Eminent domain - Fair compensation?

[Kelly Douglas]

This is a legitimate case of condemnation for public use.

Here is the deal. An eminent domain move by the village will reduce our site by approximately 10%. We need to determine the fair market value of the land required (10%) and the loss of value to the remaining 90%.

Questions:
1. How is the fair market value assessed? How many appraisals are typically required?

2. With the 10% percent loss in usable land, how does this affect the value of the remaining 90%? Obviously it is reduced, but how is compensation figured in this situation?

3. The adjacent developer is required to negotiate with us in good faith, before the village will condemn the land needed for public use. For the adjacent developer to break ground, they need an agreement with our company to use 10% of our land for public improvements. In this case, how is “good faith” negotiating defined? Would it be more beneficial for the adjacent developer to half heartedly negotiate with us and to just let the village condemn the land?

4. Would it be better for us to actively negotiate with the adjacent developer or let it fall into the village’s hands to be negotiated?

Thank you for your help.

[Bart Pair]

Wrigley,

I would get aggressive and act quickly in determining the value of the loss, otherwise you are liable to be stuck with the value they come up with (which may be the case regardless.)

I assume you are talking about a significant piece of property they will be taken. Significant enough to warrant what I suggest you do.

First, you need to create two (2) site plans of the property showing it developed fully for the highest and best use under the current zoning. One site plan will utilize the entire property and one will utilize only the property that is remaining once the City takes their portion.

The site plans should be based on the current zoning and conform to the land development code for the site. Since time may be of the essence it may be worth speaking with an appraiser first to determine what is the "highest and best use" in terms of the dollar value for the property. And then hiring an engineering firm to create site plans that maximize the development potential of the site and stay within the land development codes. Tell the engineer to really squeeze as much square footage as possible into the sites - it will effect you dearly.

Get the 2 site plans appraised and now you have concrete $ values of what the land the City is taking is worth.

Now you have some bargaining power. Most likely the City will think the price difference is too much and not want to pay that amount of cash to you. This is an opportunity!!!

Get creative. There are so many things you can get in exchange for a lower compensation price;
a change in zoning (to a higher density),
elimination of setbacks and landscape buffers,
a reduction in parking requirements,
a change in land use for taxation purposes,
a reduction in stormwater requirements
an increase in building height restrictions

the list goes on and on. Just make sure whatever you conced to gives you much more value than the compensation price you originally set.

Most Cities will jump at giving you concessions in exchange for a lower cash price. Make the most of it.