U-Haul to city: You’ll pay

Gary B. Gray • Mar 7, 2012 at 8:57 PM

U-Haul is contesting the condemnation by Johnson City of its downtown location in Washington County Circuit Court, claiming the property is not being taken under eminent domain for the public good but for private economic development and commercial enterprise.

In late July, commissioners voted 4-1, with Commissioner Clayton Stout voting in opposition, to condemn 114 W. King St., where U-Haul is doing business. The city informed the owner, Phoenix-based AMERCO Real Estate Co., that the property is a needed part of Johnson City’s stormwater plan and that it would help relocate the business.

By that time, the city had worked for months to get U-Haul to accept an $820,000 offer for the property, and to undergo negotiations in which the city would help the company relocate within Johnson City. Public Works Director Phil Pindzola said at the time that communication had simply come to a standstill.

“It’s my belief that every good-faith effort was made, especially by Phil Pindzola,” said Erick Herrin, who along with James Epps is serving as co-counsel for Johnson City. “He tried to see if there could be a meeting of the minds. We want U-Haul to be in Johnson City. It is an important and valued business, and our goal is to help them relocate.”

On Feb. 12, Herrin and Epps filed a petition for condemnation with the court, which cited the city’s right to exercise eminent domain under state law. Attorneys Thomas Peebles and Mark Bell with Nashville’s Waller Lansden Dortch & Davis fired back on Feb. 24.

The attorneys, who were not immediately available for comment Wednesday, admit the city has the power to exercise the right of eminent domain. However, they deny the city has the right to condemn the U-Haul property and have demanded a hearing in court. A date for that hearing has not been set.

The attorneys also say the compensation offered by the city is “totally inadequate” and have asked for a 12-person jury to decide the value. They also claim the taking of the property violates the company’s Fifth Amendment right and that the proposed taking is not for public use but for financial incentives associated with the city’s revitalization and redevelopment efforts.

Long-established plans call for a large detention pond on the property to capture overflow when King Creek floods. The long-range goal is to turn this area of downtown into what is being called the Event Commons, which would be traversed by a newly created path for King Creek running between Boone and Roan streets.

“The U-Haul property has, from the outset (of storm water plan), been recognized as an essential piece of land for downtown flood control,” Herrin said. “We will be providing U-Haul with a lot of material at their request of the engineering studies regarding flood control. One map reflects that property as a ‘bulge’ of the flood problem back in 1939.”

The two parties are in the process of exchanging documents. The next step will be a hearing in front of Judge Thomas J. Seeley at which the issue will be specifically over whether the city has a right to take the property.

The city has placed with the Circuit Court clerk $820,000 in cash, and this is where a jury trial could come into play.

“U-Haul can walk in there today and pick that up,” Herrin said. “If they do, that’s the end of the matter.”

Right now, that doesn’t seem likely to happen. And even if the company was to take the cash, it still would have a legal right to challenge the fair market value of the property, Herrin added. Should that be how U-Haul wants to play it, a jury would be called upon to determine a reasonable price.

In late December, Johnson City officials said they had done everything within reason and more to work out an amiable deal to buy U-Haul’s downtown property and proceed with a major phase of its long-term storm water plan.

“The last communication I had was a telephone call in which they flatly said no — they would not accept a reasonable offer,” Pindzola said at the time. “They just decided no. I then sent them a final offer, and they did not respond.”

Joanne Fried, U-Haul International public relations director, has said AMERCO President Carlos Vizcarra has talked with City Manager Pete Peterson and expressed his desire to stay at the current location. She also said the company had submitted a $5 million plan to create a viaduct at the site but the city turned it down.

Pindzola said any plan for a $5 million viaduct “must be sitting on some desk other than mine.”

The Johnson City Press has made numerous unsuccessful attempts to reach Vizcarra.

Under the city charter, which is supported by state law, municipalities have the right of eminent domain, which includes the condemnation and acquisition “for present or future public use.” Tennessee law adds that the action is permissible should “the public welfare” require it.

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