Caltrans, Property Owners Settle Suit

The owners of an Anaheim apartment complex in the path of the Santa Ana Freeway widening project became millions of dollars richer Monday, thanks to a lawsuit they settled with Caltrans.

Nancy and Neal Buxton of Villa Park and Bill Visser of Anaheim will be paid $10 million by the state transportation agency, which had sued the owners of 303-unit La Cresta Apartments when they refused to accept $4.5 million in compensation from Caltrans for loss of business and loss of about 23% of their rental units caused by the freeway expansion.

The property owners, who could not be reached, had sought $10.9 million from Caltrans after the agency condemned part of their property using its power of eminent domain, their lawyer said Monday.

“They’re happier today than they’ve been for the past couple of years,� attorney Patrick Hennessey said. He said his clients have been unable to collect fair market rent on their remaining, uncondemned apartments during the prolonged construction project and demolition of their affected units.

“The past two years have been the strongest rental market in 20 years,� Hennessey said.

Caltrans and the La Cresta owners agreed to settle their legal dispute at a mandatory settlement conference Friday afternoon in Orange County Superior Court, where trial of the case was set to begin.

Caltrans staff attorney Glenn Mueller, who handled the La Cresta case, said both sides had property appraisals that differed widely: Caltrans appraisers assessed the value at $4 million to $5 million; La Cresta-hired appraisers set the value at $10 million to $11 million.

“You have to have some confidence in your appraisals,� Mueller said. “If there is disagreement, that’s when you hopefully protect the taxpayers while not forcing people to pay more than their fair share.�

The freeway-widening project is funded by the Orange County Transportation Authority and has involved more than 550 parcels that Caltrans needed to acquire.

OCTA spokesman John Standiford said the agency is satisfied with the settlement and had budgeted for it.

“It’s taxpayers’ money. And it’s a balancing situation where we have to be especially prudent with, in this case, voter-approved transportation dollars--money from Measure M, the half-cent sales tax,� Standiford said. “So I think the level of responsibility to the taxpayers is especially big� in negotiating with property owners whose land or business is being acquired for the freeway widening.

Hennessey said the La Cresta settlement is one in a series of setbacks for Caltrans as it takes property owners to court over eminent domain proceedings. Caltrans attorney Mueller disagreed. He said only 8% to 10% of affected parcels have required litigation--the rest have been settled without controversy--but Caltrans does not publicize each of those successes.

“Cases where Caltrans loses are publicized as part of the marketing plan of private law firms. And obviously people wish to advertise when they get good results,� Mueller said. “Nothing wrong with that. It’s just how it goes.