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Modera Hotel Awarded $756,000 Just Compensation for Closure of Access to a Portland City Street

A jury awarded the Modera Hotel $756,000 for diminution in value to the hotel property for TriMet’s action in closing an access onto the city street for expansion of its light rail through downtown Portland. The case is unusual because closure of an access by a condemning authority is usually considered to fall under the condemning authority’s “police power,” that is to promote public safety, and is not generally a constitutional taking that results in compensation to the property owner. However, the Hotel was able to rely on a city ordinance that provides that when a City or Mass Transit restricts the use of a street traffic lane adjacent to a commercial property the City or Mass Transit shall be liable for and pay the difference between the fair market value of the property prior to the restriction and after the restriction. The Court of Appeals affirmed the jury award.

The case is unique because the hotel was already in the process of being purchased and remodeled from a Days Inn to the Hotel Modera at the time TriMet made its statutory offer to close the driveway onto the City street prior to the closing the Hotel transfer. Additionally, the hotel construction to update the property to the new Hotel Modera was preformed prior to the physical closure of the driveway access. TriMet argued that the date of value was the actual date the closure occurred and that it was improper to allow the appraisal expert to rely on a hypothetical condition for a later closure to support a diminution in valuation to the property under the statute. The Court of Appeals agreed with the trial court that the jury could consider the evidence and upheld the award. TriMet v Posh Ventures, 244 Or. App. 425, 261 3d 33 (2011).

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