Eminent domain is the legal system that allows the government to lay claim to the real property of an individual or business. Either through a negotiated sale or a condemnation, the state government can effectively force a property owner to transfer ownership to another party for a project that benefits the public.
Examples of situations that lead to eminent domain claims against property include highway expansions and the installation of new utility infrastructure. Often, eminent domain negotiations result in the sale of a parcel. However, sometimes what is necessary for a project is only a small fraction of the total property. Businesses with a parking lot near a road, for example, might lose their road frontage but not the full acreage of a commercial plot. What would happen if a business were to lose its parking infrastructure due to an eminent domain claim?
The change will have an impact on the business
Research into the companies that people patronize and why makes it very clear that parking has a significant impact on the success of the average retail establishment. Consumers choose to patronize businesses in many areas, in part, based on the perceived availability and convenience of parking there.
Being able to access parking lots quickly from the street and move into the store quickly makes a business more attractive. Distant parking or very limited parking spaces may prompt consumers to visit another business to avoid a pre-shopping logistics nightmare. Therefore, the loss of only the parking spaces around a business could still be a fatal blow to an otherwise successful organization. Business owners may need to adjust their negotiations to reflect the fact that they will no longer be able to attract the same volume or caliber of customers because of the change in the amenities they can offer. In many cases, their best option might include closing or relocating.
The use of a property for business purposes can drastically alter the fair market value of that property and what kind of compensation is appropriate during an eminent domain claim. Property owners worried about parking lots and other amenities may need to prepare for a complicated negotiation process. Identifying the factors that will affect the value of a property and the success of a business can help owners more effectively respond to pending eminent domain claims that will impact a commercial property.