City of Fresno v. Cloud

• Decision Date: 16 June 1972
• Citation: 26 Cal.App.3d 113,102 Cal.Rptr. 874
• Court: California Court of Appeals Court of Appeals
• Parties: CITY OF FRESNO, Plaintiff and Appellant, v. George H. CLOUD et al., Defendants and Respondents. Civ. 1604.

Page 874

102 Cal.Rptr. 874

26 Cal.App.3d 113

CITY OF FRESNO, Plaintiff and Appellant, v. George H. CLOUD et al., Defendants and Respondents.

Civ. 1604.

Court of Appeal, Fifth District, California.

June 16, 1972.

Hearing Denied Aug. 23, 1972.

[26 Cal.App.3d 115] Spencer Thomas, Jr., City Atty., Alan D. Davidson, Asst. City Atty., A. Grant Macomber, Senior Deputy City Atty., James A. McKelvey and Norton O. Nishioka, Deputy City Attys., for plaintiff and appellant.

Lerrigo, Thusesen & Thompson and Maurice E. Smith, Fresno, for defendants and respondents.

OPINION

GARGANO, Associate Justice.

This litigation concerns two adjoining and separately owned ten-acre parcels of land located within the City of Fresno near the intersection of East Gettysburg Avenue and North First Street. The intersecting city streets are included in Fresno's Master Plan of Streets and Highways. The first parcel, hereafter referred to as Parcel 1, is owned by George Cloud and fronts on East Gettysburg Avenue to the north and on North First Street to the west. The second parcel, hereafter referred to as Parcel 2, is owned by Valentine Cloud and fronts on North First Street to the west.

The two parcels are located in an R-A (residential-agricultural) zone as established by the city's Comprehensive Land Use Ordinance; an R-A zone is an area in which only residential, agricultural and similar limited land uses are permitted until such time as the need for more extensive land development warrants a change in the zone; and, it is the city's position that if it is determined that such a change in zoning of property fronting on a street shown on the Master Plan of Streets and Highways could result in an increase in vehicular traffic generated by the use of the property, the city council, before approving the change, may require street dedications necessary to conform the street to the master plan. ¹

In 1968, the City of Fresno, to widen the two city streets, instituted this action to condemn a 40-foot strip from the frontage of Parcel 1 on Gettysburg Avenue and a 40-foot frontage strip from the frontages of Parcels 1 and 2 on North First Street; a prescriptive easement was located within the strips taken by the city, and because of this easement, the court, for all practical purposes, determined that only a 20-foot frontage was actually taken from Parcel 1 along East Gettysburg Avenue and a 26-foot frontage from Parcels 1 and 2 along North First Street. ² The court also found that the proposed improvement did not bring the streets to their full master plan widths and that an additional 10-foot strip from the frontage of Parcel 1 on East Gettysburg and an additional 10-foot strip from the frontages of Parcels 1 and 2 on North First Street would be required in the future to bring the streets to their full widths. ³

After issue was joined on the complaint, defendants waived severance damages, and the cause proceeded to trial on the value of the property taken. James H. Hopper, a private appraiser, appointed by the court, testified for defendants; Charles Briggs, the Assistant Property Management Agent of the City of Fresno testified for the city.

In arriving at the value of the property taken, Mr. Hopper assumed that the R-A zone, in which the main parcels were located, was a 'holding' zone and that there was a reasonable probability that a more favorable zoning change would be made in the near future. On the basis of this assumption, Hopper visualized three different zones of value for Parcel 1: a 176 160.3 service station site on the northwest corner having a value of $70,000 or $2.50 per square foot, a 'wraparound' zone for professional offices around the service station with a 150-foot frontage on Gettysburg and a 150-foot frontage on North First having a value of $1 per square foot, and a multiple residential unit area for the remaining 7.03 acres having a value of $13,500 per acte. The court-appointed appraiser then allowed $2.50 per square foot for the strip taken from the service station site, $1 a foot for the strip taken from the professional offices site, and $13,500 per acre for the strip taken from the remaining area; he fixed the value of the 'take' from Parcel 1 at $23,334. ⁴

Mr. Hopper concluded that the highest and best use for Parcel 2 was multiple residential and that it had a value of $13,500 per acre. He fixed the value of the frontage strip taken from this parcel at $5,306.50.

