Alaska Eminent Domain

Alaska Statutes address Eminent Domain at 09.55.240 through .460.  When a governmental entity makes a taking, there are actually two portions to the valuation process.   First, the taken parcel’s value and the remaining parcel’s diminished value.   The government will  focus the target’s attention solely on parcel taken.  Typically people will forget to consider the affect to the remaining parcel.

Government offers frequently select valuation methods that support low prices.  For example they will suggest that vacant land value should be measured by a gross proportion of the whole.  By measuring the property as a percentage of gross they pay the lowest cost on the valuation.

I advise against providing the entity with a right of entry on the premises prior to resolving the property valuation and damages issues.  Absent a project deadline the entity has no pressure related to making a full and fair offer on the property.  You will generally fair better by withholding the right of entry permit.  The following provides a summary of a few of the important provisions in Alaska.

Valuation Date

 

  1. The valuation date for the taking is the day the government enters the property and begins construction.  Alaska Stat. 09.55.280. Wickwire v. City & Borough of Juneau, 557 P.2d 783 (Alaska 1976).
  2. The taking “. . . shall be located in the manner that will be most compatible with the greatest public good and the least private injury. . .”  Alaska Stat. 09.55.280.
  3. If the property boundaries change at all, the agency must apply for and obtain a preliminary replat approval before the acquisition and then shall also obtain a final plat.  Alaska Stat. 09.55.275.

Hearings

  1. If you object to the taking, the extent of the taking, the value of the consideration paid, the manner or nature of crossings you have a right to a hearing before the court.  Alaska Stat. 09.55.300.
  2. You have a right to a jury trial as to damages and the value of property.  Alaska Stat. 09.55.320.
  3. If you do not reach an agreement on value and damages then in a court action value is established on the day the suit is filed.  Alaska Stat. 09.55.330.
  4. If those attempting to condemn the property file an action, they may also seek an order to allow them to take possession before the value is determined.  Alaska Stat. 09.55.380.  When they do this then they must also pay interest from the date of suit until the final value determination.  Alaska Stat. 09.55.330.
  5. If there is a hearing and judgment rendered, the entity taking the property must pay within 30 days of judgment.  Alaska Stat. 09.55.350.
  6. If they fail to pay then you are entitled to vacate the condemnation award.  Alaska Stat. 09.55.360.

Damages

  1. When the state takes a parcel you are entitled to the value of the parcel and all the appurtenances on the parcel.  Alaska Stat. 09.55.310(a)(1)
  2. When the state takes only a portion of a larger parcel you are entitled to the damages related to the remaining parcel that they failed to take.  Alaska Stat. 09.55.310(a)(2).
  3. When the benefit of the state’s investment to a parcel not taken, exceeds the damages to the remaining parcel, you only get the value of the parcel taken.  Alaska Stat. 09.55.310(a)(3).
  4. As far as practicable, compensation shall be assessed for each source of damages separately.  Alaska Stat. 09.55.310(b).
  5. Alaska has very little settled case law on the sources and methods of establishing other damages.  The list from other jusidictions can be very long.  Some of the more common Damages Sources include:
    1. Just compensation for real estate that is taken;
    2. Severance damages to property impacted, but not directly taken;
    3. Tenant lease value damages;
    4. Property and business fixture damages;
    5. Loss of going concern damages when a business is destroyed by a taking;
    6. Residential and homeowner relocation damages;
    7. Business relocation damages;
    8. Highway and right-of-way accesses damages;
    9. Construction related damages;
    10. Minimum compensation damages to make business owners whole;
    11. Diminution of value damages in land use cases;
    12. Attorney’s fees payments to landowners; and,
    13. Loss of land development potential damages.

To establish the individual components of each of these elements of damages you will need to have admissible evidence.  The evidence will need to be reasonably certain in the measurement of the damages.  You typically will need to enlist the services of not only counsel but, appraisers, site analysts and engineers to evaluate and present evidence supporting the value of these damages.

 

Valuation

  1. Valuation is based on “fair market value” or the price a willing buyer would pay a willing seller for the property.  State v. Alaska Continental Dev. Corp. 630 P.2d 977 (Alaska 1980).
  2. Value is established by what the owner has lost and not what the condemner gains.  Gacksetter v. State, 618 P.2d 564 (Alaska 1980) (owner of residential property lost residence and value was set based on that loss not on the value of the gravel pit developed after condemnation).
  3. Owner’s loss in value does not include the value of the project giving rise to the project.  But, if the taking is unrelated to another project that adds value to the owner, the owner does capture the other projects value.  See, e.g., State v. Alaska Continental Dev. Corp. 630 P.2d 977 (Alaska 1980).
  4. Owner’s improvements made in anticipation of condemnation is ordinarily not relevant or admissible even with knowledge of the prospects of taking; unless, the improvements are made solely to enhance their award.  Babinec v. State, 51 P.2d 563 (Alaska 1973) rev’d on other grounds, 586 P.2d 966 (Alaska 1978).
  5. Valuing a larger parcel generally results in a lower value.
  6. Severence Damages

Attorney’s fees and experts

You are not entitled to be compensated for your experts or your counsel unless the fact finder determines that the value the government offered you was more than 10% less than the value they should have offered to you.  This rule pretty much guarantees that the government is always going to take your property at a discount to the actual full and fair value.

Posted on: 5 December 2013, by : Clayton Walker

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