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Condemnation Gurus Help Needed!

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Austin, Greg ..

And now you understand why people fly jets into buildings ..
 
Austin,

Interesting problem/situation, which many commercial condemnation takings are. You didn’t say if the 96/acres is part of the original church property or if it was a separate purchase/donation. And/if the land, was purchased, how long ago was it, and what was the consideration in relationship to its current value?

How far along is the development process, that is, is there a survey, building plans, costs estimates, etc? The more evidence you have of an actual proposed development, the stronger your case [and damages].

You should review Highest and Best Use, as vacant, and do a H&BU analysis on your subject. What is the current zoning regulations and what is the current H&BU. When a change in use is indicated in the near future, the current H&BU use is considered an interim H&BU. The H&BU use of vacant land is not only its existing use, but ALL POTENTIAL USES.

H&BU should be a specific use, that use which returns the greatest value to the land(maximally productive). Try using the land residual technique based on H&BU and the proposed improvements, and if you can determine a net operating income from the improvements. By calculating how much income is attributed to the building(s), you would subtract this amount from the NOI, and the balance would be income attributed to the land and then capitalized, this capitalized value would be an estimate of the land value. This may be used in support of the sales comparison approach.

Its hard to believe you have six recent comparable sales in close proximity to your subject... this is gold, if it confirms the $11,000-$30,000/acre as you stated. All you need to do is prove the H&BU is for institutional use; surely you can do this, because based on your comps there is demand for such use.

However, this only addresses the actual taking; if the taking(3/acres) has a negative impact on the remainder, severance damages should apply. Measuring severance damages is the tricky part. Depending upon where the proposed pipeline traverses the proposed construction, plans may need to be altered(at additional cost... severance damages), or the complete project can not move forward because of the 3/acre taking, actual cost up to this point would be considered severance damages, or the other acreage is negatively affected... severance damages.

Greg brought up a good point, stigma. Will the adjoining land be stigmatized? You will need to do a study on gas pipeline stigmatation, if any. Another area which may be compensable is, what you would need to pay for similar property if the taking jeopardizes the project, and if in fact you can prove the intent of the purchase, even though the project was not started, the key is intent and proving it. Also, keep in mind, no matter what you ask for in condemnation proceedings, you will not get, it’s usually somewhere in between, and generally settled before trial, however, public sentiment is on your side.

Additionally, I would start a petition against the pipeline company requesting an alternate route; the more public awareness of a gas pipeline coming to their(the public) area the more bad press will ensue.

jt
 
It: The church property was a separate purchase. We purchased it three years ago. They were asking $290,000 and sold it to us at $225,000 because it was family land and they wanted the church to have it. Highest and best use as though vacant is subdivision development land, probably worth around $300,000 now. Very unique piece of property on the slope of a mountain. You can see it from all over the southern part of the county.
We have our vision plan showing the outline of where the buildings are to be located. We have contacted a firm to do a phase development plan waiting the outcome of this taking. They said they couldn’t do anything until that was settled. The zoning is agricultural which means you can use it for our purpose or residential development. Ignoring the church use, the highest and best use is clearly for subdivision into large lots for executive homes. It adjoins one of the most exclusive subdivisions in the area.
As I stated in an earlier post, our problem is that if we had to purchase another church site to accommodate our purposes, the price per acre would be about 10 times what we paid for this land. We located where the growth is going to be shortly and the others purchased sites where development is. To recent church site purchases are less then two miles from our site. We are right on the fringes of development. The appraiser we hired to help us agreed with what you stated: “The number of recent church development site sales is gold.” We haven’t heard from him in about three weeks, which is unusual. I think he must be struggling with this too.
Thanks for your time and suggestions.
 
Austin, just some additional thoughts; if the declaration of taking has not been filed against the property, all you have is hearsay, and I certainly would move forward completing the proposed construction plans. Even if the declaration was filed, I would have the physical documentation to visually prove to judge/jury the actuality of the proposed development and how far along it is. In addition, I would produce a visionaly descriptive alternate route bypassing the proposed construction as part of the presentation. I would be interested in knowing how this plays out, keep me posted if you would.
 
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