Kmart allowed to sue state over removed access

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The Utah Supreme Court ruled this week that Kmart, and not just its former shopping center landlord, has the right to seek compensation from the state for losing its direct access from Bangerter Highway — which it contends helped drive its Taylorsville store out of business.

The high court upheld a 3rd District Court ruling — appealed by the Utah Department of Transportation — that the state must figure separately the value of the loss of that access not only to the landlord but also Kmart as a tenant, and compensate both separately.

UDOT had determined an appraised value of $1.25 million for the loss of access to FPA West Point, the landlord of a shopping center at the corner of 5400 South and Bangerter Highway. UDOT had contended that amount would need to be split by the landlord and its tenants.

The court held instead that the value to the landlord and Kmart must be determined separately and added together —┬ánot divided. It sent the case back to 3rd District Court.

When UDOT built a new Continuous Flow Intersection at 5400 South and Bangerter, it condemned land needed for widening and closed what had been direct access to Kmart from southbound lanes on Bangerter.

Kmart argued that losing the access "substantially and materially" impaired ability of shoppers to get to its store. The ruling noted the loss led Kmart not to renew a 30-year lease it had at the West Point Shopping Center, and it "decided to operate the store on a month-to-month basis for eight months before finally closing the store."