Road Construction in front of car wash !!

[KMCKERN]

There is upcoming road construction in front of my car wash and Texas DOT is taking/purchasing a substantial portion of the frontage - including most of my incoming driveway!

I have several questions:

A. The car wash will be closed for 3 months during construction to reconfigure the driveways and structures on my property. What are the estimated costs to reopen the business - promotions, signage, etc? Does anyone have any experience with this, and possibly an amount to budget for reopening of the facility?

B. The TXDOT appraiser based his property assessment using comps for other car washes that were in-bay automatic type washes. We have a compact Sonny's express tunnel wash that processes much more volume than any in-bay unit can handle. My thought is that the comps for express tunnel should be considerably greater that the in-bay automatic ..... does anyone have thoughts as to % greater market price per square foot for an express tunnel facility?

C. The portion of the property being taken/purchased by Texas DOT is 21% of the total lot. It looks like my operation can continue if the city approves the construction and traffic plan. Does anyone have thoughts as to how the long term value of my property will be affected?

I appreciate any observations that y'all might have.

Thanks !!

 

[Kevin Reilly]

My son bought my two tunnels from me back in 06 and right after purchasing it (a corner lot - short exterior & 3 bays). Right after purchasing it the City needed about 10' of the property on the busy street for a right hand turn lane. They paid him $80K for this piece.

They finally started the project 2 months ago and this location has been shut down for that period of time and he has just reopened that location. What the City did will help with the congestion that has always been there.

My question would be:

Certainly they will pay for the property they are taking from you!!?? Is it fair?
Are they going to pay you for the down time that you are shut down.
(If so, how long have you been in business at that location and just simple math could give you that figure plus the increase you may have had!)

During their construction this would also be the time to do any of your improvements you have been thinking about in the past, but hadn't done!

As far as restarting your business after they are finished somebody else could probably jump in and help you with that!

 

[rph9168]

If the construction is forcing you to close you should get compensated by the city. They may not volunteer paying you but if they give you a problem you may need legal counsel.

I have worked on several projects like this. As far as reopening I think you should treat it like a Grand Opening. Start marketing activities about a month before you will be open. Put up banners or signs on the site and use local media for additional exposure. You might even get a local TV station to do a piece on it. If possible come up with some type of giveaway or promotion like reduced pricing for the first month. Make sure your wash is in perfect operating condition and employees are well trained to make things go as smoothly as possible.

 

[JimmyJaffa]

I hired an attorney and my own appraiser to value the "taking" by the state when they wanted 10 to 25 feet of frontage. It is the only way not to be taken advantage of. In Florida, the state will pay for the attorney, probably Texas will as well. Get the best attorney that has done this type of work before..

 

[Randy]

Every situation is different. My suggestion is to talk to a lawyer. I’ve been there and done that. In my situation when the state widened the road. The road was about 42 feet wide, they had an easement of 120 feet, 60 feet on each side of the center line. I lost with no compensation about 30 feet of property in front of the car wash. There was no compensation for lost business as long as the road was open during normal business hours with short closures. The road was open the 8 months it took to do the road rebuild, it was more like a jeep or 4 wheel drive trail, but it was open. The contractor is the one who was going to have to pay for any loss of business and they did everything humanly possible to make sure that no business was closed during construction, as long as it was open they didn’t have compensate any of the businesses. During that period I lost about 60% of my business. When it was all done I ended up with a new sign, a nice wide road out front, with a nice sidewalk and a 40% increase in my property taxes

 

[robert roman]

“The car wash will be closed for 3 months…. What are....costs to reopen the business….?

The cost of reopening could be substantial because people are creatures of habit – if you are closed today, most people will assume you will be closed tomorrow.

“The TXDOT appraiser based his.... assessment using comps for other.... washes that were in-bay automatic..... My thought is .... comps for express ……should be considerably greater (than)….in-bay.....”

The expense of ROW can be substantial portion road construction cost. DOT uses market-based because it gives them a better chance to arrive at a lower market value as compared to using the income-based approach.

The worst I have seen as expert and giving depositions was using several self-service properties to arrive at a market value for a full-service wash.

I would petition DOT because the cap rates and multiples for express and in-bay are very different. Has your damage expert or attorney raised this issue with DOT?

“The portion of the property being taken…..is 21% of the total lot.” “It looks like my operation can continue if the city approves the construction and traffic plan.

21 percent is a healthy taking. If the city does approve your plans, you may have some incurable functional obsolescence – a flaw, say, design/layout that hinders or diminishes the function, utility or “rent,” and thus value of the improvement.

Arguably, a property now 21 percent smaller gets less rent.

You might also suffer external obsolescence – loss in utility and thus value. While construction delay is temporary and curable, road widening may affect building size, stacking, parking, travel speed, or impose barriers such as median that are known to affect highway-oriented businesses like carwash.

“Does anyone have thoughts as to how the long term value of my property will be affected?”

Consequently, the fair market value of your property could be affected substantially.

 

[Kevin Reilly]

My son called me last night from Hawaii and said his GM informed him that the city was going to install a barrier on the opposite street (corner lot) of this location so there would be "no left turn" lane into the car wash which would affect the business tremendously.

He said in the negotiations for the purchase of the property on the other side street that nothing was said regarding the Southbound lane and barriers to that. He called his Attorney and was told he may have to sue regarding with regards to "errors and Omissions" in the purchase contract!

He will be back in town today and is meeting with the Attorney to meet with the City and get a resolution to this problem.

So, the advice given above by others in getting an Attorney is the best advice and an Attorney that is familiar with battling the City in resolving this type of issue.

I will keep you posted as to how my son's plays out!

 

[KMCKERN]

Thank y'all for the thoughts and advice on this

I have contacted attorney to represent me and hopefully get fair treatment in this matter

Maybe this will be resolved over the next several months