Business owners wait for fair compensation, relocations for south end redevelopments: Kansas State Collegian, Manhattan KS, 4/4/07

By Mandy Stark

They have been shuffled not once, but twice by the City of Manhattan.

Janice Slanary, co-owner of Art Craft Printers, 339 Colorado, said her business was one that was displaced by Manhattan Town Center in 1987. She said the strip mall in which her business resides was built specifically for those displaced by the mall.

Now they are moving again to make room for the south downtown redevelopment project.

"I feel being relocated once was enough," Slanary said. "But we've been fair and reasonable with Dial because we don't want to go the eminent domain route."

Dial Realty is the developer working on the redevelopment project with the city. They have been trying to negotiate agreements with property owners for the project, but the city commission agreed as part of the project to use eminent domain to remove any property owners that did not make agreements with Dial.

Eminent domain comes from Fifth Amendment to the U.S. Constitution, which reads, "... nor shall private property be taken for public use, without just compensation." The U.S. Supreme Court ruled that using it to take land for economic development is constitutional.

Developers are pushing the south project because of a law passed by the Kansas Legislature last year. The law ends the city's ability to use eminent domain to buy property for economic development purposes on July 1.

The city commission voted to use condemnation on two property owners in the north project last year and approved an ordinance to begin condemnation proceedings on properties in the south downtown redevelopment area Tuesday evening.

The south redevelopment project extends from Fort Riley Boulevard to the south and east, Fourth Street to the west and Pierre Street to the north. The city plans to replace the current businesses there with a discovery center, a theater, hotel and conference center, parking garage, restaurants and retail stores.

Tuesday's meeting was the second reading of the ordinance that allows government entities to acquire private properties through eminent domain, a constitutional right enacted through statutory law, said William Frost, city attorney.

"Under this law, court-appointed appraisers decide the amount the city must pay for each of these properties," said Frost. "After the second meeting (last night), the ordinance will be published, allowing us to file the eminent domain lawsuit."

Assistant city manager Jason Hilgers said property owners could negotiate contracts with Dial and avoid the eminent domain process.

"Our hope is that everyone will sign contracts, and we can avoid resorting to eminent domain transactions," Hilgers said. "Both parties need to continue to communicate and reach a solution."

Hilgers said the offers from the city were for the properties' market values plus 25 percent and included a relocation plan. He said the eminent domain process would give the market value, but that other details of the price are up to the judge.

The remaining property owners can reach a settlement with Dial any time during the eminent domain process, Hilgers said.

Slanary said Art Craft Printers still is negotiating with Dial.

"Signing a contract, for us, is contingent upon finding a suitable relocation site," she said. "We would like a secure place to move to."

Slanary said they are working with Dial to buy a suitable property from its current owners. She said though they are working toward a solution, she feels her business could have been compensated more.

"For all of what's being taken from us, I think we could have been compensated even better," Slanary said. "I would have liked to have seen an offer that reflected the revenue we will lose from our tenants, too."

Rick Kiolbasa, partner in Dial Realty, said he believes they are making progress in the negotiations. Dial has signed contracts with 16 of the 23 property owners.

"I think we'll be successful in negotiating contracts with most folks," Kiolbasa said.

Mike Conkwright, owner of Bud's Auto Service, 301 Colorado St., said he and his family are not opposed to the project, but they are waiting for an offer they can accept.

"In the long term, this project will be very good for the Manhattan community," Conkwright said. "We don't want to be against the project. We just feel it should not be at the present business owners' expense."

Conkwright said the offers his family has received have not offered enough to maintain their business.

"We're expected to move to a location that's not as competitive for a one-time price," he said, "but they're going to continue to profit from this deal for a long time."

Conkwright said he and his family would agree to a contract with a new site for their business, provided the site is acceptable and relocation costs are included.

"This is a third-generation business that my family has owned for more than 50 years," he said. "We have to have an offer that allows us to continue our way of life."

City commissioner Ed Klimek said the commission's intent is to treat the property owners fairly in the purchase of the properties and assisting them in relocation.

"Businesses in the redevelopment district need to be able to stay in business if they want to do so," Klimek said. "We need to make sure we're giving them a fair offer. At the same time, there is a limit to what the city and Dial can pay."

Klimek said he has spoken with the majority of owners in the district and understands what they need.

"The city commissioners are the policy makers, not the negotiators," he said. "We pass on what we find out to the negotiating team, and if we don't feel the offer is fair, we can step in and say, 'Hey, you need to go a little further.'"

Robert Greene, director of real estate legal services for O'Reilly Automotive, 324 Fort Riley Blvd., said the company has cooperated with Dial and is waiting for an appropriate relocation site to be found before they sign a contract.

"Our view is that we have to have a suitable new site as step one," Greene said. "Once we have that, we can move to steps two and three, getting to the value of our property and relocating costs."

Greene said since O'Reilly Automotive has more than 1,700 stores across the nation, it is easier for the company to change locations than other businesses in the district.

"We set up stores often so we can move our Manhattan store pretty economically," Green said. "For a lot of the people affected by this redevelopment, this is their one business. Everyone is pretty unique down there."

Kansas State Collegian, Manhattan KS: http://media.www.kstatecollegian.com