This is an interesting question that comes up often in eminent domain law in one primary scenario. Let's say you are the owner of a Taco Bell in Seattle, Washington and you have built your Taco Bell on a street that is right off Highway 527. To get to your Taco Bell, people simply slow down or stop, make a turn onto your street, and travel the one block drive to your store. And business is good. That is, until the Seattle department of transportation comes along and wants to change everything. They have analyzed the highway corridor that contains your business and have decided, because of ever increasing vehicle counts, that highway access needs to be restricted to interchanges spaced out at one mile intervals. Which is fine, except they didn't pick your intersection for an interchange. What was once a one block drive from the highway will be, once the highway project is complete, at least half a mile - and you can bet people will be building plenty of places to eat right off the interchange. You call the Seattle Department of Transportation and demand to be paid for the lost business and lost property value you'll surely experience once the project is built, but they dismiss your complaint and tell you they don't owe you anything.
As a Seattle, Washington eminent domain attorney who has worked for both landowner and the government, this is a scenario seen often. And the answer, for the most part, is that the loss is not compensable. The SDOT is correct in turning down your request for compensation. But how can this be? They are clearly diminishing my property value and taking my business, you might be saying to yourself. Well, three concepts are working against you in this scenario.
The first concept working against the property owner is that business profits are not a compensable item under the law, generally. This is because the law of eminent domain is not in place to compensate people for lost business profits, but for lost land. The loss of business is just a tragic byproduct of losing property (or access), but the law sees businesses as something not tied to any property - the thinking is that if your business is successful in one place it can be successful in another. It's a troubling concept if you are a business owner, but the fact is, this is the way you will be treated.
The second concept working against you, the Seattle property owner, is the idea of "police power." Police power is a constitutional concept that bestows upon the government the authority to regulate pretty much anything if it involves the health, safety, and public welfare of its citizens. This theory holds for road construction as well. So, in the above example, Seattle will argue, successfully, that the closure and limitation of access to interchanges is done in order to preserve the safety and welfare of drivers on that road. And, assuming they have traffic studies and things of that nature to back up what they are saying, the Court will take them at their word. There is a very narrow exception to this if your property is significantly injured separately from the general damage incurred by other property owners in similar circumstances. But this doesn't apply to traffic flow of cars to fast food restaurants - traffic flow is seen generally as an exercise of the government's police power.
Finally, in order for your Seattle condemnation attorney to successfully argue for a taking under eminent domain law, they would have to show that some property interest of yours has been taken. A loss in the value of property in and of itself is not viewed as a taking under condemnation law (generally). In other words, if the SDOT is not physically taking or touching something of yours, it is extremely difficult, if not impossible, to allege inverse condemnation.
So, the short answer to the question of compensability after a long explanation is that generally you, the Seattle property owner, would not be eligible for money in the above scenario. But, let me add, that if you are in this situation, it can't hurt to contact a Seattle eminent domain attorney to look at your case. There are exceptions to every rule. Maybe your property is one of them.
Christopher Small is a Seattle eminent domain attorney and Washington condemnation lawyer with CMS Law Firm LLC. If your property is being taken by eminent domain or you think you are owed money because the government has damaged your property, please give us a call.
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