WAIPAHU — Nick Cutter’s family has sold cars in Waipahu for more than a decade. Fords, Mazdas, Pontiacs, Buicks and GMCs.

But someday soon, a concrete platform for the Honolulu rail project‘s West Loch Station will stand where the Cutter Family Auto Center now sits with its colorful lot of cars and trucks.

The June 14 release of the project’s Final Environmental Impact Statement offers the most up-to-date list of homes and businesses that will have to move to make way for the train.

All told, the city will have to acquire 199 parcels to build the 20-mile rail line from East Kapolei to Ala Moana.

One appendix of the final environmental report — you can read thousands of pages of sections and appendices right here at Civil Beat — shows the exact locations of the parcels. Twenty residences, 67 businesses, and one church will have to relocate to make room.

They can feel the train rumbling down the tracks, and they are going to have to move quickly to get out of the way.

Cutter owns two adjacent properties at 94-119 Farrington Highway and 94-136 Leonui Street in Waipahu that must be acquired in full by the city. Eminent domain grants the state the power to seize private property for public use without the owner’s consent, but the owner must be compensated.

The car dealership is the only home or business that lies in the path of the project’s East Kapolei-to-Fort Weaver Road section, the first of four overlapping phases expected to break ground.

“They basically informed us that two of our parcels were identified for a future transit station and that they would be contacting us in the future to talk about terms, and that if we couldn’t get together on terms, then there would be condemnation,” Cutter said.

The city first contacted him more than a year ago. Yet he hasn’t heard anything since and said no negotiations have begun. Cutter says he has no idea when he’ll have to move or how quickly.

“Frankly, that’s a bit disconcerting. I need to relocate a business that employs 90 people, and we don’t have a time frame,” he said. “I think it would have been better dealt with when we were first notified … so we could at least have done some intelligent business planning. That would have at least made the concern more manageable.

“It’s a question of keeping people informed that are going to be affected. I think the city could do a better job of that,” he said. “Personally I have no problem with rail or with the fact that the land was identified as being beneficial. That’s fine. But let’s deal with the issue instead of waiting until the last minute.”

For their part, City and County of Honolulu officials said they’re limited in what steps they can take and when they can take them.

“We cannot acquire any of the properties until we obtain the record of decision,” the final approval from the Federal Transit Administration, said Toru Hamayasu, deputy director for the Honolulu Department of Transportation Services and general manager of the rail project. Negotiations cannot start until that moment either.

Hamayasu said the city plans to buy land along the entire route shortly after federal authorities sign off on the project. Relocating businesses and residents will be a separate process on a more flexible schedule.

“So what we’re doing is basically informing the people what is the likely impact to the property or their businesses and what are their options and their rights in dealing with their government trying to buy their property,” he said.

Landowners started to receive warnings from the city in the months before and after the Draft Environmental Impact Statement was released in October 2008, Hamayasu said.

But that doesn’t mean all of the businesses affected are aware. While all the landowners that face potential impacts have been contacted, the city can only reach out to tenants with landlords’ permission. As a result, some businesses have unwittingly wandered into the path of the speeding train.

Public Use Vs. Private Profit In Eminent Domain

There are rules in place to make sure the government doesn’t abuse its eminent domain power. In what is known as the U.S. Constitution‘s “takings clause,” the Fifth Amendment guarantees that “nor shall private property be taken for public use, without just compensation.”

The Federal Highway Administration has published informational brochures on acquiring real property and displacement and relocation. The relevant federal law is called the Uniform Relocation Assistance and Real Property Acquisition Policies Act.

In Hawaii, the power of eminent domain is laid out in in Article 1, Section 20 of the state’s Constitution and Chapter 101 of the Hawaii Revised Statutes.

The definition of “public use” has been at issue in recent years. In 2005’s Kelo vs. New London decision, the U.S. Supreme Court ruled that a Connecticut town could essentially transfer its eminent domain powers to a developer seeking to condemn a neighborhood to put up a pharmaceutical plant. The prospect of economic development was determined to be a public good that qualified as a public use even though the seized property was not going to be owned by or accessible to the public.

Here in Honolulu, unwilling sellers or other opponents could argue that the condemnations are just a pretext to a benefit for a private entity, such as a business that would use the land for a different purpose. But because the city will own the land and operate the trains, property rights attorney Robert Thomas said he expects that the project will meet the threshold of being “predominantly” a public use.

“At the end of the day, at least the way it’s shaping up now, the taking of property for public transportation purposes is generally seen as one of those classic uses for eminent domain, provided there’s no pretext for private business,” Thomas said. The Los Angeles County Metro Rail, the Bay Area Rapid Transit system in San Francisco and Tri-Rail in Miami were all built despite large controversies surrounding them, he said.

While he thinks “someone, somewhere is going to fight” the condemnations and said the city’s current timetable might be ambitious, Thomas does not think land acquisition will bring the project to a halt.

Negotiating ‘Just Compensation’

If a court determines that a project is indeed a public use, the only remaining hurdle to land acquisition will be negotiating a fair price. Negotiations are not likely to delay the project because state law allows the city to take possession (though not title) of parcels — and start construction on them — while terms are still being finalized.

Honolulu is using the current assessed property value as a starting point, and has a small right-of-way team working on appraisals, said Hamayasu, the project manager. Potential lost income will also be weighed for the displaced businesses. All told, the city has estimated the cost of right-of-way acquisitions at $157 million.

Hamayasu said there’s no “showstopper” acquisition — a historically significant building the city cannot demolish or any known archaeological property — on the entire route. Although iwi, or Native Hawaiian remains, are expected to be found along the rail route, they are not likely to complicate land acquisitions. Hamayasu said he considers condemnation a “last resort.”

In Hawaii, property valuation is left up to a jury if the parties can’t strike a deal.

“There’s no set formula. It’s whatever would approximate just compensation in a particular case,” said Thomas, the property lawyer. “This is really a case where the valuation of each parcel could be different because property is always unique, and the only standard that ultimately has to fly is this ‘just compensation’ in the eyes of a jury.”

And because just compensation is “a pretty elastic concept,” Thomas said, litigation is a risky proposition that both the city and the landowners might want to avoid.

Thomas said the acquisitions are “not going to be limited to the footprint of the rail line or of the rail stations.” People whose properties are impacted — for example by noise or dust that reduces property values — can bring what are known as inverse condemnation lawsuits for up to six years after the date of injury.

And those who see only part of their parcel taken by the city can seek damages for the leftover piece if its value is also diminished, he said.

Said rail project manager Hamayasu: “I would say the overwhelming majority has been understanding of the need to take, so they’re willing to negotiate or willing to wait for the next step of notification. There are few that have expressed — what is the right word — their unhappiness, but we haven’t gotten any indication that they’re going to fight all the way or anything like that.”

One of those willing, if unhappy, sellers is Cutter, the auto dealership owner.

“We have no desire to fight the city over the rail project,” he said. “If the price is fair and fair market value and we deal with the economic issues, then we’ll relocate the business and support the city in what they’re trying to do.”

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