Building a business enterprise near a freeway can be a good marketing strategy because it gives you access to customers who may remember what they need to purchase from your establishment when they see your property. But what if the government decides to expand the freeway? Could your business be demolished to make room for a road construction project?
Imagine a government official knocking on your door, and when you open, they inform you that your business will be demolished to make way for a freeway expansion project. Even though this scenario is unsettling, it is a possibility under a legal concept known as eminent domain. What exactly is eminent domain, and how does it apply to businesses?
What is eminent domain?
Under the U.S. Constitution, the government has the authority to claim a private real estate property for a legitimate public project. Should your business be claimed for the expansion of a freeway, you can expect fair compensation that corresponds with the value of your business.
While the intention behind eminent domain is often to serve the public good, it can have significant consequences for investment. If your business is located on the proposed path of the freeway expansion, you might want to have legal support during this difficult time.
Impact on your business
Waking up every day to the realization that you’re losing your enterprise can feel like you’re living in your worst nightmare. First and foremost, you’re losing a suitable business location and might not find a new location that compares in profit potential and customer access. Furthermore, having to uproot your operation and move to a new location can result in the loss of a loyal customer base.
Moreover, the compensation you receive from the government may not fully cover the actual financial loss you will continually incur as you restructure your business. The compensation is based on the fair market value of the property, not the potential future earnings or the cost of relocating the business.
Suppose the expansion of a freeway is forcing you to uproot and relocate your business; you have every right to ask for fair compensation that reflects your enterprise’s market share. Appropriate legal guidance can help minimize your losses as much as possible so that you can transition and rebuild.