Friday, September 03, 2010

The city's $312,000 McDonald's settlement: What if it had been a local small business?

City Agrees to Reimburse Struggling Burger Joint for Lost Business
A lot of people, including Emily Mills, wondered about the city's $312,000 eminent domain settlement with McDonald's on East Washington Ave. The case arose from access problems during construction of the bike and pedestrian bridge at this location, as well as McDonald's claim that the bridge obstructed the view of its Golden Arches from the road. The real eyebrow-raiser for Mills and others was the size of the award.
What I have a problem with are their tactics and the precedent they might set for other large corporations looking to fight city improvements.

I’m also curious -- if it had been a small, independent business filing the suit, would the city have settled for such a high payout?
Many people were curious. As it turns out, the McDonald's settlement can be compared with another settlement with a small, independent local business. Although the issues raised by the two cases are not identical, both involved eminent domain, and the local business also happened to be in the burger business -- the Dotty Dumpling's Dowry near the Square on N. Fairchild Street that was torn down to make way for the Overture Center.

Owner Jeff Stanley fought a long court battle to keep Dotty's open on Fairchild St. before being forced to take a $583,680 settlement, plus additional funds for relocation. That's in 2001 dollars -- more than twice what McDonald's got, adjusted for inflation.

However, Stanley not only lost his property and a thriving downtown business, but he also was forced to shut down and take on the risks of relocating. Although Dotty's appears to have done well in its Frances St. location, success in a new location was by no means a sure thing. In contrast, McDonald's still has its building, is doing business at the same location and is being reimbursed for a loss that is difficult to quantify. And how much was MacDonald's really harmed? It's not as if they'r located on the interstate, where people flying by at 75mph might easily miss them if construction obscured the entrance. But the East Wash McDonald's is basically a neighborhood restaurant supported by a national brand. People on the East Side didn't exactly forget where it was when the bridge went up.

Two burger joints, two settlements -- were they fair? Who got the best deal? What do you think?


Ms. Wis./Each Little World said...

The Fairchild location was actually Jeff's third. He had to leave the first (on Monroe st.) when it was torn down to make way for Associated (then Randall) Bank. I thought his Regent st. location was the best and the current one is the least successful (food, location and ambiance). Still, I'm sure the Frances st. site works for most folks, especially those too young or new to Madison to remember the others.

Madison Guy said...

I agree about the Regent Street location as well as the current one.

Robin said...

I seem to recall 4 locations. 1st where the bank is, 2nd on Regent, 3rd off State and current. I really liked #3.