Citations
- 237 F. Supp. 2d 1123
Full opinion text
ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
WILSON, District Judge.
TO THE PARTIES AND THEIR ATTORNEYS OF RECORD:
I. INTRODUCTION
Plaintiff 99 Cents Only Stores (“99 Cents”) alleges that Defendants Lancaster Redevelopment Agency and the City of Lancaster (collectively “Lancaster”) have threatened to take its property in violation of the Fifth Amendment and, accordingly, seek equitable relief under 42 U.S.C. § 1983. In particular, 99 Cents asks the Court to enjoin Lancaster from initiating condemnation proceedings against it on the ground that any such condemnation would violate the “public use” provision of the Takings Clause contained in the Fifth Amendment. For the reasons set forth below, the Court grants 99 Cents’ motion for summary judgment and, accordingly, issues an injunction as described herein.
II. FACTUAL SUMMARY
A. The Development of the Power Center
In 1983, pursuant to California’s Community Redevelopment Law (the “CRL”), Lancaster enacted an ordinance establishing the Amargosa Redevelopment Project Area (the “Project Area”) and adopted a Redevelopment Plan (the “Amargosa Plan” or the “Plan”) for the revitalization of that area. As it was required to do by the CRL, Lancaster made specific findings in the Amargosa Plan describing the blighted conditions existing in the Project Area at that time. According to those findings, the Project Area was then plagued by inadequate public improvements and facilities, faulty subdivision planning, and flood hazards. The Amargo-sa Plan also conferred on Lancaster the power of eminent domain necessary to condemn any blighted real property. Pursuant to the CRL, those condemnation powers were set to expire in 1995, unless the Plan was expressly amended to extend them beyond that year.
In 1988, Lancaster began plans to develop a regional shopping center known as the Valley Central shopping center. The cornerstone of that center was to be a large retail shopping area called the “Power Center,” which would house so-called “anchor” businesses like Costco Wholesale Corporation and Wal-Mart. Costco, in fact, moved into the Power Center in 1988 and was involved in the continued planning and development of the Power Center. The Power Center was completed in 1991, and all adjoining public roads, infrastructure, and facilities were completed by 1993. The Power Center is currently occupied by large retail stores like HomeBase, Wal-Mart, Circuit City, Costco, and 99 Cents.
In 1994, Lancaster amended the Amar-gosa Plan to extend the number of years the city could utilize property tax increment funds and to achieve other planning purposes. Notably, however, Lancaster did not extend its eminent domain powers, nor did it make any new blight findings, even though the California legislature had revised the CRL’s definition of blight in 1993. The next year, in 1995, Lancaster’s condemnation powers expired under the terms of the Plan. A year and a half later, in March of 1997, Lancaster rehewed its condemnation rights by amending the Amargosa Plan a second time. Again, though, Lancaster made no new evidentia-ry .findings of blight. Instead, it merely relied on its prior 1983 findings.
As for the Power Center itself, it had become the highest quality commercial retail property in Lancaster and one of the most prestigious shopping areas in the city. In fact, it is promoted on Lancaster’s official web-site as a redevelopment “success story” and is the only shopping' center in Lancaster that has a regional draw for customers.
B. 99 Cents and Costco
In 1998, 99 Cents moved into a vacant piece of property located next to Costco and entered into a 5-year lease with the property owner of the Power Center, Burnham Pacific. Under the lease, 99 Cents had the option to extend its leasehold interest beyond 2003 for an additional 15 years. In its first full year of operation, 99 Cents’ sales were in excess of $5 million. In a candid admission, Lancaster has stated that it “loves” 99 Cents because of the significant tax revenues generated by the store.
Almost immediately after 99 Cents moved into the Power Center, Costco advised Burnham Pacific and Lancaster of its need to expand the size of its Lancaster operations. Costco threatened to relocate in the City of Palmdale unless Lancaster provided Costco with additional space in the Power Center. Costco, Lancaster, and Burnham Pacific began negotiating options by which Costco could expand its store and remain within the city of Lancaster. Significantly, Burnham Pacific advised Lancaster that “the most efficient use of [Costco’s] property would be an expansion to the south of their existing facility behind the 99