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It doesn't happen often, but when it does eminent domain can cripple a convenience store owner's thriving business. I have represented landowners in hundreds of such cases. Here's what convenience store operators need to know to ensure they are compensated fairly if the government comes knocking with plans to seize their land.
What is eminent domain?
Eminent domain is the power federal, state and local governments have to take private property and devote it to a public use, such as a road, library or airport. The U.S. Constitution provides that property shall not be taken for a public use without the payment of just compensation (fair price for the property taken and compensation for any damage to the property not taken).
Realistically, what is the probability a c-store will be involved in an eminent domain suit?
The federal government has recently included in highway appropriation bills a provision that requires a large block of federal highway funds to be used only on projects where there is a demonstrated safety improvement. These projects will not qualify for funding unless they are supported with safety data, including traffic studies, accident reports and the like. One of the most likely places to find a large volume of accident reports is at a busy intersection, and the most likely place to find a c-store is often at a busy intersection as well. The presence of these funds earmarked for safety-related purposes has created an incentive for local communities to examine their roadway grid to look for intersections that will satisfy the federal requirements. The likelihood that any one c-store will be involved in an eminent domain action is, of course, quite small. Nevertheless, the trend is increasing.
Should I tell my employees if I learn I might be involved in an eminent domain case?
Yes. Often, employees will assume their jobs will be lost and the station put out of business, but this is not so in many instances. Also, you should tell your employees they are not to talk to representatives of the condemning authority, especially appraisers and engineers. If conversations of this sort take place without the owner or attorney present, nothing good can come of it.
I already know the value of my store, so do I really need an attorney?
I have found owners are in general, a very reliable source of information concerning the value of their operation. However, the valuation problems in c-store cases can be very complex and therefore, require the participation of skillful appraisers and attorneys for their successful presentation. In one case in which we were involved, only a few hundred square feet was taken by eminent domain. The difficulty was that it resulted in problems with how customers circulated within and exited the property. The damage to an operation should be compensated, but many times, the condemning authority -- at least in its initial offer -- sets compensation at the value of the land alone without regard to damage to the continued operation of the store. In some cases, we have found the c-store owner is entitled to compensation that is nine or 10 times the condemning authority's original offer.
If an owner tries to fight the state in an eminent domain case, will costs and attorneys' fees eat up the whole award?
Some people think when they are threatened with eminent domain that it will be too expensive and too hard to "fight city hall." This is not true. The Constitution entitles you to just compensation and the procedures to follow in order to obtain that just compensation are not overly difficult or expensive. In fact, many attorneys are willing to handle eminent domain cases on a contingency fee. That fee would be a percentage of what the attorney is able to obtain for you above the government's original offer of just compensation and above all expenses.
What can an owner do to keep their property "safe?"
Unfortunately, if your property is taken or threatened with being taken for a public purpose, such as a road, highway, etc., there is nothing that can be done to stop the government from moving forward. All you can do is ensure you at least get just compensation. You should consult an attorney as soon as you learn your property is threatened with a public project. The attorney can make sure you take the proper steps to protect your right to just compensation, and not lose or waive any of the rights to which you are entitled. Not only are you entitled to just compensation for the land taken, you also are entitled to damages for the remainder of your property that was not taken, but may suffer as a result. You are also entitled to certain relocation expenses, and in certain cases, compensation for loss of income or goodwill. You shouldn't have to work through this all on your own.
Michael Braunstein and his partner, William A. Goldman, have been involved in eminent domain cases throughout the state of Ohio for nearly 15 years. They only represent landowners, never the condemning authority. Braunstein can be reached at [email protected].
Editor's Note: The opinions expressed in this article are the author's, and do not necessarily reflect the views of Convenience Store News.