This is about a story that could happen to you, me, and anyone else just struggling to get by.
Houses are more expensive than they’ve ever been on Guam. Let’s say you bought a three-bedroom standard home to complete your American dream for your family. You have a 30-year mortgage on the property, which was sold to you at $475,000 for, among other things, the value of the land around you. Two years after you buy it, the Guam Legislature – through a senator in cahoots with a farm business – rezones the neighbor’s land and the surrounding properties to agricultural from residential.
Your home value automatically plummets.
And then you find out the farm business that will be constructed near your home is a piggery. Your property value plummets even further.
What if some jerk built a sewage treatment plant right next to your land, and the Guam Legislature helped him to do it?
That’s happening right now to Chamorro ancestral land owners and a couple of companies with land holdings in the Harmon Annex at Ukudu, Dededo. The ‘jerk’ in this case is the government of Guam.
In late 2016 Guam Waterworks Authority and then-Sen. Tom Ada, who had been part of the Consolidated Commission on Utilities, conspired to form and pass a law that took 17 acres of Spanish Crown Land from the Guam Ancestral Lands Commission and gave it to GWA as part of its improvements to the Northern District Wastewater Treatment Plant. The plant, currently under construction, is a civilian lynchpin to the multi-billion-dollar military buildup; its cost subsidized by a $150 million grant from the government of Japan as part of its security pact with the United States.
Spanish Crown Lands are lands taken by the U.S. Government on Guam following the Spanish American War, and for which no pre-war private title claims exist. Basically, the land was once owned by the Spanish government, which at the time was run by a king and a queen; thus, ‘Crown.’ The U.S. Government, in a series of so-called federal excess land returns in the 1990s deeded thousands of acres of property to the government of Guam. Among those lands were those that had pre-condemnation owners (ancestral lands), and Crown Lands. When the Guam Legislature created the GALC to administer the return of ancestral lands to the heirs of the pre-condemnation owners, it deposited the Crown Lands into the GAL bank. The Legislature allowed the GALC to develop and lease the properties to generate revenue that could one day be used to compensate people who had ancestral land claims, but could never get their lands back.
The Ada statute, Public Law 33-198, took less than three months to pass. It was introduced October 27, 2016, and was enacted in early December. The effort was so well-orchestrated, two government boards – the CCU and the GALC – had already met in publicly-announced meetings to pass resolutions in favor of the statute before it was even introduced in the legislature. Once introduced, Mr. Ada wasted no time with it. It received a public hearing in less than two weeks. Two members of the public, including one of the landowners whose property abuts the 17 acres, testified; both were against the measure.
Both warned the legislature that passing the law would lead to inverse condemnation.
Inverse condemnation, according to Cornell Law, can be declared when a government takes a property for public use that greatly damages the value of the plaintiff’s property. In this case, GovGuam was taking Crown Lands surrounded by private property, and building a public facility – a secondary treatment system for raw sewage pumped from Andersen Air Force Base, Yigo, Dededo, and Tamuning-Tumon-Harmon. What’s the damage, and who’s the plaintiff?
“Lot 10188, which abuts and is downwind of the GALC property,” Terangue Gillham, the general partner of the company that owns the property left of the 17 acres, stated in testimony to senators November 9, 2016, “I have serious concerns about the inevitable negative impact that the proposed use contemplated by [the proposed law] would have on the value of Lot 10188 and our ability to enjoy the benefits of our ownership.”
Appealing to the senators’s experience working in Hagatna, where another sewage treatment plant is located, he wrote to them, “[Y]ou are no doubt aware of the obnoxious odors that permeate our area from time to time when west winds bring the smell of the Agana wastewater treatment facility our way. Unfortunately, the prevailing northeast winds on Guam will bring the odor from the expanded NDWTP on the GALC land directly to Lot 10188 for most of the year. Aside from the very real effects of this predictable future nuisance, it is entirely foreseeable that the mere prospect of a sewage treatment facility being constructed on the adjacent GALC parcel will cause an immediate and irreparable diminution in value and decrease in marketability of Lot 10188, with resulting financial losses to us as the owner.”
