Property owners in the path of light rail and bus rapid transit projects are now eligible to receive the full protection of the state’s eminent domain laws, thanks to legislation passed in 2017 by the State Legislature.

Before passage of this legislation, the Metropolitan Council (Met Council) had been taking the position that it was a public service corporation. This status would have exempted the Met Council from extending to property owners certain compensation rights normally available under Minnesota law when private property is taken for public projects.

Because of this new legislation, the following property owner rights are now available to those whose property is taken – in whole or in part – by the Met Council for a light rail or bus rapid transit project:

• Attorney fees under Minn. Stat. § 117.031, which provides that the court may award attorney and expert fees if just compensation recovery is at least 20 percent, but not more than 40 percent greater than the Met Council’s last written offer. The statute further provides that the court must award such fees if the just compensation recovered is more than 40 percent greater than the last written offer.

• The Met Council must provide property owners with a written offer, along with a copy of an appraisal. The council must also make a good faith attempt at negotiating with the property owners and reimburse them for appraisals up to $1,500 for single and two-family residences and $5,000 for other types of property.

• Property owners must now be advised by the Met Council of certain rights in the petition filed with the district court to commence the condemnation proceedings. These rights include their right to challenge the public use, purpose or necessity of the project for which their property is being taken and their appeal rights from any adverse determination on such a challenge.

• Business property owners are now eligible to seek compensation for “loss of going concern” under Minn. Stat. § 117.186, and to seek minimum compensation under Minn. Stat. § 117.187. Minimum compensation recognizes that when a business owner must relocate, the damages, at minimum, must be sufficient to allow the owner to purchase a comparable property in the community.

• The Met Council cannot require a property owner to accept as part compensation a substitute or replacement property and cannot force the owner to accept the return of property that has been acquired.

• Displaced business property owners are now also eligible for relocation assistance in the form of reestablishment expenses up to a maximum reimbursement of $50,000. All displaced property owners also now have the right to challenge their eligibility for relocation assistance and to challenge the amount of such assistance through a contested case proceeding before an administrative law judge.

These are significant statutory rights that the legislature adopted to ensure that property owners displaced by a public project would have the opportunity to receive “just compensation” for the taking of their property, as the state and federal constitutions require. The 2017 legislation restores these rights to property owners who find themselves in the path of transit projects carried out by the Met Council.

The Twin Cities of Minneapolis and St. Paul, and surrounding metro region, are experiencing a surge in large public transit projects, most notably the long-awaited Southwest Light Rail Line (SWLRT), which extends the existing Green Line from Minneapolis to the southwest suburbs, terminating in Eden Prairie, MN. In addition to light rail, several other fixed transit ways are being constructed or are in the planning stage.

What does this mean for a property owner with land potentially in the path of any work required to construct a new transit corridor? Uncertainty, confusion, frustration, anger and anxiety are just a few of the emotions that landowners, including business owners, experience when they discover their property may be taken through a future condemnation action. The consequence could be to force a wholesale relocation of a business and its employees to an unknown new location, with all the risks associated with such a move.

The public agencies do a reasonably good job of providing base-level information about a major public project, including broad estimates of timing, and SWLRT is no exception. However, when it comes to the specific project location, impact, land payments, relocation and especially timing, such agencies often themselves have no answers on which to base a plan.

In the case of SWLRT, the involved public agencies and their hired contractors have been waiting literally years to throw the switch and get started on land acquisition and construction of the new approximately 15-mile corridor.

The “promised” start date has been a moving target, frustrating the planning efforts of affected parties. This means landowners and business owners have been riding a roller coaster of emotions as they anticipate a firm start date. The practical consequence of this uncertainty is that an affected business owner might be forced to hedge a bet and speculate about a new location, sometimes even committing to buy land or another building for a future relocation if and when it occurs.

This means they are forced to expend time and precious capital to research new location options, evaluate the value of their existing property and make concrete plans for the future. The alternative is not a good choice either: delaying a search process to secure a new business home could place an affected business at risk of losing its current home without having secured an acceptable replacement.

For those with special site needs, such as extended parking or outside storage, the challenge to find a location is further frustrated by municipal zoning restrictions affecting such uses. The prudent step is to initiate the planning process presuming the outcome and secure as much lead time as possible before making a hard commitment to the new location. If you have a particular urgency to act, the Metropolitan Council has been cooperative in confirming eligibility for relocation assistance ahead of formal condemnation proceedings.