Lasting effects of eminent domain on commercial development - by Sebastian Jablonski

The state has the authority to seize all or part of privately owned commercial real estate for public use by the power of eminent domain. Although the state is constitutionally required to provide just compensation to the property owner, it frequently fails to account for the property’s future development potential and the lasting impact the taking may have on its prospective use.

A partial taking of a commercial real estate property can create a ripple effect, which could dramatically alter the usability of the remaining land. The remainder may fall out of compliance with local zoning codes, including setbacks, parking minimums, and lot size requirements. When the state’s taking causes such violations, the property owner may be forced to seek variances, either to bring the remaining property back into compliance or to pursue future development plans.

For example, if the state takes a narrow strip of land located alongside the frontage of the property to widen a road, the remaining parcel may no longer comply with local codes. This seemingly minor taking can significantly hinder future development or expansion unless the property owner is able to bring the property back into compliance. 

If your property is at risk of being taken by the state, it is essential to consult with an attorney to fully understand the potential consequences. Even a minor taking can have major implications for future development. Understanding the full impact is crucial to ensuring that you, as the property owner, are properly compensated by the state and that the remaining property is still usable and can still be developed in the future.

Sebastian Jablonski is an associate at Forchelli Deegan Terrana LLP, Uniondale, N.Y.