Abbreviated Eminent Domain Business Relocation Regulations – State of Oregon and Trimet
For an owner planning a business relocation in eminent domain, you will need to have a good understanding of the applicable relocation regulations and compensation for your business relocation.
An abbreviated list of Oregon and Trimet’s relocation benefits for relocation compensation is attached below. This list can be used as a cheat sheet for your relocation planning. This will help you understand what you are entitled to for relocation cost reimbursements, or compensation, while planning the relocation of your business that is being displaced by a public project and where the relocation regulations are 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.
Oregon and Trimet’s relocation regulations are based on the Uniform Relocation Act.
How to Begin Planning Your Business Relocation in Eminent Domain
Eminent Domain and Business Relocation Questions and Answers
If you have questions, feel free to contact me for answers while planning your relocation.
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.
Below are links to Oregon’s eminent domain and relocation laws and policies along with links to the Federal Uniform Act. These links will provide you with a full description and eligibility requirements for relocation benefits and payments when eminent domain is used for the acquisition of private property and relocation of the occupants.
EMINENT DOMAIN; PUBLIC ACQUISITION OF PROPERTY – Oregon
Abbreviated Eminent Domain Business Relocation Regulations – State of Colorado
For an owner planning a business relocation in eminent domain, you will need to have a good understanding of the applicable relocation regulations and compensation for your business relocation.
An abbreviated list of Colorado’s relocation benefits for relocation compensation is attached below. This list can be used as a cheat sheet for your relocation planning. This will help you understand what you are entitled to for relocation cost reimbursements, or compensation, while planning the relocation of your business that is being displaced by a public project and where the relocation regulations are 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.
Colorado’s relocation regulations are based on the federal Uniform Relocation Act. However, the state has enhanced the Reestablishment limited category to $50,000. The Uniform Relocation Act has a maximum of $25,000 for this one 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.
Planning Your Business Relocation in Eminent Domain
For your use, I have provided a guide to help you get started with planning your business relocation in eminent domain and includes a list of my recommended best practices for the relocation process. Please follow this link to How to Begin Planning Your Business Relocation in Eminent Domain.
Questions and Answers on Eminent Domain and Business Relocations
If you have questions, feel free to contact me for answers while planning your relocation.
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.
Below are links to Colorado’s eminent domain and relocation laws and policies along with links to the Federal Uniform Act. These links will provide you with a full description and eligibility requirements for relocation benefits and payments when eminent domain is used for the acquisition of private property and relocation of the occupants.
Colorado Business Relocation Benefits and Compensation Regulations in Eminent Domain, Abbreviated
Colorado Business Relocation Benefits and Compensation in Eminent Domain, Abbreviated
References:
Colorado Relocation Assistance and Real Property Acquisition Policies
A business owner should know the summary below for planning their relocation. It’s an abbreviated version of the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA), also referred to as the Uniform Act. This is for your convenience as a quick reference while planning your business relocation and understanding your benefits and compensation of relocation costs, or otherwise working with the Uniform Act. Many of the relocation benefits have requirements and/or conditions for the business to qualify or be eligible for the benefit and its compensation.
Also, please feel free to contact me with eminent domain business relocation questions at 425-398-5708 or
The full version of the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) can be viewed at Uniform Relocation Act. 49 CFR Part 24.
Indiana
Includes Relocation Benefits in Its Eminent Domain and Condemnation Laws
In Indiana, relocation
benefits in eminent domain follow 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.
These regulations are followed when the State or any other public agency
uses eminent domain to purchase new right-of-way for a public project and for
the relocation of those occupying the property.
These regulations must be followed when state or federal funds are
included in the project. Reference: Indiana Code Title 32 Article 24 (IC 32-24).
About The Federal Uniform Relocation Assistance and Real Property Acquisition
Policies Act (URA)
The URA describes the
types of costs that are eligible for reimbursement, known as relocation
benefits, which are available to those being displaced while relocating
from real property being purchased or those otherwise impacted by the new right-of-way
for the public project. The URA is required to
be followed on projects that include federal funding. It’s listed relocation benefits are minimum
requirements where a state or local agency can enhance the level of benefits,
but not reduce them. Non-federally
funded projects may not be required to follow the URA, but many states, as
Indiana, choose these guidelines or some version of them for their state and
local agencies to follow, while others do not.
