Real Estate & Property Law

Malls Expand

By Alan Ackerman

In previous entries, I discussed how communities struggle to deal with aging malls. These structures, no longer viable, destroy the economic fabric of the surrounding community. Of course, some malls are prospering and need to expand. Even though a mall is clearly a private commercial use, some operators may rely on delegated eminent domain power to increase their capacity.

When a mall needs to acquire property to expand, the market should determine value—not a jury months down the road. Thankfully for the Golden Key Hotel, California law favors payment for property at its highest and best use.

Curbed.com Los Angeles

Golden Key Hotel owner Ray Patel is rejecting Rick Caruso's $6 million offer, reports the Glendale News Press. In an email to the paper, Patel writes: "The hotel is not for sale. I recommend if Caruso feels he needs to expand his mall, to do it across the street on Brand and purchase an existing mall. I am sure the Glendale Redevelopment Agency will give him the air rights to connect the mall with a bridge." A Caruso exec responds by asking what Patel will do to redevelop the property. As previously covered, Patel was basically given two choices: Sell to Caruso or present a plan for redevelopment for the site. (Amid all of this, there's the threat of eminent domain.) Last week, Caruso re-iterated his offer of $6 million for the hotel. Complicating matters is the fact that Patel also has a lawsuit against the city and Caruso, which was filed back in 2008, over lost revenue Patel says was caused by the construction of Americana.

Full post as published by National Eminent Domain Blog on January 15, 2011 (boomark / email).