Successful Business Relocations Within Eminent Domin

Proper planning of a Maryland business relocation in eminent domain can be rewarding to the business owner by bringing new opportunities to the business with the use of relocation benefits and compensation provided by the public project and its displacing public agency.  Those opportunities can include the following, with the use of relocation benefits and compensation:

• Moving to a right-size facility and/or right location for your business
• Replacing equipment with more productive equipment
• Improving the flow or style of your business operations

Proper relocation planning can achieve those items listed above and more. I’ve experienced having relocation compensation pay for those opportunities in amounts ranging from a few thousand dollars for a very small business, and as much as $34 million for a more complicated business.

Seldom have I experienced a business relocation in eminent domain go unrewarding for the owner.  99% of the hundreds of business relocations that I’ve been a part of have benefited because their relocation put them in a better long-term business situation.  This was while following relocation regulations that were based on the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended.  This is also known as the Uniform Relocation Act, the Uniform Act, or more simply the URA.

Maryland’s relocation regulations are based on the federal Uniform Relocation Act.  However, the state has enhanced the Fixed Payment category to $60,000.  Additionally, the Reestablishment category is also increased to $60,000. The Uniform Relocation Act has a maximum of $40,000 for the Fixed Payment category and $25,000 for the Reestablishment category.  To comply with the Uniform Relocation Act regulations, a public agency cannot diminish any of the benefits within the Act, however, it is allowed to enhance the benefits.

Unfortunately, too many businesses not only miss out on those described relocation opportunities, but some even fail to survive, as reported in a federal study published in 2005.  I want to share with you a few tips on how to not be a part of the business failed statistic, but to become a business success statistic after being relocated for a public project.

Failed Business Relocations Within Eminent Domain

In my opinion, most business failures occur, not because of inadequate relocation benefits within the URA, but because of improper implementation of the relocation regulations on the part of the public agency and the business owner.  The relocation process and relocation regulations must be intimately understood and closely followed by the business and the condemning public agency for the business to properly plan the relocation so that they can receive proper reimbursements for relocation expenses.  Unfortunately, those regulations are frequently improperly understood or followed at the level that is necessary by both the business and the public agency. 

I’ll share with you some of my methods and recommendations for achieving excellent relocation results. My hope is for you you and your business to also complete your relocation in a better situation by fully using the available relocation benefits described in the Uniform Act, or the displacing agency’s guidelines based on the URA.

It starts with understanding some of the positive and negative influences that will impact the relocation results.

Factors Affecting the Level of Success for Business Relocations in Eminent Domain

Several key factors will influence the level of success a business experiences with relocating while following the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) and Maryland Relocation Regulations. A few of those include:

• The particular circumstances of the real property being condemned
• The circumstances of the business type being displaced
• The condemning public agency’s approach to relocation
• The ability to soften or overcome those factors listed above
• The business owner’s approach to relocating their business.

For this discussion, I’ll focus on the business’s most controllable part of the process, the business owner and their approach to relocating while following the URA or state regulations.

Best Practices for Eminent Domain Business Relocation Planning

For the best relocation outcome, the business owner will want to use the proper approach to the relocation process.  There is a cause and effect science to the relocation process, which we want to control to create the best results. It starts with the business owner’s approach to the relocation. Below is a list of best practices that I recommend while advising business owners through their relocations in eminent domain.

1. Work with the displacing public agency as much as reasonably possible.  Take advantage of the services they offer you.
2. Educate yourself on your relocation benefits (see my Maryland State abbreviated Relocation Compensation Regulations cheat sheet), determine how best to use them for your situation, know how to qualify for them, and how to not lose them.
3. Avoid these common mistakes listed below and my Top-10 business relocation mistakes when relocating within eminent domain:
   1. Denying that your business can be relocated.
   2. Denying that a certain item or items you own cannot be relocated.
   3. Not gaining ownership or control of fixtures used in your business
   4. Complaining about the public agency, project, or circumstances that interfere with properly planning your business relocation for its best outcome.
   5. Assuming that you can relocate using normal business best practices and expect to receive proper relocation reimbursements.  You must follow the details of the Uniform Act, no matter how seemingly nonsensical they appear.
4. Start planning early, start before the displacing public agency starts for you (read more on preplanning your eminent domain relocation). Continue your preplanning into relocation planning for developing an actual relocation plan report. You can use my 11-Step Business Relocation Planning as a guide for you. Start your planning with:
   1. Updating your lease to reflect any improvements you have made to the real property and your right to remove your improvements and trade fixtures.
   2. You will want a current inventory of equipment and other personal property that is owned or controlled by your business. If you are using landlord owned fixtures in your business, this is a good time to consider negotiating a purchase of those items to give you the right to remove them and the right to relocation compensation for those items.

5. Begin searching for a replacement property as soon as you feel or know that your business will be displaced. However, don’t incur costs or move until you have received a Relocation Benefits Eligibility Letter from the displacing public agency.
6. Dedicate the time necessary for you and/or key employees to organize, plan, and perform the relocation tasks necessary for the duration of the relocation process, while not sacrificing the necessary time for ongoing business operations.
7. File relocation claims with the displacing public agency as you incur an obligation to the costs.  File claims early and often.
8. Relocation claims should be well described and supported.  Don’t dump unorganized costs onto the public agency’s relocation agent and expect them to arrive at the best reimbursement for you. No shoe box relocation claim submittals.
9. Request any public agency claim denials for relocation benefits to be in writing.  Verbal denials from the public agency’s relocation agent are a frequent cause of misinformation and misunderstanding of benefits causing an unnecessary loss of eligible relocation compensation.
10. If your business is more complicated than a small insurance or real estate office, or, you feel that you are not being properly treated by the displacing public agency, consider talking with an eminent domain relocation consultant.

This summary of best practices will hopefully get you started on the right foot with your business relocation.  Business relocation planning within eminent domain is one of my favorite services I provide and my favorite topic for conversation.  Please feel free to call me to discuss your situation.

Questions and Answers on Eminent Domain and Business Relocations

If you have questions, feel free to contact me for answers while planning your relocation, which may include but not limited to:

• What do you do next, starting from the point where you are in your relocation process?
• How do you apply the best practices to your specific business relocation planning?
• What are your eligible relocation benefits and compensation?
• How and when do you become eligible for relocation benefits and compensation?
• How do you prevent a loss of your relocation benefits and compensation?
• How can you get out of a pickle in your current relocation situation?
• What do I need to know about the Uniform Relocation Act, relocation advisory services, relocation assistance, and relocation planning?
• When and why would I want an eminent domain relocation consultant for planning my move? Also, see FAQ of Martyn Daniel

You can contact me at 425-398-5708 or . There’s no obligation for your contact, it will simply be a good productive conversation.

Business owners and their representatives, attorneys, appraisers, and public agency representatives are all welcome to call.

References:

MARYLAND RELOCATION ASSISTANCE—REAL PROPERTY ACQUISITION POLICY

Md. REAL PROPERTY Code Ann. § 12-205

Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970

United States Code Title 42 USC Chapter 61

Code of Federal Regulations Title 49 CFR Part 24