Thursday, May 30, 2024

Road closures

By Edward Martin

The shouting rousts them. The couple leap from bed and rush to the window to find police cars and an assault vehicle surrounding the house next door. Men with guns are darting through the yard screaming, “Police, police!” One rushes the house and hurls a stun grenade through the door. There’s a flash and explosion, and the bedroom window from where the man and woman watch quivers.

It’s dawn east of Apex. The husband is 78 and his wife, 74. She reminisces about life as it was 28 years ago when they moved here, to what was then their new home in a neighborhood just beginning to feel the Triangle’s creeping suburbia. Whippoorwills trilled in the dewy night air of Deerfield Park. “Our house is where the old homeplace was,” she says. Next door where the drug raid unfolds used to be the farm family’s garden, full of flowers, plants and a grapevine trellis.

About a decade later, a letter arrived from the N.C. Department of Transportation. Soon, officials told them, the state would build the Triangle Expressway along a 1,000-foot-wide Wake County corridor that included their property. DOT would eventually buy the couple’s home, but until then, a law restricted their options. They could repair the roof or replace a leaking faucet but make no room additions or anything substantial enough to require a building permit. They could sell, though finding a buyer for a house in the path of a promised highway would be unlikely.

Only if the couple had a terminal illness, bankruptcy or some other hardship would the state buy the house before road construction started. If it did, the state would then rent it, which explains why drug dealers lived next door in the neighborhood of $200,000 homes. How long, the couple asked, will this go on? “As long,” replied the highway officials, “as it takes North Carolina to get the money to build the road.”

That was 18 years ago. Stymied by a lack of funds and environmental snags, this southern leg of Raleigh’s Triangle Expressway exists only on paper. Now, another DOT-owned house nearby was raided by police. Several are vacant. The couple, trapped in their own home and fearful — they asked that their names not be used — are among an unenviable cadre of Tar Heels whose complaints about the process could cost the state hundreds of millions of dollars.

The Transportation Department estimates 4,400 home and business owners, investors and others are frozen by a law passed when urban loops first gained popularity in a state dominated by rural roads. The 1987 Transportation Corridor Official Map Act, since shortened to Map Act, is intended to hold down public costs by halting development where highway planners envision expressways. While state and federal agencies have poured more than $60 billion into North Carolina’s nearly 80,000-mile highway system in recent decades, congestion has steadily increased in urban areas. That has prompted demand for loops and bypasses.

About a dozen states have similar laws, though none is as draconian as North Carolina’s, says state Rep. Paul Stam of Apex. His efforts to repeal or weaken the law have repeatedly failed. “I wasn’t there at the time,” says the Republican House speaker pro tem, “but my guess is they never contemplated it would be preserving these corridors for 20, 30 or 40 years.”

The act was intended to put a temporary hold on development, but in 2010, then-N.C. Transportation Secretary Gene Conti told some owners that, at the rate the state was funding urban-loop construction, some wouldn’t be built for 60 years. The eventual tab he projected: $8 billion.

While they wait, owners pay lower local property taxes until projects are funded and the state condemns their property in traditional eminent domain proceedings. By then, real-estate agents and some internal DOT documents say the value will wither to a fraction of similar property outside a corridor. Businesses will be shuttered, local governments will lose hundreds of millions in property taxes, and neighborhood deterioration known as condemnation blight will often breed crime and fear among stranded owners. Though “temporary,” the process can drag indefinitely. About 700 affected property owners, for instance, are in the path of the 34-mile Winston-Salem Northern Beltway, first sketched out in the 1960s and officially designated a protected corridor in 1997.

Map Act owners contend the law is selectively enforced, with the state acquiring property of owners with the financial firepower to fight the DOT while leaving others stranded. DOT acquired more than 30 acres in a Wake County subdivision owned by Jim Goodnight and partners, paying $87,000 an acre ­— nearly $2.8 million — while refusing to buy properties such as that of the Deerfield Park couple. Goodnight, CEO of Cary-based SAS Institute, was named the 54th-richest American by Forbes in 2015.

Property owners in Shelby, Fayetteville and Greensboro and in Cumberland, Robeson and Pender counties describe lives locked in limbo by the law enforced by the DOT, which had a $4.4 billion budget in 2015. On an icy winter morning, many of them sit shoulder to shoulder in the high-ceilinged chamber of the N.C. Supreme Court in Raleigh, most with deeply lined faces, some with white beards and some on canes.

