Conflict between the state and a Haines Highway resident over property acquisition to accommodate the highway’s reconstruction is headed for a trial after months of failed negotiation. Although the state has the legal right to acquire private property when deemed necessary for the public good, property owner “Bud” Filipek says the state is lowballing the value of his land.

Alaska Department of Transportation and Public Facilities officials say the acquisition is necessary to bring the Haines Highway to National Highway System standards compatible with a 55-mile-per-hour speed limit. Due diligence has been done in “a manner that is most compatible with the greatest public good and the least private injury,” according to a DOT&PF Property Acquisition Decisional Document.

The property in question involves 4.67 acres from three separate parcels at Horse Farm Creek, located at 18 Mile Haines Highway. The proposed design would move an orchard, shorten an existing 1,641-foot private dirt airstrip by nearly 250 feet, and impact wetlands.

The state offered the Filipeks $29,800 for the land, $8,500 to move the orchard, and $30,900 for damage to the airstrip. Bud Filipek said he believes the state-contracted assessor used incomparable properties from 26 Mile Haines Highway and the townsite to determine fair market value.

Alaska law gives the federal government, the state and municipalities the right of eminent domain as long as three conditions are met: the use is lawful, the taking of the private property is necessary to the use, and the public’s greater good is of more value than the private use.

Although the government has the right to acquire private property for public use, just compensation at fair market value is required by law. Some attorneys claim that negotiating with a low-ball offer is a common abuse of eminent domain by governments.

Attorney Clayton Walker said that claim is difficult to prove because reality is complex. Government officials are acting on limited resources and determining fair market value is difficult in rural areas where there are few data points for comparison.

Although it’s common for the state to acquire private property for development, Walker said, it is rare for the issue to go to trial. More often, the acquisition is either successful during the negotiation process or the parties settle out of court.

Because of failed negotiations regarding the value of Filipek’s land, the state moved forward with the eminent domain process.

Black-Smith, Bethard & Carlson LLC, described in DOT documents as a “well-respected geographically competent certified general appraiser,” was contracted to determine fair market value. The 4.67 acres were assessed at $29,800 “by evaluating several recent local sales of similar comparable properties.”

Filipek said that the appraiser used 10 separate parcels at 26 Mile, which were assessed together as a 30-acre lot for comparison. A second property was a downtown lot. “It seems that my property is worth more that that because it has a view and a salmon stream. An acre on a runway is worth more,” Filipek said.

“(The proposed road design impacts) the whole property. They’re separating the most desirable part (by removing the anadromous waterways).”

Black-Smith, Bethard & Carlson declined to comment for this story, citing litigation.

According to the Haines Borough parcel viewer, Lot 2 (north of the proposed highway realignment) is assessed for tax purposes at $31,500 (3.33 acres), and Lot 1A is assessed at $45,900 (2.51 acres). However, Haines Borough assessor Dean Olson said that although state law requires the borough to assess properties at fair market value, Alaska is a non-disclosure state, meaning that sales information is confidential. This results in inconsistent assessment values.

DOT said they provided the Filipeks with numerous opportunities to obtain their own assessment or provide a counter-offer, but “Mr. Filipek continued to refuse to counter the offer or provide any solution other than to have the State purchase his (entire 52-acre parcel and home) in full (for $2,250,000).” That offer was rejected because the entire 53 acres and building were not needed for the project. Filipek said he remembers countering the offer for $60,000 an acre plus damages or offered to sell the entire property with the hope that the State would turn it into a park because “(public access at Horse Farm Creek) really was for the greater good of the public.”

Although Filipek said he believes his property was valued unfairly, he is equally concerned that the proposed design will drain five acres of upwellings that provide warm water for coho salmon-rearing habitat. In addition, he said he worries mitigation will occur outside of Haines.

Jim Schull, Environmental Analyst for DOT, declined to comment citing litigation.

If the design placed the road farther west, Filipek said, the curve will lie straighter and the wetlands will remain valuable habitat.

“I’m not trying to stop the road. We understand the need to make the highway safer,” he said. “Why would they want to make it minimum safe instead of maximum safe?”

DOT said they studied this option, but they ultimately decided against it because of the impact it would have to the development on the private property, including obliterating the house.

Dylan Krull, habitat biologist of the habitat section of Alaska Department of Fish and Game, said although there are five acres of wetlands, the amount currently suitable as coho-rearing habitat is small. Krull worked with Filipek on developing ponds, but most of the improved area has not yet been catalogued as anadromous waters.

“Overall,” Krull said, “the mitigation efforts by DOT should result in a net gain of coho habitat.”

DOT concluded that “the state has made a diligent, conscientious effort to acquire the required property through amiable, good faith negotiations. The state remains amenable to reaching a mutually satisfactory settlement with the property owner. However, at present, litigation is required to resolve ongoing disagreements as to valuation.”

Filipek has a different understanding. He believes they were negotiating in good faith, but “after a back and forth (DOT) basically said I was difficult to work with and they were starting the process of eminent domain.”

“Human beings aren’t supposed to sue. They are supposed to be able to talk to each other. But we want something fair,” Filipek said. “And we want something best for the people of Haines.”

“An inherent conflict in government is an individual’s rights to life, liberty and happiness and a public’s need to let everyone do the same,” said borough manager Debra Schnabel.

Attorney Walker believes the courts are an excellent venue to weigh this conflict. “I think both parties get a fair shake this way.”