Tag Archives: Oregon Just Compensation

Just Compensation Under Oregon Law

January 27, 2022 By in Basic Principles, Eminent Domain, General, The Basics, Uncategorized Tags: , , ,

This post re-explores some of the basic concepts surrounding the constitutional right to “just compensation,” which is one of the foundations of condemnation law.

What is “just compensation”?

When the government takes private property for a public use, it is constitutionally required to pay the property owner “just compensation” for the property.  Just compensation embodies the fundamental ideas of justice and fairness; that one private property owner should not shoulder an unfair share of the burden of providing for public uses.  Just compensation provides an express constitutional counterweight to the government’s power to take private property for public use.

How is “just compensation” determined?

Just compensation is the amount of money necessary to make whole a property owner for the taking of his or her property.  This amount is determined by the fair market value of the highest and best use of the property taken by the government, plus, in the case of a partial taking, the reduction in fair market value to the remainder of the property.  For example, if the government takes part of your property for a highway project, it must compensate you for the property it physically took, but also for the diminished value of your remaining property considering that it is now adjacent to a highway.

What is fair market value?

In normal market conditions, fair market value is generally defined by what a private buyer would pay a seller for the property at the time of the acquisition or taking, with no compulsion to either buy or sell.

What is highest and best use?

The highest and best use of real property is the most profitable use of the property.  It can be a use other than the current use of the property if it is reasonably probable that the property has an actual potential for a higher and better use.  For instance, if the property currently has a residential structure on it, but under current or reasonably imminent zoning laws, it could be developed as a retail shopping center, redevelopment as a retail shopping center is most likely its highest and best use.

What is included in the determination of “just compensation”?  What is not included?

In the typical condemnation matter, in which the government is taking the whole or part of a parcel of real property, you are entitled to just compensation for (1) the real property taken and the effects to remaining real property; and (2) fixtures (personal property that is considered part of the real property).  You may also qualify for just compensation if the government takes from you permanent or temporary easements, or deed restrictions.

A property owner is not typically entitled to just compensation for (1) private property that can be removed from the real property; (2) the costs of relocating a home or a business; and (3) loss in value to business—i.e., the value attached to a business being in the same place for 20 years, reduced revenue, etc.  Certain relocation and business reestablishment costs, however, qualify for “reimbursement” under the federal and state law.

Who determines just compensation?

The government will typically employ an appraiser to render an opinion of value of the property it intends to take.  This is usually the basis for the government’s initial “offer.”  The property owner will also typically employ an appraiser, in addition to formulating his or her own opinion of value.

The final amount of just compensation may be reached either in pre-trial negotiations or after a jury renders its verdict.  In the latter case, subject to a judge’s instructions on the law, the jury will have the final say as to what constitutes just compensation.

Southwest Corridor Light Rail Project: TriMet Moves Forward

May 15, 2020 By in Eminent Domain, Southwest Corridor, TriMet Projects Tags: , , , , ,
Southwest Corridor Light Rail Project: TriMet Moves Forward

TriMet is moving forward with its Southwest Corridor Light Rail Project. The “mega-project” will extend over 11 miles of new light rail or “MAX” line from downtown Portland to Bridgeport Village. The Project will also result in the construction of 13 new light rail stations and new park and ride lots accommodating up to 3,600 parking spaces. The Project is estimated to cost approximately $2.8 billion and will require the taking of hundreds of properties in whole or part. In order to take the properties, TriMet will exercise its power of eminent domain.

Additional information on the Project, including the list of properties currently targeted for acquisition can be found at swcorridorlightrail.com, which is an informational site for property owners my firm has created.

On TriMet’s most recent light rail expansion—the Portland Milwaukie Light Rail Project—my team and I represented a significant number of the property owners who sought legal representation. For one of those property owners, TriMet refused to negotiate a reasonable result, so we took the case to trial and obtained a jury verdict in an amount six times what TriMet originally offered and to the dollar on the testimony of our client’s appraiser. The court followed with a significant award of attorney fees and costs to our client. We then successfully defended TriMet’s appeal of the trial court judgments. See Tri-County Metropolitan Transportation District v. Walnut Hill, LLC, 292 Or App 417 (2018).

 

 

Eminent Domain Handbook for Oregon Property Owners

May 14, 2020 By in Basic Principles, Eminent Domain, General, The Basics Tags: , , , , , ,
Eminent Domain Handbook for Oregon Property Owners

In an effort to educate property owners on the eminent domain process under Oregon law and their rights to just compensation, Olsen Barton has published the Oregon Property Owners’ Handbook: Eminent Domain and Just Compensation Under Oregon Law.  While it is available in hard copy, in an effort to make it easily accessible we have also made it available on our website.  It covers everything from the basics of eminent domain and just compensation to handling offers from the government and the anatomy of a condemnation action.  I hope folks find it helpful.  Also, a big thanks to my co-author and colleague Brian Best.

Willamette Water Supply System: Massive Project Will Result in Significant Takings

April 25, 2020 By in Eminent Domain, Willamette Water Supply System Tags: , , , ,
Willamette Water Supply System: Massive Project Will Result in Significant Takings

The $1.3 billion Willamette Water Supply System is a massive project which will result in the taking of parts of a significant number of properties across the western part of the Metro area.

