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by Ron Davis
The efforts of a Texas shopping center owner to close an adjacent street despite resistance of a neighboring property owner have finally proved successful.
The shopping center, located in the Houston-area city of Kemah, is owned by a restaurateur who leases space from the same property owner who is protesting the closing of the street. Shortly after beginning operations at the leased premises under a 20-year contract, the restaurateur purchased the land surrounding his landlord’s property and began construction of the shopping center.
The street in question divides the two property owners and is owned by the city of Kemah. Citing safety reasons, the shopping center owner sought to limit access on that street to pedestrians and emergency vehicles. So he appealed to the city to grant the limitation.
The city then conducted public hearings and afterwards passed a resolution granting the shopping center owner’s request.
The neighboring property owner, however, was able to prevent the resolution from going into effect by contending that the closing of the street would diminish the value of his property. He claimed, in fact, that the restaurant property leased to the shopping center owner would plummet from $7 million to $700,000 if the resolution were enforced.
He further pointed out that Texas law requires consent from all abutting landowners “before a municipality may vacate, abandon, or close a street.” He consequently sued the city of Kemah and the shopping center owner to either keep the disputed street open or pay him for the depreciation of his property.
A Texas appellate court ruled in favor of the city and the shopping center owner, explaining, “The city of Kemah did not “vacate, abandon, or close” the street at issue here, but only restricted traffic on the street to emergency vehicles and pedestrians based on public safety concerns…. Although Texas law forbids the taking of property without adequate compensation, it does not require compensation for every decrease in market value attributed to governmental activity.” (Jordan v. Landry’s Seafood Restaurant, Inc., 89 S.W.3d 737 [Tex.App.—Houston 1st Dist. 2002])
Decision: November 2002
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