You can find the URA described in full within the United States Code (Title 42 USC Chapter 61) and the Code of Federal Regulations (Tile 49 CFR Part 24). However, reading through the URA regulations can be a bit daunting, so I’ve prepared a brief summary of the URA business relocation benefits to help you. The summary is attached below. Please understand that my summary of listed benefits is abbreviated for your convenience as a quick reference. Many of the relocation benefits have requirements, and/or conditions for the business to qualify or be eligible for the benefit.
Relocation Assistance
Advisory Services
The displacing public
agency will provide what is called Relocation Assistance Advisory Services to each displaced person. Many property owners
and business owners choose to self-plan and perform their relocation using the
recommendations provided by the condemning public agency’s designated
acquisition agent and relocation agent.
This may be a desirable approach for you if you are not too concerned
with the amount of money you will receive for your property acquisition or for your
business relocation. Also, if your
property or business is uncomplicated, at times, simple issues only need simple
solutions. This method is focused more on simplicity and works well for small businesses
such as an insurance or real estate office having only a few employees. If your
business is more complex, you may need a more in-depth analysis of your relocation
needs and reimbursable relocation benefits. For a more complex business relocation,
you may consider assistance from an eminent domain relocation consultant.
Eminent Domain and
Relocation Consultant
Business Relocation:
An eminent domain
relocation consultant, referred to as a move planner within the URA, can help you gain an understanding of the
relocation issues and how to begin with putting your best foot forward when
facing an eminent domain relocation and communicating with the condemning
public agency. Once engaged, the
consultant’s fees are generally covered by the relocation benefits within the
Uniform Act. The consultant should be skilled with: educating you on how
relocation benefits within the URA will help you, and where they will not; they
should quickly grasp your business situation and its operations; and be fully
versed on construction related activities necessary for relocating your
business. These and other skills are
necessary so that the consultant can fully inform you, and help you with your
critical decision making on your relocation matters, while allowing you to
focus more on your business operations.
To find such a
consultant, I suggest an internet search of: Eminent Domain Relocation
Benefits, Indiana. However, your search will show several eminent domain
attorneys listed who talk about relocation benefits. When an attorney is part
of the relocation team, their work is usually at a higher legal level and is
hopefully based on the relocation consultant’s work. Usually the two will work
together on your situation. If your internet search is not successful for you, feel
free to call me to discuss your business relocation.
Eminent Domain and Real Property Acquisition:
Eminent Domain Attorney:
If you are a property owner facing eminent domain and potential condemnation, I encourage you to talk with an attorney who regularly practices in eminent domain in your state. You can find such an attorney by searching the internet for: Eminent Domain Attorney, Indiana. If that’s not a successful search for you, feel free to call me for some suggestions on who to contact. We regularly work with eminent domain attorneys around the country.
How to Begin Planning Your Business Relocation in Eminent Domain
Eminent domain and business relocations can be rewarding to the business owner by bringing new opportunities to the business with the use of relocation benefits or compensation provided by the public project and its displacing public agency. Unfortunately, too many businesses not only miss key and multiple opportunities, but some even fail to survive, as reported in a federal study in 2005. In my experience, the failures occur because the relocation process and relocation regulations must be understood and closely followed by the business and condemning public agency for the business to receive proper reimbursements of relocation expenses, and those regulations are frequently improperly followed. Several 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), these include:
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 the State 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.
Work with the displacing public agency as much as reasonably possible. Take advantage of the services they offer you.
Educate yourself on your relocation benefits (see my Indiana Eminent Domain Relocation Compensation Regulations cheat sheet below), determine how best to use them for your situation, know how to qualify for them, and how to not lose them.
Denying that a certain item or items you own cannot be relocated.
Not gaining ownership or control of fixtures used in your business
Complaining about the public agency, project, or circumstances that interfere with properly planning your business relocation for its best outcome.
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.
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:
Updating your lease to reflect any improvements you have made to the real property and your right to remove your improvements and trade fixtures.
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.
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.
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.
File relocation claims with the displacing public agency as you incur an obligation to the costs. File claims early and often.
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.
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.
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.
