Road construction is always disruptive. But for Houston businessman Kent Edwards, years-long roadwork has cost him so much that he’s suing the Texas Department of Transportation (TxDOT).
“This is a long-term saga going back to 2015 for me,” Edwards told Moneywise.
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Edwards has run Motorcars Limited, his restoration shop for luxury and classic cars, on Hempstead Road since the mid ’80s. As he shared with KHOU, it used to be full of cars. Now it’s nearly empty. It’s hard for customers to drive in.
That’s because for 10 years, Hempstead Road has been under construction with repeated roadwork delays and no end date in sight. Edwards has not only lost customers but had to sell a commercial property across the street when all his tenants moved out due to the disruption.
As for his auto body shop, “I can’t sell it. I can’t rent it. I can’t do anything with it.”
Now he’s filed an “inverse condemnation” lawsuit against TxDOT seeking compensation for lost profits and business damages.
Meanwhile, the road construction is also costing the state a lot of money. TxDOT has to pay for ongoing delays with tax dollars. What is TxDOT doing to recover the cost of delays?
State charges, then refunds, road contractors for cost of delays
KHOU reported that when a roadwork project is past due, the state is within its right to charge the contractor damages. In the case of the roadwork outside Edwards’ business, those damages amount to $1.7 million.
But as the news outlet discovered, as soon as TxDOT charges contractors for these damages, it regularly reverses course and waives the costs, crediting money back to the same contractors.
In the past three years, TxDOT charged roadwork contractors $88 million in damages, but credited them back $39 million. In some cases, the credits were almost equal to the damages, essentially negating the cost to contractors.
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“There ought to be consequences,” said Adrian Shelley of the government watchdog group Public Citizen. “If there’s no consequences for delays, they’re going to keep happening, right? It’s that simple."
TxDOT Executive Director Marc Williams told KHOU that contractors are not being let off the hook, but that contractors dispute the damages, claiming legitimate reasons for delays, like bad weather.
“We work very hard to hold those contractors accountable,” he said. “We want the projects … to be done right, to be done on time, but we also are fair.”
What can small business owners do?
But Edwards doesn’t think TxDOT is being fair to business owners.
“I don’t think it’s acceptable at all,” he said.
In other parts of Texas, city councils offer financial assistance to business owners affected by construction.
San Antonio City Council has earmarked $1.4 million for businesses in construction zones to help them with advertising and operating costs — during and after construction.
For small businesses across the U.S., the Small Business Anti-Displacement Network offers tools and resources to help owners stay afloat, including advice on filing for tax credits and incentives and information on commercial tenant protections.
Small business owners can also reach out to their local community organizations and business development councils for support and to organize cross-promotional activities to keep the community aware that the business is open while construction continues.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
