Facts

Property Owner Ahmad Mesdaq ("Mesdaq") and his family sought political asylum in the United States in 1983 after his father, an Afghan air force general who was cooperating with the United States to fight the Soviet invasion of Afghanistan, was threatened repeatedly with death if he remained in Afghanistan. The family left with what they could carry and lived first in Texas and then in El Cajon, Calif.

Mesdaq attended high school in El Cajon. While in school, he worked two jobs to support the family and to save money for college and for the business he hoped to start after college. After completing college in 1992, Mesdaq immediately opened a small coffee shop in the Gaslamp called the Avignon. The Avignon grew along with the Gaslamp and by 2000, it offered a full range of coffees, teas, pastries, and had an on-site and mail order cigar business. Mesdaq was looking to expand, with a strong preference for property ownership, when one of his employees called him about a "for sale" sign at 502 J Street.

Mesdaq closed escrow on 502 J Street in January 2001. Between January 2001 and April 2003, Mesdaq worked on renovating the dilapidated warehouse located on the property. The expanded business, eventually called the Gran Havana Cigar and Coffee Lounge, opened at 502 J Street on April 15, 2003. This new business quickly became successful. Growth rates between 2003 and 2005 were high. The Gran Havana was closed per court order in June 2005.

While Mesdaq was building his business at 502 J Street, the Redevelopment Agency of the City of San Diego ("City") was negotiating an agreement with two individuals - Ramin Samimi and Ed Himmelberg - to condemn Mesdaq's property so that Samimi and Himmelberg could locate the lobby of their planned hotel in that location. That agreement, by which Samimi and Himmelberg would pay for all costs and fees related to the condemnation, was finalized in January 2004, just before the City's 12-year power of condemnation in the Gaslamp expired. Following the execution of that agreement, the City sent Mesdaq an offer to purchase for $3.1 million.

Additionally, with full knowledge that Samimi and Himmelberg were engaged in private negotiations with Mesdaq, and with the purposes of aiding Samimi and Himmelberg in those negotiations, the City served Mesdaq with a toxic waste notice, requiring him to investigate whether toxins existed on his property within 60 days or risk being liable to the City for all fees and costs incurred by the City in investigating that issue. The plaintiff spent over $77,000 trying to investigate while his building remained intact. Following that investigation, the City sued him for their fees and costs anyway. At trial, the City's toxic waste expert admitted that there was no way that Mesdaq could have investigated those issues while the building remained on the site because Mesdaq had no access to the dirt.

Over Mesdaq's challenges to the right to take, the Court permitted the City to take the property on June 15, 2005. In August 2005, in a second bench trial, the Court ruled that the City's conduct in serving a toxic waste notice in April 2004 in order to aid the developers in their private negotiations was unreasonable.

Beginning in August 2004, Mesdaq searched for a suitable location site for his business. Unfortunately, he discovered that the Gaslamp market was extremely difficult. As a result, when the Gran Havana was displaced on June 15, 2005, it was unable to re-open at another location. Mesdaq did attempt to keep his mail order business alive at a property owned by a friend at 319 Market Street but recently received a letter from the City advising him that the zoning restrictions prohibited such a use at that location.

DEFENDANT'S CONTENTIONS:
The City contended that Mesdaq could have relocated his business to three nearby locations.

Settlement Discussions

Prior to trial, the plaintiff offered to settle for $6 million. The City offered to settle for $4 million.

Result

TOTAL JURY AWARD: $7,785,132. Value of Property, (with improvements) $4,250,000; Loss of Good Will, $3,361,208; Toxic Waste Study Expenses, $77,824; Loss of Immovable Fixtures (by stipulation), $96,1000.

Other Information

The valuation trial was heard by a jury between Oct. 20 and 27, 2005. Mesdaq requested $4.25 million as compensation for the condemned property, $3,361,208 for lost business goodwill, and $77,824 as compensation for the money he spent as a result of the City's unreasonable conduct related to the toxic waste notice. The City argued that the property was only worth $4 million and that Mesdaq was entitled to no compensation for the lost business and the toxic waste expenses. The parties stipulated that the immovable fixtures entitled the plaintiff to compensation of $96,100.