State ex rel. Missouri Highways & Transportation Commission v. 1811 North Broadway, LLC

405 S.W.3d 539, 2013 WL 2483836, 2013 Mo. App. LEXIS 710
CourtMissouri Court of Appeals
DecidedJune 11, 2013
DocketNo. ED 98682
StatusPublished
Cited by2 cases

This text of 405 S.W.3d 539 (State ex rel. Missouri Highways & Transportation Commission v. 1811 North Broadway, LLC) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Missouri Highways & Transportation Commission v. 1811 North Broadway, LLC, 405 S.W.3d 539, 2013 WL 2483836, 2013 Mo. App. LEXIS 710 (Mo. Ct. App. 2013).

Opinion

GARY M. GAERTNER, JR., Chief Judge.

Introduction

This appeal concerns a partial taking of private property in the City of St. Louis (City) as part of a government project to construct a new Mississippi River Bridge (bridge project). Appellant 1811 N. Broadway, LLC, argues that the expert appraiser for Respondent Missouri Highways and Transportation Commission (Commission) improperly relied on sale prices of land that had been influenced by the bridge project when determining the value of the property taken pursuant to condemnation. Appellant argues this caused the jury to return a verdict that did not justly compensate Appellant for its loss. We reverse and remand for a new trial.

Background

The property at issue here is located at 1811 North Broadway in the City of St. Louis (1811 Property). This 1.68-acre property was made up of two adjacent parcels separated by Brooklyn Avenue: a triangular parcel to the north and a rectangular parcel to the south. The Commission condemned the rectangular parcel as part of the bridge project, taking approximately half an acre of land. The triangular parcel remains intact.

[543]*543Also related to this property, though not directly a subject of this case, is a 2.48-acre property (Archview Property) on the south side of and adjacent to the rectangular parcel of the 1811 Property. The Commission also condemned the Archview Property as part of the bridge project. The trial for damages regarding the Arch-view Property was a separate distinct action that took place before the trial in our case.

The history of these properties in the condemnation actions involved a corporation named 1811 North Broadway, LLC (1811 LLC), which was made up of members Daniel McGuire (McGuire), president of McGuire Moving & Storage, James Lindsay, and Randy Heil (Heil). 1811 LLC purchased the 1811 Property in 2002. A building (1811 Building), previously used as a truck terminal, sat on the triangular parcel of the 1811 Property in 2002 at the time of purchase. Heil owned a machine shop business, which used the 1811 Building. 1811 LLC also leased part of the 1811 Building to a bus storage company.

In 2006, 1811 LLC purchased the Arch-view Property from the Land Reutilization Authority of the City of St. Louis. 1811 LLC had a plan to develop both the Arch-view Property and the 1811 Property into a 400-unit self-storage facility, which the City’s alderwoman for this ward had approved before the sale- took place. The self-storage construction was to occur in three phases. The first phase would occur on the Archview Property, and the second phase involved the rectangular parcel of the 1811 Property. The storage business was to begin operating out of the first storage units built on the Archview Property and then expand as construction continued. The final phase would extend the storage facility into the triangular parcel of the 1811 Property. It would include tearing down the 1811 Building and putting storage units in its place. Until the third phase of construction, which required removal of the 1811 Building, Heil planned to use the 1811 Building as an office from which to manage the construction and storage business in its early stages in addition to using it for his machine shop. Heil also anticipated that the 1811 Property’s proximity to a McGuire Moving & Storage 1 location a few blocks away would be positive for 1811 LLC’s growing business, because McGuire would refer customers who were interested in self-storage.

Between 2006 and 2008, 1811 LLC2 made progress toward the first two phases of its plan. This included work on the infrastructure to prepare the sites for the storage buildings, as well as putting concrete pads and storage buildings on the Archview Property. 1811 LLC also constructed a fence that enclosed both the Archview Property and the rectangular portion of the 1811 Property. Shortly after business opened on the Archview Prop-, erty, the Missouri Department of Transportation notified 1811 LLC that the bridge project would require condemnation of the Archview Property and the rectangular parcel of the 1811 Property. Because of this, 1811 LLC agreed to stop its operation and expansion of its storage facility. Approximately one year later in 2009, the Commission took the Archview [544]*544Property. Then, the Commission took the 1811 Property on February 17, 2010.

The trial for damages involved in the taking of the rectangular parcel, which is the subject of the present appeal, took place in April of 2012. Regarding the value of the property before the taking, the jury heard testimony from McGuire and Heil regarding their plans for the property and its value. McGuire testified that in his opinion as the owner and someone who had been in the storage business for many years, the value of the property taken was $22 per square foot. 1811 LLC then presented the expert testimony of Bradley North, a self-storage consultant, and Sheldon Johnson, a commercial real estate broker. These experts testified that they performed feasibility studies for self-storage and concluded that self-storage was an economically feasible use of the property. Sheldon Johnson testified self-storage was the highest and best use of the property. He valued the 1811 Property at $20 per square foot before the taking and concluded just compensation for the land taken was $1.25 million.

The Commission then presented testimony from two real estate brokers, Peter Ingersoll and Richard Shepard. Both experts opined that self-storage was not the best use for the 1811 Property. Peter Ingersoll believed the risks related to not generating enough business for self-storage outweighed the possible rewards at that location, including the Archview Property. Richard Shepard had visited the 1811 Property during the month before trial, in March of 2012. He observed that the rectangular portion of the property was vacant, fenced, and any use of the property was being destroyed by construction of the bridge project. He testified that the highest and best use of the property was industrial, both before and after the taking. He opined that the semi-retail nature of self-storage was not sustainable there due to lack of retail and exposure in the area.

Additionally, the Commission offered the testimony of a real estate appraiser, Ronald Metcalf (Metcalf). Metcalf had also viewed the property during the month before trial in 2012, and he agreed that the highest and best use of the 1811 Property, both before and after the taking, was industrial. He believed a commercial self-storage use was too speculative for this property. He concluded that the 1811 Building should not be torn down, but rather the highest and best use would be to utilize the 1811 Building. He testified that there were similar buildings being used successfully in the area as industrial buildings. Metcalf performed comparable sales analyses to value the whole property before the taking and the remaining triangular parcel after the taking, in order to calculate damages. He determined that the value of the 1811 Property both before and after the taking was $4 per square foot. He concluded that just compensation for 1811 LLC’s loss, including the land taken, the lost ability to vacate Brooklyn Avenue,3 and the cost of the fence around the rectangular parcel, was $139,000.

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Cite This Page — Counsel Stack

Bluebook (online)
405 S.W.3d 539, 2013 WL 2483836, 2013 Mo. App. LEXIS 710, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-missouri-highways-transportation-commission-v-1811-north-moctapp-2013.