 Cal.5th at pp. 603-604.) This is because “when a public agency
designates property for future public use in a planning document, it may well
expect to acquire the property through dedications in response to future
development rather than by purchase or condemnation.” (Id. at p. 604.)
      In such an instance, the determination of whether “it is probable that
the property will be included in the project” depends on factors such as
(1) “the nature and circumstances of the dedication requirement” (Stamper,
supra, 1 Cal.5th at p. 604); (2) “other evidence bearing on the reasonable
expectations of the parties” (ibid.); (3) whether the dedication requirement is
“a standard . . . requirement imposed on multiple, similarly situated
properties” (ibid.); and (4) the length of time between when “the property is
designated for public use and the time the agency first signals its intention to
condemn the property” (id. at p. 605).
      The date of probable inclusion “is for the trial court rather than the
jury to determine.” (Stamper, supra, 1 Cal.5th at p. 605.)
                                 B. Analysis
                   1. The Porterville Doctrine Applies
          (a) The Dedication Requirement is Constitutional
      Whether a dedication requirement is constitutional under Nollan and
Dolan is a “mixed question[ ] of law and fact in which the legal issues
predominate.” (Stamper, supra, 1 Cal.5th at p. 586.) “In reviewing a mixed
question of law and fact, we defer to the express or implied factual findings of
the trial court and determine the applicable legal principles de novo. The
standard which applies to the third step of the analysis, applying the law to
the facts, depends upon whether factual or legal issues predominate.
Where . . . the issue is predominately one of law, we review it de novo.”
(Border Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538,

                                         20
1554; see Ali v. City of Los Angeles (1999) 77 Cal.App.4th 246, 250.) On our
de novo review, we conclude the dedication requirement is constitutional
under Nollan and Dolan.
      The Nollan “essential nexus” test is easily satisfied here because
requiring dedication of land for a roadway in exchange for development
approval is logically related to the public interest in mitigating traffic
impacts caused by that development. (See Dolan, supra, 512 U.S. at p. 395
[“Dedications for streets, sidewalks, and other public ways are generally
reasonable exactions to avoid excessive congestion from a proposed property
use.”]; Stamper, supra, 1 Cal.5th at pp. 591-592.)
      The dedication requirement also satisfies Dolan’s rough proportionality
requirement. Procopio testified at length about the various calculations she
performed to ensure that the burdens of the City’s dedication requirement did
not exceed the impacts caused by developing the Property.
      Most notably, Procopio testified that because the Property was zoned
for industrial use, the City would condition any development of the Property
on dedication and construction of an industrial classification road. She
estimated it would cost $2.38 million to build such a road entirely within the
Property, and $4.6 million to build such a road that connected to the existing
northern segment of Citracado Parkway. The City’s construction of the
extension project across the Property would spare Owners this expense,
which the City would otherwise demand as Owners’ fair share contribution.
In contrast to this benefit, the dedication requirement would burden Owners
either $50,000 (under the City’s valuation) or $960,176 (under Owners’
valuation). Even the most favorable comparison for Owners—a $2.38 million
benefit versus a $960,176 burden—shows that the City’s dedication
requirement is not disproportionate.

                                        21
      Owners do not really take issue with these numbers. Instead, they
argue that an industrial classification road across the Property is
unnecessary because the Property already has sufficient frontage along
Harmony Grove Road, which they could widen to industrial classification
standards. But this ignores the City’s evidence showing that Harmony Grove
Road is already overburdened apart from any development of the Property.
Approving further development along a road that is already expected to
suffer from “substantial congestion” (level E) in the near term and
“essentially gridlock” (level F) in the long term would violate the general
plan’s policy goal of providing service at level C. As Procopio and Martin both
testified, the City requires that all development proposals conform to the
general plan.
      Procopio also testified that under SANDAG traffic-generation
estimates, development of the Property for the range of uses allowed by its
industrial zoning would likely result in 3,500 average daily trips, which
represents about 18 percent of the Citracado Parkway extension’s traffic
volume, equating to about $6 million of the project’s $34 million overall cost.
And this was “the low end of what you would expect based on the anticipated
uses” for the Property. Again, the burden on Owners under this measure is
not disproportionate to the impacts of development.
      Owners have several complaints about Procopio’s traffic estimates.
First, they assert she improperly based her estimates on Owners’ 2009
proposal to subdivide the Property, which Owners maintain is a more
intensive use than other alternatives. But Procopio explained she based her
estimates on the whole range of uses permitted by the Property’s industrial
zoning, not just on Owners’ 2009 proposal.