“They were young when this started,” says Matthew Bryant, a buzz-cut Winston-Salem lawyer who stumbled onto the Map Act in 2009 after an oil-company client was snagged by it. Word spread and others came forward. Today, his case before the Supreme Court represents nine property owners. “These are our parents, our grandparents,” he says. “They’re walking civics lessons with gray hair.”

In 2015, Bryant argued to the N.C. Court of Appeals that property of Map Act owners was unconstitutionally seized by the DOT without compensation, a process called inverse condemnation. Chief Judge Linda McGee agreed, sending shock waves through the Transportation Department, construction industry, and the General Assembly, where the financial bill could land if the Supreme Court rules in the owners’ favor. The DOT appealed to the state’s highest court.

Now, in the Supreme Court, John Maddrey, the state solicitor general, stands before the seven black-robed judges arguing on the DOT’s behalf that the law is no more than an exercise of the state’s police powers. It doesn’t meet the legal definition of a “taking” by the state, he says, so the DOT owes property owners nothing. Both sides know stakes are enormous, with a decision expected to be made in several months. The state estimates the value of frozen properties at $600 million, though interest costs could push the tab to $1 billion or more.

Maddrey finishes his defense and Bryant stands before the justices. His voice rising, he jabs his right index finger in the air to punctuate his points. “DOT uses fancy words to get around what they’re doing, but they end up in the same place every time,” he says. “Justice delayed is justice denied.”

In the corner of the hushed Raleigh courtroom, a grandfather clock’s pendulum swings with a soft ticking. In a half dozen or more cities and towns across the state, where expressways eventually may whisk thousands of cars and trucks a day, clocks tick too.

* * *

In 2012, Michael Hendrix, pleading financial hardship, asked the DOT to buy the 24 acres off Germantown Road in Forsyth County where he grew up. His father had left it to him, asking that he sell it to take care of his aging mother. A developer eyeing the land had offered $1.2 million for 8 acres in 2008, but backed out when the Map Act was invoked. The DOT then offered Hendrix $530,000 for the entire plot. As the years passed, unable to sell privately, he continued pleading for the state to buy at a fair price. By then, his mother, Frances, had died. Still waiting for an answer, he died of a stroke in 2013.

A year later, in Pfafftown, in northern Forsyth County, Larry Dale and Mary Myers asked the state to buy their home on Kecaughtan Road in the expressway’s path. Larry and their son, who was 26, both had medical problems, and they needed money for bills. They were turned down because, a DOT official told them, the loss of Larry’s amputated leg to cancer “does not qualify as an undue hardship.”

“They’re generally not the wealthiest people in the community, not politically savvy,” says Bryant. “They’re out of sight and out of mind. That’s why this has gone on so long.”

Faye Stout, 68, and her husband, Raymond, a working retiree, care for Faye’s 95-year-old widowed mother, ill with asthma, congestive heart failure and, increasingly, dementia. “She’s in and out of the hospital, and now she hallucinates,”  Faye says, stifling tears. “I don’t know how much longer I’ll have her.” Faye’s parents inherited 22 acres in the 1950s that are now in the pathway of the proposed Winston-Salem Northern Beltway. “They were going to use that in their old age,” Stout says, “so they could enjoy life a little.”

Outside Shelby, in the rolling foothills two hours south of Winston-Salem, Mike Price, 62, has similar concerns. He sells real estate, and more than two decades ago, he bought 9.6 acres of raw land just outside the city limits in what he expected to become a valuable commercial strip. “I had the expectation that in my later years, I might be able to market and recoup, more or less, what I put into it.” If outside the Map Act corridor, the property might be worth $300,000 to $400,000. Instead, in the mid-1990s, he saw in a local newspaper that the Transportation Department had sketched a corridor for a planned U.S. 74 bypass around Shelby. He began his 20-year-long battle in which he says DOT officials have reneged on promised meetings and misled him about their timing for buying the property. “They’ve just stonewalled me.”

