3/25/2007

Rep. Giles introduces eminent domain bill: Belfast ME Village Soup, 3/23/07

By Beth Staples

[Maine state] Rep. Jayne Crosby Giles presented a bill Wednesday, March 21, to assure that businesses taken under eminent domain procedures will be paid based on their value as a “going concern.”

She gave a formal presentation of her bill, LD 960, to the Legislature’s Judiciary Committee, which is scheduled to conduct a work session March 27 on the bill.

“Eminent domain is not taken lightly by the governing body and is done only when essential for public infrastructure needs,” said Rep. Giles, a first-term Republican legislator from Belfast, where she has been a community banker for nearly 30 years. “However, current law compensates the business owner only for the loss of the real estate and some relocation expenses.”

Rep. Giles said the inspiration for her bill came from the case of the Sail Inn restaurant, a family-owned, 55-year-old landmark in Prospect that was taken under eminent domain in 2003 due to construction of the new Penobscot Narrows Bridge. The state offered $225,000 for the restaurant and five acres of land that included deep-water frontage. The owner’s appraiser valued the property at $1.6 million to $1.8 million.

“Through the eminent domain process, the business owner has lost more than just the real estate,” Rep. Giles said. “They may have lost the one thing most important to their business success. This critical ingredient may be described in three words: location, location, location.

“LD 960 will not correct the loss of the business location,” she said. “However, the bill will provide a fairer compensation to the business owner by giving full value to the business, not just the real estate. A Going Concern Value will be used to determine this value by using state-approved commercial appraisers qualified to make such an assessment.”

The legislation has thus far attracted five cosponsors, including Rep. Mike Thibodeau, another Waldo County first-year Republican legislator whose district includes Brooks, Jackson, Monroe, Swanville, Waldo and Winterport, where he resides.

LD 960 goes by the full name “An Act to Base Value in Eminent Domain Taking of Businesses on Going Concern Value.” It would establish an independent, impartial board of experts skilled at determining the fair market value of business property. The board would be empowered to make awards of just compensation in highway condemnations. It further would assure that business owners would be guaranteed “a prompt, efficient and inexpensive method of determination of just value and prompt payment.”

The bill pertains to eminent domain takings by the Maine Department of Transportation or a municipality. The value of the business would be determined by a process requiring both the owner and the governmental authority to each select a licensed appraiser. If they agree, the additional compensation must be added to the compensation offer. If they disagree but are within 10 percent of each other, the average appraisal would be used. If the disagreement exceeds 10 percent, the owner may ask the State Claims Commission to apply the same analysis when the owner appeals the offer.

Rep. Giles said a successful business possesses an intangible value known as “goodwill,” which should be factored into an appraisal. “The business owner is being forced to give up both a location and a livelihood,” she told the Judiciary Committee. “The business provides a source of income. Through the loss of the business location, the business owner has lost the income-producing potential from that location for 10, 20, 30 years or more. The governing body in an eminent domain proceeding has literally taken a lifetime of earnings from a business owner.”


Belfast ME Village Soup: http://waldo.villagesoup.com