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For the first time in its 40 year history, the Squaw Valley Public Service District is considering exercising its right of eminent domain.
The decision to begin the legal process of property condemnation was made last week after negotiations with Squaw Valley Ski Corp. for a temporary construction easement reached an impasse. The water district needs permission from Ski Corp. to replace one of its aging wells located in the ski resort parking lot. If a new well is not built, SVPSD officials say, there could be a water shortage during the summer months. Ski Corp., however, argues that the construction would impose a hardship on the resort and says the property is worth more than the district is willing to pay.
The SVPSD board last week unanimously passed a Resolution of Necessity to acquire a temporary construction and access easement by eminent domain, the power of government to take private property in the public interest upon payment of its fair market value. The resolution only declares the district's intent to seize the property; beginning the condemnation process requires going to court.
"The resolution is a step prior to condemnation," explained SVPSD General Manager Rick Lierman. "It puts us in a time frame and allows us to have a more meaningful conversation."
Built in 1958 for the Winter Olympics, three of the SVPSD's four wells reached their life expectancy six years ago. Well number one, the district's biggest producer, needs to be replaced to avert a failure. Well number three also needs to be replaced, but at a later date.
"If we don't redrill the wells, we're at risk of running out of water during the dry parts of the year," said Lierman. "We don't want to condemn this property, but we also have an obligation to provide water to the community."
The SVPSD currently has a 20 by 30 square foot easement in the east end of the parking lot for well number one. In September, the district asked Ski Corp. for an additional 30,000 square feet to accommodate equipment during construction of the new well. The extra easement was to be for a four-month period starting in the spring. After informal discussions didn't produce an agreement, at the end of October the district decided, for the first time ever, to pay for a working easement.
The SVPSD made an offer based on the property value, which was appraised at $38,000. Ski Corp. argued the property was worth $102,432 based on the amount Intrawest paid for temporary easement space during construction of the Village, as well as additional costs associated with interference in the ski resort's parking lot drainage project scheduled for next summer.
"The property has rental value that's higher than their [the district's] appraisal determined it was," said Mike Livak, Ski Corp. vice president. "It also has opportunity costs - we can't use the area as we otherwise would be able to."
Ski Corp. would like to see the district relocate the well outside the parking lot to eliminate any risk of contamination. However, since only the west end of the aquifer meets drinking water standards, this would require constructing a water treatment plant along with new wells. This would cost $3 million, according to Lierman, compared to the estimated $300,000 needed to replace wells one and three in their existing locations. While Lierman said he understood Ski Corp.'s concern about liability, in 46 years the wells have never been contaminated. The risk of pollution has even dissipated since the underground fuel storage tanks left over from the 1960 Olympics were removed six years ago.
"The wells were there long before the risk of contamination from the parking lot," the SVPSD general manager said. "The wells weren't built in the parking lot, the parking lot encroached on the wells."
Livak said the district jumped the gun on the resolution. Ski Corp. had not yet received a response to its counter-offer when the district voted on the issue.
"It was premature to say it was necessary to condemn the property when their [SVPSD's] first offer came only a month ago," he said. "They acted too hastily."
However, Lierman said it was necessary to pass the resolution to get the legal process in place so, if talks fail, work can begin May 1.
"We want to do it when there will be the least impact on Ski Corp. and we want to be done with it before the water demand really increases, around August 1," Lierman said.
While Ski Corp. officials say they feel the resolution puts a black cloud over negotiations, both sides hope the matter can be settled outside the courtroom.
"We expect to work very hard to resolve this issue," Lierman said. "Nothing will be gained by either party spending lots of time and money to work this out."
The decision to begin the legal process of property condemnation was made last week after negotiations with Squaw Valley Ski Corp. for a temporary construction easement reached an impasse. The water district needs permission from Ski Corp. to replace one of its aging wells located in the ski resort parking lot. If a new well is not built, SVPSD officials say, there could be a water shortage during the summer months. Ski Corp., however, argues that the construction would impose a hardship on the resort and says the property is worth more than the district is willing to pay.
The SVPSD board last week unanimously passed a Resolution of Necessity to acquire a temporary construction and access easement by eminent domain, the power of government to take private property in the public interest upon payment of its fair market value. The resolution only declares the district's intent to seize the property; beginning the condemnation process requires going to court.
"The resolution is a step prior to condemnation," explained SVPSD General Manager Rick Lierman. "It puts us in a time frame and allows us to have a more meaningful conversation."
Built in 1958 for the Winter Olympics, three of the SVPSD's four wells reached their life expectancy six years ago. Well number one, the district's biggest producer, needs to be replaced to avert a failure. Well number three also needs to be replaced, but at a later date.
"If we don't redrill the wells, we're at risk of running out of water during the dry parts of the year," said Lierman. "We don't want to condemn this property, but we also have an obligation to provide water to the community."
The SVPSD currently has a 20 by 30 square foot easement in the east end of the parking lot for well number one. In September, the district asked Ski Corp. for an additional 30,000 square feet to accommodate equipment during construction of the new well. The extra easement was to be for a four-month period starting in the spring. After informal discussions didn't produce an agreement, at the end of October the district decided, for the first time ever, to pay for a working easement.
The SVPSD made an offer based on the property value, which was appraised at $38,000. Ski Corp. argued the property was worth $102,432 based on the amount Intrawest paid for temporary easement space during construction of the Village, as well as additional costs associated with interference in the ski resort's parking lot drainage project scheduled for next summer.
"The property has rental value that's higher than their [the district's] appraisal determined it was," said Mike Livak, Ski Corp. vice president. "It also has opportunity costs - we can't use the area as we otherwise would be able to."
Ski Corp. would like to see the district relocate the well outside the parking lot to eliminate any risk of contamination. However, since only the west end of the aquifer meets drinking water standards, this would require constructing a water treatment plant along with new wells. This would cost $3 million, according to Lierman, compared to the estimated $300,000 needed to replace wells one and three in their existing locations. While Lierman said he understood Ski Corp.'s concern about liability, in 46 years the wells have never been contaminated. The risk of pollution has even dissipated since the underground fuel storage tanks left over from the 1960 Olympics were removed six years ago.
"The wells were there long before the risk of contamination from the parking lot," the SVPSD general manager said. "The wells weren't built in the parking lot, the parking lot encroached on the wells."
Livak said the district jumped the gun on the resolution. Ski Corp. had not yet received a response to its counter-offer when the district voted on the issue.
"It was premature to say it was necessary to condemn the property when their [SVPSD's] first offer came only a month ago," he said. "They acted too hastily."
However, Lierman said it was necessary to pass the resolution to get the legal process in place so, if talks fail, work can begin May 1.
"We want to do it when there will be the least impact on Ski Corp. and we want to be done with it before the water demand really increases, around August 1," Lierman said.
While Ski Corp. officials say they feel the resolution puts a black cloud over negotiations, both sides hope the matter can be settled outside the courtroom.
"We expect to work very hard to resolve this issue," Lierman said. "Nothing will be gained by either party spending lots of time and money to work this out."
