dentist Archives - Eminent Domain Services and Business Relocation Consulting

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 that are dictated by these public projects.

Business downtime can be an unfortunate result of relocating under those conditions. Downtime for many businesses such as those shown in the above photos data centers, metal recycle and metal shredding, dentist, and ready-mix concrete plant, along with other many other business, can cause the displaced business to default on delivery contracts, encounter losses in sales, loss of employees, loss of customers, and allow competitors to encroach on its market share.

There is a solution found within the Uniform Relocation Act (URA). The URA provides the regulations that will likely be followed by the condemning public agency for displacing the business. 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 for 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 any of the rules 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 could have otherwise been eligible substitution reimbursements.

Substitution is often an integral tool to a successful business relocation. My work, when planning business relocations always considers substitution, nearly always uses it to some extent, and sometimes for most or all of the equipment.

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.

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Martyn Daniel Eminent Domain Specialist