A big thanks to the Appraisal Institute – Greater Oregon Chapter for hosting the January 20, 2017 seminar entitled “Preparing Appraisals for Condemnation Assignments, and How to Improve Skills as an Expert Witness.” I was honored to present the day-long seminar alongside Don Palmer, MAI, of Appraisal & Consulting Group LLC. Don is one of the deans of condemnation appraisers in Oregon and the Pacific Northwest, and a true gentleman. We had a great turnout, a wealth of questions and comments, and much positive feedback. I look forward to future opportunities to work with this great group of appraisers. Finally, a special thank you to Vicki Champ, the Chapter’s executive director. Vicki is a pleasure to work with and a true professional.
The City of Lake Oswego is moving forward with its Boones Ferry Road Project, which calls for the widening of Boones Ferry Road from Madrona Street to the Oakridge Road/Reese Road intersection, together with associated public improvements. As set forth on the Project’s website, the Project includes:
- Four vehicular travel lanes
- Landscaped medians with vehicular turn lane improvements
- New, safer sidewalks with street trees, lighting, street furniture and landscaping
- Two new signalized intersections and two new pedestrian crosswalks
- Bike lanes in each direction
- Improved storm drainage systems
- Undergrounding of utilities
- Pedestrian crossing at Lanewood
The City of Lake Oswego is targeting the taking of 50 properties in whole or part. While this Project serves a legitimate public purpose, whether the owners of the impacted properties will receive just compensation is another matter.
According to press coverage, the City is armed with condemnation resolutions and will soon commence taking property through eminent domain if “negotiations” are not successful. Property acquisitions are scheduled to take place through 2017, with construction to commence in 2018.
On September 30, 2015, the Federal Energy Regulatory Commission (FERC) issued its Final Environmental Impact Statement (FEIS) for the Jordan Cove Energy and Pacific Connector Gas Pipeline Project. The FEIS is the culmination of years of study and debate regarding this massive LNG project, and sets the stage for FERC issuing a Certificate of Public Convenience and Necessity (Certificate). FERC’s issuance of the Certificate will allow the Project, consistent with the federal Natural Gas Act and Oregon law, to exercise the power of eminent domain to acquire right of way for the pipeline.
If constructed, the Pacific Connector pipeline will consist of approximately 232 miles of 36-inch pipeline from Coos Bay to Malin. It will cross four counties–Klamath, Jackson, Douglas and Coos–and will impact approximately 306 landowners and 436 parcels. Its estimated $1.5 billion price tag will constitute about 20% of the overall $7.5 billion Project.
For the most part, and if authorized, the Project will take right of way in the form of easements. These easements will consist primarily of permanent easements for the pipeline itself and temporary easements for construction activities. The easements will allow the pipeline company to construct, maintain, access, repair, and replace the pipeline. The easements will also prevent property owners from using their property in any way that would interfere with the pipeline operations.
The Project will try to first acquire these easements by “agreement.” Through a right of way agent, the Project will present property owners a modest offer of compensation and a form of easement agreement. Not surprisingly, the form of the agreement will strongly favor the pipeline company to the detriment of property owners, and the offer of “compensation” will be lacking in fundamental ways. If the Project cannot reach “agreement” with a property owner, it will then invoke its power of eminent domain, as delegated to it by the government, and take the easements on the terms it offered, with “just compensation” to be determined by judge or jury.
Given the fundamental impacts these easements and the pipeline itself will have on the value of property and quality of life, property owners would be remiss if they did not take these issues very seriously.
The Steering Committee has unanimously advanced the Tilikum Crossing to cross the Willamette River; unanimously advanced 82nd Avenue and chose to continue studying 50th and 52nd Avenues; and advanced three route options (Main/223rd, Cleveland, and Hogan Road) to connect to Stark Street and Mt Hood Community College.
As set forth in the Plan, from 2015 to 2017, the Project will create a detailed design of the new transit line and station areas, and complete environmental review and permitting. From 2018 to 2020, the transit line and station areas will be constructed.
From all indications, Washington County has begun filing condemnation actions against property owners with whom it has not reached “agreement” on its Farmington Road Project.
As I noted in my post on the Project earlier this year, it calls for the widening of Farmington Road from Murray Boulevard to Hocken Avenue.
