In January of 2017, I participated in a relocation roundtable with four other presenters at the ALI-CLE Eminent Domain Conference in San Diego. As usual, I offered my perspective from that of the condemning authority’s point of view, which I thought was a reasonable and objective based on the text of the applicable law. Then I made a simple statement which turned the room against me:
“The Relocation Act does not require that a displaced business be made whole.”
The gasps in the room were audible.
I did not intend to advocate for or debate the wisdom or fairness of the law; I thought I was just repeating its current status. Another member of the panel, a well-known landowner attorney, responded “Dave, I disagree. I think that it does.” With that, the lines were drawn for the next hour. Almost two years later, we still disagree.
The fact of the matter is, however, that the Uniform Relocation Act does not treat business and residential displacees the same. The Act provides no basis for a business to refuse to move from a property. The condemning agency is not required to provide a business with a replacement location satisfactory to the business at any point, much less prior to the business having to vacate the acquired property. The Act indicates the government is to assist displaced businesses, but does not require assistance guaranteeing a successful result. See American Dry Cleaners & Laundry, Inc. v. United States Dep’t of Transp., 722 F.2d 70 (4th Cir. N.C. 1983) (“On appeal the government contends that the district court misconstrued the statute by requiring the government to obtain or tender a relocation site for Allen instead of merely assisting Allen in his efforts to obtain a suitable replacement site. We agree.”), see also M/V Cape Ann v. United States, 199 F.3d 61, 65 (1st Cir. 1999). The law does not require that there be a satisfactory new location for every business. There simply may not be such a location.
The Third Circuit Court of Appeals previously weighed in on the subject as follows:
Relocation assistance is a supplement and, though an important option, is not a guarantee of relocation for affected businesses. The Housing Act and the URA do not require that the government “tender” or “obtain” a replacement location; they require “only assistance, not assistance guaranteeing a successful result.”
Pietroniro v. Oceanport, 764 F.2d 976, 980, 1985 U.S. App. LEXIS 19895, *10-11 (3d Cir. N.J. 1985).
The same cannot be said for residential relocations. They are clearly different and that frequently confuses participants in the process. Regarding residential relocations, 42 U.S.C. 4625(c)(3), states “that a person shall not be required to move from a dwelling unless the person has had a reasonable opportunity to relocate to a comparable replacement dwelling.” That language is compelling and crystal clear. The very next sub-section in the Code (42 U.S.C. 4625(c)(4)) deals with businesses and simply requires the agency to “assist a person displaced from a business or farm operation in obtaining and becoming established in a suitable replacement location.” What it does not say is as telling as what it does. If Congress intended to provide the same protection to a business that it did to a residence, it would have used the same language as it did for residences. But it did not.
The Fourth Circuit Court of Appeals has directly stated that individuals and businesses do not receive the same treatment under the act: “Displaced persons are defined in § 4601 to include both individuals and businesses. Individuals displaced, however, receive greater protection under the Act than do businesses.” American Dry Cleaners & Laundry, Inc. v. United States Dep’t of Transp., 722 F.2d 70, 72 (4th Cir. N.C. 1983).
The URA was not intended to slow or stop public projects. The URA is—and always has been–intended to “minimize adverse impacts on displaced persons and to expedite program or project advancement and completion.” See 42 U.S.C. 4625(a) (emphasis added). The burden of relocation is not placed on either the federal or the state agency, rather, such agencies assist the displaced person, who must cooperate with the agency and make its own efforts to find a new location. See Olean Urban Renewal Agency v Herman, 50 App Div. 2d 1081, 376 NYS2d 328 (N.Y. 4th Dept. 1975).
Interestingly, since that roundtable relocation panel in 2018, I have discussed this very topic with numerous relocation agents and several landowner attorneys. Each side remains fixed in their respective convictions, though the law seems clear. Eventually the courts—or Congress—may be called upon to weigh in. Stay tuned.
David, I heard you speak those words and also heard the gasps. Unfortunately, I do agree with your analysis. There is no requirement within the URA to make a relocated business whole. However, neither does the URA deny the business from being made whole. And, they can often be made whole.
The displacing public agency is directed to provide a minimum of relocation assistance advisory services to the displaced business. Those services provide the basics of the URA relocation guidelines to the business. The burden is then placed on the business for planning the relocation to utilize the available benefits for a favorable outcome. The business may or may not become whole with this process.
Many businesses reportedly fail within a short time of relocating under these circumstances, while some actually improve their situations with the relocation benefits provided. There are definite extremes in the level of success for business relocations while following the URA.
In my experience, the businesses that do well usually make use of the advisory services provided by the public agency, follow the URA language very closely, and they seek assistance from expert advisors in this field. That combination allows them to recognize opportunities for making necessary or desired business changes during their move, or how to simply reconfigure their existing business into a new location. So, these successfully relocated businesses could be considered to have been made whole, even if they look a little different after the dust settles.