AUSTIN, Texas — There are new developments in the legal fight for land that the Texas Department of Transportation (TxDOT) needs to expand Interstate 35.
Luke Ellis, an Austin-based attorney at Marrs, Ellis & Hodge who represents dozens of property owners being displaced due to the upcoming expansion, said TxDOT is filing lawsuits against several of his clients in order to acquire their land.
Ellis said TxDOT has been filing lawsuits continuously for the past six months, which he says is affecting dozens of the many businesses and homes that line the I-35 corridor.
Ellis said that prior to the lawsuits being filed, TxDOT was required to make an initial and final offer to acquire a private landowners’ property.
“If there’s no agreement as to the value that the government must pay to take the land, the government files the lawsuit,” Ellis said.
He said his firm currently represents office buildings, multi-family development properties, retail shops, restaurants and medical offices. He said every property owner has a right to challenge what they believe is a fair amount of compensation in response to the government taking their land from them and said the amount of money TxDOT is offering to his clients is below what they deserve.
“There’s been a tremendous amount of property appreciation in Austin in the last three years," Ellis said. "Some of the data that we see used by the government to support their valuations is older data that doesn’t reflect that significant increase in property values over the last few years."
Ellis also reiterated that there has been a dramatic change to the city of Austin's development code over the last six months that he believes increases the value of many of his clients' properties.
“In some instances, the values that many property owners believe they’re owed are multiples in excess of what they’re being offered by the government,” Ellis said.
TxDOT provided KVUE with a statement that said it uses independent appraisers for property acquisition. However, the department did not disclose how much money it has offered property owners.
Ellis said that even though the government uses independent appraisers, many of them are from companies outside of Austin.
“People always talk about real estate being local. [...] Some appraisers simply don’t know enough about what has gone on locally, and both in the spike in property values and with the changes in the City of Austin development code,” he said.
KVUE was able to find at least eight properties that currently have active pending cases with TxDOT:
- Reliable Consultants, which owns the buildings where Dreamers and Le Rouge are located
- Dakota 2550 Ventures, which owns the building Wayne Wright Injury Lawyers is located
- 3109 Props LLC , which owns the building Escuelita Del Alma is in
- The Austin Chronicle
- RMM Family Partnership, which owns the building where the Austin Eye was
- Embassy Motel Partnership, which owns the Deluxe Inn
- Gage Multifamily, which owns the building where Gage Commercial Construction is
- Clermont, which owns the building where Clermont Specialty Vehicles is
Ellis said the Austin Chronicle is reaching the end of its litigation. He said many of these longtime, often small, businesses are being impacted by the project.
“The biggest frustration for these property owners is that the value that they've been offered to take their property by the government doesn't come anywhere close to the amount of money it would take them to set up another like kind position in Central Austin,” Ellis said. "So, this is a huge frustration for my clients that are operating ongoing businesses that are being wiped out by the government.”
So, what happens now?
Ellis said litigation will proceed.
“An easy way to think about it is like a one-day, mini-trial where three court appointed special commissioners place a value on the property, and what the government must pay to take the property,” Ellis said.
He said if neither party agrees on the amount the government should pay, then it will go to a jury trial, which would likely happen in 2025.
“We think we have strong and compelling evidence that the values that the government has offered don't represent fair market value, that they're low,” Ellis said. “We do think there's compelling market evidence to suggest that property owners are owed more in many instances than what the government has offered.”
Ellis predicts TxDOT will continue to file lawsuits.
He said business owners who are being displaced and aren't satisfied with the amount of money being offered by the state should hire their own property appraisers and talk to an eminent domain attorney about their options.
When asked for a comment on the lawsuits, officials with TxDOT said the department does not comment on pending litigation.
Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.