The council left open the public hearing on eminent domain Wednesday night, at the request of the property owners.
A city can undertake eminent domain if its governing board deems the property is necessary for a project that serves the greatest public good, and if the owner of that property has been offered a fair market price for it, City Attorney Danny Wan said.
The quarter-acre lot would expand the existing parking lot that runs behind the businesses facing Monterey Road between Second and Third streets. The 35 E. Third St. lot would create about eight new parking spaces, according to a public notice.
Owners Dwight and Lola Jungkeit request the hearing be postponed to a future council meeting since their attorney couldn't make the Wednesday meeting. The next council meeting is July 1. According to a letter from Jungkeit, their attorney is Dennis J. Kehoe.
"As owners of this property, my wife and I VIGOROUSLY OBJECT to the adoption of the resolution of necessity... We want our property, which has a much greater fair market value than indicated in the city's low-ball offer," the couple wrote in a June 6 letter to the City Council. The letter goes on to say that "the facts do not exist" to find the city eligible to pursue eminent domain over his case.
"We have not been offered the full fair market value of the property," the couple wrote.
The Jungkeits say that they sent the complete appraisal of the property, conducted by James J. Nicholas & Associates, to the city Dec. 5. The appraised value they received from Nicholas was $730,000, the letter states.
"I am willing to cooperate with the city; however, the city has not dealt with me fairly as of this date," they wrote.
Sometime in 2008, the city offered the couple $525,000 for the home, and the Jungkeits made a counter offer in the $730,000 amount, according to a December e-mail exchange between Jungkeit and Assistant to the City Manager for Downtown Development David Heindel. Dwight Jungkeit says that the city has never raised their original asking price in the two years he's been in negotiations with them.
On June 1, Jungkeit received a letter from City Manager Ed Tewes notifying him of the city's intent to adopt a resolution of necessity to acquire his property.
How is this possible, considering the Redevelopment Agency does not have eminent domain powers? Simple. City Manager Ed Tewes explained that the city can enact eminent domain for a public purpose. The Redevelopment Agency can fund public projects as well as redevelopment. So the five councilmembers will put on their "City Council" hats to enact eminent domain, and then later put on their "Redevelopment Agency" hats to approve funding the project.
At the city's offered price of $525,000, that works out to a cost to the city of $65,625 per parking space. At Jungkeit's offered price of $730,000, that's a cost of $91,250 per parking space.
The city has made several property purchases for parking in the past two years.
Across Third street, the city recently bought Simple Beverages and More property for $1.5 million. That property will add as many as 30 spaces downtown. In June 2008, the city spent $683,000 on the Hamilton property next to Sinaloa Cafe which will provide as many as 30 spaces. In May 2008, the city also bought the two-acre lot at Depot Street and Third for $1.1 million. The city created about 90 spaces there.
If the council decides to adopt the resolution of necessity July 1, the city would have six months to file for eminent domain with the court, Wan said. In the meantime, negotiations will continue and if an agreement is made before the city files, the eminent domain will not be pursued.
Natalie Everett
Natalie Everett Natalie Everett is the education and city reporter for The Times. Reach her at (408) 779-4106, ext. 201, or neverett@morganhilltimes.com.
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