Back Off, Track

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Back Off, Track
From left

George Brokate sees the math as pretty simple.

He owns an industrial property in Monrovia that has been in the family for more than a half-century, land that Gold Line officials say is critical for the rail extension to Azusa. So the rail line has offered $5.6 million to buy his 4.5 acres – but next door, a 12.5-acre property owned by the city of Monrovia has received a $57 million deal.

That’s nearly four times more per acre.

Brokate said he’s getting a raw deal and cites several injustices that have led him to launch a war, which threatens to hold up the whole project.

“They still have to treat all people fairly. That’s theft by the government,” said Brokate, 72, who has filed a slew of lawsuits challenging everything from the Gold Line extension’s environmental review to its awarding of contracts to builders.

For its own part, the Gold Line Construction Authority, which wants to complete the $735 million extension by 2015, has started eminent domain proceedings to forcibly take Brokate’s property. The agency said the property is needed to build a critical maintenance yard, which will replace a smaller one in Pasadena when the 11.5-mile extension is complete.

But the Gold Line and city officials also said the math is more complicated than Brokate believes. Monrovia’s property is more valuable because it was slated for retail development, and so theoretical future sales tax revenues were factored into the $57 million purchase price. The price included funding for as much as $15.7 million in public improvements, including road widening, that the city plans to complete near the station.

“This is just the latest in an on-going series of harassing lawsuits that one property owner is dreaming up to try and get the authority to offer more money for his property than it’s worth,” said Gold Line spokeswoman Lisa Levy Buch. “A public agency and a private citizen are two very different entities. The city has to deal with potential tax revenues it’s not going to make in the future and other variables.”

Still, beyond the rhetoric on both sides, the conflict raises the issue of whether private owners, who don’t have the same kind of political clout, are at a disadvantage in their dealings with public projects.

Indeed, despite tense negotiations of their own, the city and the authority were able to agree to a deal to avoid eminent domain proceedings. Even Monrovia’s city manager has acknowledged in public records that the city got a very good deal.

Dale Goldsmith, a land-use attorney who is not involved in the case, said public agencies generally shouldn’t, and usually don’t, get better deals.

“The value shouldn’t depend on who owns it,” said Goldsmith, who often represents developers acquiring properties, both in and out of eminent domain. “Doesn’t the private property owner have lost opportunity costs as well, in terms of income? It doesn’t strike me as something unique to a public agency.”

The property at 518-624 E. Evergreen Ave. has been in Brokate’s family for nearly 60 years. Brokate said his father bought it with proceeds from land he sold to make way for another public project – the Foothill (210) Freeway, which now runs alongside the property.

The property has about 50,000 square feet under roof, occupied by five tenants including a non-profit and a carpet seller. Some of them have been there for decades. The largest, C.V. Tile & Stone, declined to comment.

Robert P. Silverstein, Brokate’s attorney, said his client wants to be left out of the project. But if the Gold Line really needs the property, the agency must quadruple its offer to match the deal for the Monrovia-owned property.

“If they have to have it, then we sure as hell demand equal protection,” Silverstein said. “They’re stealing from the little guy to overpay the city.”

How did Monrovia manage to land such a deal, even accounting for the public improvements it must complete and any lost future tax revenue? The city also had something pretty basic: leverage.

The Los Angeles County Metropolitan Transportation Authority is funding the Gold Line authority and will take over operation upon the extension’s completion. But the MTA won’t start paying for the next phase until at least half of the 25-acre maintenance yard site in Monrovia is acquired. Since Monrovia itself owns half of the site, the city holds the keys to more funding.

City Manager Scott Ochoa acknowledged that Monrovia’s negotiating position played a factor, but less so than the future opportunity costs lost by the city, which was planning to bring in big box retailers to the site.

“Once it’s acquired, the community of Monrovia gets no financial value out of the usage of that property forever, whereas a private property owner can just reinvest and continue to generate income,” Ochoa said.

In addition to that leverage, one expert said that public agencies can be reluctant to enter drawn-out battles with each other in these situations, while a private property owner can get rougher treatment.

“Fundamentally, it’s harder for a public agency to deal with another on these issues, and they may be more willing to settle at a higher number,” said economic development consultant Larry Kosmont. “Sometimes, you have collaborating goals, which can also be a factor.”

Indeed, Monrovia’s mayor was an alternate GLCA board member, prompting Brokate’s attorneys to complain about conflicts of interest to the state Attorney General’s Office. After that complaint, Mayor Mary Ann Lutz stepped down, but she denied it was related to any conflict of interest.

Monrovia’s deal, agreed to in principle, won’t be voted on until early next year due to a statewide freeze in redevelopment agency activity. In the meantime, Brokate said he plans not to back off his fight.

“It’s been in the family for a long time,” he said of the property.

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