What rights do Texas property owners have in eminent domain cases?

AUSTIN (KXAN) — Late last year, documents related to the Texas Department of Transportation's proposed Interstate 35 expansion project revealed the plan would displace more than 100 properties near downtown Austin. Now, an eminent domain lawyer representing some of the impacted property owners said he expects a slew of lawsuits to emerge in the coming months as the plan seeks federal approval.

TxDOT released a draft environmental impact statement on the project in late December, with the federal government expected to release its decision on the plan by end of summer. Under the I-35 Capital Express Central project, the $4.5 billion proposal would add additional HOV and through lanes, remove existing I-35 decks, lower the roadway and add east-west cross-street bridges along the eight-mile project stretch.

Possible impact of I-35 expansion on residences, businesses

As TxDOT awaits federal input on the project, both community organizations and legal counsel for some of the impacted property owners anticipate an onslaught of litigation to be filed. Luke Ellis, an eminent domain and condemnation trial lawyer and partner at Marrs Ellis & Hodge LLP in Austin, represents several impacted property owners affected by the I-35 expansion proposal.

On Monday, he said he and his clients are in the early stages of condemnation, which means some property owners are beginning to receive initial offers from TxDOT for the costs of their property.

"The overall concern and thought of the project for many of my clients is that it can have a catastrophically negative impact to the land they own and their ability to continue to use that land and operate businesses," he said.

Ellis said he anticipates disputes between his clients and TxDOT over the values of the affected properties, given the significant market value changes in the Austin real estate scene over the past several years. He added another consideration in condemnation cases is the concept of "highest and best use," or analyzing what is the optimal use of the land.

Of the properties slated for displacement, TxDOT's EIS draft identified 69 commercial properties, 26 residential properties and 12 vacant properties. These include businesses that have operated along the I-35 corridor for years, which he said could now face financial impacts as they try to find a new place to set up shop.

"It's incredibly difficult to find a location as central and as ideal as Interstate 35 is," he said. "And for those that are able to find that, they're going to have to pay a high premium to get into those new properties."

TxDOT officials said in the EIS draft the agency would help provide “advanced relocation assistance for selected properties to minimize impacts to underserved communities.” They added federal rules that allow the department to offer rental assistance to people, but not businesses.

However, the agency noted in its EIS draft that both people and businesses will likely “find it difficult to relocate in the same neighborhood or general area due to increasing housing and real estate prices.”

What do property owners need to know if their property is condemned or earmarked for displacement?

Ellis said the most critical thing for impacted property owners to know is they have a constitutional right to just compensation, should the government evoke eminent domain to claim the property owner's land. That includes both entire site takeovers, along with partial portions taken via eminent domain.

While the government's initial offer will be supported by an appraisal, he said disputes can and have gone as far as jury trials to ensure property owners are adequately compensated the full amount of their property's value.

"I strongly encourage property owners to visit with an experienced eminent domain lawyer, to visit with real estate professionals, before they reach any final agreement when any government or governmental entity is seeking to take their land," he said.

Last week, the U.S. District Court in Austin dismissed a case filed by three organizations last year against the I-35 expansion projects, largely focused on environmental concerns with the proposed plans.

In a statement to KXAN, a TxDOT spokesperson said all three portions of the expansion were the result of "thorough environmental studies and extensive public input."

“TxDOT looks forward to bringing safety and mobility improvements to the corridor through these critical projects,” the spokesperson continued. “Construction continues uninterrupted on the North and South projects, and we expect to have a final environmental decision on the I-35 Capital Express Central project by late summer.”

One of the plaintiffs in that case, Rethink35, told KXAN last week they requested a dismissal on the suit in order to refocus efforts on possible litigation against the downtown portion in the coming months.

Ellis added Monday he anticipates Rethink35's impending litigation will not be the only lawsuit that emerges, once the federal government weighs in on the EIS draft.

"I do think there's a potential for additional litigation over the environmental impact statement," he said. "And I certainly know, including just on behalf of my work for our clients, that there will be many contested eminent domain lawsuits as well."