As NCDOT buys land for I-26 Connector, negotiation can pay off for property owners

by JOHN BOYLE

After 35 years of talking, planning, designing and redesigning, the Interstate 26 Connector project is finally underway, and the N.C. Department of Transportation or its contractors are buying land to accommodate the north-to-south downtown bypass.

As Asheville Watchdog reported in early March, the NCDOT has been acquiring land for more than a year for three of the five sections of the $1.2 billion Connector project. The project will affect 175 property owners — 154 residential and 21 nonresidential.

As of May 9, the NCDOT had made 142 offers on the project, settled 75 cases and condemned eight properties.

At The Watchdog’s request, the NCDOT provided statistics for the past three years on eminent domain cases in its seven-county Division 13, which includes Buncombe County. A Watchdog analysis shows that negotiating with the NCDOT, whether with or without an attorney, results in considerably higher payouts for property owners.

Cases negotiated in 2021 that did not go to trial settled for a final payment that was on average 154% above the approved appraisal, while jury cases resulted in a final payment that was 118% above the appraisal, according to the statistics.

For 2022, the settlements rose to an average 250% above the appraisal before trial, and 115% above average for a jury verdict. In 2023, settlements stood at 161% average above appraisal. No jury verdicts occurred in Division 13 in 2023.

Should you hire a lawyer when negotiating an eminent domain case?

Asheville attorney Kevin Mahoney, head of the eminent domain practice at the law firm NC Eminent Domain Attorneys, said it’s important to be careful in evaluating the percentage figures, as smaller cases can show a huge percentage increase, while higher figures may show a small increase.

“Relying on percentage calculations without examining the specifics of a particular case may not truly account for impact of the recovery,” Mahoney said.

It’s usually the larger NCDOT condemnation cases that go to a jury trial, Mahoney said, as smaller cases usually settle.

It is important to remember that each property in a condemnation case is evaluated individually, and the impacts from the NCDOT project may differ from one property to another, Mahoney said.

NCDOT spokesperson Meredith S. Vick said the department does not track statistics on cases where owners hire attorneys versus when they represent themselves.

In the Burton Street neighborhood, a historically Black community just off Haywood Road and adjacent to Interstate 240, the NCDOT estimates that “approximately nine relocations of residences and five businesses” will be necessary. That number could change, Kevin Moore, a senior NCDOT project manager, said via email.

“This project is huge, and it’s been going on for so long, people still don’t believe it’s going to happen,” said DeWayne Barton, president of the Burton Street Community Association in West Asheville.

Barton said he and other community leaders have worked with city, county and NCDOT officials since 2010, but the frequent project delays have been rough on his credibility.

The NCDOT’s Burton Street Neighborhood Plan, part of the Connector project’s final environmental impact study, was created to address potential impacts on the neighborhood. It states the NCDOT proposes improvements to upgrade I-240 from south of the I-26/I-40/I-240 interchange through the I-240 interchange with US 19-23-74A/Patton Avenue west of the French Broad River, so that I-240 can be redesignated as I-26.

Moore said the department is following through with commitments on the neighborhood plan and will adhere to the federal Uniform Relocation Act, which provides protection and assistance for property owners affected by federally funded projects.

City of Asheville spokesperson Kim Miller said the project’s design near Burton Street hasn’t been finalized, as the NCDOT hasn’t awarded the contract for it yet.

“Until the design is finalized, the city will not have final details on which properties will be affected, nor the total number,” Miller said, but she said the city recognizes residents face potential impacts.

“City staff from multiple departments have been attending monthly NCDOT-convened Burton Street mitigation strategy meetings with members of the Burton Street Community Association,” Miller said.

‘Contact an attorney’

Leicester resident Bill McDowall, who owns West Asheville apartments that will be affected by the Connector project, has these words of advice:

“My advice to people facing something like this is, ‘Contact an attorney.’”

A decade ago, McDowall, a retired attorney who practiced criminal law, hired an attorney to help him negotiate with the NCDOT on the New Leicester Highway road widening project. The 4.3-mile project began in 2014 and affected nearly 150 land owners.

McDowall is again negotiating, this time over his apartments on Virginia Avenue. For the Connector project, NCDOT plans to take some of his land for easements and road work, but not the buildings themselves. He’s not ruling out retaining an attorney.

Court documents show that in 2016, NCDOT gave McDowall and his wife, Sharon Waugh, $37,250 for four acres that included 1,000 feet of frontage on New Leicester Highway (N.C. 63).

The widening was a “design-build,” meaning the contractor handled the design, building and right-of-way land acquisition.

“I told him it was a bunch of hooey,” McDowall said.

He countered with a figure about five times larger. The parties could not agree on a settlement, so the state sued under the eminent domain law, took the land and built the road.

McDowall and Waugh went to court and reached a settlement seven years later. The couple got another $262,750, for a total of $300,000 – eight times the original offer.

