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Despite the ongoing pandemic, states are opening up for business and establishing a new normal. This determination to move forward includes pushing public transportation projects full steam ahead. While this may be good news for certain industries, it may not be for commercial property owners hoping to see a slow down to public projects and avoid a taking of private property. As many grapple with new economic realities, we examine the approaches employed by states in the southeast to manage construction of public projects in this unprecedented time.

Georgia

The Georgia Department of Transportation (GDOT) is moving forward with all of its previously funded public projects, including the massive I-285 Top-End Project, designated as a “Major Mobility Project” for the Atlanta metro region. Affecting approximately 260 property owners along I-285 and Georgia Highway 400, environmental review of the project continues. GDOT anticipates a contract let date in 2022 and construction start in 2023. Like ocean liners, these projects don’t turn on a dime. Under the 2015 Transportation Funding Act, the budgeted funds cannot be shifted to other needs or projects due to economic shutdown. Once environmental review is complete, GDOT will approve the final design and move toward acquiring right-of-way from affected property owners.

Owners with property in the project corridor should not assume projects are stopped or delayed due to the current pandemic. An essential first step in preparing for an upcoming project—and GDOT’s exercise of eminent domain—is reviewing design concept overlays or fully engineered plans for potential property impacts and possible remediation steps.

North Carolina

The future of construction projects for the North Carolina Department of Transportation (NCDOT) stands in stark contrast to GDOT. Across North Carolina, funding for highway projects is frozen, plans for new projects are on hold, and routine maintenance is delayed.

NCDOT finds itself in this situation for two reasons: first, NCDOT spent significantly more money than anticipated when cleaning up from major storm events over the past few years; and second, NCDOT’s cash balance dropped below the legislatively mandated minimum of $293 million. Accordingly, NCDOT is prohibited from entering into contracts among other restrictions. Without a bailout from the General Assembly, things could be on hold for quite some time.

While some major projects, such as the Capital Boulevard North Upgrade Project from Raleigh to Wake Forest are “fully funded” by the State Transportation Improvement Program (STIP) for 2020-2029, this does not mean proceeding as planned. The STIP is evaluated every two years and funding can be shifted between projects as they are reevaluated, or delayed altogether. This places affected property owners in limbo as nearly all projects in development or acquisition phases are suspended. For many projects, NCDOT is rescinding settlement offers and declining to negotiate further, without any indication of when or if projects might resume.

Owners impacted by NCDOT projects should not assume projects are gone for good. Information about these projects is still available online, giving owners the ability to learn details and determine the potential property impacts. Additionally, rescinding offers or abandoning condemnations may not relieve NCDOT of the duty to pay compensation.
South Carolina

Like GDOT, the South Carolina Department of Transportation (SCDOT) is proceeding as planned. However, SCDOT anticipates possibly losing over $290 million in gas and car sales tax revenue due to the shutdown, the main source of road project funding. Projects underway and set to be awarded through July are considered fully funded and will not be impacted. SCDOT is monitoring its revenues and may make some changes to its 10-year road construction plan.

For large projects, such as the Carolina Crossroads project (which completely alters the I-20, I-26, and I-126 corridor in Columbia), future project construction phases may be impacted by lost revenue. Right-of-way acquisitions are not delayed and SCDOT has begun acquiring properties, estimating it will pay over $240 million for approximately 160 properties needed.

Despite potential funding delays, owners contacted by SCDOT regarding right-of-way acquisition should not assume they have time to wait.

Conclusion

No matter what state your property or building site is located in, the pandemic created a unique environment for public transportation projects. Because projects are state-specific, partnering with experienced eminent domain attorneys can help property owners navigate this landscape, understand and preserve their rights, and reach resolutions that make business sense.

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