The powers-that-be planned on building a major freeway interchange, part of which was going to be on the property owned by Jefferson Street Ventures. Problem was, Jefferson Street also had plans for its property -- a shopping center -- and when it came time for it to apply to the City of Indio for permits to build, the city said yes, but only if Jefferson Street left open and didn't build on the 11 acres on which the interchange was envisioned.
We're going to buy it eventually said the city, but the complex federal and state process for studying, evaluating, and funding the project takes a long time, and if you build on it now, it's going to cost us more in the future to take the developed property and relocate all of the tenants.
In Jefferson Street Ventures, LLC v. City of Indio, No. G049899 (filed Apr. 21, 2015, ordered published May 15, 2015), the California Court of Appeal concluded that the City's condition was a taking of the "Temporary No-Build Area" There was no claim that Jefferson Street's development proposal caused or contributed to the need for a freeway interchange, and the only evidence in the record for why the city imposed the condition was that it might cost more in the future for it to condemn the property. Slip op. at 23 ("The City’s primary rationale for removing 11 acres from the otherwise developable site was that it planned to acquire all or some of the development-restricted property for construction of the Interchange Project and if development of that property was permitted, the City could incur additional costs for the buildings and relocation of tenants.").
After this went down, the County instituted an eminent domain action, and the Court of Appeal remanded the case to the Superior Court for consolidation with the pending condemnation.
Barista's note: the North Carolina Court of Appeals recently reached the same conclusion in a similar case.