When a business must move because of a public project displacing it using eminent domain, often there is insufficient time allowed to properly plan, prepare, and perform the move.  Typically, a business would never choose or plan to move under the conditions dictated by these public projects.

Business downtime can be an unfortunate result of relocating under those conditions. Downtime for many businesses such as a ready-mix concrete plant (shown in the above photo), manufacturing, and many others, can cause the displaced business to default on delivery contracts, encounter losses in sales, loss of employees, and allow competitors to encroach on its market share.

There is a solution found within the Federal Uniform Relocation and Acquisition Act (URA). The URA has a method of claiming relocation cost reimbursements described in a category called Substitution of Personal Property. This category includes some amount of reimbursement for the business to install new, or substituted, equipment at the replacement property. This can result in the continuation of operations at the displacement site while installing modern equipment at the replacement site, thereby eliminating downtime while also improving future operations. The amount of reimbursement will be equal to or less than the estimated cost to move and install the existing equipment.

This category has specific rules which must be followed in order to qualify to receive the cost reimbursement. Some of the rules may seem non-applicable or even nonsensical. Don’t fall into the trap, as some have, of thinking you can skip a specified rule and still qualify by simply following prudent business practices while relocating your business. It won’t work and you will risk losing the entire reimbursement. I recently saw a substitution claim missing some of the required components causing an agency to deny several million dollars of what would have otherwise been eligible substitution reimbursements (unrelated to the above photo).

Substitution is an integral tool in my business relocation planning work. I almost always analyze its use and nearly always use it to some extent.

The best practices when using the substitution method of reimbursement will be discussed another time.