In my last blog post, “An Overview of Capped Actual Cost Items for Business Owners Affected by Eminent Domain” I discussed two reimbursement options available to business owners who must relocate due to eminent domain; lump sum and actual cost.
The lump sum amount is a rather simple process for the business owner. He/she simply accepts the $40k[1] available for relocation and ‘calls it a day’. No other claims processing is needed. Hopefully, the business owner has cash reserves available in addition to the $40k because rarely does a full relocation of a business fall within that dollar amount.
I am often asked by business owners, “$40k (or whatever the capped amount may be) sounds like a lot of money. Why would I want to go through the trouble of calculating actual costs?”
While $40k may sound like a lot of money a business owner can benefit 100 fold or more through actual cost accounting. Business owners can relocate to a better location and some often upgrade their equipment while previously that might not have been possible. Further, a business owner can include the services of a relocation consultant in their process where the professional costs will be reimbursed as well. Note: Preparation of claims is not a reimbursable expense, but planning for claims is reimbursable.
But that is really just the ‘tip of the iceberg’ for the business owner who benefits from actual cost reimbursement.
For example, I worked with a pharmacy owner who chose not to accept the lump sum payment. Line item costs for a handful of reimbursement amounts which the pharmacy owner received are as follows:
Pharmacy Relocation Reimbursements
- Transportation of Personal Property – $27,000
- Packing , crating, unpacking, uncrating of Personal Property – Included above
- Disconnecting, dismantling, removing, reassembling, and reinstalling equipment, machinery, and other personal property – $72,000
- Professional services for planning , moving, and reinstalling the personal property – $15,200
- Re-lettering signs and replacing printed materials made obsolete by the move – $8,000
- Purchase of substitute personal property. $34,000
- Searching for a replacement location (Maximum $2,500) – $2,500Note that there are 27 line items the agency will consider for reimbursement. I have just listed 7 items which more than exceeds the $40k the owner might have received if he had taken the lump sum.
So I ask, “If your business needed to relocate due to eminent domain, would you take the lump sum offered by the agency or would you consider working with a business relocation consultant to reap the best benefit from your move?”
I offer proof.
My next blog post will indicate the reimbursement for a company with 50+ employees.
Martyn Daniel
www.EminentDomainandBusinessRelocationConsulting.com
[1] If a business owner chooses to be reimbursed using actual cost as the basis for the claims reimbursement, bear in mind, though that some expenses are capped.
Note that a $25,000 cap on the category referred to as Reestablishment 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.
In the state of WA, where I often practice eminent domain and business relocation consulting, the Lump Sum cap is $40k.