Bill would place cap on more eminent-domain payments

A bill before lawmakers calls for capping the amounts that counties and certain other government entities can be required to pay tenants and property owners when they seize property using eminent domain.

The proposal, put forward by Sen. Tom Tiffany, R-Minocqua, and Rep. Rob Brooks, R-Saukville, would allow counties, redevelopment authorities and community-development authorities to take advantage of a cap placed on payments owed to those displaced by eminent-domain acquisitions. Current law contains caps preventing property owners from receiving more than $100,000 in eminent-domain compensation and tenants more than $80,000. But those limits apply only to cities, villages and towns.

This latest proposal follows on changes that were made to the state’s eminent-domain law in 2018 to require governments for the first time to provide compensation for so-called “reasonable project costs.” State statute essentially defines these costs as whatever must be spent to get a business up and running at a new location.

Erik Olson, an attorney for Madison-based Eminent Domain Services, a law firm that largely represents clients who are fighting eminent-domain acquisitions, said he has serious reservations about the latest proposal. Olson said the state’s current exemption for municipalities is “terrible” because it leaves agencies like the Wisconsin Department of Transportation responsible for providing compensation for moving costs while exempting cities, towns and villages.

“Our view is that it’s really unfair to have a law that allows a government entity to destroy the productive engines of a community,” Olson said.

Brooks and Tiffany did not respond to messages seeking comment by press time Friday. Their proposal got a first-read on Thursday and was referred to the legislature’s Committee on Utilities and Housing.

This latest proposal follows on a bill that, having taken effect last April, has increased how much governments are obliged to pay property owners who are forced to move when governments acquire their property using eminent domain. Wisconsin law had previously capped eminent domain pay-outs for property owners, setting the maximum amount that municipalities could pay at $30,000 for tenants and $50,000 for property owners.

But Act 243, which sailed through the Legislature before being signed by former-Gov. Scott Walker, lifted that requirement, forcing government entities to pick up the tab for the costs of moving a business. Although the bill kept a cap in place for cities, villages and towns, it raised the maximum amount that could be paid out to $100,000 for property owners and $80,000 for tenants.

The bill drew opposition from a number of cities, including Madison and Milwaukee, and critics argued it would lead to big increases in the cost of developing infrastructure and other public improvements.

But Olson said government entities should have to pay up when they force a property owner or tenant to pull up stakes. He said businesses that rent commercial spaces are often required to make improvements to the property — by adding, say, wheelchair ramps. If they are later forced to move out because of public improvements, $80,000 will hardly suffice to cover their costs.

“If someone has to move their business, the government should make sure that they are back to square one,” he said. “The fact that this only applies to (municipalities) makes it even more unfair.”