NEW BILLBOARD CASE COULD AFFECT COMPENSATION FOR CONDEMNED SIGNS
Last month’s TML Legislative Update included an article regarding proposed Texas Department of Transportation (TxDOT) rules that could allow electronic billboards in cities. In another recent billboard law development, the Dallas Court of Appeals issued an opinion that could affect the valuing of billboards in condemnation proceedings. State of Texas v. Central Expressway Sign Associates involved a condemnation proceeding in which TxDOT used the power of eminent domain to obtain a piece of land on which a billboard was located.
In most condemnation proceedings, the value of a piece of property is based on the fair market value of the physical land and structures. In the Central Expressway case, however, the court held that the billboard company’s advertising revenue and the rental value of the property had to be considered in the condemnation award. The value of the billboard was not based on the billboard itself, but rather on the value of the location of the real property upon which the billboard was located. That conclusion meant that any advertising income had to be included in the valuation of the property for a condemnation award.
This holding could dramatically increase the cost to cities and other governmental entities that may need to condemn land containing billboards. This opinion is located at http://www.5thcoa.courts.state.tx.us/cgi-bin/as_web.exe?c05_07.ask+D+12022976.
While no appeal has been filed in the Supreme Court of Texas, TML will track this case and possibly provide amicus support.