In response to Andy Goodman’s insightful piece on handling condemnation letters, we thought it was important to shed light on the significant implications eminent domain can have on billboard owners and the proactive measures they can take to safeguard their investments. As a firm deeply entrenched in the world of billboard brokerage, valuation, and advisory services everyday, SignValue sees firsthand the challenges and complexities that arise when eminent domain inevitably affects the OOH industry.

Eminent domain, the power of the government to take private property for public use, can be a formidable force, particularly for billboard owners. When that condemnation letter arrives, it’s not just a piece of paper; it’s a harbinger of potential disruption to your business, your advertiser’s plans and both of your investments. But as daunting as it may seem, there are proactive steps that billboard owners can take to navigate this terrain effectively.

First and foremost, as Andy rightfully advises, seeking legal counsel is paramount. The stakes are often very high because highway and bridge projects usually take place in areas where there are significant traffic volumes (what we call circulation), so having a seasoned billboard attorney by your side can make all the difference. These legal experts understand the nuances of eminent domain proceedings and can offer invaluable guidance on how to protect your interests.

Equally crucial is enlisting the services of a reputable billboard appraiser. At SignValue, we understand the intricate dynamics of billboard valuation, especially in the context of eminent domain. The book we published on the subject can be purchased here. Collaborating with experts at SignValue ensures that you have a robust valuation and consultant that accurately reflects the true worth of your billboard assets, empowering you in negotiations with governmental entities. Keep in mind that SignValue also does valuation work for government agencies as well. Our reputation for providing fair market opinions that are justifiable, reliable and fair is unsurpassed and that is critical when these cases end up at trial. It doesn’t matter who retains us for an appraisal because our opinion of the fair market value of a sign does not depend on who engaged us. Any value opinion has to be justified by market-based research and analysis and knowledge of transactions in the open market. Hiring a local real estate appraiser to say anything that a sign owner tells them about the value of their sign(s) will only end up costing far more in litigation fees.

Perhaps the most critical piece of the puzzle lies in the early contractual arrangements between billboard owners and property landlords. Because our team looks at dozens of leases every day, we cannot stress enough the importance of having a meticulously crafted lease agreement in place—one that anticipates the possibility of eminent domain actions. Such agreements should explicitly outline the rights and obligations of both parties in the event of condemnation, ensuring clarity and minimizing potential disputes down the line. In particular, clauses that allow the billboard company to proceed with a condemnation award independent of the property owner can be instrumental in safeguarding your interests. Legal advisors disagree on whether provisions stipulating that the lease remains in effect until the condemnation issue is resolved or whether the sign company alone should have the right to cancel the lease upon notice of condemnation. This is something we recommend you seek legal counsel to advise sign owners. The terms “Leasehold” – the sign owners interest and “Leased Fee” – the landowner’s interest should be used to describe the different interests in the sign being taken.

Ultimately, the key to mitigating the impact of eminent domain lies in proactive planning and strategic foresight. By leveraging the expertise of legal advisors, appraisers, and ensuring robust lease agreements are in place, billboard owners can navigate the complexities of condemnation with confidence. At SignValue, we are committed to empowering our clients with the knowledge and resources needed to protect their investments in the face of eminent domain challenges.

Feel free to reach out to any one of our team members about your case. info@signvalue.com (480) 657-8400