While highway projects stand still, personal lives don’t. Price’s parents, Robert and Ruby, in their 70s and independent when his struggle

with the DOT began, are now 91 and 92, respectively. Price and his wife are trying to keep the couple at home as long as possible. “We could use the money to do that. But we’ll be dead and gone, too, before any action is ever taken on that section of the Shelby Bypass,” he says. “I understand we have to build roads. But there has to be compensation. For a lot of us facing our retirement years, this property is our only hope.”

South of Raleigh, in the path of the Triangle Expressway near the Deerfield Park couple,  David Arnold’s father, who died in 1980, had bought 26 acres. “He had aspirations of developing some of it,” Arnold says. When that didn’t happen, part became a mobile-home park that has dwindled to three units because of the uncertainty facing owners leasing spots. His mother, now in her 90s, remains there but wants to move to Wilmington, where Arnold lives. The land, with a tax value of more than $1.1 million, won’t sell on the private market, and the state refuses to buy it. “Frankly,” Arnold says, “we could use the money to relocate her. It’s emotionally draining when you’re 90. It would be even for a young person.”

When business and personal lives become caught in the mire of the Map Act, the financial and emotional stakes for owners can escalate.

* * *

White-bearded, in khaki pants, Gene Kirby dotes on his black, chocolate and yellow retrievers, raised in kennels off Old High Point Road near the south end of what might become the Winston-Salem Northern Beltway. On this day, at home, wife Martha is fielding telephone calls from potential buyers for the latest 13 puppies. “We’ve sold dogs to television stars, actors, baseball players and Army generals,” he says. But at age 82, he did not expect to be raising dogs on his 40 acres.

In 1981, Kirby, who owned High Point Woodworking Co., along with a clothing store and other business interests, noticed a run-down horse farm in an area that would eventually include a now-closed Dell Inc. computer plant. He’d already developed a High Point subdivision.

“I bought it with the idea that my son, who was then just a young kid, would grow up, become my partner and we’d develop this into multifamily apartment buildings,” he says. “I had great plans for my son and myself.” He set about putting in roads and underground drain pipes and building ponds, spending several hundred thousand dollars.

In the mid-1990s, Kirby was ready to take his plan to local building authorities. “They said, ‘No, you can’t do that. The state’s going to build a highway there.’ I said ‘Wait, that’s my land, nobody’s paid me anything for it, and I ought to be able to do what I want to with it.’” Kirby was told he could submit his plan and the state would, as a routine provision of the Map Act, be allowed three years to rule on it. “I found out it would cost me $30,000 just to do the engineering study, and then after waiting three years, I was told the state would reject it anyway.” Under Map Act rules, the state could then buy the land. Owners say they are typically offered take-it-or-leave-it prices far below market value.

Kirby is now the lead plaintiff in the Supreme Court case. His son, Brad, is in his 40s and a homebuilder in the Winston-Salem area. “When we first attempted to get the building permit, he was about 14,” Kirby says.

Other business owners say the Map Act has strangled their enterprises. At the Mayflower Seafood Restaurant, hustling waiters serve up hundreds of plates of fried shrimp, fish and other dishes daily.  But in the path of the Winston-Salem expressway, the restaurant’s owners, Maria and Gus Hodges, dangle in uncertainty.

After operating a nearby Winston-Salem restaurant for a decade, the Hodges bought about   8 acres in 1992, intending to build a new Mayflower Seafood Restaurant on part and sell the remainder for a strip mall or hotel. They pumped $2.2 million into the 10,000-square-foot restaurant. In 1997, the letter from the Department of Transportation arrived. “We were told we could not lawfully sell or develop the rest of the property until further notice,” she says. “We’re still waiting.”

Maria Hodges says the couple shelled out $50,000 last year for a new roof, a repair permissible under the Map Act, but can’t make other needed improvements. “It’s difficult to go to bed every night and wake up every morning like this,” she says. “It’s been going on for 20 years. That’s blood, sweat and tears for all those years that we cannot replace.”

The Map Act has outlived hundreds of property owners, pitting human costs against financial ones. It’s politically explosive, leaving conservative Tar Heel politicians twisting in the wind between promises of holding tight purse strings but also pledging hands-off, small government. The state refused to make N.C. Transportation Secretary Nick Tennyson or other top officials in Gov. Pat McCrory’s administration  available for interviews for this story.

