PA 07-207—sSB 1054

Planning and Development Committee

Judiciary Committee

Transportation Committee

Appropriations Committee

AN ACT CONCERNING THE DEFINITION OF DETERIORATING AND DETERIORATED PROPERTY IN REDEVELOPMENT AREAS, REFERRAL OF STATEMENTS OF COMPENSATION TO THE OMBUDSMAN FOR PROPERTY RIGHTS, A STUDY OF THE CALCULATION OF LOST GOOD WILL FOR RELOCATION ASSISTANCE FOR DISPLACED BUSINESSES AND COMPENSATION FOR OUTDOOR ADVERTISING STRUCTURES

SUMMARY: The law allows towns to designate an area for redevelopment if it is deteriorated, deteriorating, substandard, or detrimental to the community's safety, health, morals, or welfare. The designation allows them to prepare and implement plans for acquiring and improving land so that it can be developed for public or private purposes. This act specifies the criteria towns must use to determine if an area is deteriorated or deteriorating.

The redevelopment law also allows towns to acquire property by eminent domain and specifies the procedures for doing so. It requires a town to notify the court about the amount it offered for the property (i. e. , statement of compensation) and allows the owner to appeal that offer. The act specifies conditions under which the court must refer the town's offer to the property rights ombudsman, who must review it and report back to the court. The law already allows the court to refer the statement to a trial judge referee.

PA 07-141 requires the transportation commissioner to pay relocation benefits to billboard owners when he acquires their structures and specifies how he must calculate the benefit amounts. This act requires him to do so only if it does not conflict with federal law.

Lastly, the act requires the ombudsman to study whether it is feasible to base relocation benefits on the unique gains or losses of operating a business at a specific location (i. e. , good will). It limits the study's scope to situations when a town takes a property for private economic development. The ombudsman must report his findings and recommendations to the legislature by January 1, 2008.

EFFECTIVE DATE: Upon passage for the business good will study and the provisions governing billboard relocation benefits, except that the latter apply only to property acquired on or after that date; October 1, 2007 for the remaining provisions and applicable to plans prepared and appeals started on or after that date

CRITERIA FOR DESIGNATING REDEVELOPMENT AREAS

The law allows towns to designate an area for redevelopment if it is deteriorated, deteriorating, substandard, or detrimental to the community's safety, health, morals, or welfare. The designation allows a town to acquire and prepare property for public uses, such as schools and playgrounds, and private purposes, such as shopping malls and office towers. The town can acquire property by negotiating a sale with the owner or taking it by eminent domain.

The act specifies criteria for determining if an area is deteriorated or deteriorating. An area meets these standards if at least 20% of buildings there contain at least one of the following deficiencies:

1. defects that need to be cleared or removed;

2. conditions resulting from a defect that normal maintenance cannot correct;

3. extensive minor defects that collectively harm the surrounding area;

4. property that was inadequately constructed or altered;

5. inadequate or unsafe plumbing, heating, or electrical facilities;

6. overcrowded or improperly sited structures;

7. too many dwelling units close together;

8. properties converted into incompatible uses, such as homes converted into rooming houses;

9. underused or improperly maintained obsolete buildings that depress an area's physical appearance;

10. detrimental land uses or conditions, structures used for different purposes, or the adverse effects of noise, smoke, or fumes;

11. unsafe, congested, poorly designed, or deficient streets;

12. inadequate public utilities or community facilities that diminish living conditions or hinder economic growth; and

13. other equally significant building or environmental deficiencies.

STATEMENT OF COMPENSATION

The act specifies when the property rights ombudsman must review the statement of compensation. Municipal agencies must prepare the statement when they take property by eminent domain under the redevelopment statutes. The statement describes the property and the amount the agency offers to pay for it. It goes to the property's owner, who can appeal the agency's description and offer to Superior Court. Under prior law, the court could only review the statement or assign it to a trial judge referee, who had to view the property, revise the statement if necessary, and report back to the court.

The act allows the court to refer the statement to the ombudsman at two points in the appeals process. The court must do so if the parties to the appeal—the owner and the agency or their attorneys—file a motion to that effect. The second point arises if the court refers the case to a judge trial referee. By law the court can reject the referee's report if the referee did not perform his duties properly. Under prior law, the court could only appoint another referee or review the statement itself. The act additionally allows the court to refer the statement to the ombudsman.

The ombudsman's duties are the same as those of the trial judge referee. He must hold a hearing on the statement, notifying the parties at least 10 days before about the place and time. He must listen to both parties, view the property, take relevant testimony, and submit a report to the court. In preparing the report, the ombudsman must consider evidence about the property's fair market value, including its environmental condition.

In determining the property's environmental condition, the ombudsman, like the referee, must determine if the property is contaminated and, if it is, how much it would cost to clean it up. As is the case when the referee determines the clean-up costs, the owner may deduct the ombudsman's determination of that cost from the actual clean-up cost if he is subsequently sued for this expense.

The report must provide enough information so that the court can determine the basis for his findings about the property. It becomes part of the proceedings and its statement of compensation is conclusive upon the owner and the agency.

RELOCATION BENEFITS

Relocation Benefits for Billboard Owners

PA 07-141 requires the transportation commissioner to pay relocation benefits to billboard owners when he acquires their structures. The benefit amount depends on whether they find another site in the area within one year after the commissioner acquired the structure. Under this act, these requirements apply only if they do not conflict with federal laws and regulations governing outdoor advertising signs or agreements made under these rules between the transportation commissioner and the federal commerce secretary.

Business Good Will

The act requires the property rights ombudsman to study whether it is feasible to base relocation benefits on the good will a business gains or loses when it moves to a new location. Good will generally refers to the unique advantages a business receives from operating at a specific location. The study is limited to situations where a town acquires business property by eminent domain mainly for private economic development.

The law requires state and local agencies to pay relocation benefits whenever they displace people from their homes, farms, and businesses for economic development or public purposes, such as widening a road or building a school. The benefits cover moving expenses and, for homeowners and renters, the cost of acquiring or renting a new dwelling. They do not consider how the move affects the business' good will.

The study must examine different way to calculate the change in good will resulting from the move, the advantages and disadvantages of basing relocation benefits on that change, the experience of other states that base the benefits on good will, and how towns can finance benefits based on the loss of good will.

The ombudsman must submit the report to the Judiciary and Planning and Development committees by January 1, 2008. The report must contain the ombudsman's finding and recommendations. If the report recommends compensating owners for the loss of good will, it must also recommend how that amount should be determined.

BACKGROUND

Property Rights Ombudsman

PA 06-187 established to Office of Ombudsman for Property Rights to develop expertise in eminent domain law, help public agencies and property owners in eminent domain proceedings, mediate disputes about takings and relocation benefits, and recommend changes to the legislature.

Related Act

PA 07-141 makes many changes to the laws towns must follow when taking property for economic development. The changes affect the procedures for preparing plans to redevelop physically and economically distressed areas, filing the statement of compensation, and determining the amount of relocation benefits towns must pay when taking property for economic development. And, as noted above, the act requires the transportation commissioner to pay relocation benefits when he acquires billboards.

OLR Tracking: JR: KM: CR: RO