South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Rae’s Cleaners, LLC vs. SCDOT

AGENCY:
South Carolina Department of Transportation

PARTIES:
Petitioner:
Rae’s Cleaners, LLC

Respondent:
South Carolina Department of Transportation
 
DOCKET NUMBER:
05-ALJ-19-0069-CC

APPEARANCES:
For Petitioner: Richard D. Bybee, Esquire

For Respondent: Deborah Brooks Durden, Esquire
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter is before the Administrative Law Court (ALC or Court) pursuant to S.C. Code Ann. §§ 28-11-10, et seq. (1991 & Supp. 2004) and 49 C.F.R. §§ 24.1, et seq., upon Petitioner’s request for a contested case hearing to review a decision of Respondent South Carolina Department of Transportation (SCDOT) denying relocation assistance benefits. After notice to the parties, a contested case hearing on the merits was held on September 20, 2005, at the offices of the Court in Columbia, South Carolina.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and taking into consideration the burden of persuasion and the credibility of the witnesses, I make the following findings of fact by a preponderance of evidence:

1. Notice of the date, time, place, and subject matter of the hearing was provided to all parties in a timely manner.

2. Angus Rae is the owner of real property located at 1644 Highway 17 North in Mt. Pleasant , South Carolina. He owns and operates Petitioner Rae's Cleaners, a dry cleaning business which includes a production facility at that site. A strip along the front of the property which consists of 0.1675 acre or 7,297 square feet was acquired by SCDOT for a highway-widening project pursuant to a condemnation action. The condemnation action was settled by Consent Order dated December 12, 2004. The acquisition did not affect Petitioner’s building or utility services, and had a minimal effect on the parking and circulation of traffic on the property subsequent to the condemnation. However, as a part of the highway widening project, a raised median will be installed on Highway 17 in front of Rae’s Cleaners which will prevent left turns into and out of the property. After the installation of the median, customers will have to make u-turns to access his building to and from the northbound lanes of Highway 17.

3. Petitioner sought relocation benefits as a result of SCDOT’s property acquisition and planned raised median installation. SCDOT denied those relocation benefits, finding that Rae’s Cleaners was not a displaced person because the business is not required to relocate as a direct result of the project. Petitioner argues that a high-end dry cleaning business such as his cannot successfully operate on a site without full and easy access from every direction. Mr. Rae contends that because his customers would have to make a u-turn at a nearby traffic light to access the business from the northbound lanes of Highway 17 changes the highest and best use of his property from a primary, or impulse, site to one suitable only for secondary, or destination, businesses. He estimated he would lose at least half of his customers because the changes to the median will make it inconvenient for customers attempting to pick up their clothing on the way home from work.[1] Therefore, he claims that he will be forced to move his business as a result of the left turn limitations the project will impose on his property. In other words, it is not the acquisition of the small strip of land but the installation of the median that Mr. Rae contends will adversely affect his business.

4. Petitioner’s production facility will not be harmed by any of the potential roadway changes. Additionally, Petitioner’s retail business was not adversely impacted by SCDOT’s acquisition of the strip of land in front of his property. In fact, once the project is complete, Petitioner's business will be more visible from Highway 17. Furthermore, after the completion of the roadway project, the subject site will be fit for many types of commercial uses, including its current use.[2] Petitioner’s retail business, however, will be negatively impacted by the left turn limitations into his business. More specifically, Petitioner’s access will not be as good as the dry cleaners he competes against.[3]

Nevertheless, the evidence did not establish that the loss of the turning lane in front of his business will make it necessary for Petitioner to move the retail business from the site.[4] In other words, the evidence did not sufficiently show that his store will not have sufficient customer volume to continue to operate at this location. Mr. Rae testified that his business provides a high quality service and that his customers are loyal to him. Those customers currently patronize the Highway 17 store though it is often difficult to make a left turn into the store from the existing turn lane. Even after the construction of the raised median, the store will have reasonable access from the northbound lanes of Highway 17. I find that in light of his customers’ loyalty, it is reasonable to conclude that Petitioner’s customers will make the minimal effort to access the retail business after the construction of a raised median.