McDowall, 77, said the couple had bought 64 acres in 2001. While the property was largely empty, McDowall said it could be developed for commercial use, and it also included a fair amount of fencing. He felt the NCDOT was lowballing them.

“Their offer to me was less than I paid for the property,” McDowall said, noting he and his wife paid $711,000 for the entire parcel, or $11,109 per acre.

The Watchdog analyzed a spreadsheet of 142 property acquisitions for the New Leicester Highway widening project, of which 120 had been settled as of the end of 2017. Some more complicated cases that went to court through the condemnation process settled after that, and some are still ongoing. In some cases, information was incomplete or unclear, and The Watchdog omitted those.

Cases vary widely, with some including relocations or movement of septic systems and others involving a simple taking of a small piece of land. Appraisals varied from $50 to $474,600.

Overall, the average appraisal was $71,471 and the average settlement $92,754, an increase of $21,283, or 30%. For appraisals that were more than $100,000, the average was $213,984 and the average settlement $266,951, a 25% jump.

Appraisals under $100,000 averaged $30,096, with an average settlement of $42,181, a 40% increase.

“You’ve got a process where the state has a duty to treat their citizens fairly, I believe,” McDowall said. “This isn’t a negotiation between people who are equal. They’ve got the power of eminent domain, and they’re going to try to get it as cheap as they possibly can. Their original offering price, as far as I’m concerned, was highway robbery.”

NCDOT intends to treat property owners fairly, offering “fair market value” for homes and businesses, according to Nathan Moneyham, division construction engineer with the NCDOT’s Asheville office. Appraisers contracted to work for the agency are not incentivized to offer low bids to save money for the department and taxpayers, he stressed.

Typically, after the NCDOT has identified the need for a project, it starts work on project design and holds public meetings, Moneyham said. Once design is about 75% complete, the agency has identified the amount of land needed.

Moneyham said the NCDOT expects negotiations. If an agreement is reached, NCDOT buys the property, Moneyham said. Typically, the state pays the owner within two to six weeks.

If an agreement is not reached, that triggers the condemnation process, filed through the courts. The NCDOT takes the land after depositing the offered amount in the property owner’s account. For the New Leicester Highway widening, the NCDOT condemned 29 of 148 parcels, meaning the cases went to court, according to the agency’s Asheville office.

For that project, court documents show McDowall’s lawyer, Ronald Payne, had numerous successes in several other cases, including several parcels of the Snelson family farm. In those cases, NCDOT’s payments later increased by as much as nearly 12 times.

Bruce Snelson’s family has lived in the area since the early 1800s. “The land means more to us than the money — we’d rather see cows than houses,” Snelson, 67, said.

When the DOT came in with what he considered lowball offers, he contested the decisions.

“They say they’re giving you fair market value, but they’re not,” Snelson said. “They’re paid to buy it cheap.”

The Snelson farm property was divided into multiple parcels, and Payne secured these settlements:

• $650,000, 5.5 times the $118,825 initial NCDOT pay-in deposit
• $390,000, 11.8 times the $33,175 initial pay-in deposit
• $53,500, 4.4 times more than the $12,150 initial pay-in deposit

As a businessman and farmer, Snelson realizes his cases vary quite a bit from what those of property owners in West Asheville and other paths of the I-26 Connector may look like. He also says it’s important to realize an attorney will get one-third of any amount won over the NCDOT deposit amount.

Still, it’s worth it to hire an attorney, Snelson said. “And part of it is sort of the principle of the thing — not to let them just steal it.”

A spreadsheet of cases on the New Leicester Highway project shows many were settled at or just slightly above the appraisal, but more than 20 cases show settlements significantly higher.

These are three other cases Payne handled on New Leicester Highway:

For property owned by Cuman and Inez Dockery, NCDOT offered $37,475. Payne negotiated a settlement of $105,000, or 2.8 times more.

For property owned by Joanne Carter Gunter and Robert S. Gunter, the state offered $68,925. Payne secured $150,000, or 2.2 times more.

For Stephen Frank Suttles and Georgia Plemmons (trustees for the property owner), the NCDOT offered $280,925. The settlement was for $375,000, or 1.3 times more.

Why the huge discrepancies?

Randy Guess, NCDOT’s real property appraiser supervisor, acknowledged that during a large project such as the New Leicester Highway widening, “there are going to be some settlements that fall outside the norms.”

The department contracted more than 140 appraisals on the project.

“To see three to five settlements that are well above the initial deposit is not surprising,” Guess said via email. The Watchdog provided five samples, but a spreadsheet of the project’s appraisals and settlements shows appraisals consistently coming in 30% below settlements.

“NCDOT does the best it can to offer just compensation based on a well-supported appraisal at the beginning of the process,” Guess said. “Also, property owners have every right to try to maximize their compensation, and many do that well.”

