Proposal to nullify property damage caused by transportation projects raises concern

 

BULLETIN: 11:40 p.m. Monday

City Council voted 9-2 to amend the proposal, giving property owners the choice to have their property declared conforming despite any harm to their property caused by any partial taking of property for a public transportation project. The original proposal would have left the condemning agency in control of that decision.

The vote came after a groundswell of public opposition to the original ordinance. (Full update on Tuesday). 

LAKEWOOD: City Council Monday will consider a proposal that could let road and rail agencies escape paying for damages to the value of private property caused by their projects without doing anything but paperwork.

The proposal, which amends city code provisions on “non-conforming” properties, would allow the Regional Transportation District and other governmental agencies to seek administrative relief for “non-conforming” parcels that no longer meet zoning requirements after public agencies have taken a bite out of the property through eminent domain.   

Non-conforming properties fall short of zoning regulations in such things as how far fences, homes and other structures are setback from property lines; minimum lot sizes; and other zoning regulations.

The city portrays the change as a method “to reduce some difficulties the current ordinance could cause some property owners along RTD’s (light rail) project” and as a way to “reduce the burden” and “uncertainty” for property owners, according to memos and letters circulated by city staff.

But property-rights advocates say the proposed change is designed to save public agencies a lot of money at the expense of homeowners.

Although the city says it would benefit property owners, the proposal “in actuality is depriving property owners of the compensation they are otherwise entitled to,” said attorney Robert Hoban, a prominent metro-area property rights lawyer.

“They’re keeping money in RTD’s pockets that they otherwise would probably have to go pay to bring these properties back into compliance,” Hoban said.

The attorney said the ordinance would taint the “nature of negotiations” between property owners and public agencies and takes away one of the most important arguments in  establishing damages through a District Court filing.

 When a transportation project requires taking a piece of private property, the diminished value of the remaining non-conforming property must be paid by the agency.

Under the proposed change, a government agency could simply ask City Hall to designate the property as conforming and the city could set aside the rules, providing a “cure” on paper without the agency actually fixing or paying for the damage to the remainder of the parcel.

And, in the case of city projects, the proposal apparently would allow the city to apply to its own staff to grant itself similar relief from having to pay for diminishing the value of properties affected by city projects. The also city could conceivably use the process to widen the use of any non-conforming property it owns.

“If you are a property owner and part of your property is taken, there are two things you are entitled to in the Constitution: You are entitled to a property that is compliant, whether non-conformance is allowed is sort of a non-issue, you are entitled to have it be fixed and you are entitled to the compensation to have it be fixed,” Hoban said.

“So if they are saying that the non-conformity is allowed, they are basically taking away your right to be compensated for that non-conformity.”

Hoban recently resolved a case in west Denver in which a street project left Hoban’s client with a property that would cost about $80,000 to be brought into actual compliance. The settlement of $67,000 was based on the cost to remedy to bring the remaining property into compliance.

And the change would apply to projects citywide, not just to RTD’s takings along the FasTracks line. Projects such as the Colorado Department of Transportation’s 6^th Avenue/Wadsworth Boulevard project, now in the final stages of the design phase, also would benefit, Hoban said.

When the project gets off the ground, a number of businesses along both sides of Wadsworth will lose part of their current frontage, as much as 20 feet or more along the length of the parcel, sacrificing parking spaces in many cases.

“You should be able to get compensation to fix that problem, to either realign, regrade or do whatever you need to do to squeeze those parking spots in there and get paid by RTD or Lakewood to do it,” Hoban said. “Here, they’re saying ‘No, no it’s OK’ but it’s not solving the problem.”

Hoban worries that future City Councils could change the plan, throwing the properties back under the restrictions of non-conforming properties.

And Hoban said it is a certainty that mortgage and title companies would look past the paperwork and judge a property’s worth based on the zoning regulations and whether the property actually meets those standards. In the case of a future sale, he said, the remaining property would carry the stigma, if not the label, of being out of compliance with the zoning standards.

Nowhere in the city’s letter to affected property owners, its request that City Council approve the changes or in the language of the proposed ordinance does City Hall mention the effect on compensation, or the legal requirement that damages to parcels from partial takings be paid for.

“When a portion of a parcel of land is taken from a property owner in a condemnation proceeding, the landowner is entitled to recover all damages that are the natural, necessary, and reasonable result of the taking, as measured by the reduction in the market value of the remainder of the property,” according to the language cited in at least three separate Colorado court rulings.

“I am wondering how our ordinance could trump those court rulings,” City Councilwoman Vicki Stack said Wednesday.

“When I asked the city why we are changing the ordinance, they told me it was because the citizens have come to them,” Stack said. “Citizens have come to me for the opposite reason, not to change it to conforming but to complain that it was going to be changed automatically.”

Stack also has questions about why the issue of compensation has not been raised.

“In fact, somebody asked them (city administrators) about it, but it was dismissed as ‘not something we are talking about here,’” she said.

 Stack also is concerned about the way lenders might react to a mortgaged property being out of compliance with zoning regulations, even if the city has declared it OK.

“Some loans are called when you make changes like this,” she said.

City Council will decide the fate of the proposal at Monday’s 7 p.m. City Council meeting.