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What you need to know for 01/22/2018

Gas pipeline project spurs legal issues

Gas pipeline project spurs legal issues

As residents delve into the pros and cons of building a 30-inch natural gas pipeline through Schohar

As residents delve into the pros and cons of building a 30-inch natural gas pipeline through Schoharie and other New York counties, attorneys are brushing up on legal topics such as “eminent domain” and property valuation.

It’s been decades since a major construction proposal came with the spectre of government taking private property, and the Schoharie County Bar Association is inviting attorneys to learn some basics from those experienced in the topic.

Constitution Pipeline is proposing to build a pipeline from northeastern Pennsylvania through Broome, Chenango, Delaware and Schoharie counties with an alternate route suggested that would pass through Otsego County.

The company, a partnership of Oklahoma-based Williams Partners, Texas-based Cabot Oil & Gas and North Carolina Piedmont Natural Gas, is undergoing a pre-filing process with the Federal Energy Regulatory Commission in hopes the agency will approve construction by issuing a certificate of public convenience and necessity.

With that certificate comes a host of complicated issues, including that some property owners could be forced by the government to allow the pipeline company a right of way on their property.

To help lawyers and property appraisers get prepared, the Schoharie County Bar Association is holding a forum Tuesday: “The Pipeline Is Coming to Town.”

Guest speaker Patrick Seely, an attorney at Hacker Murphy LLP, expects to outline the complicated process that can follow the $750 million project’s approval.

“Whenever you’ve got a big project, and this I think would fall in that category, it will take months if not years to finally resolve itself,” Seely said.

Seely said eminent domain — the principle used by the government to make use of private property for public good — hasn’t been a major topic for local attorneys since back in the 1960s when the federal highway system was being built.

It’s unlikely local attorneys will be fighting the government’s certificate, but rather working to get the most for their clients who have no choice but to host part of the pipeline.

A fight on two fronts

Failing a challenge to the certificate, people are left to fight on two fronts: where the pipe is located and “how much are they going to pay,” Seely said.

The price a pipeline company might suggest is adequate to compensate for a right of way can be a contentious issue, said Ken Gardner, another guest speaker who works as a property appraiser at Ithaca-based North East Appraisals & Management Co.

“I think it is a complicated process for most property owners because they don’t necessarily understand the eminent domain process. It tends to be a scary process for a lot of people,” Gardner said.

He said in many cases, as few as 10 percent of property owners challenge the process to where it goes to court or is scheduled for court before a settlement.

“In the work I’ve done over the years, it’s amazing what gets written into some of these easements, so you have to be concerned about what the language of the easement actually says,” Gardner said.

Payment for an easement or right of way goes beyond what a property is worth, Gardner said.

Fine print

“It’s not only from the direct taking of the easement itself but the consequences of the easement,” Gardner said.

Sometimes, there are rules of thumb applied that simply put a dollar figure on land for a particular project. But Gardner said all easements are different as are their impacts to varying types of property.

“It’s not just that it’s a pipeline easement but all the other rights that are being acquired,” he said.

These include the right to have unfettered access to the property, to disturb the soil, to install valves.

“It’s not really clear to even attorneys or experienced appraisers when you read an easement document what all the fine print means. In my experience, there’s always a little more to it than what you think,” Gardner said.

Cobleskill attorney Michael West, who represents Schoharie County and some other municipalities in the county, said eminent domain has only come up for him two or three times in three decades of law.

West said factors such as the use of land whether in agriculture or timber or as a residential, and the pipeline’s impact on property values are among complicated details lawyers will be studying for clients if the pipeline is approved.

“I think that’s where the question is. What is fair market value?” West said.

The Apple Barrel on state Route 30 in Schoharie is hosting Tuesday’s forum from 10 a.m. to 2 p.m.

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