The department is required to review all appraisals for errors “and for proper appraisal theory, and we require our appraisers to provide support for their conclusions,” Guess said. The initial appraisal forms the basis for the offer.

He noted that the cases listed above had initial deposits made in 2016 or 2017 but didn’t settle until 2023.

“The interest on a settlement over that time can be substantial,” Guess said.

‘Is it ever going to happen?’

Burton Street, a historically African American community, is in the crosshairs of the I-26 Connector project. But as Barton, president of the Burton Street Community Association, says, residents remain skeptical.

MeaGan Jones, 39, grew up in the neighborhood and said she and her family have lived in their three-bedroom, two-bath, one-level home for 20 years.

Asked if she was deeply worried about the potential disruption, Jones said, “No. I’m still like, ‘Is it even going to happen?’”

She mentioned how many iterations the project has been through and that it’s been talked about since 1989. Told the project should start this year, Jones laughed and said she was skeptical.

“They’ve been working on I-26 by Brevard Road for what, about 40 years?” she said, referring to a project that involved a new bridge and roadway widening.

Jones said she’s unsure how she would handle the potential loss of property. She lives with her grandmother, father and aunt.

“Is it worth the fight? Because you’re going to lose,” she said. “How do you fight it, especially if everybody around you sells? In the end, you still end up losing your property.”

“Some residential and business relocations are anticipated within the Burton Street Community as a result of the Section A Widening Alternative,” the NCDOT’s Burton Street Neighborhood Plan states.

Moore, the NCDOT senior project manager, said the department is “following through with its commitments on this neighborhood plan that was developed in 2018.”

Early on in the project, estimates came in that suggested 71 residences, 14 businesses, and one religious institution would have to be relocated. Moore said “those numbers are not correct anymore,” although the widening still will have an impact.

“Since the origin of the document, NCDOT has reduced impacts in that section and continues to do so,” Moore said.

Barton said the sense of the project’s inevitability and NCDOT’s power is partly why the neighborhood association is working with the Southern Environmental Law Center to help ensure NCDOT keeps its commitments regarding neighborhood safeguards. SELC is not representing anyone in eminent domain cases, though.

Patrick Hunter, managing attorney for SELC’s Asheville office, said the organization has offered to connect residents with attorneys who specialize in eminent domain.

SELC is focusing on the commitments the NCDOT made to the Burton Street Community in the 2018 Appendix to the Final Environmental Impact Statement, including maintaining walkability with sidewalks, ensuring parks, and other quality-of-life issues.

Hunter said he can understand how residents may feel overwhelmed.

“When people are faced with these huge government-funded projects, it certainly is intimidating,” Hunter said. “It is important, and it helps to have someone on your side to help with the process.”

The Burton Street Community Association notes on its homepage that the neighborhood “is one of ten communities being impacted by the proposed I-26 improvements.

“The neighborhood was first impacted by interstate development in the 1960s when I-240 was built,” the webpage states. “The construction of I-240 displaced residents and took land from many areas in West Asheville, resulting in significant impacts to the Burton Street neighborhood.”

The proposed widening means additional right-of-way will be required in the neighborhood. The association points out that because of the community’s demographics, the neighborhood has been identified as an “Environmental Justice population that has experienced recurring impacts.”

That means NCDOT “can provide additional mitigation opportunities to lessen the burden of the project on the Burton Street neighborhood,” the website states.

On Virginia Avenue, McDowall walks his property pointing out stakes with pink flags on them that represent easements the NCDOT will enact to build an exit ramp and roundabout for the Connector. Some will come within feet of the one-story apartment buildings McDowall rents to local residents, many of whom have lived there for years.

He thinks the NCDOT’s right-of-way agent is using an inaccurate technique in calculating his property’s worth, considering only the totality of the acreage instead of its worth were it to be divided, so he’s pushed back. Also, the road project will create more noise and a view that includes an expressway, which likely could inhibit what McDowall could charge for rent.

The NCDOT does not compensate landowners for these types of inconveniences, though, as they are not covered in state statutes.

McDowall owns three buildings on Virginia Avenue, with a total of 10 units. He’s been offered over a million dollars for the property from an out-of-state investor, but McDowall wants to keep the units, in part because they provide affordable housing for working people, which is becoming increasingly rare. He bought the complex in 1993.

The amount of information that comes with right of way cases can be overwhelming for any layperson, McDowall said. So he encourages people to seek help.

“Just be careful and speak to somebody before you cut a deal,” he said.

Asheville Watchdog data reporter John Maines contributed to this report.

Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. John Boyle has been covering Asheville and surrounding communities since the 20th century. You can reach him at (828) 337-0941, or via email at jboyle@avlwatchdog.org. The Watchdog’s reporting is made possible by donations from the community. To show your support for this vital public service please visit avlwatchdog.org/donate.