Charles Briggs agreed with Hopper's opinion that the highest and best use for the northwest corner of Parcel 1 was a service station site with a 'wraparound' zone for professional offices; he visualized a planned unit development area for the remaining acreage. The city appraiser also agreed with Hopper's opinion that the highest and best use for Parcel 2 was multiple residential. He assumed, however, that the parcels could not be used for any of these purposes without a change in the existing zoning, and that before the city council would have approved the change, it would have required street dedications needed to conform the widths of Gettysburg Avenue and North First Street to the Master Plan of Streets and Highways. He also assumed that before building permits for the construction of a gas station and professional office buildings would have been issued, street dedications would have been required under subsection (c) of section 11--208 of the city's Municipal Code. ⁵ Briggs then concluded that the frontage strips taken from Parcels 1 and 2 could never be used for any purpose other than residential-agricultural, that residental-agricultural land had a value of $5,300 an acre and that the value of the 'takes' should be calculated accordingly.

The trial judge accepted Hopper's opinion of the highest and best uses for Parcel 1. He also accepted the court-appointed appraiser's opinion that the service station site had a value of $70,000, the 'wraparound' zone a value of $67,500, and the remaining acreage a value of $13,500 an acre. Finally, he found that the land could not be used for these purposes without a zoning change and that the change would not be made by the city council without street dedications. But the judge restricted the probable dedications to the 10-foot frontage strips which he determined would still be needed by the city to bring the two streets to their full planned wedths, after the present improvement is completed. For example, the judge decided that an area encompassing 150 150 , or 22,500 square feet, was suitable for a service station site and had a value of $70,000; to this usable site he added an additional 10-foot strip to the north and an additional 10-foot strip to the west, increasing the area to 25,600 square feet; the judge apparently theorized that a buyer would want 160 160 so that he could make the dedications needed to get the city to change the zoning regulations for the property. The court, then, divided the $70,000 potential purchase price by 25,600 square feet, determined that the site was worth $2.73 per square foot, and compensated the condemnee at that rate for the strip taken from the theoretical area. Using essentially similar reasoning, the court determined that the value of the professional offices zone was 96 cents a foot instead of $1 per foot and compensated the defendant, George Cloud, at that rate for the property taken from that zone. For the strip taken from the remaining acreage, the judge compensated the defendant at the rate of $13,500 an acre. He awarded a total or $31,030.30 for the property taken from Parcel 1.

The court agreed with the opinion of both appraisers that the highest and best use of Parcel 2 was multiple residential, with a value of $13,500 per acre. The court took into consideration the future 10-foot street dedication which would be required to secure the necessary change in zone to enable the landowner to use the property for multiple residential and compensated the condemnee at the rate of $13,500; he awarded $5,307.50 for the strip taken.

The city has appealed, raising two basic valuation principles.

One of the principles is articulated in People ex rel. Dept. Pub. Wks. v. Investors Diversified Services, Inc., 262 Cal.App.2d 367, 68 Cal.Rptr. 663. In that case the court was directly concerned with the appraisal of land affected by zoning regulations which restricted the land's uses and which depressed the market value by limiting the land's availability. ⁶ It held that the appraisers could take into consideration the reasonable probability of more favorable zoning changes in the near future, so long as they also considered the burdens of the probable changes. The court at page 376 of 262 Cal.App.2d and at page 668 of 68 Cal.Rptr. of the opinion stated:

'The property owner here wants the court to value its property as though the benefits of a zone change could be had without the burdens. Here again the total effect of the land zoning laws must be considered. If an appraiser finds that by reason of such a law the land probably will never be availabe for residential use, he should take that into consideration in forming his opinion of value.'

The other is found in City of Los Angeles v. Allen, 1 Cal.2d 572, 36 P.2d 611. There the City of Los Angeles, to widen Santa Monica Boulevard, condemned a frontage strip from a parcel of land that fronted on the boulevard. The main parcel was under one ownership, contained 38.6 acres and had a maximum depth of 2,000 feet; to a depth of 107 feet, the land had a commercial value of $1.64 per square foot; the rear portion of the property was valued at 25 cents per square foot. The trial judge used the weighted average of the two zones of value and compensated defendant at the rate of 32 cents a square foot. On appeal, the condemnee contended that the strip taken was frontage and that he should have been allowed the commercial value. The Supreme Court disagreed. It reasoned that if to widen a public highway, a strip of...