Eminent Domain Law Update: School Property Takings

Recently the Indiana Court of Appeals heard a case between Indiana school corporations and the State of Indiana regarding a political subdivision’s ability to assert a Takings Clause claim for the taking of its property in Lake Ridge School Corporation and School City of Hammond, West Lafayette Community School Corporation v. Eric Holcomb, Indiana State Board of Education, Indiana Department of Education, and Todd Rokita, Case No. 22A-PL-423. In that case, Lake Ridge School Corporation, School City of Hammond and West Lafayette Community School Corporation learned that as political subdivisions, the State could force them to sell or lease their schools, once they were no longer in use, to a charter school or state education institution for $1.

In 2019 and 2020, Lake Ridge and School City of Hammond closed schools in their districts. Under Indiana Code, once the school closed, the schools should have notified the State within 10 days, made the building available to a charter school or state educational institution and sell that building to the interested charter school or state educational institution for $1. The Schools sued the governor, the attorney general, the Indiana Department of Education and the Indiana State Board of Education contesting the validity of the statute and claimed that the statute constituted a taking of the Schools’ property. The State argued that the Schools could not sue the State for an unconstitutional taking because “the Takings Clause has no role to play in intragovernmental disputes between a State and one of its agencies or political subdivisions”.

The Court of Appeals agreed with the State. In its decision for the State, the Court cited a US Supreme Court case that political subdivisions are created as convenient agencies for exercising such governmental power of the state as may be entrusted to them. “The state, therefore, at its pleasure, may modify or withdraw all such powers, may take without compensation such property, hold it itself, or vest it in other agencies, expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the character and destroy the corporation.”  The Court went on to explain because a political subdivision is merely a department of the state and held that the state may withhold, grant or withdraw powers and privileges as it sees fit, that political subdivisions cannot sue their states under the takings clause.

This case may have lingering effects on the rest of political subdivisions and municipalities throughout Indiana, as the State may now seize any property of a political subdivision for any reason or any purpose, with no compensation. I have practiced eminent domain condemnation law for over a decade and accept case referrals from attorneys across Indiana and represent commercial, agricultural and residential landowners to assert their rights and maximize compensation in land acquisition transactions.

Article by: Lindsey M. Bennett, Attorney

Update on Indiana Eminent Domain Law: Duke Energy, LLC v. Bellwether Properties, LLC

Bellwether Properties, LLC, (“Bellwether”) owned property encumbered by a 10’ utility easement owned by Duke Energy, Indiana (“Duke”). Duke owned a transmission power line that ran through the property centered within the easement area. Bellwether wanted to build a warehouse on its property abutting the easement. Duke informed them that the electrical safety code would not allow Bellwether to build within 12.5 feet of the power line, some of which was outside of the 10’ Duke easement. Bellwether sued Duke for inverse condemnation, claiming that Duke had taken part of its land without compensation by disallowing Bellwether to utilize the property abutting the easement for the warehouse.

The parties disagreed whether Bellwether’s claim was an issue of a physical taking or a regulatory taking. A physical taking is one where the government acquires the private property for a public purpose as opposed to a regulatory taking where the government’s regulation of the property is so onerous that it in effect has taken the property. The court recognized two categories of regulatory action that are deemed regulatory takings: (1) where government requires an owner to suffer a permanent physical invasion of her property and (2) regulations that completely deprive an owner of all economically beneficial use of their property.

The Court treated the claim as a regulatory taking and examined the case under the lens of Penn Central Transportation Co. v. New York City and weighed the factors created by the US Supreme Court for regulatory takings – (1) the economic impact of the regulation on the property owner, (2) the character of the governmental action and (3) if there was a physical invasion as opposed to a public program adjusting the benefits and burdens to the property owner to promote the common good. Using the Penn Central factors, the court determined that the economic impact to the Bellwether property was minimal. The warehouse to be built had to be resized by only 150 square feet and it reduced the number of storage racks in the building from thirty to twenty-nine. The court also found that the electrical code clearance standard had already been in the Indiana Administrative Code when Bellwether purchased the property and property owners are charged with knowledge of the laws that affect their property. Further, the clearance was intended to protect lives and property from being too close to electric transmission lines, which is applied across the board, not just to the Bellwether property.

