Court rejects payment to business in future path of North-South Freeway; attorney Bob Dunn plans appeal

A Spokane business park isn’t entitled to state payments now just because the north-south freeway eventually will take part of its property, the Washington Court of Appeals ruled Thursday.

In a unanimous decision, the three-judge appeals panel upheld a trial decision denying payments being sought by the Tapio Center, which is north of Interstate 90 between Thor and Freya streets.

The center will lose some buildings when the interchange connecting the freeway to I-90 is constructed, which the state Department of Transportation estimates is sometime after 2020, near the end of the long-running road project.

The center’s owners had claimed publicity about the planned route of the freeway, along with purchases by the Department of Transportation in the surrounding area, was costing them money by making it hard to find tenants willing to sign leases in the 3-acre business park. The owners sought payments now, rather than when part of their property will eventually be taken for the interchange.

The appeals court disagreed “because there has been no physical invasion of Tapio’s land, no regulation restricting Tapio’s use of its property and the harm it complains of does not otherwise amount to a constitutional taking” of the property.

Bob Dunn, attorney for the Tapio owners, said they will appeal to the state Supreme Court. Even if that appeal takes several years, a victory there would mean owners would be paid sooner than a state timeline that has them waiting until the freeway nears completion. The decadeslong project has been regularly delayed for route changes and political fights over money.

“If I live another 30 years, I’ll never see the north-south freeway completed,” Dunn said. “This freeway route is moving all the time and we’re never going to get enough money over here to finish it.”

Owners tried initially to appeal directly to the Supreme Court because the state didn’t have a case that dealt with this specific kind of condemnation, but it was sent down to the Court of Appeals. “It’s going to go back to the Supreme Court,” Dunn said.

The Tapio Center has nine office buildings and a restaurant arranged in a circle. Five of the buildings have one set of owners, the other five have a different set. The owners argued that hearings the state has held since the late 1990s on the route of the freeway, and purchases of nearby land and buildings starting in 2003 were damaging the value of the center. They asked the state to buy the buildings for the freeway.

The department countered that the Legislature only gives it so much money to buy property for the freeway each year, and it put a priority on buying single family homes with yards because that was more cost effective.

By the time the lawsuit went to trial in 2014, the department had purchased 300 parcels in the area, demolishing many of the buildings and bulldozing the land.

Witnesses for the Tapio Center said the value of the property had dropped and finding potential tenants was difficult because of plans for the freeway. But the state pointed out that the owners could still sell the property and the department hadn’t issued rules to keep them from operating.

In the end, the trial court ruled the case should be dismissed because the theory the owners were using – unwarranted delay or oppressive conduct before the state acquires the property – hasn’t been recognized in any previous Washington case.