The Law

Government Department Ignores Reality by Ron Davis Owners of a Wisconsin shopping center will finally receive just compensation for partial loss of access to their property. The shopping center, located in Kenosha, is owned by the principals of 118th Street Kenosha, LLC. And a highway project changed the configuration of the roads that the center’s customers had been using for access and egress. On completion of the project, customers were still able to enter and leave the center. But that was possible using only two driveways. The entrance/exit to and from the main thoroughfare was eliminated. Because of the loss of that access and outlet, the Wisconsin Department of Transportation (DOT) compensated the center’s owners. The owners apparently believed that the award was insufficient, however, and sued. At trial, the DOT argued that the center’s owners must refrain from introducing any evidence that it is entitled to additional compensation. The center’s owners replied that they should be allowed to show that loss of access to the center property resulted in its devaluation. A Wisconsin circuit court sided with the DOT, concluding that the changing of the road configuration did not cause loss of access and “proximity” to the shopping center. But in so ruling, the judge preserved the shopping center owners’ right to appeal. And the center’s owners did indeed appeal. They contended that the circuit court judge erred in prohibiting them from presenting important evidence. That evidence, they added, would illustrate the impact that the loss of access to the main thoroughfare had on the market value of the property. But the DOT countered that the circuit court was correct in concluding that the closing and rerouting of the access road did not result in the property loss. The DOT explained that the shopping center continues to have two entry/departure roads, though not to or from the main thoroughfare. The Wisconsin Court of Appeals determined that “the DOT’s argument ignores reality.” The court explained, “The right of access to and from a public highway is one of the incidents of the ownership of land abutting thereon. Such a right is appurtenant to the land and exists when the fee title to the way is in the public and well as when it is in private ownership.” The court noted that the taking of the temporary easement was integrally connected with the shopping center’s loss of direct access to the main highway, adding that the taking of an easement requires proper repayment based on the value of the loss. In this case, explained the court, the taking of an easement, that compensation to be paid “shall be determined by deducting from the fair-market value of the whole property, the fair-market value of the remainder immediately after the date of evaluation…and giving effect to the items of loss or damage…where shown to exist.” (118th Street Kenosha, LLC v. Wisconsin Department of Transportation, 2013 WL 6083709 [Wis.App]) Decision: November 2013 Published: December 2013