Over the next several weeks we will be posting case studies of actual eminent domain and condemnation actions. These studies will help landowners understand some of the principals our eminent domain law firm uses when arguing for additional compensation. Our first case study takes a look at a condemnation of farm land.
Agricultural Case Study
Facts
In this case, the piece of property at issue was an irregularly-shaped 519.138-acre parcel consisting predominantly of agricultural land with approximately one acre devoted to the home site. Interstate 69 was projected to pass through the Eastern portion of the property, requiring a taking of 78.281 acres of permanent right-of-way and 1.968 acres of temporary right-of-way (see Figure A). The taking would sever the property and create six separate residual (or remaining) parcels.
The State’s initial offer for total compensation was $1,422,350.00. This offer included $642,000.00 for the acquisition of the land and improvements and $739,850.00 for loss in value to the residue (the remaining land). The court-appointed appraisers determined the landowner was due $1,467,182.00, allocated to land and residual damages in much the same way as the State’s offer.
Analysis
Using different valuation strategies, we were able to nearly double the State’s initial compensation offer. The State didn’t necessarily fail to account for a particular aspect of valuation; our methods simply provoked a more complete analysis.
One method involved locating more appropriate comparable sales figures for the property. This alone resulted in a sizeable increase in value related to the acquisition of the land and improvements. Additionally, in considering comparable sales figures, numbers have to be adjusted to account for recent market trends. In this case, there had been a steady, significant increase in prices for agricultural land in the area of the taking. Accordingly, the appropriate comparable sales figures were much higher than the outdated figures the State had relied upon in making its offer.
We also considered a number of studies on field shape and angulation in order to better determine the full effects of the proposed taking. These studies are often used as the basis for valuing damage caused by creating a landlocked parcel or non-traditional field shapes and dimensions. Our research suggested that placing a highway directly across this landowner’s particular parcel would have a greater impact on the value of the property than the State initially realized. The proposed route created one landlocked parcel and cut through the entire parcel on a diagonal, resulting in substantial undesirable irregularities in field shape. The State’s initial offer significantly undervalued the negative impact of these irregularities, but we were able to demonstrate that our client was entitled to additional compensation for these damages.
Resolution
This case was eventually settled for total compensation of $2,700,000.00. Of this amount, approximately $900,000.00 was allocated to acquisition of the land and improvements and $1,600,000.00 was given as compensation for loss in value to the residue.