Because Bellwether did not meet the standard set forth in Penn Central, the court ultimately found that the prohibition of building the warehouse, even outside the easement area, was not a compensable taking by Duke. The decision in Duke Energy, Indiana, LLC v. Bellwether Properties, LLC affirms a condemnor’s rights within right of way easements and should serve as a caveat to landowners to carefully consider easements when considering current and future property improvements. I have practiced eminent domain condemnation law for over a decade and accept case referrals from attorneys across Indiana and represent commercial, agricultural and residential landowners to assert their rights and maximize compensation in land acquisition transactions.

Article by: Lindsey M. Bennett, attorney

 

5G Is Coming, What Are Your Rights?

Could you come home one day to discover that a 5G tower is being built in your front yard?

For a group of Indianapolis homeowners, the answer was “yes.”

Local media reported this summer that some Indiana homeowners had come home to find a 5G tower being built essentially in their front yards. One homeowner expressed shock as they had no notice that a large pole would be placed in the right of way of their front yard. As they investigated the matter, they quickly discovered that they had no recourse to have it removed.

What is 5G?

5G refers to fifth generation mobile network and is supposed to deliver faster more reliable data speeds. This means that you will be able to, for example, download a movie faster without buffering, join a zoom call so you can work remotely and program your smart refrigerator from your smart phone. 5G and Wi-Fi currently coexist but 5G can be used as an alternative, if its available. The main 5G disadvantages are that it is offered in limited areas, it requires several towers where it is available and some believe that it can cause cancer. 5G is made possible by wireless antennas and other equipment called “small cell facilities”. The small cell facilities supplement cellular networks and facilitate the 5G deployment; they require a support structure and a single pole in most cases called a “tower” to transmit signals properly. You might see them attached to a utility pole or the 5G company may construct a new pole to support the small cell facility. Towers can reach up to fifty feet (50’) tall.

Where are 5G towers allowed?

The federal government allows telecommunication providers to place their 5G towers in rights of way or other city-owned property. Rights of way are generally found along roads, whether on main streets or in neighborhoods. The right of way area of a neighborhood is usually found between the curb and the sidewalk of each property.

Who regulates 5G?

The Federal Communications Commission (FCC) regulates the telecommunications industry. Federal law gives 5G companies discretion to place their poles where they see fit to implement 5G. Many people get upset at their local government for allowing placement of the 5G towers in their neighborhoods, but in Indiana, local governments are prohibited from regulating most aspects of 5G towers and cannot prohibit the 5G tower from being placed in the right of way.

Local governments have limited, control of 5G towers. Municipalities may require a permit for (1) the construction of new support structures, (2) substantial modification of a support structure, (3) collocation of wireless facilities on an existing structure and (4) construction, placement and use of small cell facilities. If the municipality has an existing ordinance which restricts its right of way for underground or buried utilities in residential areas, a communications provider may be required to apply for a waiver and send notice to a neighborhood association that a new pole is to be placed in their neighborhood. The neighborhood and the municipality can work together to have a say in the preferred location of the new poles and what the pole should look like.

How can you protect your property?

Check your property and see where the right of way is located. Check with your local government and ensure that they have passed the required ordinances. Sign your neighborhood up for notifications with your local government. Stay involved in the process if you receive notification and communicate regularly with your elected officials.

The Federal Communication Commission has stated that “supporting the deployment of 5G and other next-generation wireless services through smart infrastructure policy is critical” and that they are “committed to doing (their) part to help ensure the United States wins the global race to 5G to the benefit of all Americans”. Indiana 5G Zone recently announced their intent to launch a $2 million grant program to accelerate 5G related projects around the state. 5G isn’t going anywhere and the federal government is making rules and enacting laws that ensure it will continue to grow. Make sure you know your rights.

The government and public utilities do have certain rights related to the right of way easements of private property. However, if the government or public utility requires a portion, or all your land in addition to the right of way easement for a public project that is when you need an eminent domain attorney. I have over a decade of experience in eminent domain law and help landowners protect their rights and maximize compensation in land acquisition transactions. There is no cost for a case evaluation. Contact me to learn more.