Below
is a partial list and links to projects where the Indiana State Department of
Transportation (INDOT) will likely be purchasing private property for a project’s
new right-of-way under eminent domain and making business relocation payments
for business displacements caused by the projects while following the federal Uniform
Relocation and Acquisition Act (URA).
If you are aware of other projects or familiar with current events on the above projects, please let us know. We would be pleased to update and share information.
Indiana Eminent Domain Relocation Benefits and Compensation Regulations, Abbreviated
Please join me for The Eminent Domain and Land Valuation Litigation conference is taking place January 26-28 in San Diego. I’m looking forward to participating in a full range of cutting-edge issues. My own session, alongside Jill Gelineau and Kelly Walsh from Schwabe Williamson & Wyatt P.C, is entitled Lessons Learned and How to Appeal Under the Uniform Relocation Act and will take place on January 26th at 2:15pm.
For more information, please click here.
There is also a coupon to attend in-person: CY009MK at check out. (Save $150.)
When easements and rights of way are condemned causing an occupant to move or modify the use of personal property, state and federal procedures apply. Learn more about who is eligible for relocation benefits and the top 5 categories of relocation benefits within state regulations and Federal Uniform Act. Find out what you can do as an eminent domain attorney, appraiser, or right-of-way professional that will improve the results of your work.
Please join me The Seminar Group’s upcoming seminar on Easements and Right of Way, Friday, November 18, 2016, Missoula, MT. You can register here.
The 202 Loop South Mountain Freeway project in Phoenix, Arizona, provides a poignant example of how Business Relocation Planning Services can help to improve the situation for both landlords and tenants who are being displaced by eminent domain.
The Loop 202 freeway, also known as the South Mountain Freeway, is part of a new freeway system being constructed in Phoenix. Businesses being displaced by the project include industries with very specific relocation demands such as cold storage, truck repair, truck services, manufacturing, and warehousing. I recently drove the North end of 59th and saw that the effected businesses were still in place. This presented a good opportunity for pre-planning services for their eventual relocation. My article, 6 Benefits of Preplanning your Eminent Domain Relocation, will offer some insights into these services and the value that they bring to an eminent domain team. The article explains that by the time a business has been made eligible for relocation benefits, it’s often times more difficult to prevail in non-standard or complex relocation situations.
I soon learned that the owners of many of the properties in question lease their buildings and properties to unrelated third party tenants. As a result, the owners were not encouraging their tenants to move. Naturally, the landlords want their tenants to remain for as long as possible. This is a common situation and follows the standard practice of dealing with landlord/tenant situations. However, there are some alternatives to the standard practice that can be of substantial benefit to both parties.
When landlords and tenants work together, there are many advantages for both parties. I have extensive experience working with both sides of the fence—with both the displaced businesses and also with the displacing public agencies—and many times cooperation between the landlord and the tenant can benefit both parties. This is often related to the method of treatment of fixtures and working with the displacing public agency.
I have encountered situations where, following the standard practice, each party made separate plans with no attempt to explore strategic cooperation. This can make a difference of millions of dollars. In one instance, this led to lost rent for the landlord and loss of tenant relocation benefits of more than $2.5 million dollars. Strategic planning and cooperation between the two parties could have brought additional rental income to the landlord and maintained the tenant’s eligibility for the $2.5 million in relocation benefits.
Tenants are typically obligated to pay their rent through the end of the lease term or until the time of the actual property taking, whichever occurs first. Long-term and month-to-month tenants will lose their relocation benefits if they move prior to the agency’s real property purchase offer to the property owner, which encourages the tenants to stay at least until that time.
The landlords will have less leverage to hold on to month-to-month tenants after the State has made its offer. It’s far more strategic for the landlord and tenant to have a plan in place before the time of the offer.
I’ve had excellent results obtaining improved relocation benefits or cost-to-cure payments for landlords and tenants who work together. I specialize in conducting preliminary relocation planning services for businesses that will be displaced by a public project. Utilizing our preplanning services for business relocation while following relocation guidelines based on the Uniform Act nearly always improves the outcome of the relocation.
Attorneys may wonder how this scenario applies to them and to their clients. Attorneys who have extended these services to their owner or tenant clients have found that they are able to recover more funds for the real property acquisition and relocation of their clients. They have also been able to improve client acquisitions and client satisfaction.
The people of Chicago have been wondering what’s going to happen to the Bryn Mawr Breakfast Club restaurant?
