Showing Energy the Way

Tarrant County May Be Eminent Domain Capital

For original version Click Here

February 01, 2010

In Tarrant County, eminent domain is a way of life.

Thanks to the area’s burgeoning transportation projects, a few high-profile real estate developments and sprawling Barnett Shale sites, local experts say Tarrant County real estate owners are bombarded – and will continue to be bombarded – with eminent domain issues for years to come. And that’s just not how it is in other areas.

“I would put Tarrant County against any major metropolitan area in the nation as far as the number of eminent domain cases here,” said Mike O’Brien, with Korman and O’Brien Real Estate Consultants and Appraisers. “Some just don’t understand, because Tarrant County has so much going on, eminent domain is prevalent here compared to other major metropolitan areas where growth may not be as aggressive, eminent domain might not be well-known.”

In Tarrant County, O’Brien, who – along with his business partner Josh Korman – routinely performs appraisals for eminent domain cases, said a certain convergence has occurred making the area one of the highest eminent domain areas by volume. A Tarrant County spokesman said the county does not officially track the number of eminent domain cases filed each year.

“It really goes to the growth of the region,” O’Brien said. “Meaning the infrastructure that is needed now to support that growth has to be built and it’s happenstance that TxDOT has gotten its funding for this region. Then when you add in Trinity River Vision and Barnett Shale, you have a lot of eminent domain coming this way.”

The Texas Department of Transportation currently has several projects slated for Tarrant County including State Highway 360, State Highway 121 Southwest Parkway and the North Tarrant Express – and Oncor Electric Delivery has a planned Overhead Transmission line project related to the Credible Renewable Energy Zones that has been reported to include constructing or expanding 860 miles of overhead transmission lines in Texas

“The Willow Creek to Hicks project is one that will come into northwest Tarrant County,” O’Brien said of Oncor’s plans.

Also topping the list of Tarrant projects to call on eminent domain is Barnett Shale exploration because some landowners are not willing to give up ground surface rights so drilling companies can have access to well heads. Korman said the impact of Barnett Shale drilling for future development is evident simply by looking at a map of the area.

“The pad sites in Tarrant County look like somebody took a shotgun to the area versus in Dallas where they aren’t as prevalent,” he said.

In the last four years, O’Brien has been involved with a number of pipeline companies and “developers are definitely going to have to find a way to develop around the sites,” O’Brien said. “It’s going to be something everyone has to deal with – property owners and the companies.”

Don Valden, CEO of Texas Right of Way Associates Inc., said he has been in business for 28 years and it’s been hard not to notice the increasing number of eminent domain cases in Tarrant County. Valden said prior to the Barnett Shale movement in Tarrant County, he went to court for an eminent domain case three times in 23 years and testified once. Since the Barnett Shale, Valden said he has been to court seven times and testified twice in the last six years.

“And that’s why I say there are definitely more cases,” Valden said. “The biggest difference is that prior to Barnett Shale, you were dealing with right of way with people in the country, but now with Barnett Shale, we’re dealing with more individual neighborhoods and home owners and professionals, and nothing against those in the country, but there are more per area here and more people means more attorneys. Most attorneys say ‘let’s go to court’ and so you see more cases. And none of these oil and gas companies wants to go to court.”

For the Trinity River Vision project, which is planned for the banks of the Trinity River just north of Fort Worth, project planners estimate the development will require collecting land from 82 business owners in the project’s path before completion, which is something that also will have to be dealt with. Trinity River Vision Authority officials have repeatedly said eminent domain, however, is a last resort.

“It’s no small project and it all goes back to the ‘highest and best use’ for the land,” Korman said. “That’s what we look at. What is the property’s highest and best use?”

An eminent domain or right of way acquisition is made when private land is needed for a public use, such as the construction of a new highway or the expansion of an existing highway

When land is determined to be needed for a public-use project, a landowner is notified and offered a payment for their property, which the owner has 30 days to review. The landowner then has options including turning down the payment entirely or negotiating the payment. The state, in some cases, also will help relocate the business or homeowner to new property or a new home.

Should a landowner accept the Department of Transportation’s offer, the department then moves forward with taking care of any title or lien issues outstanding on the property, and later meets with the owner at a title company, pays the owner, and the property becomes the state’s.

Communities always have used eminent domain to acquire land for roads, sewers, water towers and other public utility projects. But in Tarrant County, communities also have seized private property to build projects such as North East Mall in Hurst, Texas Motor Speedway and LaGrave Field in Fort Worth and The Ballpark in Arlington and the Dallas Cowboys Stadium in Arlington. In those deals, leaders believed the public would gain significantly from the additions, calling on the land’s ‘highest and best use,’ which is the property’s use that produces the highest property value.

Korman said eminent domain cases outside of Texas are much different in that several states don’t recognize general eminent domain laws.

“Texas is so dynamic of a state that eminent domain has to be a part of life here,” Korman said.

O’Brien said another factor many Tarrant County residents are not yet aware of is the influx of wind farms in northern Erath County, southwest of Tarrant County.

“We’ve been getting calls from land owners in Erath, saying leases have been taken – it’s a phenomenon we’re not seeing in Tarrant County yet. But it’s going to have an impact because they’re going to have to have the infrastructure to bring it to market,” he said.

Korman said the wind farms will absolutely play a role in the area’s future eminent domain cases.

“It’s uncharted waters right now,” Korman said. “You’ve got farmer Joe who had his place and then his neighbor signed a wind farm lease and now there’s a 200 or 250-foot-tall wind turbine there. And it’s not likely those will stop with Erath County.”

In November 2009, Texas voters passed proposition 11, the measure to limit eminent domain powers, outlining that governments in Texas are prevented from seizing private property and giving it to a private developer to boost the tax base.

But in Tarrant County, that doesn’t necessarily mean a decrease in eminent domain cases.

“Tarrant County is going to see more cases based on its growth,” Korman said. “It’s not about development; it’s about infrastructure and you would be hard pressed to find another Metropolitan area growing as much – and in as many different ways – as Tarrant County right now. And that means eminent domain will continue to be a norm here.”

Valden, agreed, adding that eminent domain is a must when it comes to growth.

“If it wasn’t for eminent domain we wouldn’t have electricity, or water,” he said. “We hate it, but it has to happen or else we wouldn’t have utilities. I mean, let’s face it, we all have easements on our homes.”