In road widening projects such as this one, which result primarily in partial “strip takings,” the often-found fundamental tension between the government’s approach and just compensation is the government’s propensity to ignore or minimize damages to the value of the property remaining after the taking. Unfortunately for property owners, such damages can be significant, even if the strip taken is relatively small. In addition to factors such as an increased proximity to travel lanes and attendant noise, property owners can be faced with adverse impacts to access, parking, on-site vehicle maneuvering, and conformity with set-backs and other development requirements. In certain situations, the highest and best use of the property can take a hit, potentially resulting in very significant damages.
Fortunately, property owners have a constitutional right not to have their just compensation minimized. Vindicating that constitutional right, however, requires action and standing up to the government.
The steering committee for Metro’s Powell-Division transit project has spoken. Moving forward, it will focus on bus rapid transit (BRT) options, dropping from considering street car and light rail options.
The unanimous vote came as committee members said they were focused more on a project that could be built soon and require substantially less private property acquisition and roadway impacts than a rail project.
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The committee also voted unanimously to focus on a transit route that would use Powell Boulevard in inner Portland, then jog north to Division Street somewhere between 52nd and 92nd avenues, before heading east to Gresham. The route could then extend as far east as the Mt. Hood Community College campus near Troutdale.
For more on the Powell-Division project, see my earlier post.
Metro is moving forward with preliminary planning for its “Powell-Division Transit and Development Project.” For this “high capacity transit” project–meaning most likely light rail or bus rapid transit–Metro is currently soliciting input from the public and the Project’s steering committee regarding transit type, route, station areas, and redevelopment opportunities. Similar to Metro’s “Southwest Corridor” planning, such move was foretold by Metro’s 2009 High Capacity Transit Plan, which sets forth its vision and priority for high capacity transit projects across the Portland metropolitan area.
The Powell-Division corridor, as currently envisioned, stretches from downtown Portland to Gresham. As the name of the Project indicates, the corridor centers on SE Powell Boulevard and SE Division Street for much of its length. A “Project Atlas” published by Metro provides a many-layered view of the corridor area.
As noted above, the planning for the Project is currently in its public input phase, after which the Project team will decide on a preferred mode of transit and preferred route. The Project’s published timeline, from its most recent fact sheet, indicates that the Project team will make a final decision on mode and route recommendations in Winter 2015.
Whatever route and mode of high capacity transit is ultimately chosen, many properties, homes and businesses will likely be impacted. While many elements of the Project appear to serve legitimate public purposes, whether the owners of the impacted properties will receive the just compensation to which they are constitutionally entitled is a wholly different matter. It will also be interesting to see how the Project implements its development goals.
Metro has set its sights on the “Southwest Corridor” as the region’s next area for construction of “high capacity transit,” meaning most likely light rail or rapid bus transit. Such move was foretold by Metro’s 2009 High Capacity Transit Plan, which sets forth its vision and priority for high capacity transit projects across the Portland metropolitan area.
The Southwest Corridor, as currently envisioned, stretches from downtown Portland to Tualatin. It centers on SW Barbur Blvd/99W for much of its route, working its way through Tigard, and then south through the Bridgeport area to downtown Tualatin.
The planning for the project is currently in its “refinement phase,” in which the stakeholders will zero in on a preferred mode of transit and preferred route. “Recommended routes for further discussion” are set forth in Metro staff’s May 5, 2014 report. The Project’s published timeline indicates that the Project’s steering committee will make a final decision on design options in June 2014.
Whatever route and mode of high capacity transit is ultimately chosen, many properties, homes and businesses will likely be impacted. While this Project appears to serve a legitimate public purpose, whether the owners of the impacted properties will receive the just compensation to which they are constitutionally-entitled is a wholly different matter.
In the event the government decides to take your property, you will most likely receive a visit from a “right of way agent” who will present you the government’s “offer” to acquire your property. This post explores what that “offer” typically looks like and what next steps you need to think about.
What kind of communication from the government will accompany the offer?
The government must attempt to reach agreement with you on the fair market value of the property and its acquisition. ORS 35.235(1). Without such an attempt, the government cannot initiate a condemnation lawsuit. ORS 35.245(1). As part of this negotiation, the government must make you an unqualified offer based upon what the government contends is the just compensation for the property. The offer will be in the form of a letter from the government or a private right of way agent with whom the government has contracted.
