Some of the first land condemnation hearings along the Permian Highway Pipeline route in Central Texas resulted in awards to landowners that are as much as 81 times greater than the initial appraisals by the company building the project.
As part of the eminent domain process, a special commission in Blanco County ordered Kinder Morgan to pay more than $3 million to four different landowners after a series of hearings earlier in August.
In a news release sent by the Texas Real Estate Advocacy and Defense Coalition—the organization funding two separate legal challenges to the pipeline—Patrick Reznik, an attorney for one of the landowners, attributed the difference in part to the fact that Kinder Morgan’s appraisal does not take devaluation of property into account.
“Kinder Morgan only wants to compensate landowners for the part of the land impacted by the easement and refuses to accept responsibility for the 20-40% devaluation caused by the pipeline,” Reznik said in the statement. “Their appraisal formula is inherently flawed.”
The Permian Highway Pipeline, a planned 430-mile natural gas conduit between the Permian Basin and the Gulf Coast, runs through 16 Texas counties, including Blanco and Hays. Along the route, the company has to acquire a permanent 50-foot easement as well as a 75-foot temporary easement for construction.
Under eminent domain law, Kinder Morgan can take private land to build the pipeline even if the owner does not want to sell as long as fair compensation is made—this process usually begins with an initial offer and requires negotiations to come to an agreement.
If no agreement is reached, the matter goes to a three-member panel of local landowners who consider both the value of the land and potential damages. In Blanco County in recent weeks, the commission has made a number of awards that far exceed the appraisals from Kinder Morgan.
The Gloor Ranch easement, for example, was appraised by the company at $20,739 but was awarded $1.3 million by the special commission. A property belonging to Matthew Walsh was appraised at $16,707 by the company but awarded $233,500.
No condemnation proceedings in Hays County have been made public, and the two legal actions against the Permian Highway Pipeline—in addition to a lawsuit against the city of Kyle—threaten to at least temporarily derail construction. But landowners in the area may eventually face the same process.
In response to the release, Kinder Morgan sent a statement through a public relations firm noting that the process involving the special commissioners court is well-established and adding that the company believes the awards in Blanco County to be excessive.
“These commissioner awards are the next step in a legal process that will ultimately result in these specific landowners being fairly compensated for easements that will be used for the Permian Highway Pipeline, pursuant to a long-established condemnation process in Texas that Kinder Morgan supports and was recently upheld in the Texas state court system,” the statement reads. “Additionally, over 60 percent of the right-of-way has been acquired for the project without lengthy condemnation proceedings. It is also worth noting that a judicial appellate process exists in order to deal with excessive valuations such as this one.”