                                       22
      Second, Owners contend that although Procopio estimated traffic
impacts for some hypothetical industrial developments of the Property, her
analysis was deficient because she failed to consider every conceivable
industrial development. For example, they assert she failed to consider that
“multiple companies had approached [Owners] since 2009 with proposals to
construct a single large building to house their corporate headquarters or a
warehouse,” which Owners imply would generate less traffic. We find this
critique unpersuasive for several reasons.
      First, the SANDAG data on which Procopio relied shows that requiring
Owners to dedicate the strip would be roughly proportional to the traffic
impacts of Owners’ cited development alternatives. That is, the SANDAG
chart shows that a corporate headquarters building would generate 1,870
new daily trips (110 trips per acre, multiplied by 17 acres), and a warehouse
would generate about 1,020 new daily trips (60 trips per acre, multiplied by
17 acres). These totals represent about 10 percent and 5 percent,
respectively, of the 19,400 new daily trips the $34 million extension project is
expected to generate, yielding respective development impacts of about $3.4
million and $1.7 million—both of which exceed the $960,176 that Owners
claim the strip is worth.7 Thus, even assuming additional hypothetical uses
are likely, these figures provide plenty of leeway to support a rough-
proportionality finding.
      Second, although Dentt testified that a lower-intensity use was the
Property’s highest and best use, another principal testified the highest and

7     Alternatively, applying the Exeter project’s $590-per-trip cost—which
Procopio explained is lower than the Property’s per-trip cost would be—yields
development impacts of $1.1 million for headquarters use, and $601,800 for
warehouse use.

                                       23
best use could include medical offices, which Procopio testified would
generate 8,750 new daily trips on the extension, which amounts to about 45
percent of the extension’s 19,400-trip capacity, equating to about $15 million
in development impacts from the Property.
      Wholly apart from traffic-generation estimates, Procopio also analyzed
rough proportionality by comparing the proportional length of the overall
extension project with the portion that crossed the Property. Under this
method, Procopio again determined the Property would obtain about 18
percent of the benefit of the extension project, equating to about $6 million in
development impacts. This outweighs the burden of requiring that Owners
dedicate the strip.
      All in all, we are satisfied the City did “its constitutionally required
homework” (Stamper, supra, 1 Cal.5th at p. 596) to ensure that its dedication
requirement was “more or less proportional” (id. at p. 592) to the impacts
caused by developing the Property.
(b) It Is Reasonably Probable the City Would Require the Dedication
      We likewise conclude the second Porterville inquiry—that it was
“reasonably probable that the condemner would actually impose the
dedication requirement as a condition of development” (Stamper, supra, 1
Cal.5th at p. 600)—is satisfied.
      Indeed, Owners concede in their appellate briefing that “development of
[the Property] likely would have required some sort of dedication to mitigate
any resulting adverse impacts.” They question only whether the City would
have “required [Owners] to give up the specific strip of land the City has now
condemned.” It is clear to us that the City would have.
      Since 2002, the City’s operative general plan and circulation element
have shown the Citracado Parkway extension running through the strip.

                                       24
Procopio explained that this is what made annexation of the Property feasible
and desirable. Procopio (and Martin) also testified that the City reviews
development proposals and ensures they comply with the circulation element.
Consequently, other developers in the area dedicated land to extend
Citracado Parkway in conformance with 2002 circulation element.
      We are, thus, confident the City would actually condition development
of the Property on Owners’ dedication of the strip.
               C. The Project Effect Rule Does Not Apply
      Owners contend the trial court erred by finding the project effect rule
inapplicable because they maintain the City’s dedication requirement arose
after the date of probable inclusion (i.e., the date it became reasonably
probable the City would acquire the strip by purchase or condemnation,
rather than by dedication to mitigate development impacts (Stamper, supra,
1 Cal.5th at p. 603)).
      Specifically, Owners maintain the date of probable inclusion was in
2006, when the City agreed in the PPH development agreement to complete
Citracado Parkway. However, they insist the dedication requirement did not
arise until 2012, when the City amended the general plan to restrict access to
the Property from Harmony Grove Road. Assuming without deciding that

2006 is the date of probable inclusion,8 we conclude the City’s dedication
requirement arose several years earlier.9

