Tag Archives: business relocatioin

Appraisers, Attorneys, Businesses, Contact Martyn, Eminent Domain, Property Owners

An Overview of Capped Actual Cost Items for Business Owners Affected by Eminent Domain

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In my last blog post entitled, “Would You Choose Lump Sum or Actual Cost Relocation Reimbursement? I discussed two reimbursement options available to business owners who must relocated due to eminent domain; lump sum and actual cost.

If a business owner chooses to be reimbursed using actual cost as the basis for the claims, some expenses are capped.

Capped Expenses: Reestablishment (maximum $25,000):

Note that the $25,000 cap mentioned above is the minimum set by the Federal Relocation Guidelines. Some states have higher amounts, some are at $50k or higher, and a few are unlimited. Link to a state-by-state relocation listing here.

1. Repairs or improvement to the replacement property as required by law or code

2. Modification to the replacement property to enable the business to operate

3. Construction and installation of new signage to advertise the business

4. Redecoration or replacement of soiled or worn surfaces such as carpeting, paint, paneling

5. Advertisement of the replacement location

6. Increased cost of operations for two years

7. Other items considered essential to the reestablishment of the business

Since an eminent domain and business relocation consultant’s services are an eligible cost when opting for the actual cost for a planned relocation, the capped items listed above are where a consultant’s expertise is important.

For example, #2 – capped within the $25,000 (depending on your state or location) is ‘modification to the replacement property to enable the business to operate’.  A consultant with construction experience can suggest modifications which are contained within that reimbursement amount.

On the other hand, a business owner may simply look at a replacement property (if he even has the time to search for properties) and believe that hefty modifications leading to out-of-pocket expenses is the only solution to enable the business to operate.

Can you see why an eminent domain and business relocation consultant’s services are absolutely necessary to the seamless transition in an eminent domain move?

In my next blog post, I will compare actual cost estimates for relocation for small businesses versus acceptance of the lump sum.

Do you have any questions about the capped amount in your state?

Appraisers, Attorneys, Businesses, Contact Martyn, Eminent Domain, relocation

Would You Choose Lump Sum or Actual Cost Relocation Reimbursement?

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Under Relocation Guidelines featured on my site by state, business owners who must relocate due to eminent domain can choose to receive benefits from the government agency one of two ways.

1) Lump Sum Payment – up to $40,000 based on income

2) Actual Cost Relocation – based on actual eligible costs, some of which are capped.

Lump Sum Payment

Business owners can receive a lump sum or a fixed payment of up to $40,000 and call it a day.  The business owner will move themselves and no other claims can be submitted to the agency for reimbursement.

So if it costs the business owner $300,000 to relocate machinery, office equipment, parts, furniture for example, along with setting up of computers, telephones, heating and air conditioning, the business owner will pay-out-of-pocket for anything over and above the $40,000 amount.

In this example this amount would be $260,000.

In a cash-strapped economy, any out-of-pocket expenses could make or break a business.

Actual Cost Relocation

The following expenses can be reimbursed to the business owner based on the individual and actual costs of the move.

Moving (no maximum amount with one exception):

1. Transportation of Personal Property

2. Packing, crating, unpacking, uncrating of Personal Property

3. Disconnecting, dismantling, removing, reassembling, and reinstalling equipment, machinery, and other personal property

4. Storage of personal property up to 12 months

5. Insurance for the replacement value of personal property during the move and necessary storage

6. Any license, permit, or certification required at the replacement site, which the business had at the displacement location

7. Replacement value of property lost, stolen, or damaged during the move

8. Professional services for planning, moving, and reinstalling the personal property

9. Re-lettering signs and replacing printed materials made obsolete by the move

  • Stationery
  • Notification of the move

10. Actual direct loss of tangible personal property

11. Reasonable cost incurred trying to sell and item that is not to be relocated

12. Purchase of substitute personal property.

13. Searching for a replacement location (Maximum $2,500)

14. Costs to secure professional move bids

15. Low Value/High Bulk

16. Disposal of personal property and hazardous materials

If a business owner does not opt for the lump sum payment and chooses to be reimbursed via actual costs, there are a few expenses which are capped. My next blog will explain and list these items.

If your company has to move due to eminent domain, which option would you choose? Contact Martyn Daniel, Eminent Domain and Business Relocation Consultant to help you answer that question.

 

Businesses, Eminent Domain

City Prepares to Seize Willet’s Point Properties – Following URA Guidelines?

