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Fire Islanders face long odds in battling buyouts, say legal experts

Ocean Beach on Fire Island after it was

Ocean Beach on Fire Island after it was hit by superstorm Sandy in 2012. Credit: Daniel Goodrich

Some Fire Islanders are gearing up to try to stop dozens of home buyouts intended to clear the way for new storm-shielding dunes, but the odds are stacked against them in a legal fight, experts say.

The government's ability to condemn property needed for public works projects is one of its most powerful tools, they say.

"Think of it as the government having an option on every property out there that stands in the way of a public project," said Los Angeles attorney Edward G. Burg, who specializes in eminent domain cases.

Challenging condemnation proceedings on the project's merits is generally a long shot, said Manhattan eminent domain lawyer Mike Rikon, whose firm has been contacted by a handful of anxious Fire Islanders.

"They wouldn't be successful in my opinion," he said.

The U.S. Army Corps of Engineers aims to rebuild the battered Fire Island dunes as part of a $700 million, federally funded Long Island flood-protection project. The agency has targeted 41 oceanfront homes and lots for an estimated $46 million in buyouts, with Suffolk County responsible for carrying out the purchases and condemnations.

Because obtaining the properties and more than 700 easements might prove a lengthy process, the Army Corps this September plans to begin dredging for the first phase of dune-building, where no such agreements are required: Smith Point County Park within the Fire Island National Seashore.

One criticism raised by targeted property owners is a federal rule requiring buyouts to be based on current appraisals, rather than higher pre-Sandy values. Several told Newsday they are weighing possible legal action, questioning whether the science behind the project is outdated and whether the planned dunes are high enough.

For homeowners to prevail in court, experts say, they could try to convince a judge that the government's actions are "arbitrary and capricious."

"One way to do that is to show that what they will do will do no good -- zero, zip," said Joe Willis, a Bend, Oregon, eminent domain attorney.

That usually requires finding credible experts to dispute the government's analysis and plan, he said, noting, "These are very difficult standards to meet."


Legal precedents exist

Many legal precedents show land can be condemned for public uses, including dunes, experts say.

In New Jersey, some beach communities last year launched eminent domain proceedings to obtain easements needed for that Sandy-wracked state's Army Corps-built dunes. So far, property owners have granted about half of the 1,100 easements sought, according to the New Jersey Department of Environmental Protection.

Eminent domain attorneys say courts likely would defer to Army Corps experts in an emergency flood-control project.

The government will probably win in court if it can prove that it's taken a "hard look at the issues," Rikon said.

The Army Corps says it has minimized the number of Fire Island homes that would be bulldozed. Putting the new dune in front of all existing oceanfront homes would push it closer to the ocean, making it too costly to maintain, the agency has said.

Property owners could try to stop or delay the Army Corps by accusing the agency of failing to follow its own procedures.

But Ross Moskowitz, a Manhattan real estate lawyer, said government officials typically are well-versed in how to push through a major public works project. "This is the basic kind of stuff they don't screw up," he said.

A delaying game might hold more promise, experts say. If the Fire Island project bogs down, the promised $700 million could wind up being spent elsewhere.

"Nothing is certain," Rikon said. "This whole project could go away, and there would be no condemnation."

The difficulty of fending off condemnations often shifts the battle lines to the amount of buyout money being offered.


Pre- vs. post-Sandy prices

Officials first told Fire Islanders to expect pre-Sandy prices, but the federal government only pays the current appraised value.

That switch forced some residents to race ahead with repairs this spring. They were wary of acting until more plan details emerged, and were frustrated by a series of delays. Others had to wait until fights with insurance companies were resolved and contractors finished other jobs.

Now some of these homeowners fear buyout prices might be too low for unrepaired homes -- despite the emotional strain and upside-down logic of fixing houses only to have them demolished.

As of March, eight of the 41 houses targeted for buyouts were still considered substantially destroyed.

Buyout offers typically reflect what comparable homes would fetch, eminent domain attorneys said.

"Property owners are entitled to fair market value. What that simply means is, put a theoretical 'for sale' sign on the property and what would you get for it," said Robert Denlow, a St. Louis, Mo., eminent domain attorney.

Though homeowners can argue they should be paid enough to buy an equivalent oceanfront home, that's not the government's general practice, Denlow said.

"If you want to talk law, you talk fair market value; if you want to talk fairness, you talk replacement costs," he said.

Some Fire Islanders are hopeful that buyouts will wind up topping the $46 million estimate.

"There's some 'whisper number' out there that they are going to offer each homeowner $1.5 million -- just to destroy their homes," said Emil Chynn, a Manhattan surgeon who owns a targeted home in Ocean Bay Park.

As soon as September, Suffolk could hire property assessors to appraise homes on the buyout list.

If Fire Islanders object to the appraisals, the county could condemn their homes. But it would have to pay any extra amounts the courts might award under a bill the Suffolk Legislature is considering.

Though the real estate market has rebounded from Sandy in some Long Island beach resort areas, Fire Island has had a spotty recovery.

Broker Nancy Bush said prospective buyers are concerned about powerful storms, driving down the value of shoreline homes by as much as 30 percent.

"Oceanfront and bayfront homes are difficult," she said. "They have to be a giveaway price to move."

With David M. Schwartz

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