Town wants to buy my car wash

[Mel(NC)]

I have a meeting with the town administrator next week to discuss purchasing my SS car wash. My wash is adjacent to the town hall and they are looking to expand. I am not real enthusiastic about selling it at this time. Does anyone have experience with this? I am wondering if I have negotiation abilities or will this be an act of eminent domain.

 

[Earl Weiss]

You can always negotiate. Value may be tied to income - or not. Different states have different regulations.

 

[Randy]

There was a guy here who’s wash the state wanted to widen the highway. They made him a decent offer but being the greedy bastard that he was the state said No. About 3 months later he got a registered letter and the state took his car wash for pennies on what they offered him the first time. So be very careful and it might behoove you to hire a real estate attorney

 

[Kramerwv]

Most likely if they use eminent domain there’s a formula they’ll use based on comparable land values or income. A dispute can end up in court as my wife was on a jury several years ago with a billboard owner fighting the state over eminent domain. The billboard owner had good representation and he won.

 

[Greg Pack]

It will eventually be an act of eminent domain. Familiarize yourself with your State's laws. I would suggest working with them, but don't get pushed around. In our State, we get nothing for business value- just value of the real estate. Just a few years ago the County took some land for a road widening project. I hired an attorney who specialized in eminent domain negotiations. He negotiated a higher price that they wouldn't entertain with me and more than paid for himself.

 

[Earl Weiss]

. I hired an attorney who specialized in eminent domain negotiations. .

Yep, find someone who has expertise in this specific area.

 

[Axxlrod]

You're gonna need an attorney.

Your govt will try to screw you.

Currently involved in a taking for road widening at one of our washes, and it's laughable they valuation they came up with for compensation. Literally pennies.

They will offer you something based on comps they dig up, and then will move to ED if no deal is struck.

You will need excellent records and an attorney with a axe to grind against the city.

Good luck.

 

[boywonder]

They will give you what the value of land and building is appraised at. If you get greedy, they will eminent domain you. Through eminent domain they can pay you up to 125% of the appraised value. They will not give you the value of the business. Try to negotiate where they build you a new wash for the same value of the sale, somewhere else in town.

 

[JGinther]

Not giving value for business is worth a legal fight for sure. Car washes are special use buildings and the business cannot be moved. The business value is an inseparable aspect of the location, equipment, business operation, and the real estate. The sum of the parts is greater than the whole. There is no lease, so the income approach to a valuation would be irrelevant. I would challenge that they would have to give new replacement value if not giving business value. They can't have the cake and eat it too.

 

[Mel(NC)]

I met with the city yesterday and I am feeling positive so far. This was just an informal discussion so things could still go south. They agreed to a purchase amount that equals 4.5X gross income. I think this is as good an offer as I would receive on the open market. I would also be able to sell off equipment to raise a little more money.

There was some discussion about purchasing the wash and renting it back to me until the city is ready to build in a year or so. I like this idea but I’ll be surprised if this happens considering liability concerns.

The next step is a phase 1 environmental study. I am a little concerned about this since there is an old gas station beside my wash with underground tanks still in place.

 

[Greg Pack]

Sounds like best case scenario Mel! My experience has been much worse with the two ED cases I've had where they only wanted some land. IN one of these, the County took by eminent domain and did not pay me immediately. They then filed bankruptcy and in the proceedings attempted to argue all people owed money on condemnations were creditors and tried to get out of paying us. The judge shot that down though.

 

[JMMUSTANG]

If you still want to be in the car wash business at another site in town I would try to get a guarantee from the city in your sale contract that you get full approval without delays.
Earl would probably know how to word it better than me.

 

[Mel(NC)]

If you still want to be in the car wash business at another site in town I would try to get a guarantee from the city in your sale contract that you get full approval without delays.
Earl would probably know how to word it better than me.

I may look for another existing car wash close by but I don't think the town is big enough (pop 1800) to support a new wash.

 

[mjwalsh]

Sounds like best case scenario Mel! My experience has been much worse with the two ED cases I've had where they only wanted some land. IN one of these, the County took by eminent domain and did not pay me immediately. They then filed bankruptcy and in the proceedings attempted to argue all people owed money on condemnations were creditors and tried to get out of paying us. The judge shot that down though.

Wow ... my country bumpkin mindset once again shows through. I had no idea that municipalities could a process an eminent domain document. Then the property owners in some cases where the judicial is more pathetic will actually never pay the amount promised based on some legal-academia manipulation!

We had situation of eminent domain against business properties close to our grandiose civic arena- convention center. The "overly glamorized out of state company IMHO" the city was dealing with was allowed to not follow through on some legal technicality. Long story short ... the mayor who pushed the Eminent Domain ... did not get re-elected despite local media going easy & glossing over the fiasco. The formerly robust strip mall is still unoccupied for the most part.

Extra ways to weasel more tax money probably kept our city from a Chapter 9 bankruptcy filing???

 

[boywonder]

Sell it and run!

 

[soonermajic]

4.5 x gross is pretty good in a small rural area. Especially if you've been honest on your taxes. I'd take that & thank God!