8     There is good reason to reject 2006 as the date of probable inclusion.
Although the City agreed in the PPH agreement that it would complete the
Citracado Parkway extension, it agreed to do so within 10 year of obtaining
the funding to do so, some of which it anticipated would come from other
developers in the area who would benefit from the extension project. Other
developers in the area did, in fact, dedicate land along the extension, and the
Director of Community Development testified that as of 2009 he expected to
                                       25
      Like the trial court did, we too conclude the City’s dedication
requirement existed by 2002. The general dedication requirement arose in
1993 when the City enacted an ordinance requiring such dedications in
exchange for development approvals. And the specific dedication
requirement as to the strip arose in 2002, when the City’s general plan and
circulation element fixed the location of the Citracado Parkway extension
across the Property.
      Owners maintain the 2002 circulation element is insufficient to trigger
the dedication requirement because the City could have amended it. (See
Stamper, supra, 1 Cal.5th at p. 604 [“A circulation element is an anticipatory
document, subject to amendment and updating.”].) But the City has never
done so. To the contrary, Procopio testified the City has been implementing
the 2002 circulation element by requiring other developers in the area to
dedicate land for the extension project in exchange for development
approvals. Indeed, even Owners candidly admit that once the City adopted
its 2002 circulation element it “requir[ed] adjacent property owners who
sought to develop their properties to give the City the land through which the
contemplated Parkway would run.” This supports a finding that the project
effect rule does not apply. (Stamper, supra, 1 Cal.5th at p. 604 [“[A]
standard . . . dedication requirement imposed on multiple, similarly situated
properties, tend[s] to show that the[ ] requirements predated and were
imposed independently of a plan to condemn the property.”].)

obtain Owners’ strip by dedication rather than condemnation. In any event,
we will accept 2006 as the date of probable inclusion.

9     We will apply the same standard of review as we did for the Porterville
issue because both issues concern predominately legal applications of law to
fact.

                                      26
      The fact that the 2002 dedication requirement arose four years before
the date of probable inclusion also supports a finding that the project effect
rule does not apply. (Cf. Stamper, supra, 1 Cal.5th at p. 604 [“a short period
between the time the property is designated for public use and the time the
agency first signals its intention to condemn the property may support an
inference that inclusion was probable when the dedication requirement was
put in place” (italics added)].)
      Owners argue the specific dedication requirement did not arise until
2012, when the City amended the general plan to restrict access to the
Property via Harmony Grove Road. We are not convinced. The 1993
ordinance and 2002 general plan and circulation element already required
the same dedication. The 2012 amendment did not alter this preexisting
requirement or signal that the City was suddenly more likely to condemn the
strip than to eventually obtain it through dedication.
      Owners argue more generally at a policy level that tying a general
dedication ordinance to a circulation element “would subvert the very
purpose of the project-effect rule” because “a city could ensure that any land
it ultimately acquired for [circulation element] projects would be valued well
below what it would have been had the city not contemplated including it in
the project.” But this is the very tension the Stamper court resolved by
clarifying that the date of probable inclusion is the dividing line before which
a city’s general dedication requirements may obtain the benefit of the
Porterville doctrine, and after which a landowner may obtain the benefit of
the project effect rule. (Stamper, supra, 1 Cal.5th at pp. 603-604.)
      Finally, “the reasonable expectations of the parties” (Stamper, supra, 1
Cal.5th at p. 604) support a finding that the project effect rule does not apply.
Since at least 2002, the circulation element has shown the extension project

                                       27
running through the Property, and other developers in the area have built
out portions of the extension. The 2006 PPH agreement further implemented
the extension project and expressly contemplated that further
implementation may come from developer contributions. Thus, by the time
Owners purchased the Property in 2007—with knowledge that the 2002
circulation element contemplated the extension would run through the
Property—they should reasonably have expected that any development
approval would be conditioned on their dedicating the strip to mitigate
development impacts.
      Moreover, from the City’s perspective, it was the fact the extension ran
through the Property that made the 2015 annexation feasible and desirable.
Owners presumably benefited from the annexation because it resulted in up-
zoning the Property from low-density residential use to industrial use.
      Under these circumstances, applying the project effect rule to require
that Owners be compensated for an industrial use of the strip that they
should never reasonably have expected to make would result in the type of
windfall the Porterville doctrine sought to avoid. (See Stamper, supra, 1
Cal.5th at pp. 599-600 [“If the owner were compensated based on the highest
and best use of the property, the owner would get a windfall—i.e., payment
based on developed value for property that could not have been developed
under any circumstances. Such a result would be at odds with the Fifth
Amendment principle that ‘[t]he owner is to be put in as good position
pecuniarily as he would have occupied if his property had not been taken.’ ”].)

                                      28
                     II. No Precondemnation Damages
      Owners also contend the trial court erred by finding they were not

entitled to precondemnation damages.10 We disagree.
                             A. Legal Principles
      In addition to paying just compensation for the actual condemnation of
property, the condemner may also be liable for precondemnation damages if
the owner can “demonstrate that (1) the public authority acted improperly
either by unreasonably delaying eminent domain action following an
announcement of intent to condemn or by other unreasonable conduct prior to
condemnation; and (2) as a result of such action the property in question
suffered a diminution in market value.” (Klopping v. City of Whittier (1972)
8 Cal.3d 39, 52, fn. omitted; see Dryden Oaks, LLC v. San Diego County
Regional Airport Authority (2017) 16 Cal.App.5th 383, 404; Redevelopment
Agency of San Diego v. Mesdaq (2007) 154 Cal.App.4th 1111, 1134.)
      “In order for any right to precondemnation damages to accrue . . . there
must have been either some formal announcement by the condemning agency
of its intention to condemn, or some other official act or expression of intent
to acquire the property in question.” (Terminals Equipment Co. v. City and
County of San Francisco (1990) 221 Cal.App.3d 234, 245 (Terminals
Equipment).) “The pivotal issue in every case is whether the public agency’s
activities have gone beyond the planning stage to reach the ‘acquiring
stage.’ ” (Id. at p. 246.)

