Determining Fair Value in the Central I-35 Taking Process

February 28, 2023

With the design process for the Central I-35 Capital Express Project nearing completion, the Texas Department of Transportation (TxDOT) likely will begin contacting more than 100 impacted Austin property owners with land between U.S. 290 East and SH 71/Ben White Boulevard by this summer.

The Texas Constitution dictates that property owners are entitled to receive “adequate compensation” for any land taken for public use, but determining fair value involves more than agreeing upon a simple dollar-per-square-foot value of the land taken. 

Owners can be awarded compensation for the negative impacts that the taking has on their remaining property, including loss of functionality. However, that impact often is not addressed in TxDOT’s assessment of compensation owed for a taking.  It is up to the property owner to ensure that these critical factors are fully documented and considered.

Survey is critical to assessing full impact

Under state law, TxDOT can only take as much property as it needs for public road projects, which means it typically takes only a small portion of a property. However, the removal of even a sliver of land can significantly impact the remaining property’s day-to-day operations and value. As an example, in some cases a small taking can render the remaining property in violation of applicable building or fire code without costly improvements.  

TxDOT begins the condemnation process by contacting property owners to request access for a survey. The survey will show the precise boundaries of the acquisition for the road widening project.

Once the survey has been prepared, the property owner can begin assessing and documenting the lost value and expenses associated with a wide range of negative impacts that could include:

  • A reduction in rentable square footage
  • A loss of parking spaces 
  • Required changes to parking configurations
  • Driveway improvements needed to address new accessibility issues, including the grade of the driveway to ensure continued access for both standard vehicles and also delivery trucks
  • The removal of valuable building signage
  • Drive aisle changes needed to ensure minimum width turning radiuses for emergency vehicles and traffic
  • Diminished wastewater and stormwater drainage infrastructure

Property owners must advocate to ensure compensation covers full impact

To determine fair compensation, TxDOT’s appraiser will value the subject whole property before the taking, assuming no project, and will also value the subject whole property after the taking, assuming the project has been completed.  The difference between these two values is typically what TxDOT will offer the landowner to acquire the property TxDOT seeks. 

TxDOT’s initial valuations are heavily influenced by the comparable properties selected by its appraisers, comps that may not serve as an ideal or fair comparison from the property owners’ perspective. TxDOT’s initial offer may also fail to take into account the full range of issues and expenses triggered by the taking, including damages to the remaining property or the expenses required to restore the property to its pre-taking condition.

Under state law, TxDOT must make an initial offer and provide the landowner with an appraisal report that explains how TxDOT determined its offer amount.  The property owner must be given at least 30 days to accept or decline TxDOT’s initial offer, after which the state can send its final offer.  The property owner must be given at least 14 days to accept or decline TxDOT’s final offer. If the owner does not accept this final offer, TxDOT can file a condemnation petition in the Travis County Probate Court to begin condemnation proceedings.

We can help build your case and assemble your team

Given the tight window to present a counteroffer with supporting evidence, it is important that Central Austin property owners along the I-35 between U.S. 290 East and SH 71/Ben White Boulevard begin preparing for the takings process now. 

Barron, Adler, Clough & Oddo, PLLC has helped Texas property owners impacted by eminent domain for more than 40 years with more than 100 years of combined eminent domain experience. We understand every property is unique and can quickly assemble a team of trusted experts we routinely work with in fields like real estate appraisal, land planning and engineering to help build and document your case.

If you think your property will be impacted by TxDOT’s Central I-35 Capital Express Project, contact us so we can help you better understand the takings process and advise you through the process.