Walker Machine & Foundry filed an inverse condemnation lawsuit against the city of Roanoke on Tuesday, claiming the city’s threatened use of eminent domain to take company land for the Roanoke River Greenway devalued the foundry’s property and drove business away.
The lawsuit filed in Roanoke Circuit Court did not specify an amount of money the company is seeking, but asks the court to begin a process to determine damages.
The foundry, located on the south side of the Roanoke River in the Norwich neighborhood since 1920, has for several years been the lone holdout in providing land for the greenway that is close to traversing the city for 10 miles.
City leaders publicly discussed using eminent domain to take a narrow strip of land from the foundry for the greenway as far back as August 2015, and the city council authorized use of condemnation in August 2017.
In the lawsuit, the foundry claims it has lost customers and business every year since talk of eminent domain began. In 2016, the company lost 5% of customers from the previous year and 35% of gross revenues, the lawsuit claims, for example. In 2018, the foundry lost 25% of gross revenues and 10% of its customers, according to the court filing.
Foundry President Glenn Muzzy has for several years asserted that building an incompatible linear park adjacent to the foundry would imperil the foundry’s air quality permit, without which it can’t operate, a claim repeated in the lawsuit. Foundry customers feared the city’s use of eminent domain would close the foundry, making them reluctant to continue business with Walker, the lawsuit claims.
Vendors restricted credit to the company, according to the lawsuit. Walker’s attorney, Joe Sherman of Norfolk, said currently 35 workers are on temporary layoff due to the greenway-related downturn in business.
Roanoke City Attorney Dan Callaghan had no comment Tuesday because the city had yet to be served.
In April, the city council rescinded authorization to use eminent domain to take foundry land. Callaghan would not comment on whether that action was done with such an inverse condemnation claim from Walker in mind.
Roanoke is well-acquainted with inverse condemnation. The first successful claim of that type in Virginia was a case brought against the Roanoke Redevelopment and Housing Authority by Walter Claytor, whose family land in Gainsboro was held under a cloud of threatened condemnation for 20 years.
In a 2006 precedent-setting decision in Roanoke, a panel of commissioners awarded Claytor nearly $300,000 in losses. With Claytor’s legal fees tacked on, the case cost the authority $730,000 — an amount ultimately paid by the city.
In an inverse condemnation action, the landowner claims that while the land was never officially condemned, the threat of it by the government devalued the property and hindered the use of it to the extent that it amounts to the same result as if the government took it.
The city and Walker have circled each other in negotiations over land for the greenway since 2015.
While Walker’s neighbors, including Associated Asphalt and Norfolk Southern Corp., have granted easements for the path, Walker has refused, citing the threat to its operations. The greenway, nearly 9 miles long at this point, has been built entirely without the use of eminent domain so far, and city leaders considered its use a last resort.
While the city and Walker have negotiated off and on for years, no fruit has come from the discussions.
Foundry officials have said the city must take the whole factory site, find them a new one and pay for the relocation.
In the lawsuit, the company claims that in 2015 then-City Manager Chris Morrill agreed with them and put city staff to work finding a new location for the foundry before cooling on the idea due to its costs.
As an alternate path or a negotiating chip, in 2017 the city convinced Norfolk Southern to abandon a railbed that passes through the Walker property near the proposed greenway path and sell it to the city for $80,000. Walker has for years crossed the railbed to store waste from its production process on the other side.
In the lawsuit, the foundry claims acquisition of the railbed was part of “coercive methods” the city used to compel the company to sell the land for the greenway.
In April, at the same time the city council rescinded the eminent domain authority, it also passed an ordinance restricting use of the railbed for recreational purposes and authorizing the city manager to enter into an agreement with the foundry to allow it use of the land. Callaghan, the city attorney, said Tuesday the city has never stopped the foundry from crossing the railbed for its needs.
The lawsuit seeks compensation for damage done to its property value and lost business and asks the court to empanel a jury to decide the amount. It also asks the court to declare the foundry a “displaced person” so it’s eligible for relocation benefits.
The company also seeks reimbursement for its legal fees.