November 14, 2007
Fiesta versus TxDOT

I noted before how the Katy Freeway expansion is forcing the closure of the Fiesta at I-10 and Blalock. Before that happens, there has to be an agreement on how much TxDOT should pay for the property.

Fiesta and the Texas Department of Transportation disagree how much the highway project is to blame. The state used eminent domain proceedings to take 36 percent of Fiesta's parking lot that served the supermarket as well as businesses in an adjacent strip mall.

A TxDOT-hired appraiser said Fiesta and and landowner Weingarten Realty Investors deserve $3 million in compensation for the 1.3 acres and the cost of relocating the store, according to court records. An appraiser hired by Weingarten put the value at nearly $16 million -- $9.7 million for Fiesta's trouble and the rest for the landlord. An independent commission appointed by a judge in the Fiesta case recommended the store get $7.7 million.

That's an amazingly broad difference of opinion. Remember the two different appraisals for Bolsover? They were at least roughly in the same ballpark - the high end was about 60% more than the low end. Here, the high end is more than five times as much as the low end. It's simply not possible for them to be talking about the same property in the same terms. Even if you throw out the money allotted by the Weingarten appraiser for the landlord, it's still more than triple the TxDOT estimate. No wonder this is contentious.

Generally, compensation of property owners works like a negotiation. The state makes an offer based on its appraisers' suggestions, and property owners respond with data from their appraisers. Then a court-appointed special commission reviews the methods used to reach each number and recommends a value it deems fair. If either side doesn't like it, they go to court.

What's not negotiable is that the state can take control of property even as compensation remains in limbo. In Fiesta's case, road crews bulldozed the former parking lot months ago to carve out the new westbound feeder.

Appraising property value is a technical process that examines what similar properties nearby have recently sold for to gauge the market value.

But rarely are two parcels identical, so appraisers use various other factors and analyses. That makes it tricky to explain complicated cases to a jury, said Jeff Avant, an Austin lawyer who specializes in condemnation cases.

The article then cites two examples of court-resolved disputes involving Katy Freeway properties, one in which the landowner got more than the high-end estimate, and one in which it got less. We'll see what happens here.

Posted by Charles Kuffner on November 14, 2007 to Planes, Trains, and Automobiles