Furthermore, in anticipation of the changes to the median, Petitioner opened several satellite stores. Those stores give Petitioner’s customers an option if they do not wish to use the Highway 17 store as a result of the roadway changes. More importantly, Petitioner has a means to cure most of the difficulty in accessing his Highway 17 store by building a driveway to the new Beaucastle connector road that is under construction to the rear of the subject property. Therefore, I do not find that Petitioner’s business will be economically infeasible as a direct result of the acquisition of a limited portion of the property or the insertion of a raised median on the highway in front of the business.

CONCLUSIONS OF LAW

Based upon the above Findings of Fact, I conclude the following as a matter of law:

1. The ALC has subject matter jurisdiction in this case pursuant to S.C. Code Ann. 1-23-600(B) (2005) and 25A S.C. Code Ann. Regs. 63-322(D) (Supp 2004).

2. Petitioner seeks moving expenses pursuant to 42 U.S.C.A. § 4622 as a result of SCDOT’s acquisition of his property and the installation of a raised median on Highway 17 in front of his dry cleaning establishment. The South Carolina Relocation Assistance Act, S.C. Code Ann. §§ 28-11-10, et seq. (1991 & Supp. 2004), requires State agencies to make payments to displaced persons in accord with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Public Law 91-646). 42 U.S.C.A. Chapter 61 (Uniform Relocation Assistance and Real Property Acquisition Policies for Federal and Federally Assisted Programs) and 49 C.F.R. Part 24 contain the criteria which SCDOT must follow in determining a person’s entitlement to those relocation assistance payments. More specifically, 42 U.S.C.A. § 4622 (a)(1) provides that whenever a project undertaken by a displacing agency results in the displacement of a person, the displacing agency shall provide for the payment to the displaced person of “actual reasonable expenses” of moving the person's business. Therefore, to obtain payment for moving expenses, Petitioner must be displaced as a result of a project undertaken by SCDOT.

Here, it is questionable whether Petitioner is even entitled to seek relocation benefits. 42 U.S.C.A. § 4601 (6)(A) defines a “displaced person” as “any person who moves from real property. . . as a direct result of a written notice of intent to acquire or the acquisition of such real property in whole or in part . . . .” Likewise, 49 C.F.R. § 24.2 (9)(i) defines a “displaced person” as any person who moves from the real property:

(A) As a direct result of a written notice of intent to acquire (see § 24.203(d)), the initiation of negotiations for, or the acquisition of, such real property in whole or in part for a project;

* * *

(C) As a direct result of a written notice of intent to acquire, or the acquisition, rehabilitation or demolition of, in whole or in part, other real property on which the person conducts a business or farm operation, for a project.

Section 24.2 (9)(ii)(F) further provides that a person does not qualify as a displaced person if that person is not displaced “as a direct result of a partial acquisition.” SCDOT acquired a portion of Petitioner’s real property. However, the acquisition of that land will have a negligible impact upon Petitioner’s business. Nonetheless, in South Carolina, the erection of the median barrier may be an interference with a valid property right that is protected by the Constitution. See Hardin v. South Carolina Dept. of Transp., 359 S.C. 244, 597 S.E.2d 814 (Ct. App. 2004). To receive compensation under such circumstances, a person must establish a “special injury.” Therefore, if Petitioner incurs a “special injury” as a result of the erection of a median barrier, Petitioner may be entitled to compensation in the court of common pleas for that injury.

Nevertheless, there is no authority to recover relocation benefits merely because of a “special injury.” Rather, the federal law explicitly sets forth that a person must be required to relocate as a direct result of the acquisition. Arguably, the only acquisition that occurred in this case as contemplated by 42 U.S.C.A. Chapter 61 is the strip of land at the front of Petitioner’s business. The acquisition of that land certainly has not precipitated the need for Petitioner to relocate.