10    The City contends Owners forfeited this challenge by failing to set forth
in their opening brief all the relevant evidence on the issue. While it would
have been helpful for Owners to have provided more details in their brief, we
decline to declare a forfeiture.

                                       29
      A public entity is liable for precondemnation damages “only where it
has acted improperly and unreasonably.” (City of Ripon v. Sweetin (2002)
100 Cal.App.4th 887, 897.) “Whether the public entity has acted
unreasonably is a question of fact . . . ‘to be determined by the court.’ ” (Ibid.)
If the court finds that liability exists, “the amount of damages” is then tried
to a jury. (Ibid.)
      We review the trial court’s liability ruling for substantial evidence.
(People ex rel. Dept. of Transportation v. McNamara (2013) 218 Cal.App.4th
1200, 1206.)
                                  B. Analysis
      Using the City’s March 23, 2016 adoption of the resolution of necessity
to condemn the Property as the formal announcement against which to
measure unreasonable delay, there certainly was none here—the City filed
suit just two days later.
      Not surprisingly, then, Owners argue the City’s 2006 development
agreement with PPH constituted the formal announcement because that is
when the City “irrevocably commit[ed] itself to constructing the Citracado
Parkway directly through the [Property].” (See Terminals Equipment, supra,
221 Cal.App.3d at p. 246 [moving to the ‘acquiring stage’ ” can constitute a
formal announcement].) Owners then contend the City’s 10-year delay
between entering into the PPH agreement and filing this condemnation suit
“was unreasonable, having no colorable justification other than waiting to see
whether [Owners] would give in before the City needed to file suit.” The trial
court disagreed, as do we.
      Specifically, the trial court found “that any delay by the City in moving
forward with [the extension project] was the result of general planning and
was not unreasonable.” Substantial evidence supports this finding. First,

                                        30
the PPH agreement, itself, contemplated that it would take the City a
considerable amount of time to complete the extension project—up to 10
years from the time the City obtained funding from all sources (including
developers, like Owners, who would benefit from the extension).
      Second, the City lacked authority to approve any development of the
Property until 2015, when the City annexed it from the County. Moreover,
until the annexation, the Property was zoned for low-density residential use.
The City’s up-zoning of the property to industrial use during the annexation
undoubtedly benefited, rather than harmed, Owners.
      Third, other than the 2009 tentative map proposal that Owners
ultimately withdrew, Owners never sought City approval to develop the
Property in any other manner. Although Owners contend it is improper to
focus on their conduct instead of the City’s, we fail to see how the City’s delay
could have unreasonably restrained Owners’ development of the Property if
Owners never sought approval to develop it. Indeed, it appears that if Owners
had sought approval for a development that conformed to the general plan by
incorporating the Citracado Parkway extension, the City would have
approved it as it did for neighboring developments.
      At its core, Owners’ precondemnation damages claim is based not so
much on the City’s failure to condemn the strip sooner, but rather, on the
notion that the City might condemn it at all. Owners’ general partner
testified he “would have preferred to not have Citracado on there and have a
parcel . . . with no road going through.” And he asserted the potential
brewery tenant shared that sentiment. But a landowners’ displeasure with
the fact that a public entity’s long-range planning documents contemplate
some future public use of the owner’s property does not give rise to a claim for
precondemnation damages. (See Selby Realty Co. v. City of San

                                       31
Buenaventura (1973) 10 Cal.3d 110, 119 [“The adoption of a general plan is
several leagues short of a firm declaration of an intention to condemn
property.”].)
      Owners also cite the City’s 2012 general plan amendment restricting
access to the Property from Harmony Grove Road as an instance of
unreasonable delay in condemning the strip. But this only proves that
Owners are more unhappy about the fact they must take their access from
Citracado Parkway than that the City has delayed condemning the strip.
                               DISPOSITION
      The judgment is affirmed. The City is entitled to its costs on appeal.

                                                        HALLER, Acting P. J.

WE CONCUR:

AARON, J.

IRION, J.

                                      32
APPENDIX

Exhibit 321.17

 Exhibit 343