Commercial and Retail Property Owners

When commercial and retail use properties are targeted for acquisition using the power of eminent domain, the landowner is not the only affected party. Any businesses located on the premises may sustain significant losses and may be included as a party in a condemnation action. Many retail and commercial properties rely upon the access and visibility to traffic traveling on major roadways and highways. Because of their location along well-traveled roads, such properties may be more susceptible to acquisition for transportation projects.

A business’s success may be determined by its location, the ease with which customers can access the location, and the availability of parking. If a business is required to relocate due to condemnation, the business’s profitability and viability are at risk. In some states, business owners may be entitled to compensation for this loss, which is known as business damages, business losses, loss of goodwill or diminished goodwill. Such losses include those that a business sustains as a direct result of the eminent domain taking, such as lost profits. An experienced eminent domain lawyer can determine what compensation or other remedies your business is entitled to receive and can assist you in recovering the maximum amount of compensation or non-monetary benefits due to your business under eminent domain laws.

As the landowner, there are significant concerns you will have regarding your property. If only a portion of the property is required for a partial taking, you may be entitled to receive severance damages for the damages to the remainder property. Other compensation or remedies may be available to counter the negative effects of the taking, such as compensation for loss of access, relocation assistance, compensation to “cure” any damages to the property. Experienced eminent domain counsel can assist in determining the compensation and other remedies you may be entitled to receive under the law. Condemnation lawyers will also guide you in through the process to insure that you are able to recover just compensation for the loss of your property.

Eminent domain is a proceeding exercised against the real estate, not the owner or businesses operating on the property. Condemnation removes ownership of the real estate and all interests in it, including leaseholds, from the landowner and lessees and transfers to the condemning authority. Landlords and tenants have unique objectives and responsibilities under their contractual relationship. As such, the rights at issue are contractual, rather than constitutional, and subject to competing interpretations. Because the landlord-tenant relationship is multilayered and interrelated, both parties should seek experienced eminent domain counsel to ensure that their individual needs are met.

Case Studies – Commercial and Retail Properties Acquired by Condemnation

Case Study #1 – Partial Taking of Mixed-Use Commercial and Retail Property for Road Project

The state Department of Transportation (DOT) proposed upgrades and additional lanes to a well-traveled existing road affecting multiple commercial properties. The owner of one strip mall consulted an experienced eminent domain attorney to assist with mitigation efforts, pre-suit negotiations and any subsequent litigation. The proposed road project would acquired 1.29 acres from mall’s parking lot impacting the total number of parking spaces and internal circulation on the property. Additionally, the DOT required a temporary construction easement for the duration of the construction of the project area adjacent to the property. The property owner believed that the temporary construction easement, loss of parking and change to the internal circulation of the property would cause the property to suffer severe damages including diminished value, temporary diminished access and visibility. Additionally, the owner as a landlord was concerned about meeting the needs of his tenants for parking, access, deliveries and customer traffic. In advance of the filing of an eminent domain lawsuit, the owner’s attorney, with the assistance of the owner’s expert appraiser and engineer, successfully negotiated changes to the construction plans and proposed methods which mitigated some of the concerns of the owner as well as his tenants. The changes reduced the size of the taking, impact to the property and temporary diminished access. The case settled after the filing of an eminent domain lawsuit but prior to trial in a confidential settlement. Settlement included payment of just compensation for the taking, severance damages and cost to cure physical damages to the property as well as the payment of attorneys’ fees and costs. The DOT also agreed to make additional changes to the construction plans to the benefit of the property.

Case Study #2 – Taking of Waterfront Restaurant Property for Municipal Harbor by Inverse Condemnation

Following the damage caused by a to multiple private and municipal owned properties along the bay, the city and state partnered to redevelop the area into a municipal harbor. A family-owned popular beach front restaurant that had a large deck overlooking the bay prior to the hurricane, was among the properties to be redeveloped for the harbor project. When construction on the municipal harbor began, a portion of the restaraunt property near the waterline was included in the construction. The property owners believed that their property line extended to the water and that the government took a portion of their private property for the project. The owners sought legal advice from an experienced condemnation lawyer. When it became clear that the government and owners would not reach an agreement about the ownership of the property, the owners filed an inverse condemnation lawsuit to determine whether their family owned the entire waterfront property and, if so, how much they should be compensated for it. The family argued that the state and city took their property which extended to the water and asked the jury to award $800,000. The family’s expert appraiser testified that historical plat maps and deeds confirmed that the family owned more than 14,000 square feet of property extending from road to the water’s edge. Lawyers for the government argued that state statutes regarding public tidelands excluded much of the land the owners claimed as their private property. The jury returned a verdict in favor of the of the owners finding that the state was liable and should compensate the family $644,000 for the value of the property.