A dispute over the value of a key parcel of railyards land is getting closer to a resolution. An arbitration hearing began Monday over land likely to become the home of a future arena and a regional transit center.

On Monday, two weeks of witness testimony began to help determine how much the city of Sacramento should pay developer Thomas Enterprises for nearly 33 acres of prime land adjacent to downtown. The land also holds historic value as the western start of the first transcontinental railroad.

The city already paid $55 million for the parcel in 2006 after Thomas Enterprises bought the 244-acre former railyards site.

But the city and the developer have never agreed on the parcel's value. A city appraiser later valued the land at $8 million, while an appraiser hired by Thomas Enterprises set the value at more than $87 million.

The land stretches from the Sacramento Valley Station train depot downtown to the historic Southern Pacific railroad shops currently undergoing redevelopment by Thomas Enterprises.

The 32.68-acre parcel includes more than 17 acres of railroad easement. After factoring out the depot and land being used for public transit, about eight acres of vacant land remain, said Senior Deputy City Attorney Sheryl Patterson.

Thomas Enterprises representatives won't disclose what the company paid Union Pacific for the land or any other information relevant to the arbitration, according to company spokeswoman Leslie Valpey.

Last week, a sports and entertainment arena task force formed by Mayor Kevin Johnson recommended that the Sacramento City Council support a proposal to build a new arena on the city's railyards parcel in connection with a new regional transit center the city already plans to build there.

Court arbitrator William Bettinelli, a retired Sonoma judge, is presiding over the hearing after the city won a coin toss held by Sacramento County Superior Court Judge Robert Hight. Hight helped the two sides winnow their lists of arbitrators down until Bettinelli was chosen. Bettinelli has experience trying, arbitrating and mediating complex, multi-party construction and real estate cases, among others.

Bettinelli must determine the land's value after weighing all the information presented in the hearing. A decision is expected by April 26.

Photo by Eric Whalen.