New Jersey Commissioner Of Transportation v.

Facts

P filed a complaint seeking to acquire approximately 1.65 acres of Dt's 2.86-acre property. The property is improved by a one-story 31,775-square-foot building, which was directly accessible from Route 17 southbound. The building was rented by Sears. The site is also improved with a blacktop parking lot, which provided parking for 112 cars. The building and improvements were included in the taking. The property remaining was reduced to 1.21 acres of vacant land without direct access to Route 17. The land use ordinance permitted industrial uses only. P filed a motion in limine to exclude the testimony of D's experts because they valued the property as a renovated retail property, and such a valuation was speculative. The trial court denied the motion. P valued the property in its actual physical condition as of May 23, 2005, using the cost approach because there were no comparable sales or rentals to support the market sales or income capitalization approaches. P appraised the property at $5,637,000. Employing the cost approach, D valued the property at $9,133,000. Using the comparable sale approach, D valued the property at $8,897,000, while using the income approach, D valued the property at $8,821,000. D concluded that the 'highest and best use' of the property would be as a commercial or retail building. That would require $1,589,000 in renovations to create an appropriate interior for the property. After considering all three of the above approaches, and deducting the $1,589,000 of improvement costs, D concluded that the fair market value of the property and damage to the remainder was $8,727,000. The jury returned a verdict of $8,096,140. P appealed. P contends it was error to allow the valuation as a commercial retail use based on a speculative renovation, instead of limiting the value of the property in its existing physical condition.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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