In case you missed it, WCCO ran a story the other night about a small business owner who has been displaced through condemnation of her property by the massive, two-billion dollar Southwest Light Rail project. The business owner said she was promised by the project’s sponsor, the Metropolitan Council, that she would be “made whole.” Her land and building were taken through the legal process of eminent domain and she continues to seek compensation from the Met Council for the loss of her business property and for the costs of relocating her business. She said that after three years with no final resolution, she has been forced to take out loans to keep her business afloat and that she is still seeking several hundred thousand dollars in moving expense reimbursement from the Met Council.
This is a familiar story and a familiar dilemma. The Takings Clauses in both the United States and Minnesota Constitutions require that property owners receive “just compensation” when their property is taken for a public purpose. This is an express recognition that when the government plans and executes a public project for the greater good, the burdens of the project are likely imposed more heavily on some members of the public than on others. As the Minnesota Supreme Court has put it, “The purpose of the Takings Clause is to ensure that the government does not require some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Fair application of the Takings Clause ensures that the burdens of a public project are equalized between the general public that benefits from the project and individual property owners who must sacrifice property interests to make way for the project. The greater public benefits from rail transit. In turn, those who have been forced to give up their property for the project are constitutionally entitled to be paid for what has been taken from them. The payments to these property owners who have suffered loss come from taxpayer money. This ensures that the burden of the project is “borne by the public as a whole” and that the burden is not unfairly borne by the unfortunate property owners who must move their businesses or homes.
What struck me in the television news report was a comment by a Met Council official who pointed out that the agency needed to be responsible with taxpayer money (undoubtedly true) and that there is a $50,000 limit on relocation reimbursement to a business property owner. The latter comment is not entirely accurate. There is indeed a $50,000 limit on “reestablishment expenses,” which are expenses incurred by the business owner in relocating and reestablishing the business at a replacement site. But there is no monetary limit to “relocation expenses” that can be shown to be both “reasonable” and “necessary.” The broad category of relocation expenses includes everything from professional services (planning and executing the move, installing equipment and property at the relocation site), to disconnecting, dismantling, removing, reassembling and reinstalling machinery and equipment, to reestablishing utility connections at the replacement site; such expenses also include modifications needed to personal property to adapt it to the replacement site. The business owner in the television news story said she was still attempting to recover $400,000 in moving-related expenses. The attorney representing the business owner said that Met Council was adopting an unduly narrow interpretation of the law governing relocation reimbursement.
The Met Council official ultimately expressed that the greater good was being served because “this is a very good project” and “very valuable for the community.” That’s not the point. The constitution and the law provide that regardless of the merits of the public project, any private property owner who loses real property and who is forced to relocate a business must be paid both just compensation for the real property loss and reimbursed for reasonable and necessary relocation expenses. Otherwise, these property owners are being forced to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.
Click here for the full WCCO story.