Builders say highway regulation renders land adjacent to right-of-way worthless
By Charles Rathmann, SBT Reporter
Changes in a state transportation regulation that forbid any type of construction within 50 feet of the highway right-of-way are being challenged in court by the Wisconsin Builders Association (WBA).
WBA has filed suit in Dane County Circuit Court against the Wisconsin Department of Transportation in an attempt to have the court invalidate changes made in February of 1999 to TRANS 233, an administrative rule that allows the department to regulate the subdivision of land.
While the Department of Transportation (DOT) long has had a hand in regulating subdivisions along state highways, connecting highways or service roads, TRANS 233 expands the department’s power over development along right-of-ways – a power that developers say renders such land worthless.
Even utility construction is forbidden in this development dead zone, as are parking lots, swimming pools, outbuildings and other improvements. According to the civil complaint, that oversteps the authority given the Department of Transportation by the Legislature.
"All along, throughout our conversations with the department over the original development and implementation of the rule, we felt strongly that the department did not have jurisdiction to do what they were doing," said Jerry Deschane, WBA executive vice president. "This affects anybody that owns property along the highway."
According to Deschane, state statute gives the Department of Transportation the power to regulate what goes on in the highway right-of-way, but does not give it the mandate for such land regulation outside of the right-of-way.
"Some people view what DOT is doing as pre-condemnation," Deschane said. "They are making the land valueless now, so that if at some point in time the department wants to acquire it, they don’t have to pay as much."
An engineer with the Department of Transportation confirmed that departmental plans to eventually purchase land outside of the right of way are a factor.
"In the 1950s, there was a highway building boom in Wisconsin, and many homes were built too close to the highway right-of-way," said Ernie Peterson, access and utility coordination engineer. "By putting a setback on lands, we prevent people from building too close to the right-of-way."
Peterson also said that while development along many state roads would have to conform to a 50-foot setback requirement — or a 70-foot setback requirement in cases where the Department of Transportation determined the existing right-of-way was too narrow — some lesser-used roads may only require a 14-foot setback.
While Peterson stressed that the setbacks are not new, and had been contained in TRANS 233 since it was first promulgated in the 1950s, he did indicate that the changes to the code greatly increased the number of projects affected.
"It was a huge increase," Peterson said. "It was larger than we anticipated. Prior to enactment, we did some research in a few of the counties and tried to determine how many land divisions were going on. But we have received a larger number of land divisions than we thought. We at least tripled what we were doing before."
The increased volume is the result of changes that expand the type of projects from subdivisions to other types of transactions including land division created by plat or map, certified survey map or condominium plat.
Construction projects are already being slowed by the regulation. According to a spokesperson with Milwaukee-based Northwestern Mutual Financial Network, that company’s new campus on 27th Street and Rawson Avenue in Oak Creek is currently in the TRANS 233 approval process. The project is affected due to its location on 27th Street, which is also State Highway 241.
TRANS 233 has adversely affected another Oak Creek development, the 38-acre Oak Creek Business and Commerce Center.
Developer Mike Rosen of Mequon-based Cedar Development called the regulation "useless, expensive and time-taking — and dangerous."
"It is basically the state having an approval procedure to allow them to tell you how you can use your land bordering a state highway," Rosen said. "Until you have their approval, you don’t have anything firm to develop. It is expensive because they want traffic studies and all kinds of information that has to be provided by a traffic specialist and a report sent to them. The time involved can be three to nine months – and the cost can be as much as $15,000 to $20,000."
Rosen said the rule has a particularly chilling effect because developers must get the state to sign off on the project before it is even approved by the municipality. That means that, as happened at least once to Rosen, substantial money is spent before there is any expectation that the project is a go.
"Before you get approval from the municipality, you must have all of the regulations followed in TRANS 233, which means getting a permit," Rosen said. "It is a very slow process. It is very agonizing process."
And it is an expensive process that, according to Rosen, could increase the cost of commercial and residential property along state highways. In one instance, Rosen had to pay for extensive TRANS 233-related work for a project in an area along Highway 60 he thought would be annexed by the Village of Hartford.
"As we were going through our hearing processes, we started doing the spade work with the DOT," Rosen said. "I had run up almost $8,000 in bills just for conferences and meetings with my consultant. We had begun to gather some information for the DOT. Had we needed to do a traffic study, that would have been another $10,000 to $12,000."
In the end, the annexation did not take place, and Rosen was out his investment.
Apart from the lengthening of the approval timeline, Rosen, like Deschane, is concerned that the DOT is making a grab for lands beyond the highway right-of-way.
"It disturbs me that they can arbitrarily do that," Rosen said. "It disturbs me that there is the possibility that they could do that to cemeteries and other institutional sites for the convenience of people in cars."
Construction industry should be ‘resilient,’ economist says
While some market sectors are expected to lag, the construction industry in southeastern Wisconsin should continue to be remarkably resilient in 2003, according to a construction economist.
Associated General Contractors chief economist Kenneth Simonson, on a visit to Wisconsin, remarked that contractors here are faring better — particularly when it comes to the number of persons employed by the industry — than contractors in other states.
The number of persons employed in construction fell between October and November of 2002, but November’s total of 127,700 employees set a record for the number of people employed in the state’s construction trades in that month.
Redevelopment activity should help contractors stay busy in 2003, Simonson said. Infrastructure work for the redevelopment of the Menomonee Valley south of Milwaukee’s downtown could commence this year.
While activity in and near downtown Milwaukee is getting the green light, the signal is amber for many projects in outlying areas. In Waukesha County, the scarcity of developable greenfields means remaining plots of land are more likely to include wetlands, and that means a lengthy Wisconsin Department of Natural Resources approval process.
Feb. 7, 2003 Small Business Times, Milwaukee
