Top 10 Eminent Domain Business Relocation Mistakes
By Martyn Daniel

According to a recent federal government study, businesses that are forced to relocate experience failure rates commonly at 25% and as high as 85%.

What makes the difference between failing and thriving?

I’ve found some common mistakes businesses make within eminent domain and have listed ten of them so you can avoid these pit falls and control the success of your business relocation.

Businesses that thrive have avoided these common mistakes:

1. Delaying or waiting to begin planning the relocation

The longer you wait to be proactive in your relocation, the more your options will diminish. This timing will determine whether you collect relocation benefits for a planned relocation or an emergency move.  Emergency moves are the least desirable for businesses and will decrease the available relocation benefits to you.  Adequate time for planning lets you decide how to use your available relocation benefits to their fullest, as well as allowing proper preparation for a move that’s best for you.

Don’t let the typical controversy over the government’s project schedule, project funding, or project legitimacy delay your planning, putting you at risk of not being properly prepared.

2. Moving before eligible

Moving prior to proper notice can make a business ineligible for relocation benefits.  You must have one of these notices or occurrences before you are eligible for relocation benefits.

• Notice of Intent to Acquire
• Offer to purchase real property
• Notice of Eligibility

3. Using a do-it-yourself approach

The do-it-yourself business will get through their relocation; they just won’t know what they could or would have received in relocation benefits with proper help.

Why do businesses do this?

• They believe they understand the relocation guidelines
• They trust the government relocation agent will provide all they need
• They trust the government to take care of all their needs
• They believe the movers will do it all
• They don’t know that hiring a relocation consultant is an eligible, reimbursable benefit

4. Counting on the public agency to make the business whole

The public agency will usually do their reasonable best to help relocate a business as part of their required advisory services.  Within the relocation guidelines, there are approximately 25 eligible cost categories of relocation benefits for the business. Making the business whole is not among those categories, in fact, it’s stated that the public agency’s job does not include making the business whole.  The agency’s main goals and requirements are to:

• Clear the right-of-way for the project
• Provide business advisory services
• Pay eligible relocation benefits

5. Counting on the agency’s relocation agent to plan the relocation

Government relocation agents are responsible for explaining your eligible relocation benefits but they are not responsible for your planning.  They tend to review costs you have already incurred during or after your relocation to determine your reimbursable costs, leaving you with un-reimbursed costs as well as un-used benefits.  The assigned relocation agent’s main goals are to:

• Move the business off the right-of-way
• Advise the business on eligible relocation benefits
• Assist the business in filing relocation claims

The agent will usually feel they can and feel they are responsible for helping you plan your relocation, but they just don’t have the time and background to perform for the tasks that are needed to help your business thrive.  Proper relocation planning requires knowledge and use of many of the following items:

• Business operations and management
• Relocation costs and matching relocation cost reimbursements
• Budgeting
• Project pro-forma preparation
• Scheduling
• Property leases
• Equipment design and requirements
• Cost estimating
• Cost analysis
• Building and site design, space layout
• Construction costs and related work, including:
  • Design
  • Electrical
  • Plumbing
  • Mechanical
  • And, all 13 other construction disciplines

6. Failing to make full use of the available relocation benefits

Unfortunately, most businesses relocate not realizing how or where relocation benefits could have helped them improve their unique situation.  Early recognition of relocation benefits will benefit you by:

• Planning based on those recognized reimbursable costs
• Recognizing the ability to change and improve the business
• Recognizing the best replacement location
• Evaluating whether to change size of business
• Evaluating a change in business functions
• Evaluating a new business look, or a complete new type of business

7. Balancing owner/manager time for relocation with time for operating business   

The relocation process will take your valuable time away from operating your business. Most business owners/managers don’t have the extra time that’s needed to properly perform such a large and important undertaking.

8. Failing to plan the relocation

If the business fails to plan the relocation, the government will help the best they can with their limited resources of time and knowledge of the businesses needs and desires.  The lack of planning can easily result in:

• “Move them as you find them” is a common phrase used by government agencies.  This means the government will try to have you set up as close as possible to they way you were, but no better.
• Lost opportunities will increase
• Business downtime may occur
• You may have to move to storage instead of to a turn-key operating business

Planning should start when you are first aware of the project impacting your business.

9. Attending the appraisal walk-through without knowledge of relocation benefits

The government’s appraiser will be making decisions during their initial walk-through of the property that will impact the property owner and tenant.  You, or a representative, needs to be there with the knowledge of what is best for you such as:

• Is a certain item considered real property or personal property? Which determination is best for you?
• Contributory value payment vs. relocation payment. Which will benefit you most?

10. Ignoring government notices, correspondence, and key dates

Each of the following notices and key dates or time frames need to be tracked to avoid the loss of benefits.

• Notice of Intent to Acquire
• Notice of Eligibility
• Vacate date
• 90-day Notice
• Notice of Eligible Benefits
• 18 months to file claims
• 60 days to appeal agency decisions

And one additional mistake

Don’t mistakenly think the agencies non-responsiveness to your important questions justifies an extension of your vacate date.  Waiting for the agency to respond to a relocation question or issue does not change your vacate date.