San Jose truck company loses eminent domain case

A commercial truck company based in San Jose has lost its bid to gain additional compensation from VTA in an eminent domain case stemming from the planned BART extension project through Silicon Valley.

Monarch Truck Center executives have argued their business has been severely harmed following its forced relocation two years ago. But after a weeks-long trial in Santa Clara County Superior Court, a jury verdict delivered Friday upheld VTA’s determination that the truck company is due no compensation related to such losses.

“VTA respects the jury’s verdict and thanks them for their dedicated service throughout the intensive three-week trial,” a spokesperson for the public transit agency told San José Spotlight.

Monarch’s owner, Nicole Guetersloh, warned the verdict sets a dangerous precedent for other businesses caught up in eminent domain cases.

“This has really emboldened VTA to be able to get out of paying (compensation) for businesses,” Guetersloh told San José Spotlight. “If a local business can be displaced by a government project … and walk away with nothing, what does that mean for the hundreds of small business tenants in the path of eminent domain in California?”

The case is the latest legal fight related to VTA’s effort to acquire land for the $12.2 billion, six-mile BART extension project that will add another four stations and bring BART service into downtown San Jose and Santa Clara. The extended line is projected to open in 2036.

Monarch Truck Center, a full service medium duty truck dealership, operated as a tenant at 195 N. 30th St. for 35 years until VTA used eminent domain to acquire the property in 2024. The agency intends to redevelop the property for a planned BART station at 28th Street.

Under pressure to vacate the property, Guetersloh said Monarch was forced to relocate the company’s operations to a less favorable site at 1015 Timothy Drive. The property is significantly smaller than the company’s old location, far less visible and lacks parking as well as an outdoor vehicle yard, Guetersloh said.

Government agencies may use eminent domain to force property owners to sell land needed for public projects, though they are required to provide just compensation to those impacted. In addition to the property’s owner, such parties can also include displaced business tenants operating on the land.

The legal dispute between Monarch and VTA centered on dueling valuations of the losses the business incurred due to the move. VTA’s appraisal considered a scenario in which the 9.4-acre industrial parcel would be redeveloped, according to a trial brief submitted by the transit agency. Under such a scenario, Monarch would have been forced to relocate anyway, meaning it would incur no additional losses due to the displacement caused by eminent domain, VTA’s lawyers argued.

Guetersloh denied there were any imminent plans to redevelop the property, and said the company’s lease extended to 2028.

It’s not the first time a San Jose business displaced by the BART expansion has claimed VTA refused to negotiate terms. Several property owners caught in the path of tunneling work along Santa Clara Street raised similar concerns in 2023.

Even for supporters of the BART expansion, cases like this one in which a local business is displaced pose difficult conundrums.

“They’re businesses that have been in certain locations and have relationships with the communities sometimes for decades, and they provide great services,” Monica Mallon, a transit advocate and San José Spotlight columnist, told San José Spotlight. “On the other hand, you can’t lose sight of the long-term benefits of something like BART Silicon Valley. You shouldn’t let one business disrupt that.”

Guetersloh also claims VTA has failed to pay about $1 million in relocation benefits owed to her company to compensate for the cost of moving. A VTA representative said they cannot comment on the relocation claim while it works its way through an appeal process.

Despite the unfavorable ruling, the legal battle may not be over. Guetersloh said she is still exploring her legal options.

“I’m not going to let it end like this, because it still isn’t right — because the law wasn’t followed,” she said.

Contact Keith Menconi at [email protected] or @KeithMenconi on X.