September 2011 - Eminent Domain Services and Business Relocation Consulting

In my last blog post, “An Overview of Capped Actual Cost Items for Business Owners Affected by Eminent Domain” I discussed two reimbursement options available to business owners who must relocate due to eminent domain; lump sum and actual cost.

The lump sum amount is a rather simple process for the business owner. He/she simply accepts the $40k[1] available for relocation and ‘calls it a day’. No other claims processing is needed. Hopefully, the business owner has cash reserves available in addition to the $40k because rarely does a full relocation of a business fall within that dollar amount.

I am often asked by business owners, “$40k (or whatever the capped amount may be) sounds like a lot of money. Why would I want to go through the trouble of calculating actual costs?”

While $40k may sound like a lot of money a business owner can benefit 100 fold or more through actual cost accounting. Business owners can relocate to a better location and some often upgrade their equipment while previously that might not have been possible. Further, a business owner can include the services of a relocation consultant in their process where the professional costs will be reimbursed as well. Note: Preparation of claims is not a reimbursable expense, but planning for claims is reimbursable.

But that is really just the ‘tip of the iceberg’ for the business owner who benefits from actual cost reimbursement.

For example, I worked with a pharmacy owner who chose not to accept the lump sum payment. Line item costs for a handful of reimbursement amounts which the pharmacy owner received are as follows:

Pharmacy Relocation Reimbursements

Transportation of Personal Property – $27,000
Packing , crating, unpacking, uncrating of Personal Property – Included above
Disconnecting, dismantling, removing, reassembling, and reinstalling equipment, machinery, and other personal property – $72,000
Professional services for planning , moving, and reinstalling the personal property – $15,200
Re-lettering signs and replacing printed materials made obsolete by the move – $8,000
Purchase of substitute personal property. $34,000
Searching for a replacement location (Maximum $2,500) – $2,500Note that there are 27 line items the agency will consider for reimbursement. I have just listed 7 items which more than exceeds the $40k the owner might have received if he had taken the lump sum.

So I ask, “If your business needed to relocate due to eminent domain, would you take the lump sum offered by the agency or would you consider working with a business relocation consultant to reap the best benefit from your move?”

I offer proof.

My next blog post will indicate the reimbursement for a company with 50+ employees.

Martyn Daniel
www.EminentDomainandBusinessRelocationConsulting.com

[1] If a business owner chooses to be reimbursed using actual cost as the basis for the claims reimbursement, bear in mind, though that some expenses are capped.

Note that a $25,000 cap on the category referred to as Reestablishment is the minimum set by the Federal Relocation Guidelines. Some states have higher amounts, some are at $50k or higher, and a few are unlimited. Link to a state-by-state relocation listing here.

In the state of WA, where I often practice eminent domain and business relocation consulting, the Lump Sum cap is $40k.

In my last blog post entitled, “Would You Choose Lump Sum or Actual Cost Relocation Reimbursement? I discussed two reimbursement options available to business owners who must relocated due to eminent domain; lump sum and actual cost.

If a business owner chooses to be reimbursed using actual cost as the basis for the claims, some expenses are capped.

Capped Expenses: Reestablishment (maximum $25,000):

Note that the $25,000 cap mentioned above is the minimum set by the Federal Relocation Guidelines. Some states have higher amounts, some are at $50k or higher, and a few are unlimited. Link to a state-by-state relocation listing here.

1. Repairs or improvement to the replacement property as required by law or code

2. Modification to the replacement property to enable the business to operate

3. Construction and installation of new signage to advertise the business

4. Redecoration or replacement of soiled or worn surfaces such as carpeting, paint, paneling

5. Advertisement of the replacement location

6. Increased cost of operations for two years

7. Other items considered essential to the reestablishment of the business

Since an eminent domain and business relocation consultant’s services are an eligible cost when opting for the actual cost for a planned relocation, the capped items listed above are where a consultant’s expertise is important.

For example, #2 – capped within the $25,000 (depending on your state or location) is ‘modification to the replacement property to enable the business to operate’. A consultant with construction experience can suggest modifications which are contained within that reimbursement amount.

On the other hand, a business owner may simply look at a replacement property (if he even has the time to search for properties) and believe that hefty modifications leading to out-of-pocket expenses is the only solution to enable the business to operate.

Can you see why an eminent domain and business relocation consultant’s services are absolutely necessary to the seamless transition in an eminent domain move?

In my next blog post, I will compare actual cost estimates for relocation for small businesses versus acceptance of the lump sum.

Do you have any questions about the capped amount in your state?

Monthly Archives: September 2011

It Pays (Well!) to Submit Actual Cost Items for Relocating Businesses

An Overview of Capped Actual Cost Items for Business Owners Affected by Eminent Domain

Martyn Daniel Eminent Domain Specialist