Solution Notes suggested: The third appraisal presented in the case included a price per acre valuation technique based on construction of pumped storage plants in the New England region, thought to be a “reasonably reliable guide to the value of the Stanley Works property, ” (compared to the other two valuation methods used by different appraisers). However, the interim value was increased by 20% by the contention that a hypothetical buyer would pay more in this situation to acquire all the necessary land from one seller, representing a premium for assemblage of distinct property parcels.
The court rejected the plottage value premium, again from the case, “The premium, however, for assemblage is not appropriate herein because a hypothetical buyer of the Stanley Works property would be required to acquire land for the upper reservoir from parties unrelated to Stanley Works.”
Finally, the court did not agree to any of the three concluded values. First value of property $13M, second $5.394M, third $8.3404M, court $6.65M - “in our judgement and opinion and considering all the facts and circumstances herein.”
Definitions: Assemblage – the combining of two or more parcels, usually but not necessarily contiguous, into one ownership or use. Related – Plottage – the increment of value when two or more sites are assembled or created to produce greater utility. Dictionary of Real Estate Appraisal – 2nd Ed.