Bryn Mawr is the historic district in Chicago, Illinois that’s on the lakefront of the Edgewater neighborhood far north of the city. Northeastern Illinois University has acquired land along Bryn Mawr Avenue that includes the building that houses the Bryn Mawr Breakfast Club. The land was acquired by eminent domain.
Apparently the owner was aware that NEIU had an interest in the land but the idea seemed far off and he signed a lease anyways. The restaurant quickly became very popular with locals. Then, in August 2014, NEIU began the eminent domain proceedings with the intention to build student housing.
Many problems occur in cases of eminent domain because relocation benefits are not always offered. That appears to be the case for the Bryn Mawr Breakfast Club. Kitchen equipment, furniture, and decorations can be moved, but any upgrades that the owners made to the property may be a lost investment.
Ideally, the owners would be able to find a new location that was previously housed by a restaurant with an existing commercial kitchen. However, if such a replacement property is unavailable, a new kitchen installation could cost $30-$40k.
If federal funds were used in this project, or if state law required relocation benefits to be offered when using eminent domain, NEIU would be required to follow the federal Uniform Relocation and Acquisition Policy Act (URA). The URA provides regulations that offer a fair and equitable treatment of persons displaced. It includes regulations that allow certain relocation costs to be reimbursed to the tenant. Unfortunately, under many projects, as with NEIU’s project, relocation costs go unpaid and the business tenants end up baring a disproportionate amount of the burden of a project that benefits the public.
In the absence of providing required relocation benefits, such as with the URA, and to reduce the burden placed on business tenants, a relocation package should be negotiated where the business occupant will be entitled to relocation benefits for moving personal property and reconfiguring their operations because of the property taking. It’s valuable to have qualified people analyze the issues and facts, and prepare the necessary reports and documentation.
Professionals should be brought in who understand the facts so that they can perform a proper analysis and sort items into the proper categories in hopes that the business can prevail in an acquisition or relocation dispute.
As the tax season begins, it’s a good time to remind you and your clients that relocation payments from federal funded projects that use eminent domain to acquire private property are not considered income, and acquisition payments are treated as a capital gain, which can be deferred by a 1033 exchange.
The Federal Uniform Relocation and Acquisition Act (URA) states that relocation payments are not considered income on a federally funded project. My clients and their tax preparers frequently report weak support regarding this URA statement. Because this frequently causes inconsistent treatment of payments by tax preparers, I’ve been prompted to research the issue, not as a tax person but as a relocation consultant, in order to find support for the tax preparer when dealing with relocation payments, and to assist my clients with relocation planning decisions.
My article, Eminent Domain Acquisition Payments, Relocation Payments, and Taxes, outlines the results of my research in more detail here. See here. Involuntary Conversions.
Once it is understood how to handle the relocation payments, sometimes the next hurdle is to identify relocation payments or separate relocation payments from acquisition payments. This dilemma can occur when a dispute resolution process or trial is used to settle a case where fixtures are included, or when a case is a combination of acquisition and relocation issues. These processes often lump things together making it difficult to identify whether the resulting payment was part of relocation or acquisition. They can also inadvertently limit ongoing relocation benefits.
If you are in the process of preparing for a dispute resolution or trial, I can assist you by preparing language to include in a settlement agreement, preparing clarifying check-sheets, and providing other materials to help identify relocation payments. I can also assist you with preserving rights to ongoing relocation benefits.
Why a Displaced Business Should Be Concerned with Relocation Assistance Advisory Services, and Why a Displacing Public Agency Should Diligently Provide These Services
Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA)
On public projects where a public agency is using eminent domain laws to condemn private property, the agency often elects to, or in many cases is required to, follow the URA. For example, a department of transportation might use eminent domain laws in the case for expanding a highway right of way, or adding a new light rail line.
When the project includes federal funds, the public agency is required to follow the URA. When the URA is used, it provides regulations and guidelines that the public agency must follow when acquiring private property and displacing business and residential tenants for the agency’s project. The URA’s regulations are the rights of the property owners, displaced businesses, and displaced residents to receive from the displacing public agency.
Relocation Assistance Advisory Services
The URA requires a condemning public agency to provide six key relocation advisory services to a displaced business. A list of these services follows – Relocation Advisory Service #1-6. I have also included my comments for each of these services as a relocation consultant working for displaced businesses, as well as, working as a relocation agent for public agencies providing these services.