“We have a Republican governor and legislature, and I’m a conservative,” says Price, the Shelby real-estate agent with property locked in a Map Act corridor. “My hope is [that] we’ll see that the property rights issue of our citizens outweighs a problem for the state budget.” He fears the Supreme Court will bow to political pressure and the huge financial stakes for state government.

The DOT has paid more than $850,000 to private lawyers to fight cases filed by Map Act property owners, bolstering the state’s in-house staff, says Anne Fisher, a Raleigh lawyer and Bryant’s co-counsel in the Supreme Court case, based on public records obtained through the state’s Freedom of Information Act. Mike Charbonneau, deputy secretary of communications at the DOT, did not reply to a written inquiry about the payments.

Some politicians have aggressively opposed the act, including N.C. Rep. Stam, a Marine veteran who wears his hair in a military crew cut. “My in-laws had some land taken for the I-540 expressway,” the Raleigh beltway, “and as a practical matter, it was tied up for 30 years,” says Stam, who is not seeking re-election after eight terms.

The N.C. House unanimously passed a bill to repeal the Map Act last year, then it died in the Senate. Sen. Bill Rabon, a Southport Republican, is co-chairman of the transportation committee that refused to consider it. “In its original form, the Map Act certainly wasn’t the best legislation, the best idea, but you can’t blame those guys who passed it,” he says. “The climate was different than it is today for road building.”

Rabon cites soaring highway acquisition costs and says his committee wants “to wait and see what the court ruling is. We don’t want to be ahead of it or behind it.” But he also warns that repealing the act or a court ruling striking it might have unintended consequences for property owners, possibly triggering efforts by counties to collect millions in back property taxes written off since its passage in 1987. Homeowners get a 50% reduction, and those with undeveloped land, 80%.

The price tag of urban loops is astronomical, says Bryant, the Winston-Salem lawyer and a partner at Hendrick Bryant Nerhood Sanders & Otis LLP. “The state wants to do a noble thing, get land at a good price for everybody, but it has to pay for it,” he says. “What the Map Act does is shift that burden to just a few owners.”

DOT officials estimate right-of-way costs alone for Raleigh’s southern expressway at $5 million a mile, and those for the Winston-Salem loop at more than $12.5 million a mile. DOT officials concede conflict is inevitable.

“There’ll always be tension between our need to have corridors protected, whether rail, highways or for airports, and the rights of the people,” says Ned Curran of Charlotte, chairman of the N.C. Board of Transportation. “If the Map Act is overturned and that increases acquisition costs, all citizens are going to be affected.”

How much the act really saves the public, however, is questionable. Department of Transportation officials can’t point to exact figures, but Bryant wields research results that question claimed savings. “It takes real money out of counties’ tax bases while DOT burdens the counties with rental tenants, deteriorating neighborhoods and stagnant investments,” he says. 

Research by Winston-Salem State University economics professor Craig Richardson shows savings claimed by lawmakers and DOT officials are costs shifted to local governments. In the path of the Winston-Salem expressway, Bryant estimates the state has knocked $80 million in real-estate values off local tax books, resulting about $1 million a year in lost revenue. DOT, Bryant says, nets $700,000 a year in rental income but pays no taxes on it.

     Critics of the act cross business and political spectrums. Among groups supporting property owners before the Supreme Court include the N.C. Association of Realtors, the conservative John Locke Foundation and the liberal N.C. Justice Center.

     As owners of land in the path of projected roads are unable to sell, their neighbors are profiting. “There were 16,000 private property sales within a mile of our beltway” near Winston-Salem, Bryant says. “In the same period of time, there were five in the corridor, and another 500 to DOT.”

     Gene Kirby was not one of those. Spring is near at Shady Oaks Kennel on the outskirts of Winston-Salem, where Bonnie Blue was about to whelp her litter of potential field-trial champion labs recently. It’s late in the day, and he points to his surroundings of trees, fields and lakes where the pups will train.

“It’s a beautiful piece of property that’s going to end up as a highway.” But that’s not the loss that troubles him most. “I’ve been curtailed by the state for 18 years,” he says. “My youth has disappeared, and opportunities taken from me.”

For 40 years, sharing the stories of North Carolina's dynamic business community.

Related Articles