Loss of Value Due to Dam Removal

[mccunning]

I own a home that is a lakefront home in northern California. The lake is Copco Lake and is formed by a dam on the Klamath River. These dams are very possibly going to be removed in several years. Secretary of the Interior Ken Salazar has recently released the IES/EIR report for the dam removal project. This report also included an appraisal to determine loss of property values for parcels affected by dam removal. The report can be seen by going to klamathrestoration.gov. Under "Studies and Data" go to the bottom of the page and you will see "Real Estate Studies and Information". We have until November to comment and I have a few questions so that I can make an informed comment.

In the opening letter the appraiser states that he will not address loss of value to any structures on the affected parcels, only the loss in land value. Of the affected parcels analyzed (as agroup, not individually) the report states that 12% have structures. I feel the appraiser should have addressed the loss of value to the structures as well.

The appraiser made the "Hypothetical Condition" that the land under the lake has been restored to it's previous condition before the dams were built. The dam that impounds Copco Lake has been there for over 100 years. There is no estimate as to how long it will take to restore this land, if indeed it ever can be restored. As a senior citizen it is conceivable that the land might not even be restored in my lifetime. How can the appraiser make a determination of the loss of value in my land for some unknown date in the future? It is worth noting that the landowners only own the land up to the existing water line. We will not own the land from our property lines down to the future river front. We do not even really know where the river will be or if we will even have river views.

Thank you in advance for your help. Any help you can give will be appreciated.

 

[TEL2002]

You might consider getting all of the land owners together and in mass demand ownership rights down to where the river will be. Let's assume the river ends up 150 feet away from your property. The state or someone will eventually sell off the land to a developer and suddenly a house pops up between you and the river.

Maybe you could negotiate, land ownership in lieu of $$$ for loss of value. You definitely want the land reclaimed within 5 years of the dam coming down. Coal strip miners used to play the game...your land will be reclaimed in 5 years of us being done. Then they leave a piece of junk old bulldozer on your land for 10-12 years...always saying they are still using it and they are not yet done.

 

[JamesRockford]

I own a home that is a lakefront home in northern California. The lake is Copco Lake and is formed by a dam on the Klamath River. These dams are very possibly going to be removed in several years. Secretary of the Interior Ken Salazar has recently released the IES/EIR report for the dam removal project. This report also included an appraisal to determine loss of property values for parcels affected by dam removal. The report can be seen by going to klamathrestoration.gov. Under "Studies and Data" go to the bottom of the page and you will see "Real Estate Studies and Information". We have until November to comment and I have a few questions so that I can make an informed comment.

In the opening letter the appraiser states that he will not address loss of value to any structures on the affected parcels, only the loss in land value. Of the affected parcels analyzed (as agroup, not individually) the report states that 12% have structures. I feel the appraiser should have addressed the loss of value to the structures as well.

The appraiser made the "Hypothetical Condition" that the land under the lake has been restored to it's previous condition before the dams were built. The dam that impounds Copco Lake has been there for over 100 years. There is no estimate as to how long it will take to restore this land, if indeed it ever can be restored. As a senior citizen it is conceivable that the land might not even be restored in my lifetime. How can the appraiser make a determination of the loss of value in my land for some unknown date in the future? It is worth noting that the landowners only own the land up to the existing water line. We will not own the land from our property lines down to the future river front. We do not even really know where the river will be or if we will even have river views.

Thank you in advance for your help. Any help you can give will be appreciated.

Hire a GOOD real estate attorney.

You are going to need him along with a couple really good appraisers who specialize in this sort of valuation, not some guy who appraises houses or farms or office buildings.

 

[Dan Umstead]

That is a tough nut to crack. You need to call around and interview appraisers. Hire an appraiser with many years experience in your specific market to determine the loss in value. Do not price shop appraisers, with the potential large loss on the line. Hire a top dog while the most geographic knowledge.

 

[Restrain]

Sounds like the appraisal was made with certain assumptions required by Interior, such as the time frame for reclamation, no loss in value to the homes, etc. From what I have read, the dam is going to be demolished, so you and your neighbors definitely have to come together, get a GOOD atty, and hire more than one appraiser who really knows this stuff. This has become a big thing, the removal of dams out west, and there is morenthn just the loss to the homes. There is potential flooding down stream, loss of income due to the loss of the lake, etc. Good luck.

 

[Mark K]

Playing devil's advocate for a minute....

They are removing a major amenity to your property, however you don't own any part of it. Should they be required to compensate you and others for the loss of something that you don't own? Maybe you could have a case for inverse condemnation but then again, maybe not.

Very interesting scenario but I don't have any answers, and much of my work is involved with right of way projects where properties are routinely damaged. In these projects we specify whether the damages are attributed to the land or the improvements.

When a new highway is constructed it affects many property owners. Sometimes owners that are 10' from the new highway are as affected as those who have had property acquired and compensated, however the owner whose property line is 10' away receives no compensation because none of his property has been acquired. Sucks, but that's life.

Your problem is very unique and will require the expertise of some very qualified and expensive, specialized attorneys and appraisers. Good luck....I'm sure many articles will be written about this.

 

[The Dog]

Went through the same situation in Southern Oregon (about 50 miles north). Dam on Rogue River was removed after being there for over 8 decades. Dam had large lake portion behind it and all custom homes with boat access etc. Claim was made for loss of value due to the lake being drained.

Approximately 4 years after the removal of the dam, there is no evidence of any value loss. Boat launches are high and dry, but upon resale of properties, no evidence that market is paying less than before (not counting the overall declines in market over the last 4-5 years).

The impact on the properties fronting the lake portion was negligible. Good luck.

 

[mccunning]

Thank you all for your posts. The EIS/EIR does acknowledge some loss of property values so that will at least be a starting point. Meanwhile the lake is still here and we are going waterskiing! Have a wonderful week end.