I-35 expansion project: Businesses along I-35 face displacement

AUSTIN, Texas - As plans to expand I-35 get underway, businesses to the east and west of the freeway are facing a harsh reality. 

"Like everyone else, we had to deal with COVID, which was a major disruption to our ability to do business. And then just everything else that’s happened since then," said Sohan Fan, founder of the West China Tea Company, who spoke with FOX 7 in December. "As a business owner, I just want to do business. I don't need non-stop crises. [And then] it's like, ‘Oh by the way, we're going to expand the freeway and tear down your building.’"

According to the Landowner’s Bill of Rights for the State of Texas, eminent domain is "the legal authority certain governmental and private entities have to condemn private property for public use in exchange for adequate compensation."

As a partner with Marrs Ellis & Hodge, and an adjunct professor at UT Austin, Luke Ellis lives and breathes eminent domain. He is currently representing more than a dozen clients along I-35 in eminent domain cases.

"Vacant land, office buildings, medical office buildings, a daycare facility, a restaurant, and just about every other type of use you could imagine going up and down the I-35 corridor," said Ellis.

Each one has its own story.

"One client of mine is a third-generation family business. They've been located on the same spot along Interstate 35…for the last 35 to 40 years. Their business is one that is focused on servicing certain areas within close proximity to the University of Texas and downtown. So they're in a perfect location," said Ellis. "That business is now gone. It's getting kind of wiped off the face of the map."

With eminent domain, the government has to make an initial monetary offer to the property owner, who has 30 days to evaluate the offer. If there is no agreement, the government makes a final offer which is usually the same as the initial offer, according to Ellis. If there is still no agreement from the property owner, the government has to sue the property owner. Each property owner is sued individually.

"So there may be dozens or more lawsuits involving property owners and the state of Texas for the I-35 expansion," said Ellis.

This comes as construction on TxDOT’s I-35 Capital Express Central project is expected to start in mid-2024.

"It is very difficult to stop a TxDOT project. So more often than not, what we're doing on behalf of our clients is focusing on their constitutional right to just compensation," said Ellis. "So, if the government takes your land as a property owner, the government's required to pay for it. They're required under the Constitution to pay fair market value. But fair market value is a term that is very subjective."

Ellis noted that there is an opportunity for a property owner to challenge the government’s "right to take" their property. 

"Have we litigated those cases? Yes. Have we won those? Yes. Is it few and far between because the law is so favorable to governments? Yes," said Ellis. 

According to TxDOT, the Austin area is expected to see more than $10 billion in economic development over the next three decades.

"The traffic demand is here and will continue to grow as more people move to the Austin area to take advantage of the booming job market and quality of life that Central Texas offers," said Marc Williams, executive director of TxDOT in a previous statement regarding the I-35 Capital Express Central project. "It’s our duty to mitigate congestion and work to advance these needed safety and mobility improvements on this critical corridor."

MORE STORIES:

• I-35 expansion project: Rethink35, community partners announce lawsuit against TxDOT
• I-35 expansion project: TxDOT pushes back against lawsuit
• New details revealed on Austin's plan to cover I-35 through downtown

As lawsuits play out, under state code, the state is allowed to begin the process and take possession of properties.

"The big message that I like to be sure that property owners know is that they can go to court," said Ellis. "They can fight for just compensation. It is a constitutional issue, and they have every right to defend their constitutional rights."

Ellis says lawsuits are just starting to be filed by TxDOT, and three of his clients have been sued so far. Initial hearings will start this spring. 

TxDOT is also the defendant in a recent lawsuit. Rethink35, a nonprofit organization, sued TxDOT alongside other community members over the project in January.

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