Relocation Assistance Advisory Services vs. Relocation Consulting Services
Relocation Assistance Advisory Services, not to be confused with Relocation Consulting Services, also known as Move Planning Services, are a required service provided by a condemning public agency to a displaced person or business. Relocation Consulting Services are provided by a private consultant hired by the displaced business to plan and coordinate their relocation. Relocation consulting services are a reimbursable relocation expense eligible to the displaced business within the URA regulations.
Success and Failure of Relocation Assistance Advisory Services
When a public agency fulfills these services properly, they will gain important information that will help the agency prepare for the timely use, implementation, and payment of the relocation benefits provided. This is meant to better assist the displaced business to successfully relocate with minimal downtime and minimal out of pocket expenses.
When the public agency fails to fulfill these services, they find themselves ill prepared to provide the necessary relocation benefits in a timely manner. Delay causes unnecessary damages to the displaced business including excessive downtime and excessive out of pocket expenses. For the public agency, they will likely experience needless relocation payments, and unnecessary expenses for appeals and legal fees. The community may also suffer from a loss of jobs, local tax revenues, and productivity if the displaced business fails to survive the relocation.
Appeal or Tort Claim of Relocation Assistance Advisory Services
A business can appeal most anything related to their relocation benefits. Unfortunately, most of the damages caused by the lack of these Relocation Advisory Services are non-compensable within the URA, leaving little to no recovery of costs or damages from the appeal process. A lack of these services inflicts damages in the way of loss of income, loss of customers, and loss of employees, which are specifically excluded from eligible cost reimbursements. Increased costs for the business are another effect, falling into the capped Reestablishment category of the URA and leaving little if any recovery of costs. In addition to or in place of an appeal, some businesses have had success treating this issue as a Tort claim.
CFR Title 49, §24.205(c) Relocation Assistance Advisory Services
This section of the URA outlines the Services to be provided as follows:
Services to be provided. The advisory program shall include such measures, facilities, and services as may be necessary or appropriate in order to:
Determine, for nonresidential (businesses, farm, and nonprofit organizations) displacements, the relocation needs, and preferences of each business (farm and nonprofit organization) to be displaced.
Explain the relocation payments and other assistance for which the business may be eligible, the related eligibility requirements, and the procedures for obtaining such assistance.
This shall include a personal interview with each business.
At a minimum, interviews with displaced business owners and operators should include the following items:
Relocation Advisory Service #1
The Regulation:
24.205(c)(2)(i)(A) The business’s replacement site requirements1, current lease terms2 and other contractual obligations3, and the financial capacity of the business to accomplish the move4.
Comments on replacement sites and financial capacity to relocate:
Replacement site requirements – Changed zoning may mean relocating outside of the business’s customer and/or employee base. Some businesses may have special needs that are not readily found in the market place.
Current lease terms – Leases that are several years old may be very different from what is currently available in the market, causing extra expenses for many years.
Contractual obligations – We often find that the displaced property owner or landlord sold the business that is currently the tenant and is now receiving payments for the sale of the business. This creates a need and desire to continue receiving those payments by providing a replacement property to the tenant. In addition, the business may have a contract to supply products or services that may be disrupted by the relocation.
Financial capacity – Most businesses having to relocate do not have the financial capacity or cash flow to finance their own business relocation. Additionally, the move can drain any available cash and cause a loss of sales or income during the move. Knowing the financial capacity of the displaced business should alert the public agency to be ready to provide available tools within the Relocation Guidelines that will assist the business to minimize downtime and out of pocket costs for the move. This may include advance payments, recommending professional services, and assuring the displaced business understands which relocation costs are eligible and not eligible for reimbursement.
Relocation Advisory Service #2
The Regulation:
24.205(c)(2)(i)(B) Determination of the need for outside specialists in accordance with §24.301(g)(12) that will be required to assist in planning the move, assistance in the actual move, and in the reinstallation of machinery and/or other personal property.
Comments on outside specialists:
Most, but not all, displaced businesses need some level of outside specialist support. The public agency, through their agents and consultants, must recognize early on in the project this need for specialists to help a business successfully relocate in a timely timeframe.