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Willet's Point RedevelopmentA February 11th, 2011 article in The Epoch Times entitled, City Prepares to Seize Willet’s Point Properties,  reported on 9 Queens, NY business owners who gathered at a press conference expressing concern that their properties would be taken by the City to make way for the Willet’s Point Redevelopment Project.

“The eminent domain law gives the city the power to force owners into selling private land to the city for public use. Property owners will not be left completely in the lurch, however, as they will be compensated with a fair market value determined by a judge. The EDC has also provided career training and relocation to some owners who have willingly sold their properties.

The crux of the matter remains whether the redevelopment of Willets Point is in the interest of the public, as mandated by the eminent domain law.

The city plans to replace the mishmash of auto recycling and repair shops with housing developments, retailspace, a hotel, and parkland.”

I find it very interesting that relocation benefits are only being offered to the cooperative property owners.  Most public projects using eminent domain will offer relocation benefits by following the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA).

The URA provides relocation benefits and guidelines to all eligible property owners and tenants within the public project’s area and makes no distinction between those that are cooperative and non-cooperative.  Those guidelines, in part, spell out how both sides will address relocation costs and the rights and responsibilities of each side.

Businesses can successfully relocate and have actually improved their businesses when relocating under these guidelines.  Without them, a business is left with incurring significant relocation costs which they often cannot afford.  Many would say this is an unfair burden to put onto a business owner while the general public is benefiting from their losses.  That’s why these URA guidelines where developed in 1970.

Having helped several hundred businesses relocate from projects using eminent domain, my experience has revealed that the public agencies that follow the URA have had better success with clearing their needed right of way in a timely and equitable fashion for all.

It would be interesting to see if the Economic Development Corp. would find more cooperation and improved success for their project if they adopted these relocation guidelines.

Eminent Domain

North Tarrant Express and Eminent Domain

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TxDOT’s filing of eminent domain on the North Tarrant Express may be the positive aspect this project needs for right of way acquisition. 

Eminent domain provides a set of rules that the property owners, tenants, and the public agency (TxDOT) have to follow. These rules make the acquisition process smoother and often more fair for the property owner and tenants.

Eminent domain regulations spell-out how fair market value is determined for the properties and what relocation benefits are available to the tenants.

Even with regulations in place, there can still be significant differences in the interpretation of these rules. Typically, these obstacles involve the disparity in property values and relocation costs.  However, eminent domain regulations are in place to help all parties involved to reach bilateral goals resulting in a quicker and fairer outcome.

Martyn Daniel has helped hundreds of businesses successfully relocate; often to more prosperous locations.  Martyn offers one-on-one consulting services, group workshops and online seminars for clients who need the relevant facts to make an educated decision. 

To schedule a free 15-minute no obligation call with Martyn, please click here for an appointment https://my.timedriver.com/F8VSS .

Eminent Domain

I-15 Core Project – Eminent Domain and Business Relocations

Business Relocation

The I-15 Core expansion adds several new lanes and revised intersections spanning 24 miles starting in the town of Lehi and heading south passing through American Fork, Pleasant Grove, Orem, Provo, Springville, and Spanish Fork.

For the size of this project, there are relatively few businesses having to relocate.  What I see is a good effort by the design team to utilize the existing right of way, already owned by the Utah Department of Transportation (UDOT), avoiding significant impacts to businesses and property owners.

There are a large number of partial, or strip takings, which minimizes the typical impact on businesses on a project of this size.  Strip takings may create some severance damages resulting in UDOT making cost-to-cure payments to solve problems and make a property functional after the new right of way severs the properties.  This will likely create some business relocations, which sometimes show up when the impact to the property is understood by the property owner or the business tenant.

 Although minimal, there are some full acquisitions of commercial properties were UDOT is using eminent domain to force the sale of the property.  This has triggered business relocations with the use of UDOT’s Acquisition and Relocation Guidelines.

 UDOT’s guidelines closely follow the Federal Highway Administration’s (FHWA) Acquisition and Relocation Guidelines. However, UDOT has enhanced the federal guidelines by increasing payments in two areas, the in-lieu payment category, and the reestablishment category.  

 The in-lieu payment, which is a one-time payment to businesses based on their average annual income, was increased from the FHWA limit of $20,000 to a maximum payment of $75,000. The in-lieu payment requires the business to wave all of their rights to other relocation benefits, which can be a significant sacrifice for a business even at the increased level. 

 The increased reestablishment category, which FHWA limits at $10,000, UDOT increased to $50,000.  The reestablishment category covers a certain number of business cost reimbursements that are in addition to the moving, reinstallation, and other costs related to the business relocation.