Central Corridor: Underlying Valuation Issue
By: John T. Schmick
While many people are aware of the plans to expand light rail service between Minneapolis and St. Paul, few understand how underlying zoning issues will impact property values in the new corridor. The Minnesota Department of Transportation (MnDOT) must acquire enough land to support the construction and operation of the light rail system. Property owners along the corridor, with land subject to the eminent domain process, will be asked to sell/rent their land for the project. Determining a fair price for the land to be taken is complicated by recent zoning changes.
In 2008, the city of St. Paul added a Central Corridor Overlay District to the city’s zoning code. The overlay district is an interim measure which restricts new development in advance of the actual eminent domain process and construction of the corridor. The Central Corridor Overlay District includes a provision that the district will expire on June 20, 2011, roughly three years after its adoption. The temporary nature of this zoning classification is meant to give the city time to review and update its zoning code. It also reduces potential claims for damages to new development projects. However the timing of the provision and the fact that it applies to the anticipated eminent domain acquisitions does raise some questions.
Look for a full discussion of zoning changes and their impact on property values in the next issue of our newsletter, Valuation Viewpoint.
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