The Project is a joint effort of the Tualatin Valley Water District, the City of Hillsboro, and the City of Beaverton.  In addition to a water intake facility on the Willamette River, a water filtration facility near Sherwood, and water storage tanks on Cooper Mountain near Beaverton, the Project will result in the installation of new water lines across over 30 miles. The government has begun taking private property in support of the Project and has commenced construction.  Many takings are being accomplished in conjunction with road widening projects.

Additional information on the Project can be found at the Project website, located here, including the Project map, which is located here.

The government is taking and will take right of way for the Project in the form of easements.  These easements will consist primarily of permanent easements for the water lines themselves and temporary easements for construction activities.  The easements will allow the government to construct, maintain, access, repair, and replace the water lines.  The easements will also prevent property owners from using their property in any way that would interfere with the water lines and their operation.

The government will try to first acquire these easements by “agreement.”  Through a right of way agent, the government will present a property owner with a modest offer of compensation and a form of easement agreement.  Not surprisingly, the form of the agreement will strongly favor the government to the detriment of property owner, and the offer of “compensation” will be lacking in fundamental ways.  If the government cannot reach “agreement” with the property owner, it will then exercise its power of eminent domain and take the easements on the terms it offered, with “just compensation” to be determined by a jury.

To learn more about what to do when the government comes knocking, see my earlier blog post here.

 

Division Transit Project: TriMet Filing Condemnation Lawsuits

April 24, 2020 By in Division Transit Project, Eminent Domain, TriMet Projects Tags: , , , , ,
Division Transit Project: TriMet Filing Condemnation Lawsuits

From all indications, TriMet has begun filing condemnation actions against property owners with whom it has not reached “agreement” on its Division Transit Project.

The $175 million Division Transit Project calls for the permanent and temporary taking of parts of over 140 properties along the 15-mile Division Street corridor from downtown Portland to Gresham for the purpose of TriMet operating a bus rapid transit line.  In addition to taking property for road widening and related work, the Project will result in the construction of approximately 40 stations specially designed for the 60-foot articulated rapid transit buses that will operate on the line. Service on the new line is set to commence in 2022.

Additional information on the Project can be found at TriMet’s Project page, located here, and Metro’s Project page, located here.

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.

 

2019 Oregon Eminent Domain Seminar

April 22, 2019 By in Eminent Domain, Federal Case Law, General, Inverse Condemnation, Oregon Case Law, Seminars Tags: , , ,

On June 6 & 7, 2019, The Seminar Group will present its Oregon Eminent Domain Seminar.  The seminar will include an overview of and update on Oregon and federal eminent domain and land valuation litigation, with an emphasis on special appraisal problems in eminent domain cases and recent relevant court decisions.  More information on the seminar can be found here.

I am honored to have been invited to speak along with David E. Balfour, MAI, of R.P. Herman & Associates, LLC, on the “three unities” necessary to form a “larger parcel.”  Our discussion will include: (1) pre-and post-offer planning and procedural issues, valuation impacts, and evidentiary questions; (2) seminal and recent case law; and (3) application of the three unities of physical contiguity, unity of ownership, and unity of use to particular scenarios.  We will also discuss how certain larger parcel issues played out in Tri-County Metropolitan Transportation District v. Walnut Hill, LLC, 292 Or App 417 (2018), which is a case my team and I successfully tried and defended on appeal.

I have attended this seminar since 2011 and presented once before.  It is always well organized, well attended, and valuable for lawyers, appraisers and right of way professionals.  Looking forward to another great seminar.

Oregon Court of Appeals Affirms Jury Verdict Against TriMet on Portland Milwaukie Light Rail Project

August 1, 2018 By in Eminent Domain, Oregon Case Law, TriMet Projects Tags: , , , , ,
Oregon Court of Appeals Affirms Jury Verdict Against TriMet on Portland Milwaukie Light Rail Project

On June 20, 2018, in Tri-County Metropolitan Transportation District v. Walnut Hill, LLC, 292 Or App 417 (2018), the Oregon Court of Appeals affirmed the verdict of a Clackamas County jury against TriMet for a taking related to its Portland Milwaukie Light Rail Project.  At the trial court level, the jury returned a just compensation verdict for the property owner that was six times what TriMet originally offered.  TriMet appealed, assigning error to the trial court judge granting certain of the property owner’s motions to exclude evidence regarding neighboring properties.  The Court of Appeals held that such rulings were not in error.  By affirming the general judgment arising from the jury’s verdict, the Court of Appeals also affirmed the supplemental judgment against TriMet for the property owner’s attorney fees and costs.

I was proud to represent the property owner at the trial and appellate levels.  In addition to the rest of my team, I thank Brian Best of my office for his assistance on the appellate briefing.

More analysis will follow after conclusion of the proceedings.

Thank you to the Appraisal Institute – Greater Oregon Chapter

January 24, 2017 By in Eminent Domain, Oregon Case Law, Seminars Tags: , , , , ,

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.

Lake Oswego’s Boones Ferry Road Project: City Ready to Take Property

November 11, 2016 By in Boones Ferry Road Project, Eminent Domain Tags: , , , ,
Lake Oswego’s Boones Ferry Road Project: City Ready to Take Property

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.

Jordan Cove – Pacific Connector Pipeline Project: FERC issues FEIS for Massive LNG Project

November 11, 2015 By in Eminent Domain, Jordan Cove and Pacific Connector Pipeline Project Tags: , , , , ,
Jordan Cove – Pacific Connector Pipeline Project: FERC issues FEIS for Massive LNG Project

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.