With offers about a month behind schedule, local businesses forced to relocate due to jail and justice center plans are growing frustrated by delays, caused primarily by 2006 legislation that has increased demands on municipalities, according to consulting company Yaggy Colby.

“There was a new law passed by the legislature in recent years that we haven’t worked with yet … neither us nor the appraiser or the city,” said Brad King, a consultant for the city of Austin. “It’s cumbersome because it’s new.”

According to King, the law, passed by the Minnesota Legislature in 2006, requires not only an appraisal of the affected property, but also a comparable replacement. Called “minimum compensation,” it forces the city to find and appraise a second property for each businessowner, which, in turn, adjusts offers to reflect any difference between the original property and corresponding alternative.

“This is just to determine the minimum compensation if necessary — there may not be any,” King said. “And they don’t have to go where we tell them. Obviously, they can do whatever they wish.”

The theory behind it, said League of Minnesota Cities general counsel Tom Grundhoefer, is that the owner must be sufficiently compensated to purchase a comparable property in the community.

“It’s sort of an innocuous promise here, and it hasn’t been applied much so far,” he said.

The requirement has always existed on behalf of residents affected by eminent domain projects, according to King, who said in those cases municipalities consider multiple factors, including structure size, access and location.

Its commercial application, however, is generally untested, leaving Yaggy Colby to interpret the law without direction from legal precedent, King said. The second challenge reflects as a local nuance — Austin doesn’t have a plethora of alternatives available.

“It’s got to be as comparable as we can make it in a limited market,” he said.

Keith Seifkes, owner of Mankato-based Robinson Appraisal and Associates, has been leading the appraisal side, and said he too was caught off guard by the addition legal requirement.

“It’s a little different, but I think things are progressing right now,” he said, adding that he is nearly finished with the second round of the appraisals.

“We’re getting a very good handle on it,” King agreed, estimating that the first offers would be made next week. Businesses and tenants may also be eligible for moving costs and up to $50,000 in relocation expenses.

By Dec. 31, the city hopes to clear about a half-dozen businesses and one residential apartment building located on two square blocks between Fourth Avenue and Second Avenue Northeast and First Street and Second Street Northeast for the $30 million jail and justice center project.

The city’s more than $4 million budget — $1.79 million from the city and $2.76 million from the county — must cover acquisition, relocation, environmental mitigation and demolition. Any additional costs would be a local responsibility.

“We’re just doing what needs to be done to proceed with the offers,” Austin community development director Craig Hoium said of delays, later adding in an e-mail that he wasn’t certain whether the city would meet its Sept. 1 deadline for acquisition and relocation.

Several local business owners awaiting word on offers say they’re anxious to get started.

“It’s just frustrating that it’s taking so long,” Steve Davis, owner of Steve’s Pizza, said, though he added that if the additional requirements help his financial position, he doesn’t mind the wait as much.

David Thompson, owner of Farmer’s Insurance on Fourth Street Northeast, concurred.

“Given the timeframe in which we have to make some very important decisions, the delay in the acquisition offer has been somewhat frustrating,” he said in an e-mail, though he added that he has been very pleased with Hoium’s handling of the process. “I think we have to keep in mind the magnitude of the project, and allow those involved to do their due diligence to achieve a fair and equitable outcome.”