Thursday, August 01, 2013
Michael B. Phillips, a partner with Moffitt & Phillips law firm in Little Rock, attended the hearings this past week regarding SWEPCO’s proposal to take property from hundreds of people in Northwest Arkansas for a high voltage power line that would run from near Bentonville to the Kings River north of Berryville. Phillips hopes local residents opposed to the power line will prevail. If they don’t, he wants them to know that about 90 percent of people accept the first offer they get in eminent domain condemnation proceedings – and usually the offer is considerably less than they could get by challenging the proceedings before a jury of their peers.
“Most people don’t want to be made to give up something dear and precious to them like property, homes, businesses or large tracts of land that might have been in their family for generations,” Phillips said. “It is almost universal that landowners don’t want to lose their property no matter the amount of money. But what you will almost always find is that is what it will come down to. You can debate the merits and drawbacks of eminent domain all day long, and there is no doubt there is eminent domain abuse. But if there is a public necessity, the condemning authority is going to take the property. Most projects are necessary. Most projects don’t get stopped. That is no secret.”
Phillips said if the Arkansas Public Service Commission (APSC) issues a Certificate of Environmental Compatibility and Public Need for the Shipe Road to Kings River power line, SWEPCO would be given the power of eminent domain from the State of Arkansas. The process would begin with SWEPCO negotiating, and making an offer, presumably based on comparable sales. If SWEPCO and the landowner can’t come to an agreement, SWEPCO would then have the opportunity to file a lawsuit in the county where the property is located.
“What people don’t understand is that SWEPCO isn’t going to just take the land,” Phillips said. “SWEPCO will deposit what they think the land is worth. That deposit is held pending the outcome of the trial. A jury will determine the value of the land SWEPCO has acquired.”
It is common, he said, for people to be offered less than what their land is worth. Phillips said attorneys can sometimes assist in the process resulting in two- to four-fold more than is offered initially. But most people settle without ever taking it to court.
“I don’t want to make a blanket assertion and say people are always offered less than the property is worth,” Phillips said. “But as evidenced by many jury verdicts, property is often worth more than initially determined. Most people will settle for what they were offered because they don’t have any idea of the process and their right to a jury trial. They have no idea they can get more money.”
Right now all eyes are on the APSC. If APSC agrees the project is needed for the public good, then the APSC determines which of six routes should be used and also has the option of choosing a combination of routes or a different route altogether.
“If a route is chosen and it is going to go forward, my law firm will do what we do all over the state,” he said. “We will come up and hold multiple town hall meetings to answer a lot of questions people will have at that point but don’t have now because they are focused on stopping the project. Folks are usually very appreciative because they get very little info from the condemnor. They appreciate talking to someone who deals with this kind of thing on an everyday basis.”
One major concern raised by people is if the route goes through their land, it could affect not just the value of their property that is used for the right-of-way, but the entire parcel. For example, a home with a beautiful view of the White River is going to be worth considerably less if a 150-ft.-tall power line mars the view, has 24-hour noise louder than cicadas, and raises concerns about negative health impacts.
Phillips said the decreased value of the entire property can be taken into consideration to determine just compensation. “That is called damages to the remainder,” he said. “There is a lot of valuable property on these proposed routes. I think you could see acquisition costs for SWEPCO certainly exceed what they think they are going to be. You can get into high figures with a lot of expensive homes involved. In these cases, SWEPCO will have an appraiser and the property owner will have an appraiser. It will usually come down to a difference of opinion between two appraisers.”
The power company would take an easement on the property, but the property owner still owns it and is responsible for taxes on it. Would property owners owe fewer taxes if their property is devalued?
“I don’t think your taxes are going to de facto go down,” Phillips said. “You would probably have to go to the assessor’s office and make that case.”
Phillips said even though it is an easement, the company must pay full value as if they were taking ownership of the property. “That is really important and is something that a lot of people don’t know,” he said.
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