Yolo County officials have voted to use eminent domain to purchase the 17,300-acre Conaway Ranch. The ranch, which lies between Woodland and West Sacramento, contains 15,900 acres of productive farmland, endangered species habitat, open space, rights to 50,000 acre-feet per year of water, natural gas sources, and flood control value.

The county is acquiring the property to prevent private interests from purchasing the land with intent to develop the property or transfer the water out of the county, according to Yolo County Supervisor Helen Thomson. She contended that the county is invoking eminent domain due to the nature of the bidding process, which is closed and confidential. If Yolo County ultimately uses eminent domain to purchase the Conaway Ranch, it may be the largest piece of property ever condemned by a local agency in the state.

The county aims to preserve the present state of the land. However, if the property were to remain in private hands, the ability to develop or transfer the water would be highly restricted because of the county’s land use and water transfer policies. Many people say that regulations may achieve the same effect as the purchase.

In 1990, PG&E Properties, a subsidiary of PG&E Utilities, purchased the ranch for $35 million. This purchase and others throughout the state were made with the idea that profits from development could be thrown in the company pot. In the case of the Conaway Ranch, quite the opposite occurred.

As early as 1992, the Conaway Ranch Conservancy Group, made up of PG&E Properties and other local business interests, planned to develop as much as 2,500 acres to provide homes for 35,000 to 40,000 new residents in the City of Woodland. They also drew up plans for 500 to 600 acres of commercial and industrial development, including a 30,000-seat amphitheater comparable to Shoreline Amphitheatre in Mountain View. They poured millions of dollars into development plans, transportation studies, public outreach, and generous donations to local interests.

At the time, Woodland, with a population of about 43,000, had some growth choices to make. There was no doubt that the development proposals would bring homes, jobs, and revenue. But local residents and officials wondered aloud about the fate of farmland, natural resources, and water rights.

By 1996, all development plans had been abandoned because it had become clear that local desires lay elsewhere. PG&E Properties, which had since bought out all the other partners, put the land up for sale for $68.5 million. The company said that that an agri-business interest should have the land.

Yolo County, its cities and other regulatory agencies attempted to mobilize and pursue a joint purchase of the ranch. Before they had a chance, PG&E Properties withdrew the property from the market.

In 2001, the property was transferred from PG&E to National Energy and Gas Transmission (NEGT) under a corporate restructuring process resulting from the California electricity mess. NEGT subsequently filed for bankruptcy and, after a review of assets, was forced to sell the Conaway Ranch.

In May of this year, NEGT placed an add in the Sacramento Business Journal seeking parties interested in purchasing the ranch. The Yolo County government agencies reconvened and succeeded in forming the Conaway Ranch Joint Powers Authority (JPA) representing Yolo County, it’s four cities, UC Davis, and the Yolo County Flood Control and Water Conservation District. The JPA was charged with evaluating funding options for purchasing the land.

Alvarez and Marsal, the firm handling the sale for NEGT, announced that it would entertain offers using a closed and confidential bidding process. The county and the JPA said they could not participate in the confidential bidding process. So on July 8, the Yolo County Board of Supervisors voted unanimously to use eminent domain to purchase the property, adopting a “Resolution of Necessity” attempting to establish legal grounds for the process. The county announced an offer of $50 million, which NEGT promptly rejected. Negotiations, however, are under way. Stuart Somach, an attorney for the county, said NEGT’s reaction was not surprising and the amount on the table could easily change.

Because the ranch is unincorporated territory, Yolo County is the lead agency in the condemnation, not the JPA, which would lead a negotiated purchase. The JPA has publicly supported the use of condemnation action and has pledged to support to the county to the extent possible. Still, the county has stated that it is prepared to “go it alone” if necessary.

Thomson, an outspoken champion of this cause, said the Conaway Ranch condemnation was the first time during her 33 years of public service that she has voted for the use of eminent domain. She said eminent domain is necessary to protect a number of public interests: Water rights, water supply, and water security for Yolo County landowners, residents, and businesses; agricultural resources; public health and safety; local and regional flood control alternatives; open space and rural recreation; and the ability to manage natural resources for environmental purposes.

According to Chris Unkel of The Nature Conservancy, the Conaway Ranch is one of the few locations in the state that provides habitat for the endangered Swainson’s hawk, and one of two locations remaining in the Central Valley with real capacity for restoring the habitat of native fishes. The ranch also provides an important stop for migratory birds. The real issue, said Unkel, is that the ranch’s productive farmland provides important habitat for the rare hawk. Habitat restoration would require only a small reversion of farmland, he said.

In approving the use of eminent domain, Yolo County supervisors did so with a provision that the land use not be physically altered. Yet even people who support the county’s goal are wary of the route the county has taken. Blake Harlin, a Yolo County Farm Bureau board member, said that while the Farm Bureau supports the goals of maintaining the current land use and the purchase by local authorities, the Farm Bureau is opposed to the use of eminent domain and frustrated by the lack of detail put forth by the JPA. The Nature Conservancy, which has been involved with the JPA to examine funding opportunities, agrees in principle with the plans, yet The Nature Conservancy also opposes the use of eminent domain, according to Unkel.

Once a deal is done, local interests and authorities would convene and form a management JPA in which stakeholders such as the Farm Bureau and The Nature Conservancy would be involved. In the meantime, they have been asked to “have faith,” and offer their support, said Harlin.

The deal is as much about water rights as it is about land use. Local interests and officials have expressed deep concern that a sale of this property to a private developer could mean the transfer of water to another area, the fallowing of some of Yolo County’s most productive land, and the loss of a precious source of water for future Yolo County growth.

However, according to Thomson and Somach, the county has strict laws in place that would make it very difficult for a private developer to transfer water out of the county. During the early 1990’s, the county adopted an ordinance that prohibits the transfer of water out of the county in cases where the use of additional groundwater would be required to make up for the loss. All of Conaway’s 50,000 acre-feet of water would fall under this restriction, Somach said. But, he noted, the ordinance would allow the transfer if it were approved by the Board of Supervisors.

County officials such as Thomson argue that the restrictions on land use and water rights are major factors in setting the market value of this land, and that potential future projects should not be considered when establishing market value.

Helen Thomson, Yolo County supervisor (530) 666-8622.
Stuart Somach, Somach, Simmons & Dunn, (916) 446-7979.
Blake Harlin, Yolo County Farm Bureau (530) 308-6594.
Chris Unkel, The Nature Conservancy (916) 449-2852.
Yolo County background material: http://www.yolocounty.org/org/bos/agendas/2004/070804s/09.pdf