Property acquisition throws kink in Kearney interchange plan

The final cost for the second Interstate 35 interchange in Kearney is up in the air after the state entered the condemnation process with land owners over rights-of-way acquisition. The city hopes to resolve matters and have the project open by 2023. The second interchange is needed as the current interchange at Missouri Highway 92, seen here, city officials said, cannot keep up with traffic demands.

KEARNEY — The ultimate costs and completion date for the second Interstate 35 interchange in Kearney are now up in the air as legal matters between property owners and the state have stymied acquisitions of rights of way.

While appraised values were figured and sums in the hundreds of thousands to pay to land owners were presented by the state based on those figures, city leaders said two property owners and their legal representation for land owners seeks more. One land owner is requesting about half a million dollars, Mayor Randy Pogue said, and the other, about $10 million, for the land around the projected interstate site at 19th Street.

“It’s a continental divide,” said City Administrator Jim Eldridge of the differences between what land values were calculated by the Missouri Department of Transportation and sums being sought by property owners.

As a result, the condemnation process has begun and a court commission is overseeing the matter.

Because of the legal issue, city leaders postponed the bid letting for the project until the fall. Bid letting was originally slated for April 15.

“Even though the commissioners may agree or disagree and come up with a number, the current land owners still have the option, if they don’t agree with the commissioners’ recommendation, … to not accept. Then the court process continues,” said Pogue.

The legal matter puts the city in a tough situation as MoDOT/the state are securing rights of way and committed to paying for about $10 million of the project’s total costs, but the city assumes all costs outside of funds committed by MoDOT.

The city secured roughly $24 million in bond funding in 2018 after voters approved the project based on initial cost projections.

“There was a state study called an access justification report, and that report identified the interchange as costing about $10 million,” said Eldridge of 2017 cost projections before asking voters to approve funds.

The number generated in that report was deemed too low by the city’s engineering firm TranSystems, which projected costs of about $24 million. That resulted in the city seeking a higher sum approved by voters. With MoDOT’s $10 million and the funding secured after voter approval, Eldridge said there was about $34 million for the interchange.

Current costs however, including rights of way and other unforeseen costs like power line relocation exceeding $2 million, now threaten to exceed the city’s earmarked funds. This means the city may ultimately have to go back to voters for more funding approval and/or consider altering the project.

“The headache of figuring out how to finance this completion is before us,” said Eldridge.

Pogue said the city is also evaluating other funding sources and applied for $5.5 million through Congressman Sam Graves’ office.

While the process has been a complicated one, Eldridge is optimistic, saying if rights-of-way issues can be resolved and funding can be worked out, the delay of bid letting may not “substantially impact the timeline of completion of the project” slated for summer 2023.

“That is the good news,” he said, adding the city is resolute in its dedication to build the interchange.

More on this developing story will be published as details become available.

Managing Editor Amanda Lubinski can be reached at amanda.lubinski@mycouriertribune.com, 903-6001 or @myCTAmanda1 on Twitter.

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