Parking Lot Owner Allowed To Introduce Evidence of Future Development Potential
I have not written about eminent domain on this blog. This isn’t intentional because the topic is one of the most interesting aspects of real estate law, although it does not come up very much in the residential context.
Eminent domain, or a “taking,” as it’s also called, is a power vested in the state (or federal government) to appropriate private property for public or other permissible use. The government, however, must pay the landowner “just compensation” for the land.
Massachusetts city planners have historically made judicious use of eminent domain power to construct some of the largest projects in Boston and beyond, including the Big Dig, the new Boston Convention Center, and the new Greenbush commuter rail line. Eminent domain trials are often high stakes, big money cases. In 2009, a jury awarded a Medford family $4 Million in connection with the Mystic River’s Edge Project. In 2011, a Cape Cod jury awarded Sagamore property owners $2.1 Million for takings in connection with the Sagamore “Flyover” Highway Project.
The battleground in eminent domain cases almost always centers on how much the land is worth, i.e, how much money the state should pay the landowner. The recent Appeals Court case of Rodman v. Commonwealth, Mass. Appeals Court (Oct. 7, 2014) gives an interesting glimpse into the complicated and difficult task of an eminent domain attorney. Often, the land taken by the state is either vacant or underutilized, and the attorney’s objective is to show the development potential of the land. There is a limit on how far the attorney can go, and the Rodman case illustrates that tension.
In the Rodman case, the Mass. Highway Dept. took by eminent domain 5 acres of a parking lot property in connection with highway improvements around Patriot Place/Gillette Stadium. As is common in these cases, the landowner’s engineering expert planned to testify that the takings made the property less valuable by some $2 million dollars based on a potential hotel/office/retail development on the land. However, the judge refused to allow the expert to proceed on that theory which was based on a hypothetical development and subdivision plan, as the property was merely used as a temporary parking lot at the time of the taking and no formal plans had been filed. This ruling essentially torpedoed the landowner’s case, and not surprisingly, the jury awarded him only $600,800.
On appeal, the Appeals Court sided with the landowner and granted him a new trial to put forth his $2M development plan theory. The Court reaffirmed that property owners in eminent domain cases are entitled to submit the “highest and best use” of the property which is “physically possible, legally permissible, and financially practicable” even if the land was vacant and undeveloped at the time of the taking. With a prime piece of real estate directly abutting Gillette Stadium and the new Patriot Place in a new economic development zone, the court agreed that the owner may have the opportunity to show a jury that the land could have been used for a hotel/office/retail development. This is true even though special permits and other zoning relief would be necessary. This is a huge victory for the landowner and his attorney.
If you are faced with an eminent domain situation, please contact me at [email protected]. I can put you in touch with some of the best Massachusetts eminent domain attorneys in the state.
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