Otherwise, the displaced person can also decide that they need a specialist. A specialist may be needed to deal with the business’s unique needs, or, to help free up time for the business owner and key personnel so they can focus on running the business, while the specialist undertakes the planning and coordination of the business move.
I like to see a displaced business have the opportunity to have one person in charge of planning and coordinating their move who will assist them with making the move as though it had been planned and executed for sound business reasons, rather than eminent domain reasons.
Choosing to use a relocation consultant is similar to choosing the use of a general contractor to work on your house compared to you hiring and managing all of the subcontractors yourself and dealing with issues you’re not used to handling, all while you’re at your office working at your day job. There are good reasons why general contractors exist; they are key to achieving your desired results including quality, timeliness, and budget, particularly when multiple trades or vendors are involved.
Much like a general contractor, a relocation consultant can plan, organize, coordinate, and schedule other experts, contractors, and vendors in a manner that minimizes unnecessary costs and downtime, where the business owner participates as much or as little as they desire while they continue to run their business. An example of avoiding downtime is recognizing equipment that needs code upgrades before it’s disconnected and moved, or, as simple as preparing a layout plan for the new location during the planning stage that will maintain or improve the flow of operations or visual appearance to the customers. Unfortunately, relocation agents working for the government agency just don’t have that much time or budget to dedicate to a single displaced business.
For many reasons, it’s helpful for the relocation consultant to be conversant on eminent domain issues. Particularly because the most displaced businesses are not prepared financially for the move. The relocation consultant can help disseminate between acquisition and relocation issues, and assist with qualifying the business for available funding sources such as the relocation benefits. Additionally, many relocation decisions are based on available finances. During the planning stage of the relocation, the business needs to know what they will have to pay for out of pocket and where relocation benefits will help them. This is where the relocation consultant can to offer critical guidance. This marks an important difference when planning the relocation and can mean the difference between the business moving as-is, with the possibility of being in a worsened business situation, or moving in a manner that helps them continue their business success equal to or better than they experienced at their displacement location.
Relocation Advisory Service #3
The Regulation:
24.205(c)(2)(i)(C) For businesses, an identification and resolution of personalty/realty issues. Every effort must be made to identify and resolve realty/personalty issues prior to, or at the time of, the appraisal of the property.
Comments on personalty and realty issues:
When a fixture is classified as realty, the public agency’s payment for the fixture is made to the owner based on its depreciated value, if it is determined to have value. The depreciated value is usually less than the cost of replacing the item. Additionally, the realty payment often goes to the property owner or the real property mortgage holder rather than the displaced business. Finally, realty is not eligible for relocation benefits, leaving the owner to pay from their own pocket to replace this item at their new location. It’s clearly very important to get this right.
Knowledge of the business, personal property, and the laws that distinguish personalty from realty are key to proper personalty/realty classification. Unfortunately, too often the relocation agent and the appraiser do not collaborate on personalty and realty issues or one is not conversant on the issue, leaving flawed or incomplete appraisal reports. This occurrence creates confusion and debate during the business move causing additional relocation costs, delay, and downtime.
To improve on this issue, appraisers (real property appraisers, and FF&E appraisers) should be accompanied on the appraisal walk-through by a relocation agent (as the URA suggests) who has knowledge on this issue. Discussions between those parties should resolve most personalty/realty issues before they become a relocation problem.
Additionally, the business owner will benefit from having their own relocation consultant who is knowledgeable on these issues and involved prior to and during the appraisal walk-through, particularly when there is equipment and machinery involved. This will enhance the collaboration and understanding among all parties including the business owner, which will improve the relocation planning and process. In addition, the cost for this service is often a reimbursable expense to the displaced business or property owner.
Relocation Advisory Service #4
The Regulation:
24.205(c)(2)(i)(D) An estimate of the time required for the business to vacate the site.
Comments on estimated time to vacate:
A relocation schedule must be prepared to take advantage of the available time to properly plan, prepare, and perform the move. Without a schedule, a business may incur unplanned and unnecessary downtime. Downtime can cause a business to lose employees and customers along with income and profits, none of which are eligible for reimbursement, and any of which can cause business disruption and possibly devastation.
For the public agency, a relocation schedule is a tool to reduce unnecessary relocation costs and missed vacate dates. It will also improve the agency’s success with relocating displaced businesses, and improve the usage of public funds.