What is the government’s offer based upon?
In most cases, the government’s offer must be accompanied and supported by a written appraisal. ORS 35.346(2). However, if the government determines that the amount of just compensation is less than $20,000, it may provide you with a “written explanation of the bases and method” by which it arrived at fair market value, in place of a formal appraisal.
The offer mentions possible environmental issues. What is this about?
As part of the appraisal process, the government will often times conduct an environmental review of the targeted property. This review is looking for evidence of possible environmental contamination stemming from present or past uses of the property. A common example giving rise to governmental concern is the presence of an underground storage tank for petroleum products. If the government determines that the property will require some level of environmental remediation, it may seek to have associated costs deducted from the determination of just compensation.
Am I entitled to relocation compensation?
Yes, property owners, as well as tenants, are often entitled to reimbursement for certain relocation and business reestablishment costs resulting from displacement from the taken property. Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. § 4601 et seq.; ORS 35.500 to 35.530. Relocation compensation is determined by an administrative process different from the process used to determine just compensation for the taking of the property.
Am I entitled to loss of value to my business?
Technically, no. In the event of a partial taking of property, however, the taking could affect your ability to use the property for a particular business purpose, which also happens to be its highest and best use—for example, a restaurant adjacent to a highway. If the taking results in a less intensive highest and best use, you may be entitled to resulting damages.
Are there benefits to securing a team of experienced advisors in responding to the offer?
Yes, definitely. A team of advisors experienced in condemnation matters can help you achieve just compensation, advise you on relocation issues, and assist you with tax planning in regard to the proceeds of condemnation. Your team may include a condemnation attorney, appraiser, relocation specialist, real estate broker, and tax planner. In certain circumstances, you may need to also enlist the services of, among others, surveyors, land use planners, architects and engineers.
How much time do I have to respond to the offer? Do I have to accept or reject the government’s offer within this time?
The government must give you at least 40 days to respond to the offer before filing a condemnation action. ORS 35.346(1). It is important to note, however, that you are not required to respond to the offer. If you fail to respond, you will be deemed to have rejected the offer. The government may then initiate the condemnation action, but negotiations will most likely continue regarding fair market value and the government’s acquisition of title up to and through the litigation process.
If I reject the offer or do not respond to it, will the government lower its offer?
No, the government generally cannot lower its offer as a negotiation strategy. For practical purposes, the government’s initial offer represents a floor for the negotiations regarding just compensation. As a matter of law, the government cannot lower the amount of its initial offer except upon an order of the court, and that order cannot be entered less than 60 days before trial. ORS 35.346(2).
Should I obtain an independent appraisal?
Yes, in most circumstances, you should obtain an independent appraisal. Though the appraiser contracted by the government is a professional and bound by professional standards, he or she is hired by the government. You also need an analysis performed by an independent professional. Further, if you know the government’s offer is imminent, obtaining an independent appraisal before receiving the offer will, in certain situations, provide you and your advisors the necessary information to develop a proper negotiation strategy.
Washington County and the City of Beaverton are moving forward with their Farmington Road Project, which calls for the widening of Farmington Road from Murray Boulevard to Hocken Avenue. As set forth on the Project’s website:
Farmington Road, between Murray Boulevard and Hocken Avenue, is a heavily-used four-lane section of roadway that lacks continuous bicycle and pedestrian facilities.
This project will make needed safety and traffic capacity improvements to this section of Farmington Road, for all modes of transportation.
■ Widening the roadway to five lanes (two travel lanes in each direction with a center turn lane)
■ Continuous bicycle facilities
■ Continuous pedestrian facilities
■ Street lighting
■ Realign 141st and 142nd Avenues
An aerial strip map showing the extent of the takings and impacted properties is found here. While this Project appears to serve a legitimate public purpose, whether the owners of the impacted properties will receive the just compensation to which they are constitutionally-entitled is a wholly different matter.
The Project’s published schedule indicates that the government has begun “right of way acquisition,” which will continue into the Fall of 2014. Construction was slated to begin in the Spring of 2015, but has been accelerated to the Summer of 2014 according to recent reports.