F-M diversion officials using 'quick take' eminent domain law to acquire property from about 30 landowners - INFORUM

FARGO — The metro flood-control project has overcome legal challenges, run regulatory gauntlets to obtain all the required permits and lined up financing, but still faces one obstacle: holdout landowners.

So far, about 1,300 parcels of land encompassing about 7,000 acres have been acquired, but almost 30 property owners have balked at offers for their land and now face legal action.

Under North Dakota’s “quick take” eminent domain law, after months of negotiations have failed to reach agreement, the flood project can take the land and even start construction, with the question of compensation resolved by the courts.

In order to exercise quick take powers, the Cass County Joint Water Resource District, which is negotiating property rights for the project, must deposit its last offer to acquire right-of-way access, pending court determination of the land’s value.

The Metro Flood Diversion Authority to date has spent $315 million on land acquisition and $100 million for relocation services and another $100 million in associated costs, including legal and appraisal services, said Jodi Smith, the authority’s director of land and compliance.

Although almost 30 cases are pending in Cass County District Court, and one in Clay County District Court, officials still are settling cases and hope to resolve more cases through negotiation.

If settlements aren’t reached in the cases, civil trials could last between two to four days at an estimated cost of $100,000 each, or about $3 million if all of the disputes go to trial.

“It is expensive and we recognize that,” Smith said.

“I prefer to settle with landowners,” she said. Officials must balance the rights of landowners, however, against the interests of taxpayers.

“We’re in a delicate position,” Smith said. “We’re using taxpayers’ dollars to pay those landowners. It puts us in kind of a unique position.”

In some of the disputed cases, representatives for the diversion and the landowners are far apart in their valuations. As an example, in one case the offer is $950,000 but the landowners’ counteroffer is $2.2 million, Smith said. Those cases might not settle.

“That’s a big difference,” she said. “There’s a possibility that one or two of these will need to go to court.”

Some landowners asked the Diversion Authority to purchase more land than was needed for the project. Excess lands will be sold, recouping a small part of the cost, Smith said.

Some of the earliest acquisitions for the project were in the Oxbow subdivision area, where owners were paid almost $46.5 million, or 77% of the $60.1 million paid for residential property buyouts.

The generosity of those buyouts provoked sharp public criticism, and officials since have been more cautious in their offers.

“It’s brought up frequently,” Smith said. “People want the Oxbow deal,” but officials must be good stewards of taxpayer dollars.

Several holdout landowners, in fact, are arguing in court that they should be treated similarly to Oxbow property owners in terms of the purchase of permanent right-of-way, which is essentially equal to the land’s value, and relocation payments.

The lawyer for Gene and Brenda Sauvageau, Cash Aaland, argues that more than 40 homeowners in Oxbow, a residential subdivision, golf course and clubhouse built south of Fargo in the 1970s, were given preferential treatment.

“A golf course community, they get this special treatment,” including purchases that didn’t go through quick-take eminent domain and relocation assistance double that being offered to other rural residential property owners, Aaland said.

“The law requires them to treat people equitably,” he said.

Gene Sauvageau has ties to the St. Benedict community near Horace that goes back five generations. His ancestors were French-Canadian homesteaders who first came to the area in 1871, before North Dakota gained statehood in 1889.

The Sauvageaus, who learned in 2019 that their property was in the path of the revised diversion project, have a 3,340-square-foot home with a three stall garage. Outbuildings include an unattached garage and a refurbished barn converted into a shop.

Based on their appraiser's recommendation, the water district is offering the Sauvageaus $460,000 as "just compensation" for a permanent right-of-way easement for their property to enable the flood project to be built. The district also has approved a $54,315 "relocation housing differential" that is "over and above the just compensation to be paid for the property rights being acquired," according to the water district's brief.

Also, Smith said, standard relocation benefits, such as moving costs, would apply, as specified under the Uniform Relocation Act.

The land consultants working with the water district proposed several houses in Fargo and West Fargo, all located on lots of less than a quarter or a third of an acre, as suitable replacements, but the Sauvageaus rejected the offer, maintaining they are entitled by law to replacement housing that is the “functional equivalent” of their home located on a farmstead of almost eight acres.

In November of 2021, officials notified the Sauvageaus that they would have to vacate their property by March 15, 2022.

The Cass County Joint Water Resource District argues in court that it is not required by law to “guarantee identical substitute housing.”

“The Oxbow residents were provided replacement housing that addressed the unique circumstances of displacing 44 residential units located within the Oxbow area in conjunction with the construction of a ring levee,” Smith said.

The Cass County Joint Watershed District tried to locate replacement housing within the city limits of Oxbow for most displaced residents, “which was unavailable within Oxbow — no matter the cost,” she said.

Because there weren’t enough “comparable replacement dwellings” in Oxbow within the time constraints for building the levee, the water district “invoked the construction of a replacement dwelling option found with the housing of last resort provisions of the Uniform Relocation Act,” Smith said in a statement to The Forum.

“The relocation housing differential payment calculation conducted on behalf of the Sauvageaus mirrors the same process followed for other similarly situated property owners,” she said.

District Judge Susan Bailey recently rejected the Sauvageau’s motion to dismiss the eminent domain lawsuit and concluded that the water district had legal authority to use its quick take powers to acquire property rights for the project.

Aaland is saying little about what preparations the Sauvageaus are making in case they lose their case and have to leave their property. “They’re taking it one step at a time,” he said. “It’s a real emotional deal for them.”

So far, $97.9 million has been spent buying farmland and $32.3 million for commercial property acquisitions, according to Diversion Authority figures.

In March, officials expect to send out flowage easement offers to 500 property owners to allow the temporary storage of water in an area upstream, south of Fargo-Moorhead. If those offers aren’t accepted, the flood project would have to use conventional eminent domain proceedings, which can take much longer.

The Diversion Authority is working to create special crop insurance to protect farmers against planting delays from flooding.

Computer modeling indicates water would be stored for up to 19 days in some locations, while in other locations only a day or so, Smith said. And the diversion would be used only in extreme floods, estimated to trigger operations an average of once every 20 years.

Floodwalls and levees along the Red River in Fargo and Moorhead are being built high enough to allow a 37-foot river level to flow through the cities.

The diversion would operate for larger floods, using three gated control structures and a 20-mile earthen embankment to hold back flood waters in order to regulate their release into the diversion channel that will bypass the metro area.

Plans call for the $3.2 billion flood-control project to be completed in time to protect against flooding by the spring of 2027, Smith said.

source: https://www.inforum.com/news/north-dakota/f-m-diversion-officials-using-quick-take-eminent-domain-law-to-acquire-property-from-about-30-landowners

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