By Doug Haberman

RIVERSIDE – The Riverside City Council on Tuesday authorized the use of eminent domain to buy 4 acres of private property needed for the proposed Magnolia Avenue railroad-crossing underpass near the Riverside Plaza.

The action affects 11 property owners.

Public agencies usually use eminent domain to acquire private property from owners unwilling to sell. They normally employ it to buy land for public uses, such as parks, libraries and street-widening projects.

The underpass project affected 18 property owners. The city has bought parcels from seven of the owners and estimates at $10 million the cost to buy the remaining properties.

Adding the cost of fixtures and equipment the city must buy as well as escrow costs and the cost of relocating businesses on the properties, the total outstanding acquisition price tag is going to be close to $12 million, interim Development Director Conrad Guzkowski estimated in a report to the council.

Paul Pensig, who owns a strip center on Magnolia that includes Elliotts’ for Pets, told the council he objects to the city’s property valuation.

Pensig asked that the city buy the property sooner rather than later so that he doesn’t make costly repairs only to have to sell the property soon thereafter for the city to demolish it.

The city identified 26 businesses that needed to move to make way for the underpass and 17 have relocated, leaving nine, including Elliotts’ and Center Lumber.

In interviews last summer, some of the remaining business owners said it has been difficult dealing with the city and many expressed concerns they would not be fairly compensated for the forced relocations.

City officials at the time said the city would do its best to be fair to the business owners while being prudent with taxpayer money.

Deputy Public Works Director Tom Boyd said the city is estimating the total underpass project cost at $52 million.

The city’s goal is to start construction in June, he said. It should take 18 months to complete.

As part of its vote, the council authorized the city’s chief financial officer to borrow $5 million toward the property acquisitions from a city fund he designates.

The loan would be for no longer than five years with interest at the city’s cash pool rate, which was 4.2 percent at the end of September, Chief Financial Officer Paul Sundeen said.

The city expects $5 million from the state Public Utilities Commission for the underpass but the city must sign an agreement with Union Pacific Railroad before it can receive the money.

The city and railroad are still working on the deal.

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