Ready or Not, Here They Come!

Roadway Projects are on a Roll Across the Southeast: Here’s what you need to know to be ready.

Have you been receiving unexpected mail from the Department of Transportation, Right of Way Agents, and maybe even advertising materials from lawyers? You are not alone. Roadway projects throughout the Southeast seem to be at an all-time high. Why are things are moving so quickly, and what you can do to be ready for the impact on your business or property values?

To understand why roadway projects are suddenly on the move in the Southeast, it is as simple as following the people and the money. Pre-COVID, there was a trend of migration of people into the Southeast from other parts of the country. For example, based on the 2020 census, North Carolina moved up from the 10th to the 9th most populist state. Then there was a pandemic, and migration hit overdrive. The Pew Research Center reported that “some areas of Florida, North Carolina, South Carolina and Texas swelled with out-of-state movers.” According to UNC’s Kenan Institute, “North Carolina’s population grew more rapidly than the increase in the population of the U.S. during the first 15 months of the pandemic, [which highlights] disturbing trends and pressing questions [related to infrastructure] that require the immediate attention of state and local community leaders.”

Fast forward to the present. State revenues are up, and Congress has approved over $1.1 trillion for the Infrastructure Investment and Jobs Act (IIAJ), much of which will be used for state and local roadway projects across the country. In North Carolina, the IIJA funds will account for a whopping 32% of NCDOT’s budget in the coming year. The result is that delayed roadway projects are back on track, and new projects are being approved at a rapid pace.

To protect your business and property values, it is important to be aware of the projects that might affect you and have a game plan for how to handle the hardships they create.  If you’re in an eminent domain battle with federal, state, county or municipal government, you need a strong advocate on your side.

There are Five Essential Steps you should follow:

Step 1. Legal Analysis.
You wouldn’t do any other real estate transaction without an experienced attorney to represent your interests, so be sure to work with an eminent domain attorney, who can bring experience and expertise to address your concerns with creative solutions that usually include both monetary and critical non-monetary concessions on the part of the government. The earlier you engage your attorney in the process, the more likely that you will be able to construct a win-win solution.

Step 2. Road Design.
In most cases the government will only need a portion of your property. In those situations, the roadway’s design can be critical to how your remaining property functions after the work is done. Most commercial property owners and tenants are concerned about how the new road design and traffic patterns will affect their access to the property. In these instances, your attorney may engage the services of an experienced traffic engineer to help ascertain the impact of the road’s design on traffic flow and access.

Step 3. Valuation
The United States Constitution requires that you receive “just compensation” when the government takes your private property for a public use. The government will hire an appraiser and offer to purchase your property based on that appraiser’s valuation of your property. You are not required to accept the amount the government offers. Your attorney can help you retain an experienced commercial condemnation appraiser to help guide your strategy going forward and give you a sound negotiating position.

Step 4. The Lawsuit
In the event of a condemnation lawsuit, the government agency will be the Plaintiff and you and anyone else with an interest in your property (lender, tenant, easement holders, etc.) are the Defendants. The government will deposit with the court the amount of money that it believes is “just” for the property rights acquired, and you must choose whether to accept that amount or litigate over whether the property was truly acquired for a “public purpose” and/or whether the deposit constitutes “just compensation.” Rules of court and rules of evidence apply, though the time deadlines and certain legal motions are different in a condemnation case. Your attorney will help you navigate the legal process, draw down the deposit (if appropriate), prove the value of your property, and negotiate a settlement or try the case in court.

Step 5. Apportionment.
If there are multiple Defendants, you must apportion the settlement or judgment proceeds among these multiple interest holders. This can be tricky. Many commercial leases and loan documents provide for the distribution of the proceeds from a condemnation award. The language of these agreements will likely govern the split of the award. If the lease or loan documents are silent as to apportionment, common law rules will apply to divide the award among the stakeholders. The guidance of an experienced condemnation attorney is essential to ensure that you receive the full amount to which you are entitled, whether you are a lender, owner, or tenant.

Learn more about condemnation in North Carolina

Joan has over thirty years’ experience in handling eminent domain cases. She represents landowners, retailers, and lenders in dealing with real property disputes, eminent domain, and condemnation litigation.  She is regional condemnation counsel for many prominent companies like Walgreens, McDonald’s, Harris Teeter, Truist Bank, First Citizens Bank, and Sheetz and has worked with developers like Kimco, CBL Properties, and American Asset Corporation (just to name a few) in real property disputes and eminent domain cases.
For more information call 919-821-7700 or contact us through our website.