Furthermore, even if the construction of the median is considered an acquisition of Petitioner’s land within the meaning of the federal law dealing with relocation benefits, Petitioner did not sufficiently establish that the loss of the strip of land and the construction of a median will require his relocation. There are no South Carolina cases addressing the standard to consider in determining when a business has established that it is displaced as a result of a partial acquisition. In Steppelman v. State Highway Com'n of Missouri, 650 S.W.2d 343 (1983), the Missouri court, however, did address this issue. In that case, the Court, in addressing whether a mobile home park owner was forced to terminate his business, considered whether the evidence established the “economic infeasibility of [the owner] continuing the operation” of the business. Applying that analysis to this case, the above facts do not establish that Petitioner’s business will be economically infeasible as a result of the land acquisition or the construction of a raised median.

In making that determination, I find that Petitioner has a means to cure most of the difficulty in accessing the Highway 17 store by building a driveway to the new Beaucastle connector road to the rear of the property. Mr. Rae contends that consideration of that evidence was improper. He argues that the date of valuation for the acquisition of Petitioner’s property under the Eminent Domain Procedures Act is the last point in time for which evidence should be admitted to establish if construction of a median will require his relocation. In other words, no evidence should be allowed after the date of the filing of the Condemnation Notice.

I find that construction grossly in error. Here, the predominant factual issue is the impact of a raised median that as of the date of the hearing was not even constructed. Thus, Petitioner has yet to be impacted by that event. Furthermore, the legal issue is whether the project will require the relocation of the business. The hearing before the ALC is the de novo trial at which that determination is made. The federal law regulating the disbursement of relocation benefits does not restrict the consideration of evidence to any particular point in time. Moreover, the ALC is clearly not restricted to reviewing the decision of the SCDOT or considering the exact evidence evaluated during the SCDOT’s determination. Brown v. S.C. Dep't of Health & Envtl. Control, 348 S.C. 507, 560 S.E.2d 410 (2002); Marlboro Park Hosp. v. South Carolina Dept. of Health and Environmental Control, 358 S.C. 573, 595 S.E.2d 851 (Ct. App. 2004). Therefore, consideration of the access to the Beaucastle connector road was proper.

3. In conclusion, I do not find that Petitioner has been displaced as a direct result of the acquisition of the property. More importantly, I do not find that the construction of a raised median in the highway in front of Petitioner’s business will necessitate displacement.

ORDER

Based upon the above Findings of Fact and Conclusions of Law, it is hereby:

ORDERED that this case be dismissed.

AND IT IS SO ORDERED.

_________________________________

Ralph King Anderson, III

Administrative Law Judge

January 3, 2006

Columbia, South Carolina



[1] Though Mr. Rae is an exceptional businessman with keen knowledge about the dry cleaning business, I do not find his speculation regarding the potential loss of business sufficiently convincing. In that regard, he also pointed out that SCDOT offered no testimony from anyone concerning the impact the median would have upon the operation of the business. SCDOT’s failure to present evidence as to how individuals will react in the future to the need to make a u-turn rather than turn left from a median was not significant. Furthermore, the probative value of that evidence was limited in light of the fact that the median has not been completed.

[2] In light of the commercial development in this area, the highest and best use of the property may be another retail use. However, that fact does not mean that the property is not viable as it is currently used. It simply means that the property potentially has a more profitable use in another capacity.

[3] While the SCDOT appraiser did a survey of existing dry cleaners in the Charleston area market, only two of those establishments had comparable customer volumes and catered to the higher end market. However, neither of those establishments had any turning movement restrictions in the form of a raised median or other traffic barriers.

[4] It does appear that the property’s commercial value is less than before the roadway project. However, the just compensation settlement of $719,000 addressed that loss.


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