In the old days, railroad agents had the responsibility of purchasing land from Native Americans for rights-of-way on which they could build their tracks. One story tells of a rather cunning boss who understood the situation well. This Chief was approached by a railway agent who offered to buy some particularly poor land:
Buy my land? . . . Sure, sell me for $50,000, said the Chief.
$50,000! Why that land is not good for planting or grazing. It’s just no use at all! the agent exclaimed.
The Chief growled, It’s good for the railroad. [i]
While this anecdote may sound silly, there are two important lessons for Kimble County landowners to learn: The first of these lessons is that, like the railroad, LCRA power transmission lines are likely running through Kimble County, like it or not. While we are only talking about easements and should not fear the complete divestment of our property rights that Native Americans went through, a taking is a taking. Utility companies like the LCRA have the immense power of eminent domain and eminent domain to back them up.
Eminent Domain is a common law principle given statutory force at the state legislature level. Empowers government and quasi-government entities to take land from any US citizen for public use. The only real restrictions placed on this power are found in the Taking Clause of the 5th Amendment, which states that private property may not be taken for public use without just compensation.[ii]
This article is not some kind of call to arms in support of law reform. If that’s a cause you intend to support, I suggest you take a look at the materials provided by the various land rights groups or other like-minded organizations around the country.
Rather, what this article hopes to accomplish is provide Kimble County property owners with useful tips and basic information so they can better prepare for what lies ahead and hopefully achieve the best possible outcome.
This brings me to the second lesson we can learn from the wise Chief.
Owners must be aware and prepared to defend the value of their land. As a property owner, or the “big boss” of your land, can you just accept what the LCRA/railroad agent thinks the easement on your land is worth? Sure and in fact your life will be easier that way. However, your offer may not be what you think you are entitled to and may be much less than what you could receive with a little extra preparation.
Understand that eminent domain/condemnity proceedings are adversarial in nature. This means that even if you may or may not ultimately be able to avoid the installation of the transmission line on your property, you certainly have a say in determining what your fair 5th Amendment compensation will be. Preparation is key, you will be dealing with a team of LCRA trained professionals to meet a budget and schedule. Your rights and compensation are NOT your priority.
It is clear that there is a lot of confusion among the public as to how eminent domain/condemnation actions actually work and how they are going to occur. Getting familiar with the progression will allow you to make better decisions when the time comes. The following five steps are a drastically abbreviated timeline of how a normal eminent domain/condemnation matter is likely to proceed.
1: If it hasn’t already happened, the LCRA will contact you and ask for your permission to inspect, measure, and appraise your property.
2: An LCRA representative presents you with an appraisal of your property and makes you an offer.
3: This offer is time sensitive and must be accepted within a specific time frame. If you don’t respond or if you reject the offer entirely, the LCRA will likely file a condemnation lawsuit against you.
4: Once this happens, the Court selects three special commissioners to hold a hearing on the matter. The special commissioners will be disinterested property owners residing in Kimble County. At this hearing, you can present evidence to the panel in support of your assessment, question the LCRA appraisers, and generally explain to them why the LCRA assessment is too low. Once the presentation of evidence is complete, the Commissioners make a value determination and make that figure their “special award.”
5: This “special prize” is not the end of the game unless you are satisfied with it. If you are not satisfied with the commissioners’ award, you have a short period of time in which you can challenge and appeal it. In this new trial, both sides start from the beginning and the case proceeds as if the commissioners’ hearing never happened. You will be able to choose whether a judge or a jury decides your case.
As you can see, it’s really all about money. The steps I’ve outlined are your opportunities to have a say in how much you’re going to receive. Essentially, you have three main options: reach a negotiated settlement with the LCRA, accept the special commissioners award, or have a judge or jury decide how much you should receive.
Not make mistakes; Property valuation can be very complicated in the context of eminent domain. Perhaps you have sold a property in the past; maybe you even contested the tax valuation of your own home. The appraisals and valuations in these situations are very simple calculations compared to those carried out in expropriation matters. Property valuation evidence in eminent domain proceedings must comply with and reflect a set of eminent domain laws crafted over decades in Texas appellate courts. It would be wise to seek professional help early in the game.
Fundamentally, when valuing easements in the context of the transmission line, we are really talking about devaluation. How much less is my property worth now that there are power lines running through it, and that amount of devaluation is also the amount of money I could be compensated with and be happy? To set the tone, throw in some real numbers, and give you a general idea of what kind of devaluation I’m talking about, consider the following:
In 1997, the LCRA commissioned a study to find out how much its power transmission lines affected the values of the properties they cross.[iii] The geographic area studied was around Georgetown, Texas. This study was completed by an appraiser that the LCRA had contracted to do all the appraisal work on an easement acquisition project very similar to the one proposed for Kimble County. The only difference is that this study was done for a much smaller 138 Kv transmission line than the 345 Kv double circuit lattice tower we are facing today.
In this study, conducted by an LCRA-paid appraiser, an undeniable devaluation was found. It concluded that a transmission line easement has less than a 10% price impact and, in most cases, less than a 5% price impact.[v] Importantly, this is a potential overall 10% impact on the price of the entire property.[vi] Simply put, if you owned specific land around Georgetown around the millennium, the LCRA turned your $500,000.00 property into a $450,000.00 property. – Property of $475,000.00.
For the land directly below and near the line, the study concluded:
“It is concluded that the area located within an electric transmission line easement has a 90% decrease in value due to the presence of the easement. [and] [i]It is concluded that a 200 foot wide area contiguous with the proposed easement has some diminished value. The extent of the diminished value may depend on several factors, which would include the location of the easement in relation to the entire stretch and the physical characteristics of the remainder.[vii]
This is, of course, data from ten years ago from a single source that only considers strict real estate values. Also, this study was done for much smaller transmission lines; and should be considered only as a point of reference.
A lot has changed since 1997, but my opinion is that it has changed in favor of the landlord rather than the LCRA. To arrive at a fairer devaluation figure, one