At the March 22, 2017 meeting, the Transportation Agency Board of Directors approved resolutions of necessity for nine properties necessary for the Salinas Rail Extension Project. During this time, Meyers Nave secured settlements on eight of the nine properties that the Board approved resolutions of necessity, with one property, the partial acquisition for 21 Happ Place, going to trial.

The Agency was required to deposit $1,999,560 with the State Condemnation Fund as just compensation for this property, which constitutes a partial acquisition of the parcel and repairing a portion of their warehouse, while the property owner, MWM Investments, was seeking over $2.5 million. A trial date was set for February 11, 2019 for a jury to hear the case and make a determination of the final acquisition price.

The final jury verdict was to value the partial acquisition at $1,366,252 inclusive of interest and statutory costs. The Agency’s final offer was $1.1 million, while MWM Investment’s final demand was $1.9 million. As a result, TAMC was not required to cover MWM Investment’s attorney fees since the verdict was closer to our value. The Agency also received a check from the State Treasurer reimbursing it $633,307 from the amount that was placed on deposit.

The final court judgement includes a provision that requires MWM Investments to complete the cut and cap of their warehouse before receiving the full amount of the judgement, with the Transportation Agency holding $225,000 of the $1,366,252 in our account.  The retainer amount of $225,000 will provide MWM Investments with funding to begin the work and represents a significant portion of the overall judgement to ensure that they complete the work expeditiously to receive the balance of funds.  The Transportation Agency will release the funds to MWM Investments when certain milestones are met:

Milestone 1: Constructing a temporary wall in the warehouse along the new property line: $25,000

Milestone 2: Demolishing the portion of the warehouse in TAMC’s right of way: $100,000

Milestone 3: Constructing a new permanent wall to the warehouse: $100,000

It is the Agency’s understanding that MWM Investments has secured the necessary building permits and that the cut and cap is scheduled to be completed by April 2020.  However, in the event that MWM Investments does not complete the work or other legal issues arise, staff is seeking to extend the contract with Meyers Nave to December 31, 2020 with this proposed contract amendment #5.  This amendment does not increase the contract budget and funds will only be expended if any billable hours are spent on this issue.  Once MWM Investment's work has been completed and the retainer funds have been released, this contract will Meyers Nave will be closed out and any remaining budgeted funds will be returned to the Rail Extension to Monterey County project budget.