Court of Appeals says DOT must pay owners for land taken for proposed road projects

Michael Hendrix had a contract to sell eight of his 24 acres of land at Old Hollow and Germanton Roads in Winston-Salem for more than a million dollars in early 1998. But because the state Department of Transportation had identified that land as lying in the path of a proposed beltway project running east to west just north of the city, the deal died.

Instead, ten years later and with no construction in sight, the DOT made Hendrix an offer that any property owner in right mind would refuse: a non-negotiable $530,700 for all 24 acres. In 2012, though, health issues pushed the former contractor to go back to the agency for a new deal.

Hendrix died from a stroke in November 2013, still waiting for an answer from the DOT.

James and Phyllis Nelson live on two of the nearly eight acres they own on the western side of that proposed Northern Beltway project. They’d planned on developing the remaining property for retirement income. But once the DOT identified that land as lying in the path of the project, the Nelsons couldn’t improve or develop their land.

Instead, they sat by helplessly as DOT put down traverse stakes there, watching as the agency bought out other nearby owners, tore down homes (one burned down) and let others fail into disrepair.

Hendrix and the Nelsons are just a few of the thousands of property owners in North Carolina who’ve fallen victim to a state device known as the “Map Act.”

Pursuant to that Act, the DOT can file a map with the local register of deeds identifying property where it anticipates building a road and protect that property from development or other action that might improve its value — in effect holding down the purchase price until the DOT is ready to buy.

How many years away can that be?

“For as long as it takes North Carolina to get enough money to build the road,” the DOT says in a fact sheet distributed to affected property owners.

The DOT filed its first map along the western loop of the proposed Northern Beltway in 1997, and construction on just one segment of one loop is just now beginning.

In the meantime, property owners there have been fighting for relief from the agency, and in recent years have resorted to lawsuits, traveling up and down the appellate courts in search of help.

Yesterday, they may just have hit pay dirt.

In a unanimous decision with sweeping implications for North Carolina road projects, the state Court of Appeals ruled that DOT had effectively “taken” their property through eminent domain when it filed the maps protecting the eastern and western loops of the proposed beltway and owed the owners “just compensation” for that land.

“It confirms what we have been saying from the beginning — that the state was condemning these people and needed to buy them,” Matthew Bryant, the attorney representing owners in this and other lawsuits, told the Winston-Salem Journal.

“The state will now have to pay those people, and they should have bought them out years ago. They should never have gone through this.”

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An appeal by the DOT to the Supreme Court is possible, and state officials are still reviewing the decision, according to Attorney General spokesperson Noelle Talley.

But yesterday’s ruling, if it holds, will necessarily change how North Carolina plans, finances and builds roads.

In the short term, the state faces the prospect of having to compensate potentially thousands of landowners with property lying in areas protected by project maps.

Bryant represents property owners in 70 lawsuits concerning the Northern Beltway in Winston-Salem, and he estimates that there are 500 to 600 owners left with land there impacted by the filed maps. He also represents owners in Fayetteville, Shelby and Wake County with property affected by projects planned in those areas.

And then the state may just have to return to the old-fashioned way of building roads: finding the money and then buying the property.

“In my research, nobody has built a road like this and done this to as many people as North Carolina has in so many different counties,” Bryant said. They think this is ‘planning.’ But when they put legal restrictions on somebody’s property, they’ve turned it into an acquisition.”

A 20-year taking was not what two of the co-sponsors of the bill that became the Map Act in 1987 – Rep. Jim Crawford and Sen. Martin Nesbitt – intended.

“We were getting ready to embark on a pretty strong program then and figured it would be fair that we let people know we were coming through there and allow them to protect it for period of time,” Nesbitt said after a 2012 Court of Appeals decision in a similar lawsuit. “The intention was to allow for a short period of time so nobody got caught moving into a zone like that.”

Crawford agreed. “We shouldn’t be able to preserve something in perpetuity,” he said. “You can’t just go in and buy rights of way that you’re speculating on, you’ve got to buy rights of way that you really are planning to build on. Maybe we need to amend the statute again.”

Change need not be as radical as some state officials might project, according to Bryant.

“The DOT has been building roads since 1915,” he said.

“They were able to build roads without the use of the Map Act. DOT should build a road the right way. Buy it.”

Read the full Court of Appeals decision here.