Down the street is a landowner familiar to this story: CoreTech International, which acquired the properties once held by the estate of the late Jose Martinez Torres. CTI’s property – Lot 10184-6 abuts the old sewage treatment plant that sits on Lot 10184-7 – a parcel whose ownership is being litigated in the Superior Court of Guam. GWA, in its expansion of its NDWTP facilities, annexed a portion of Lot 10184-6 without any due process and without providing any just compensation to CTI. This is not to mention the rents CTI claims GWA owes it for operating the NDWTP on property it paid for, paid taxes on, and land documents indicate CTI owns.
CTI’s general counsel, Ed Ching, in testimony he gave to senators November 11, 2016 in his personal capacity and from his decades of experience as an attorney dealing with land issues. “The properties surrounding the proposed property for a sewage treatment plant are also zoned for hotel use,” Mr. Ching explained to senators. “The end result is that you would have a sewage treatment plant, regardless if were a primary, secondary, or tertiary, would have a substantial negative value on the surrounding properties that are zoned for hotel, residential, and apartment use. This negative affect on values will result in “inverse condemnation” cases against the government.
Such is the claim CTI has countered in the ownership dispute in local court. After former Department of Land Management director Michael Borja sued CTI in December 2018 in order to change land documents to state GWA owns Lot 10184-7, CTI counterclaimed and sued for $130 million in inverse condemnation costs. Among its claims and aside from the encroachment issue, CTI alleges that the expansion of the sewage operation and the rezoning of the 17 acres of land down the street from its properties, caused hundreds of millions of dollars in losses.
The Ada statute didn’t just authorize GWA to have the land, it also rezoned the property from hotel zone to public facility zone so that the property would cost less on appraisal for GWA to purchase it from GALC, and so that GWA could have carte blanche to improve the property without going through standard zoning bureaucracy.
The rezoning had a devastating effect on property values, and not just for Gillham and CTI’s land, but the lands of hundreds of heirs, who are the landowners of adjacent ancestral properties, and who are too poor to mount a legal offense against the government.
The records indicate the government of Guam knew about the damage it would cause, but proceeded in haste anyway.
In fact, in the committee report of the Ada statute, prepared by Ada’s office, Mr. Borja is on record recommending the legislature not rezone the property, but to leave such an effort to the normal rezoning process through the Guam Land Use Commission.
According to the committee report, Mr. Ada asked CCU chairman Joey Duenas whether going through the normal GLUC process, which requires public input and notification of surrounding landowners, would delay and cripple the process. Mr. Duenas replied, “The only concern is if the community comes out and says they do not want it.”
GovGuam knew it was screwing the surrounding landowners, and did it anyway.
“He does bring up a valid concern about the inverse condemnation effect of the presence of the NDWWTP,” the Ada report’s findings and recommendations portion states, referring to Mr. Ching’s testimony. The bill was sent to the floor of the Legislature by Ada’s committee members with the recommendation “To report out only,” meaning the senators in Ada’s committee didn’t necessarily agree with the bill, but allowed it to be debated by the full Legislature.
The GALC, betraying its obligation to represent the interests of ancestral lands claimants, went along with the ruse despite its knowledge that such actions would devalue the property of its landowners in the area, and that the Ada law did nothing to fund inverse condemnation, or something along the lines of just compensation for the damages.
“The [GALC] Board of Commissioners approves and declares, as designated property, approximately seventy thousand square meters of a portion of Andersen Communication Annex No. 1 (AJKD), Municipality of Dededo, be available and designated property for the Guam Waterworks Authority infrastructure development who will be fully responsible for any and all land surveys, land registration, and land appraisals as necessary,” a GALC resolution signed by all commissioners except one states. “The [GALC], as Trustees, shall reinvest the compensation by purchase of other property (real or income producing) for the continued benefit of the Land Bank Trust and beneficiaries.”
None of the surrounding landowners have ever been compensated. They were never even consulted; the CCU and GWA, along with Ada, made sure of that.
Attached to its fiscal note to senators about the legislation, the Bureau of Budget and Management Research completely missed the issue of the inverse condemnation, which was so clearly stated in the bill’s committee report and the testimony enclosed with it.
The need for the NDWWTP improvements is indisputable to the growth of the community, the expansion of the military, and the national security of the region. But so should GovGuam’s debt to those landowners.
If we’re to accept that GovGuam can do anything it wants to anyone it wants, then why should anyone be obliged to follow the law? And what’s the use of voting, banking, and courts if GovGuam can just take as it pleases. The land in this story once belonged to a Spanish king. We thought fealty and royalty ended, when the Spaniards left.