Self-Storage and Eminent Domain: A New York Facility Operator Fights the State in a No-Holds-Barred Battle
Copyright 2014 by Virgo Publishing.
By: Jim Chiswell
Posted on: 07/30/2010



 

Eminent domain: The inherent power of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation, but without the owner's consent. The property is taken either for government use or by delegation to third parties who will devote it to public or civic use or, in some cases, economic development. (Source: Wikipedia) 
 
Nicholas Sprayregen, owner of Tuck-It-Away Self Storage Inc., found himself in a six-year legal battle in New York when the state used eminent domain power to acquire his private property for an expansion of Columbia University. In June, the New York Court of Appeals ruled in the state’s favor. Sprayregen plans to appeal. 
Is it your land? That question has been raised again in this modern-day version of David vs. Goliath. In Tuck-It-Away Inc. v. NY State Urban Development Corp.(UDC), the New York Court of Appeals overturned a December 2009 decision by the New York Appellate Court that ruled in favor of the storage business. The June 2010 ruling from the Appeals Court could mark the end of the battle Sprayregen has fought to maintain control of his land, buildings and self-storage business.

“I was stunned by their decision and reversal of the prior Appellate ruling,” Sprayregen admits. “The Court of Appeals virtually ignored most of the facts we presented during the proceeding.” Sprayregen plans to appeal the decision to the Supreme Court of the United States. “But I am enough of a realist to know they only take 1 percent or 2 percent of the cases brought to their attention.”

The last Supreme Court eminent domain decision was Kelo v. City of New London in 2005, in which property owners lost their case. However, Tuck-It-Away’s scenario could be an opportunity for current Supreme Court Justices to revisit the topic. Should Sprayregen be unsuccessful in this next appeal, he’ll face evicting more than 2,000 customers, many of whom have stored with him for more than a decade. 
 
The Battle Begins

Columbia University unveiled plans in 2003 to build a satellite campus and has since attempted to obtain parts of a 17-acre site in Upper Manhattan for its expansion. After Sprayregen, who owns several self-storage facilities in the Manhattanville area, and the owner of a gas station refused to sell their property, Columbia sought to obtain the land through eminent domain, claiming the neighborhood in question is “blighted.” The University turned to UDC because it possessed the power of eminent domain as the final threat for any reluctant property owners.

In 2008, after reviewing the results of a study conducted by real estate consultancy firm AKRF (Allee King Rosen & Fleming), the state declared the area to be ruined, the main prerequisite for eminent domain. Then last December, a panel of the Appellate Division of State Supreme Court in Manhattan annulled that decision, saying the procedure used to condemn the area was unconstitutional. AKRF was the same firm used by Columbia for its research into the neighborhood. The case then advanced to the Court of Appeals, where Sprayregen was momentarily victorious before the most recent ruling.
 
Is It Your Land?

The reality is Columbia University is a private entity—a business by any definition. It wanted to expand its business, and the fact that there were other viable businesses and residents within the 17 acres didn’t dissuade it from its objective. This case and other eminent domain cases across the country raise the question: Is it really your land? At what point does the right of a private property owner supersede the right of the current owner just because it wants to grow its business by sacrificing yours? 

Sprayregen is clearly proud of the fight he’s waged to retain his property rights. “This fight is about principles and a battle over the basic right of property ownership,” he says. He’s been supported and encouraged over the years by e-mails and letters from perfect strangers urging him to continue to fight to protect everyone’s property rights. It will not be known for some time if the Supreme Court will take Sprayregen’s case. We’ll have to wait and see if David is given one more stone to use in his sling against Goliath.
 
Jim Chiswell is the owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry. He can be reached at 434.589.4446; e-mail chiswell@earthlink.net; visit www.selfstorageconsulting.com.
 
To reach Nicholas Sprayregen, e-mail nsprayregen@tuckitaway.com. 
 
Talk about this case with other self-storage professionals on Self-Storage Talk, the industry’s largest online community, on this thread, NY Self-Storage Loses Eminent Domain Battle.  

Related Articles:

Self-Storage Owner Backs Political Candidates After Losing Eminent Domain Case

N.Y. Self-Storage Owner Loses Land in Eminent Domain Case

Self-Storage Talk: Who Owns It?