The question of eminent domain may sound scary and far fetched, but as a convenience store owner your land could in fact be seized by a municipality. It happens more than you think, said noted attorney William Goldman, who works with landowners facing this threat to ensure they get what they deserve.

Goldman, and his law partner, Michael Braunstein, have been involved in eminent domain cases throughout the Midwest for more than 15 years. He spoke with Convenience Store Decisions to clarify eminent domain and discuss what types of markets and store locations are most affected.

CSD: Under what circumstances can a convenience store or gas station be involved in an eminent domain situation?

William Goldman: Eminent domain is the power granted by the U.S. and state Constitutions that permits a condemning authority (a federal agency, state or local government) to take all or part of a property owner’s land for public purposes. That can be all of the property by itself or in combination with other properties for a school, government facility, park or other public purpose uses, or for the expansion of streets or highways. As a matter of fact, the federal government has recently provided a substantial amount of money to communities to improve their road systems for safety purposes.

CSD: Is there a realistic way of stopping the condemning authority from taking all or part of a company’s property?

WG: In almost all situations, the answer is no. If, in fact, the taking of private property is for a public purpose, then the only right you have is based on the bottom half of the Fifth Amendment to the Constitution of the United States which, in essence, states that you are to receive just compensation for the property taken. Just compensation is defined as fair market value for the property and structure that are taken and compensation for any damage to the property not taken.

CSD: If a retail operator finds themselves subject to eminent domain, what should they do?

WG: Eminent domain is an emotional event, and it can certainly have a tremendous impact on your business. It is always appropriate to seek assistance in confronting the situation. An eminent domain attorney can lead you to an appraiser who has dealt with this issue and has courtroom experience. The right attorney can also assist you in setting the value of the property taken and evaluate any damage to the property not taken. The goal is not to unreasonably increase the cost of the condemning authority’s project, but to assure that the c-store owner receives “just compensation.”

CSD: Suppose the condemning authority is only taking a small portion of the property upon which my c-store is located?

WG: We are all familiar with the statement that “it’s all about location.” That’s true, but the second most important aspect of the business relates to access. In a lot of eminent domain cases, the “taking” may well affect how a potential customer enters and uses your property. Sometimes, access—the ability to enter and leave your property—is substantially affected by the eminent domain proceeding. One access point is closed, another is moved or you are limited to a right-in/right-out situation.
In addition, the taking may affect the internal circulation of your site, which may affect the ease and ability of your customers to move around the site itself. There goes the convenience factor and, with it, potential business. Both events may affect your ability to maintain an appropriate business level and could affect the amount of damages you are entitled to.

CSD: How should c-store retailers and their employees interact with and respond to an eminent domain situation?

WG: Interestingly enough, your initial response to an eminent domain suit could have an effect on its final outcome. The real key factor in this situation is listening and accumulating information and delaying what might be an initial response. For example, it might appear that the eminent domain taking itself is not going to have a significant impact on your c-store business. That may, in fact, not be true. The condemning authority through its representative, may stress the importance of resolving the situation quickly. Whenever a significant event occurs, either in your personal or business life, seeking expert advice is essential before responding to questions that can have a major impact on the ultimate outcome.

Slowing the process can be accomplished without penalty or cost.

CSD: What happens if the company doesn’t agree with the compensation being offered? Can they hold out for more?

WG: In almost all eminent domain situations, if you disagree with what the condemning authority is offering as just compensation, you are entitled to a trial by a jury of your peers. The common thoughts that you “can’t fight city hall” and the process is too complicated and expensive are simply not true. In most eminent domain cases that would affect a convenience store or gas station, the condemning authority will deposit the amount of money that it believes represents just compensation and the affected property owner can withdraw that money without compromising the ability to receive additional compensation through settlement or trial of the case.
Most attorneys will represent a client on a contingent fee basis for a portion of the additional money realized above the original offer. Most attorneys will review your situation without a cost or fee.

CSD: How should storeowners evaluate an attorney’s ability to represent them in an eminent domain situation?

WG: Experience is the best way to evaluate a prospective attorney. Have they handled many eminent domain cases and what were the results? Getting referrals and talking to past clients is an excellent method of evaluation—was the attorney cooperative, did he answer questions in an understandable manner, did he respond in a timely way to phone calls and did he have a track record of actually trying eminent domain cases?
The last factor is important because if your attorney has a reputation of actually going to court and fighting for his clients, then in all probability, the opportunity to settle your case for appropriate consideration, without the necessity of a trial is enhanced.

CSD: What happens if a c-store property involves the dispensing of gasoline and the condemning authority later discovers contamination? Who is liable?

WG: Good question. The fact is that the answer varies from state to state and condemning authority to condemning authority. In situations that I have been involved in, I have always insisted that the property that is being taken is being taken in an “as-is” situation and that the condemning authority assume all responsibilities relative to environmental and clean up situations. Another good reason to involve legal counsel, if not at the outset of the process, certainly before the conclusion. Peace of mind is a priceless commodity.