PHOENIX - Business owners whose access is even partly blocked by a street improvement project can get damages if the value of their property is decreased, the Arizona Court of Appeals has ruled.
In a unanimous decision, the judges rejected efforts by Phoenix to avoid paying damages to the owner of a property that lost access to traffic from Jefferson Street due to the light rail.
Attorneys for the city conceded the project permanently blocked two driveways facing Jefferson Street. They said, though, that John Garretson still had access from Madison Street.
That, the city's lawyers argued, means he suffered no loss. A trial judge agreed, throwing out Garretson's claim.
But Judge Michael Brown, writing for the court, said the case raised genuine issues of whether a city's street reconfiguration "materially impaired" property access, thereby diminishing the value of someone's property. He said that entitles a property owner to seek damages in court.
The ruling applies to any kind of street improvement project that diminishes someone's access to his or her property, not just streetcar projects such as the one Tucson is currently building through the University of Arizona and downtown areas.
When Garretson sought compensation from Phoenix for cutting off his access, the city argued it had used its authority to control access to roadways as part of its police power. That, they said, means there was no requirement to compensate Garretson for any damage to the property.
Besides, they said, since people could still get to the property from other streets, access had not been "substantially impaired" in any way justifying compensation.
While the trial judge, in dismissing the case, accepted that theory, Brown said that is not the case.
"When the government eliminates a property owner's established access to an abutting street and the owner retains access from another street, the owner is not necessarily foreclosed from obtaining compensation for damages to the property under the Arizona Constitution," he wrote.
For example, he cited a 1960 Arizona Supreme Court ruling involving a property along a state road where motorists going either direction had access.
That was replaced with a controlled-access highway. The property was still accessible, but only by traveling about 1,500 feet on a frontage road.
In that case, Brown said, the high court said someone whose land is adjacent to a road has a property right to that ingress and egress.
And eight years later, the Supreme Court said while property owners have no right to insist that traffic pass directly in front, that does not mean they cannot profit from that traffic flow.
While the court ruled Garretson has a right to sue, he still must prove he has been damaged.
One engineer hired by Garretson said the loss of Jefferson Street access impaired the potential to develop the property, decreasing the potential for office space from 295,000 square feet to 125,000.
An appraiser said the property is in a "strategic location," being within walking distance of the baseball stadium, the basketball arena and the Phoenix Civic Plaza, and was zoned for high density mixed-used development.
The appraiser said the loss of access - and the loss of "site prominence" to Jefferson - makes the value of the property "substantially inferior to the location it enjoyed in the before condition."
All that, Brown wrote, entitles Brown to make his case to a jury that access to his property was materially impaired and seek damages.