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Land Appraisal

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Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
DME bought hundreds of acres more than it needed for the project. The city-owned utility also paid more per acre — about 50 percent higher or more

I've seen very few such properties that sell for "market" value, rather they are generally a premium price, and 50% premium is about the usual. I have no way knowing why, but I know it happens. Schools, etc.

As for the larger site than necessary. Our local power plant bought land for a small lake for water, and to locate the plant. Due to impacts on neighbors, they ended up buying well over 100 acres more. Then a developer threatened to build close to the plant (about 2006) and adjacent to their railroad spur. The developer intended to put 120 lots on the property (about 10% of the town's total # of tax parcels) and basically blackmailed the plant into buying them out for a huge premium - about $14,000/acre for 80 acre, which is still a cow pasture. The man who sold the land to the developer for $8000/ac., greedy fellow he was, about had a cow when someone made that much money on his land (which he had bought for $1000/acre a few years earlier.) Further, he bought land in a 1031 tx exchange for $5500/acre, just before the bust, and ended up selling it for $4,000....or about what he saved on taxes.
 
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