At a minimum, the schedule should include three milestones: 1) Notice of Eligibility, 2) Acquire Replacement Property, and 3) Vacate Displacement Property. Including some known tasks between these milestones will produce a basic beginning schedule as shown below (dates and task durations are excluded for clarity).
Notice of Eligibility
Plan relocation
Search for replacement site
Acquire Replacement Property
Plan relocation
Design and permitting for replacement property improvements
Prepare replacement property to receive relocated personal property
Send change of address notices
Disconnect, move, and reinstall personal property
Vacate Displacement Property
Finalize move
This basic schedule will give the business owner a starting point for planning purposes. The public agency’s relocation agent should be cautious of including too much detail for liability reasons. Additional tasks and durations can be added, as they become known by the business owner or the relocation consultant.
This basic schedule may be more than is required by this regulation, however, it is an excellent tool that supports the required task. The schedule also makes a significant improvement to most business relocations and is well worth the small amount of effort invested in its preparation for the benefits it produces.
Relocation Advisory Service #5
The Regulation:
24.205(c)(2)(i)(E) An estimate of the anticipated difficulty in locating a replacement property.
Comments on locating a replacement property:
Planning and finding the perfect replacement property that’s affordable and in the proper location can be challenging in the best of times. Because the displaced business was not likely in the process of planning their move before the notice to vacate was delivered, it’s critical for the business to find the right replacement property more quickly than under normal conditions to allow the needed time to prepare the replacement property for the business and to relocate the business. Otherwise, if the vacate date is too near, the business may incur downtime. However, spending the necessary time to find the right replacement property can be essential to the longevity of the displaced business. There is a fine balance between finding the perfect replacement property and avoiding business downtime. That balance point varies for each business.
The fast-food industry is a good example of the effort that goes into selecting store locations. One prosperous displaced fast-food business couldn’t wait for the normal, long, yet successful process of site selection provided by the franchisor, and there was only a year to go until their vacate date. The franchisee short-circuited the proven franchisor’s process in order to quickly find the replacement property without any assistance of the franchisor. The franchisee leased and successfully prepared the replacement site, opening the doors just in time to vacate the displacement property, avoiding any business downtime.
However, during the first year of operating at the replacement property, the franchisee spent an extraordinary amount of money on advertising in an effort to attract customers to his new location and struggled with poor sales. Within the second year of operating at the replacement property while continuing to advertise, the business closed for lack of cash flow resulting from too few sales.
The project’s vacate date will be fixed and unlikely to change. Early on in the project, the displaced business needs to fully understand the project’s inflexible timeline, the tasks, and challenges facing them. To hasten the property search, the displacee needs to know how relocation benefits may or may not help make a particular property suitable and affordable for their business. It is the displacing public agency’s job and/or challenge to inform the displaced business of these issues to help them avoid downtime, as well as find an affordable replacement property that fits their needs, all while meeting the project’s schedule. This begins with the public agency estimating the difficulty in locating a replacement property.
Relocation Advisory Service #6
The Regulation:
24.205(c)(2)(i)(F) An identification of any advance relocation payments required for the move, and the Agency’s legal capacity to provide them.
Comments on advance relocation payments:
Advance payments are often necessary, as well as critical for a displaced business, which often has shallow pockets. Advance payments are often needed for ordering substitute personal property, ordering materials needed for the reinstallation of personal property, and starting design services. A public agency must recognize the need and be ready to offer advance payments. Otherwise, the business relocation may stall at the beginning of the process, which could cause missing the vacate date and delaying the public project, and can cause an unnecessary hardship on the displaced business.
Conclusion
These six Relocation Assistance Advisory Services are critical to prepare for and to accomplish a successful business relocation. Any shortcomings in their implementation leave a wider opportunity for unnecessary costs and downtime to occur.
The public agency must initiate the inquiries of the business to gain the information necessary to properly provide relocation benefits. It is the business’s responsibility to provide the necessary information to the public agency.
I would be pleased to answer any questions you may have on this matter or other eminent domain and condemnation matters you may want to discuss as they relate to relocation and cost-to-cure. Please contact me either by phone 425-398-5708 or email . I look forward to hearing from you.
425-398-5708