Here's a decision from the Wisconsin Supreme Court, similar to a recent case from the Oregon Supreme Court involving highway improvements which cut off existing access.
The issue in Hoffer Properties, LLC v. Wisconsin Dep't of Transportation, No. 2012AP2520 (Feb. 4, 2016) was whether a property owner whose parcel enjoyed direct access to a state trunk highway via two driveways was entitled to compensation when a road project cut those driveways off, but still left the parcel with access via a side road.
The Wisconsin court's approach isn't the "hot mess" that the Oregon Supreme Court's opinion is, even though it reached roughly the same result: as long as there is some access remaining after the taking, no compensation for the loss of the direct-access driveways.
Some quick background. Hoffer owned a parcel with two driveways on Highway 19. Six years before the taking, the DOT designated the highway a "controlled access" highway. Then, as part of a highway project, the DOT condemned a 3/4 acre portion of Hoffer's property, cut off the driveways, and created alternate access to the parcel. There was no dispute that the $90,000 which DOT offered for the land taken was fine, and the only issue was whether DOT owed anything for destroying the two access points on Highway 19, and replacing them with indirect access through Frohling Lane (which "requires vehicles to travel roughly 1,000 feet to reach STH 19").
For an interesting exercise in Google Street View, click on this link, then "drive" west three or four clicks. You initially are on the pre-project highway, and then -- voila! -- the new roundabout and overpass appear. Magic.
Hoffer argued that because part of its real property had been taken, it was entitled to compensation for the loss in value suffered by the remainder parcel due to loss of direct access to Highway 19. It conceded that the DOT was exercising the police power when it designated Highway 19 as "controlled access" six years earlier, but argued that DOT is obligated to provide reasonable replacement access, a question for the jury. Both the trial court and the court of appeals disagreed, concluding that as long as the parcel isn't totally cut off, the owner isn't entitled to compensation for the loss of access.
The Wisconsin Supreme Court affirmed:
Thus, in controlled-access highway cases abutting property owners are precluded from compensation for a change in access pursuant to Wis. Stat. § 32.09(6)(b) as a matter of law. However, exercises of the police power cannot deprive the owner of all or substantially all beneficial use of the property without compensation. If the replacement access is so circuitous as to amount to a regulatory taking of the property, then compensation is due and the abutting property owner may bring an inverse condemnation claim pursuant to Wis. Stat. § 32.10.
Slip op. at 11.
The opinion spends a lot of time on something that we think is pretty obvious: the DOT's highway project -- and in particular its designation of Highway 19 as a controlled access road -- was an exercise of the police power. Under Wisconsin's statute, a controlled access designation limits the ability of abutting landowners to enter the highway from their properties, and the court held that the six-years-before-the-condemnation designation met all the requirements of the statute. Thus, it didn't matter that when the DOT eventually condemned a portion of Hoffer's land that it eliminated the driveways, because the regulations had, in essence, already done so. The court held that as long as the replacement access which the DOT installed did not deprive Hoffer of all use of its land under the regulatory takings standards, Hoffer was not entitled to any compensation for the loss.
In other words, Hoffer could have challenged the controlled access designation as a taking:
This does not mean, however, that the provision of alternate access to a controlled-access highway precludes the abutting property owner from compensation in all possible contexts. Changes in access to a controlled-access highway may support a claim pursuant to Wis. Stat. § 32.10 for a regulatory taking of the property.
Slip op. at 24-25. But it would have lost that case too, because it still had "some" access to its land, and the court rejected a reasonableness test, because that would allow a jury to decide on whether the replacement access was good enough:
The legislature, however, omitted this command from Wis. Stat. § 84.25. When DOT acts pursuant to the controlled-access highway statute, abutting property owners must be compensated for DOT's "acquisition" of their property only if DOT does not provide some access or if the access provided is so circuitous as to amount to a regulatory taking of the property. Consequently, when DOT provides alternate, albeit more circuitous, access to abutting lands from a controlled-access highway, no taking compensable pursuant to Wis. Stat. § 32.09(6)(b) occurs.
Slip op. at 28 (emphasis added).
Finally, the court distinguished earlier cases in which property owners obtained compensation for the loss of access, concluding that those were not "police power" cases.
So, Wisconsin condemnors take note: wave your police power wand early and take away access by regulation.
Sure beats paying for it.
Hoffer Properties, LLC v. Wisconsin Dep't of Transportation, No. 2012AP2520 (Wis. Feb. 4, 2016)
