The North Carolina Department of Transportation is standing in the shadow of a growing wave of lawsuits challenging the state’s Map Act.
The controversial law allows the DOT to file project plans with the register of deeds and bring an indefinite halt to the development of land, homes or businesses that are in the way of the proposed road.
Some owners have been waiting for nearly two decades for the state to buy them out. Others have died during that time. Meanwhile, their neighborhoods decay, and property values drop.
The bulk of the suits have been filed in Forsyth County over the long delayed Winston-Salem Northern Beltway. More than 100 property owners in the area have about 70 suits against the DOT. A group of owners tried for class certification, but the state’s appellate courts denied their petitions.
Meanwhile, a steadily rising number of actions that have received less attention than the Forsyth suits are being filed in the counties of Cleveland, Cumberland and Wake.
“We anticipate that once word gets out about the potential of these types of lawsuits that there will be many plaintiffs contacting our office,” said Neil Yarborough of Yarborough, Winters & Neville in Fayetteville. His clients are in the path of the Fayetteville Outer Loop project.
In Blowing Rock, Anne Fisher of Henson & Fuerst represents about eight plaintiffs who own property along the future U.S. 74 Shelby Bypass.
“That number just keeps growing. I anticipate that we’ll be filing batches of [suits] as this goes on,” she said, adding that a public meeting about the project that was held over the summer filled the local library.
“They had to bring in more chairs,” she said.
The DOT filed plans on the project in 2010, but Fisher said her clients have been told that the road won’t be built until at least 2030. One of her clients owns a restaurant off U.S. 74 that will lose access to the highway when, or if, the bypass becomes a reality, she said.
“They never made him an offer at all,” she said of the DOT. “But they tell him he can’t do anything with this prime commercial property.”
Fisher also represents an older couple that bought a home in the affected area about four years before the state filed plans for the bypass. The DOT never notified them that their property was at risk, Fisher said. She believes the state mistakenly sent notification to the prior owner.
“There’s room for a lot of error,” Fisher added. “I think they [DOT officials] are not perfectionists in determining who owns the property.”
The DOT has declined to discuss the Map Act litigation with Lawyers Weekly. But DOT secretary Tony Tata and Gov. Pat McCrory briefly addressed the matter in September while announcing a plan to seek about $1 billion in revenue bonds for road construction projects, including the Winston-Salem Northern Beltway.
When a reporter asked McCrory if he believed the state had taken the land affected by the beltway through the Map Act filings, which would require the state to buy out the affected property owners, he referred the question to Tata.
“This administration is going to do something about it,” Tata said. “We’re going to get that road moving and we’re going to get that road built.”
Then McCrory stepped in and added, “The uncertainty over whether something is going to be built is unfair to the landowners of the surrounding area and puts them in economic peril and that’s not right.”
The attorney leading the charge against the Map Act is Matthew Bryant of Hendrick Bryant Nerhood & Otis in Winston-Salem. He represents the Forsyth owners and is working alongside Fisher and Yarborough as their co-counsel. They argue that the Map Act is unconstitutional.
Not only does the law harm property owners and destroy neighborhoods, Bryant said, it also deprives counties of tax dollars because the DOT does not pay taxes for property it takes and gives substantial tax breaks to affected owners who have not been bought out by the state.
He estimates that Forsyth County has lost between $500,000 and $700,000 in taxes every year because of the DOT’s actions.
At the same time, the state is making hundreds of thousands of dollars annually by renting properties that it acquired through the Map Act while not paying taxes on those same residences. In Forsyth County, he said the state netted more than $700,000 in rental income in 2010.
“The counties are losing tax revenue and nobody is offsetting this loss of revenue,” he said. “There’s a huge cost to this thing.”
Winston-Salem State University professor Craig Richardson said the Winston-Salem Northern Beltway has essentially frozen $462 million in property. He is studying the impact of the Map Act.
“It seemed reminiscent of regimes in Zimbabwe and Cuba and I was pretty astonished to see it happening in my backyard,” he said. “We’re trying to show the downside of doing nothing. The state’s kind of dug itself this huge financial hole that’s affecting homeowners.”
Follow Phillip Bantz on Twitter @NCLWBantz