WILMINGTON — The city will pay out over $300,000 in the last of three related settlements stemming from the use of eminent domain to take property to allow the construction of the public-private River Place project.
Related: Wilmington changed its mind on eminent domain deal. It could cost the city $350,000
All three cases stemmed from property taken by the city from behind North Front Street businesses, where the city and private developer East West Partners needed utility easements or construction access. In the first two, the city paid out about double its initial cost estimate.
In the third, however, the city will pay over ten times its initial cost estimate.
Three eminent domain cases
In two cases, the city initially wanted a three-year easement through a parking lot behind Front Street Optometric and Chadsworth’s Columns for construction access to the River Place site for $32,589 and $35,310 for Chadsworth’s Columns, respectively. The city then decided to opt for fee-simple taking — that is, permanently taking the land through eminent domain — but offered only about $6,000 more.
The owners of both properties disagreed with the city’s evaluation. The issue was headed to court but the city ultimately settled, offering around $73,000 for Front Street Optometric and around $69,000 for Chadsworth’s Columns, around double the initial cost estimate.
In the third case, the city needed a utility easement behind the mixed-use building at 255 N. Front St. — the former Soap Box Laundro Lounge and current home of Waffle House — and offered $24,565 for a slice of the property.
According to court records, the property owner became concerned that the construction of River Place was impinging on the rest of the parcel (which the city had not purchased); attorney Michael Davenport filed an injunction. In return, the city offered an additional $16,425, bringing the total offer up to $40,990 — and in return taking all off the property behind the building, up to the rear wall.
The property owners disagreed with this move — and ultimately the city agreed to pay an additional $260,000, bringing the total to $300,990.
The initial estimate for the Front Street eminent domain condemnations was $92,464; after expanding the land taking, the settlements now total $442,990.
Settlement: tenfold versus double
As with the other Front Street cases, the ‘Waffle House’ eminent domain case was scheduled for a trial but the city ultimately settled. But why was the settlement for 255 N. Front St. so much higher than the other properties?
In large part, it’s because the city needed the land for different reasons.
For the Chadsworth’s Columns and Front Street Optometric, the city needed land temporarily, for demolition and construction access. While the city ultimately opted to permanently purchase the land, as part of the settlement with Front Street Optometric, the city will grant an easement back to the property owner once River Place construction is complete (a similar agreement is expected to be filed with the estate of the Chadsworth’s Columns owner). The property owners will then be able to use their property as a private parking lot as they had before construction.
For the Waffle House building, the city needed to install utility lines, specifically water and sewer ducts that would be permanent, not temporary. When the city realized it needed to expand those installations, it didn’t just take more land, it reduced the options for the property owner to redevelop the building.
In particular, the building owners had wanted to install a second grease trap in addition to the existing one used by the Waffle House. This would allow the second floor to be redeveloped as a catering kitchen or restaurant. The owners also considered relocating the interior stairwell to the back of the building, which would increase available square footage.
The city’s expanded use of the property behind the building made these impossible and, unlike the other two properties, the loss of property use was permanent, not just for the duration of River Place construction. According to the attorney for the property owner, the settlement cost was never directly tied to the square footage being taken by the city. It was, instead, about the consequential damages to the value of the building.
According to Wilmington spokesperson Malissa Talbert, the settlements were paid out of the city’s general fund, but the city will not have to adjust its budget to cover any of the River Place eminent domain cases. Talbert confirmed that East West Partners, the city’s private partner in the River Place project, would not contribute to paying the settlements.
Send comments and tips to Benjamin Schachtman at email@example.com, @pcdben on Twitter, and (910) 538-2001.