City of Shreveport v. Shreve Land Investors Partnership

556 So. 2d 638, 1990 La. App. LEXIS 93, 1990 WL 5347
CourtLouisiana Court of Appeal
DecidedJanuary 24, 1990
DocketNo. 21100-CA
StatusPublished
Cited by2 cases

This text of 556 So. 2d 638 (City of Shreveport v. Shreve Land Investors Partnership) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Shreveport v. Shreve Land Investors Partnership, 556 So. 2d 638, 1990 La. App. LEXIS 93, 1990 WL 5347 (La. Ct. App. 1990).

Opinion

MARVIN, Judge.

In this appeal arising out of the city’s expropriation of a strip of land from a 31-acre tract for the extension of a city street, both the city and the landowner complain of the trial court’s valuing the land at $60,000 per acre.

The city contends the land should have been valued at no more than $45,000 per acre, the city’s highest appraisal and the amount the city deposited in the court registry. The landowner contends the land should have been valued at what its appraiser suggested (more than $100,000 per acre), and seeks to increase the award. The litigants also contest, in various respects, the propriety and amount of the expert witness and attorney fee awards.

The landowner’s appraiser valued the strip taken as if it were a separate small tract and not as a part of the larger or parent 31-acre tract. An award founded on this method of appraisal, where both the part taken and the parent tract have the same highest and best use, is erroneous. State, Department of Highways v. Medica, 257 So.2d 450 (La.App. 3d Cir.1972); State, through Department of Highways v. Hoyt, 284 So.2d 763 (La.1973).

Accordingly, we find that the award should not exceed $45,000 per acre and reverse the judgment. We render judgment rejecting the landowner’s demands.

FACTS

In early 1986, the city took 5.25 acres of an undeveloped 31-acre tract owned by Shreve Land Investors Partnership for the southerly extension of the Clyde Fant Parkway.1 This rough sketch, drawn from a photograph in evidence, depicts the land taken, the parent tract, and the surrounding area:

[640]*640[[Image here]]

Before instituting this action, the city offered the landowner the higher of two appraisals ($236,250, based on $45,000 per acre) it obtained. The higher appraisal was made by Carl Sistrunk. The city’s second appraiser, Walter Hunter, who valued the land at $40,000 per acre, died while the action was pending. His report was reviewed and supplemented by another appraiser, James Young, who was hired by the city. Young agreed with the $40,000 per acre valuation made by Hunter.

According to the city’s experts, the highest and best use of the 31-acre tract was mixed commercial and multi-family residential. The landowner’s expert, Mark Montgomery, considered the highest and best use to be commercial because the 31-acre tract was zoned B-3 for commercial development. Each expert, however, [641]*641agreed that the highest and best use of the part taken and of the parent tract was the same.

Montgomery valued the part taken at $108,900 per acre ($571,725).

APPRAISAL METHODS USED

In a partial taking, unless the part taken has a highest and best use that is different than the parent tract, the part taken must be appraised as a proportionate part of the parent tract and not as a separate, smaller tract. State, Department of Highways v. Medica, supra; State, through Department of Highways v. Hoyt, supra.

The experts, using adjusted comparable sales to value the property, generally agreed that a smaller tract will sell for more per acre than a larger tract. Montgomery, the landowner’s appraiser, did not find that the part taken differed from the parent tract in potential use, but nevertheless adjusted the comparables he used to the five-acre part taken and not to the larger 31-acre tract. Montgomery did not attempt to determine the per-acre value of the 31-acre parent tract. Each of the city’s appraisers calculated the per-acre value of the parent tract and assigned that value to the part taken.

TRIAL COURT FINDINGS

The trial court found that the property was “desirable for multi-family and commercial uses,” as the city’s appraisers testified. The landowner contends the city’s experts “arbitrarily” assigned this highest and best use to the property in order to lower its value.

As shown on the above sketch, the developments in the area at the time of the taking in early 1986 included retail stores, small office buildings, apartments and townhomes. The city’s experts testified that commercial real estate activity in this immediate area began to decline in 1985. In their opinion, it was unlikely that the parent tract would have been used exclusively for commercial development, notwithstanding its zoning for that use, because of the market conditions in the area and because it was accessible only from Dee Street and not from the more commercially active and heavily traveled Knight Street.

The landowner’s claim that the “correct” highest and best use was entirely commercial because the property was zoned for commercial development is answered by Parish of East Baton Rouge v. Thomas, 346 So.2d 364 (La.App. 1st Cir.1977):

While it is evident that zoning classifications and restrictions are to be given serious consideration in determining the highest and best use of property, they are not determinative. When property is zoned for a use for which there is no reasonable expectation that the property may be so utilized, a lesser included use may be deemed, as here, to be the highest and best use for purposes of valuation. 346 So.2d at 366-367.

The record amply supports the trial court’s highest and best use finding.

The trial court, noting the “error” in Montgomery’s method of appraising the land taken as if it were a separate small tract instead of as a part of the larger parent tract, stated it would not “give as much weight” to Montgomery’s appraisal as to the appraisals of the city’s experts. The court found the land was worth $60,-000 per acre, or $315,000, and awarded the landowner $78,750, the difference between the court’s finding of value and the city’s $236,250 deposit.

Because Montgomery did not use the proper appraisal method for a partial taking, the city contends his appraisal should have been completely disregarded, and not merely discounted, by the trial court.

MONTGOMERY’S APPRAISAL

Of Montgomery’s 14 comparable sales, he excluded five from his analysis, explaining that three of the tracts were too small to be used as comparables (less than one acre), one was too large (88 acres), and one, of 20 acres, could not be verified because he could not locate the owner.

Five of his remaining nine comparables were tracts ranging in size from 1-4 acres, [642]*642three were tracts of 8-11 acres, and one was a 32-acre tract.

When Montgomery adjusted these nine sales for size in comparison to the “subject property,” he compared them to the five-acre tract taken instead of comparing them to the 31-acre parent tract. Using this approach, he adjusted the price per square foot in the three sales of more than 5 and less than 31 acres upward because smaller tracts generally sell for more per square foot than larger tracts. He acknowledged that he would have made downward adjustments for size had he compared these tracts to the 31-acre parent tract.

When Montgomery compared the 32-acre tract in one comparable to the five-acre tract taken, he adjusted the price per square foot upward by 35 percent based on the size difference. His adjustment for size obviously would have been negligible had he compared 32 acres to 31 acres.

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Related

West Jefferson Levee D. v. Coast Quality
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City of Shreveport v. Shreve Land Investors Partnership
560 So. 2d 7 (Supreme Court of Louisiana, 1990)

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Bluebook (online)
556 So. 2d 638, 1990 La. App. LEXIS 93, 1990 WL 5347, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-shreveport-v-shreve-land-investors-partnership-lactapp-1990.