by Dan Bustard

The $9.1 million state office building-waterfront project in Newport is set to be celebrated Monday during groundbreaking ceremonies, but there is one issue that has not been settled - how much the state should pay for the taking of a nearby gasoline station for a parking lot.

James R. Reed of Newport, owner of Reed's Mobil Gas Station on Main Street, has filed a complaint in Orleans Superior Court against the state, claiming a special provision the Legislature passed has changed condemnation proceedings specifically in this case to his disadvantage.

"Yes, he does feel singled out," said Reed's attorney Philip H. White. "I don't see the justification for why a property in Newport should be treated differently than a property in Burlington, Rutland or Brattleboro when it comes to condemnation proceedings."

The state has not taken any action toward condemning the property, though in a letter dated May 2 Assistant Attorney General William H. Rice wrote, "You should be aware, however, that commencement of the declaratory judgment action will likely result in the State filing its own eminent domain action."

Contacted Thursday, Rice said no condemnation proceedings have begun, and since the state has yet to file an answer to Reed's complaint he would not comment further on the case. A filing is expected later this month.

The real issue here is a provision included in a capital construction act passed by the Legislature for the state project which gave the state "special advantages" in regards to Reed's property, White said.

"The state has made a substantial commitment to Newport which will benefit the community at large, but it will not benefit Jim Reed or Irving Oil," he said. Irving operates a Mainway station on the property and is listed as a plaintiff in the complaint. Irving has an option to buy the property.

White said the principle issue involves the business value lost by the state taking over the property, both in terms of lost revenues from that property and the cost of a move. "In a normal situation, you would assess the fair market value and lost business revenues as a result of the dislocation, and that has a value. That value has not been a part of these discussions," he said.

In the May 2 letter, Rice wrote, "You should know that I believe it to be unlikely that the state will offer any additional sums of money for the gas station property. I suspect that we have difficulty justifying an increased offer with an appraisal."

"I think the project itself is great and will benefit the community. There's nothing but good that will come out of the state investment in Newport," said White, who served as state's attorney in Newport for 10 years. "A lot of governors have talked the talk, but Howard Dean and the Legislature came through with a major commitment. The governor has been a leader along with a number of legislators."

White said any legal action should not be seen as an attempt to delay or stop the project. "The Legislature must have felt the special standing it gave the state seemed fair in the bigger context. On the other hand, for one individual, they are bringing a burden that is unfair. The statute gave them a more limited scope of criteria. Had the state been willing to negotiate on a more normal basis, we probably wouldn't be here. They are simply using the special advantages given to them by the Legislature," he said.

The particular part of the statute is called Section 62, which the lawsuit seeks a stay on until its constitutionality can be challenged. According to court documents, Reed and Irving Oil are "challenging the validity of the provisions of Section 62 which attempt to eliminate ongoing business value as a valuation criterion, as well as the procedural provisions of Section 62 which offer unique advantages to the state in this condemnation setting that are different from all others, and, by doing so, uniquely disadvantage these plaintiffs."

In the filing with the court, Section 62 is described as unconstitutional for violating the Vermont Constitution's Common Benefits Clause and the U.S. Constitution's Equal Protection Clause, as well as the Eminent Domain Provision and Due Process Clause of the state constitution.

Section 62 is also said to violate the separation of powers as the Legislature is attempting to pre-determine the outcome of judicial determination on this issue.

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Copyright 1997

The Caledonian-Record

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