Individuals, Businesses Must be Justly Compensated When Property is Taken for Public Projects
When the government takes private property for a public project, both the United States and the Minnesota Constitutions require that just compensation be paid for the taking. Unless Minnesota law is amended, property owners losing property to Metropolitan Council (Met Council) transit projects will not receive just compensation.
If you think all private property owners have the same rights and protections when their property is taken for a public project, think again. It is the position of the Metropolitan Council (Met Council) that it does not have to extend any of the following rights to private property owners when the Met Council takes their property for light rail transit (LRT) and bus rapid transit (BRT) projects:
- the right to a written offer backed by a copy of a supporting appraisal (§ 117.036)
- the right to reimbursement of appraisal fees up to $1,500 for residential property owners and $5,000 for non-residential property owners (§ 117.055, subd. 2(b))
- the right to recover loss of going concern value for businesses totally destroyed (§ 117.186)
- the right to “minimum compensation,” or sufficient compensation for the property owner to purchase a comparable property in the community (§ 117.187)
- the right not to be forced to accept as partial compensation a substitute or replacement property (§ 117.188)
- the right not to be forced to accept return of the property after it has been acquired (§ 117.188)
- the right to moving expenses (called “relocation assistance”) up to $50,000 and the right to have any dispute over such expenses resolved by an administrative law judge (§ 117.52, subd. 1a & 4)
- the right to recover attorneys’ and expert fees, which may be awarded if the property owner recovers an amount that is between 20 percent and 40 percent greater than the last written offer, and which must be awarded if the property owner recovers an amount more than 40 percent greater than the last written offer (§ 117.031)
These are substantial and significant property owner rights. When private property is taken for a public project, Chapter 117 of Minnesota Statutes (eminent domain) extends numerous rights and protections to property owners to ensure that their constitutional right to “just compensation” is fulfilled, including all those rights and protections enumerated above.
The Met Council asserts that it does not have to extend these rights when it takes private property for LRT and BRT projects because it falls within an exception under eminent domain law for “public service corporations.” An anomaly in Minnesota condemnation law provides that none of the above-stated property owner rights apply “to the use of eminent domain authority by public service corporations …” Minn. Stat. § `117.189.
A coalition of property owners that will have property taken by the Met Council for its Southwest Light Rail Transit project have retained Larkin Hoffman to seek an amendment to Chapter 117 that will restore all the above-enumerated rights. The Met Council has opposed the amendment, arguing to the Legislature that this will add $20 -25 million to the project cost. The total estimated cost of the project: $1.86 billion. Accordingly, restoring these property rights potentially would have, at most, a one percent effect on the total project budget. No private property owner should be deprived of rights afforded to all other property owners merely in the interest of cost savings for a public project.
A fundamental principle of eminent domain law is that no private property owner should be forced to bear a burden that is disproportionately greater than other property owners on account of a public project. Absent an amendment to the eminent domain law to restore the same eminent domain rights to property owners subject to LRT and BRT projects that other property owners enjoy, there will be a disproportionate burden borne by property owners for LRT and BRT projects.
Gary Van Cleve and Rob Stefonowicz are experienced eminent domain attorneys at Larkin Hoffman. If you own property that will be affected by a LRT or BRT project of the Met Council, contact Larkin Hoffman to learn about your rights.