Article by: Lindsey M. Bennett, attorney

Taking Access Rights and Altering the Nature of Property Can Have Lasting/Devastating Effects

Taking access rights to commercial or special use properties can be devastating to the business operated on site as well as the remaining value of the real estate.  However, just because a condemning agency takes access to property, doesn’t necessarily mean that it will or is required to pay for it.  The determination of when/if access rights are compensable in a particular taking can be complex.  Often times removal/relocation of access to property can result in the business shutting down and the remaining value of the real estate being reduced to pennies on the dollar compared with what the owner previously thought or expected the property to be worth.

Delays on I-69 Construction Project and the Impact on Section 6 Land Acquisitions

By now I’m sure all Hoosiers are well aware that the construction of I-69 Section 5 between Bloomington and Martinsville has been significantly delayed – by significant I’m referring to years, not months.  The primary design-build contractor and subcontractor for this section of the I-69 Project, I-69 Development Partners and Isolux Corsan, completely blundered the project and Isolux Corsan is now pending bankruptcy.  The big question for the property owners along the final portion of the I-69 Project, Section 6, is: what impact do the delays on Section 5 have on the timing for the land acquisition process for Section 6?

The Impact of IndyGo Red Line Project for Broad Ripple Property Owners

The City of Indianapolis’ most recent effort in “rapid transit” is the IndyGo Red Line.  Phase 1 of this project is estimated to cost $96 million.  It will travel from College Avenue in Broad Ripple, along 38 Street, down Meridian Street, through Fountain Square and ending at the University of Indianapolis.  The 13.5-mile stretch of bus line will require the elimination of travel lanes, parking spots, and driveways on College Avenue, 38^th Street, Meridian Street and Virginia Avenue.  The project is almost certain to have a significant impact on vehicular traffic both during and after construction for those drivers who use these streets in Broad Ripple and downtown Indianapolis.  However, some property owners will bear a much more significant burden.

How to Read a Right-Of-Way Appraisal

If you’ve ever bought or sold a home or any type of real estate, you have almost certainly seen (and hopefully) read a real estate appraisal. Typically, appraisals are in the standard 6-page Uniform Residential Appraisal Report format. However, appraisals for eminent domain/condemnation purposes Right-of-Way (“ROW appraisals”) are much different.

How Does An Eminent Domain Action Affect Your Mortgage?

Generally speaking, your mortgage won’t be negatively affected by a partial land taking. However, depending on the status of your mortgage, your mortgage holder may get involved in your condemnation case and attempt to claim some or all of the proceeds. However, it’s still a good idea to keep your mortgage holder informed of a possible land taking.

Can You Ask the State to Take Your Property Early by Eminent Domain?

If you live along the SR 37 corridor that has been identified as the I-69 Expansion Project Section Six that stretches from Indianapolis to Martinsville, you may have asked yourself the above question. Asking the state of Indiana to take your property early relates to what is called hardship/advanced acquisition or protective buying. Hardship/advanced acquisition is a method the state could use to take private property earlier than planned in order to lessen some type of health or financial situation for the property owner. Protective buying is a little different and refers to an action by the government to take a particular piece of land early to prevent imminent development and increased costs within a preferred location for the project.

How much does it cost to hire an eminent domain attorney?

 

Landowners are often concerned that they can’t afford to hire an attorney or that, if they do hire an attorney, the attorney will take most of the settlement proceeds. This is not the case with contingent fees in eminent domain cases. These fee agreements have become commonplace as potential clients prefer not to spend money upfront to hire an attorney and want to have a way to encourage the attorney to get them the most money possible out of their case. Contingent fee contracts are created to do exactly that. In its most basic form, a contingent fee agreement says that a client will not owe an attorney any money for representing them until and unless the attorney obtains a settlement or secures a favorable verdict at trial. In that event, the attorney takes his fee out of the proceeds the clients gets from their case. If an attorney is not able to settle the case and does not win at trial, then the clients owe the attorney no money for his work.