Strategies for Negotiating for Your Industrial Property: What’s the Highest Possible Compensation?

As an industrial property owner in Georgia, facing eminent domain can be a daunting prospect. Your industrial facility represents not just a significant financial investment, but often the lifeblood of your business operations. When the government exercises its power of eminent domain, it’s crucial to ensure you receive just compensation for your property.

While you may be tempted to rely on your business acumen, eminent domain proceedings require specific knowledge and experience. This short guide will outline some key strategies in negotiating for fair compensation, but it’s critical to remember: partnering with an experienced eminent domain attorney can significantly increase your odds of receiving everything you may deserve.

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3 key negotiation strategies

1. Ensure you receive a comprehensive property valuation

Don’t rely solely on the government’s appraisal because it may fail to properly assess:

• Fair market value of the land and structures: This goes beyond just the property’s listed value. Recent sales of comparable industrial properties in your area should be considered, taking into account factors like location, access to transportation, and local zoning laws.
• Replacement cost of specialized equipment: Industrial properties often house custom or highly specialized equipment. Assessments should calculate not just the current value, but the cost to purchase, transport, and install similar equipment at a new location. For example, a specialized manufacturing line might cost millions to relocate and recalibrate.
• Business reputation and lost profits: A full assessment should consider the value of your business’s reputation, customer base, and potential future earnings. For instance, a well-established logistics hub might have long-term contracts and strategic partnerships that add significant value beyond just the physical property but might be damaged by a reduction in capacity or change in location or access.

2. Consider all compensable damages

As discussed above, you may be entitled to compensation beyond just the fair market value of your property. O.C.G.A. § 22-1-13 outlines additional potential damages related to the taking, including:

• Relocation expenses: These potentially cover more than just moving costs. They can include searching for a new location, planning and engineering for the new site, and temporary storage of equipment and inventory.
• Business losses: These can encompass lost profits during the transition period, customer losses due to a changed location, and costs associated with notifying clients and updating business materials.
• Access issues: Will the taking affect entry points for large trucks or disrupt your supply chain?
• Operational flow: How will the loss of a portion of your property impact your production line or storage capabilities?
• Future expansion: Does the taking eliminate valuable space you were reserving for future growth?
• Zoning complications: Could the partial taking result in your property no longer meeting local zoning requirements for industrial use?

Example: A large distribution center loses 20% of its land to an eminent domain taking for a new road. While the taken land itself might be worth $2 million, the impact on the facility’s operations and future expansion potential could result in severance damages of an additional $3-4 million.

3. Leverage the project influence rule

Georgia law requires that your property be valued as if the government’s project didn’t exist. This rule is particularly important for industrial properties, as government projects can significantly impact nearby land values.

If your property is being taken for a new highway, nearby industrial land might have decreased in value due to speculation about the project. Your property should be valued based on prices before the project was announced.

Remember, while these strategies provide a foundation, the complexities of industrial property eminent domain cases often require focused legal experience to navigate – even for seasoned business owners.