6/23/2007

Property owner upset hospital acquired house, land for less than value: Midland TX Reporter-Telegram, 6/10/07

By Ruth Campbell

Property owner Kerry Faudree fought Midland Memorial Hospital on buying her property and lost.

Faudree, a family therapist specializing in treatment of alcoholics and children of alcoholics, went through a process known as eminent domain.

Hospital attorney Darren Skyles said eminent domain is the power to take private property for public use by a state or municipality. The hospital district is a political subdivision of the state.

The hospital district's enabling legislation gives it the power to take property to construct parking lots "to further the purposes of the district," Skyles said.

Faudree said in this case eminent domain, one of the first reported in Midland, offered examples of people receiving unfair compensation for their property and of a municipality not handling the proceedings professionally.

This past fall, Faudree said she was contacted by the hospital about buying her property at 2108 Tennessee Avenue and 2106 Tennessee Avenue. In November, she said, the hospital offered a "horribly low" price and wrote a letter to her husband, Matthew Faudree, saying they would offer fair market value.

Faudree also contends the hospital didn't view her business as legitimate and neighboring doctors got more money for their property than she did.

Her husband said he was not interested and she didn't hear from the hospital until she received the condemnation notice. Edmondson said the hospital has been working with the Faudrees and all the property owners "for quite some time."

"I don't think it could've been done any better. ... We feel we did our best. We're coming up on a deadline. We had to move forward and go ahead and request eminent domain proceedings. What's done is done. We're moving on," Edmondson said.

Faudree said Edmondson's assistant took her to see possible office replacements, but all were under contract. She said she and fellow property owners on Michigan and Tennessee Avenues never were informed as a group about what was going on with the hospital's plans.

"I don't think they handled it in a professional, ethical manner. Nobody knew what was happening," Faudree said, adding that if all the property owners worked together, they could have fought the hospital.

The hospital got an appraiser who went back 10 years to get a comparable price. Faudree said her appraiser also valued her property lower because he couldn't find any history on it. A bid on the Faudree property came in at $92,000. It was declined, as was another for $94,000, Kerry Faudree said. She wound up with $108,000 when she needed at least $150,000 to move.

Edmondson said the hospital asked for counter-offers multiple times, but "never got an answer."

Of the $108,000 she was given for 2108 Tennessee Avenue, $15,000 went toward fighting the case, she said. The hospital paid $114,000 for the 2106 Tennessee Avenue property, according to records.

Prices paid for the properties, according to hospital information, range from $47,500 to $255,000. Edmondson said prices paid had nothing to do with whether property was owned by doctors.

Because of the housing shortage, Edmondson said, the hospital has been approached by people who want to buy the houses and move them to other parts of town. The hospital recently was taking bids for the property and a decision will be made this week.

"From a property standpoint, ... there's a difference between commercial property, which is what the doctors own, and her property, which is considered residential property," Edmondson said. "Commercial property brings in more money because of the way it's constructed."

The three-member commission appointed by County Court At Law Judge No. 1 Al Walvoord to hear the eminent domain case indicated they would like to give Faudree more for her property, but the panel went with precedent - in this case the appraisal.

"People need to know how to deal with eminent domain. Every lawyer told me the law really isn't black and white. It's gray," Faudree said. "All the lawyers felt sorry for me, but sorrow doesn't do it. You've got to get a lawyer familiar with eminent domain."

"People need to be educated. They need to realize the government can come in and take your land for any reason they so choose," Faudree said. "... If people don't know what's happening, they get bulldozed. Laws protect the condemnor. They don't protect the condemnee."

Faudree said she will have to move into an office building, which she feels is less beneficial to her clients and herself. "This was a real safe environment for them. I know I'll be OK and I'll find a way to get through this. I couldn't get a lawyer to fight further."

Edmondson said the hospital serves a public need and acquiring the lots was part of it. The hospital first considered building a parking garage, but found it would cost $5 million, overbudget for what was planned.

Total cost of property acquisition and parking lot construction was under $3 million, hospital information says.

"We feel for them if we've caused any inconvenience. We serve a public need as a hospital and acquiring the properties for additional parking fulfills that role. As a hospital district, we're responsible to the taxpayers and the prudent thing to do is get appraisals on property so it's fair and equitable to both parties.

"That's what we did and that's what we paid," Edmondson said.


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