Jury: City Owes Property Owner $3M for Light-Rail Construction

The verdict is the outcome of a near decade-long legal battle.

Wed November 02, 2016 - West Edition
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The Phoenix, Arizona website AZCentral is reporting that a Maricopa County jury has awarded nearly $3 million in damages to the owner of a downtown Phoenix parking lot because light-rail construction cut off access from the lot to an arterial street.

The verdict is the outcome of a near decade-long legal battle between Phoenix and John Garretson, who owns the parking lot at Jefferson and First streets. In 2006, the city began light rail construction and cut off two driveways that connected the property to Jefferson Street.

Garretson complained the move decreased the value of his property, which is on a high-profile corner across from Talking Stick Resort Arena, and he demanded compensation.

Phoenix contended it didn't owe Garretson anything for the loss of Jefferson Street access because he still had convenient access through Madison Street to the south. The city initially won a judgement to that effect, but lost on appeal.

Dale Zeitlin, Garretson's attorney, said the case could make way for more legal challenges from property owners who lost value due to the construction of light rail and other government decisions that affect street access.

"It's a very strong and positive message, particularly to the governments, to be respectful of property rights and to owners of properties to be vigilant in protecting their property rights," he said. "A lot of people have been hurt badly by light rail and have just gotten no compensation because of it."

It's unclear if Phoenix will challenge the decision.

"Based on the verdict, the city is considering all options," spokeswoman Julie Watters said in an email. "We are not in a position to provide more specifics due to the possibility of post-verdict motions or an appeal."

Watters said if the city is required to pay a judgment, the money would come from local transit tax revenues.

While the city would not elaborate on the verdict, Watters defended the investment in rail, saying, "Vast public works projects like light rail can sometimes generate controversy from the day they are planned, designed and built. Yet these projects — like the interstate freeway system for example — justify the effort and expense.”

The case started in 2007, when Phoenix filed an eminent domain action related to a construction easement on Garretson's property. He didn't protest that easement but sought damages for lost street access.

It went all the way to the Arizona Supreme Court, which ruled in Garretson's favor on the key legal question, holding that a property owner is entitled to damages if the government completely eliminates access to an abutting road, causing the fair market value of the property to drop.

The Supreme Court remanded the case back to county court. On Oct. 26, a jury found the value of Garretson's property had decreased $2,869,360 as a result of the lost Jefferson Street access.

Zeitlin said his client had hoped to see the property developed into a high-rise building. He said it's unclear it that would be feasible after the street change, adding, "We don't really know whether it will be buildable or not anymore."

Including interest on the damages, Zeitlin said, he expects Garretson could receive up to $4 million from the city.

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