Beyond Fair Market Value : Arizona Eminent Domain Lawyer & Attorney : Zeitlin & Zeitlin Law Firm : Condemnation, Valuation, Property Disputes

The Scottsdale City Council last week approved the settlement of a condemnation action it had filed against  CGP-Aberdeen for the principal amount of $7,500,000, plus interest of approximately $790,000, for a total settlement amount of $8,290,000.  The property owner was represented by Dale Zeitlin.

The City had filed a lawsuit against the property owner on January 1,2003, which under Arizona law established the date of valuation.  The City, however, did not ask the court to take early possession of the property until July 2004 at which time the City paid $4,000,000 (the City's appraised value for the property)to the property owner, a delay of eighteen months. 

Mr. Zeitlin argued that the statutory date of valuation when applied to a factual situation where the government delays taking possession of the property for a lengthy period of time was unconstitutional. The trial court rejected this argument, but on appeal, the Arizona Court of Appeals agreed with Zeitlin's argument and held that property must be valued when the government takes possession of the property and first pays its estimate of just compensation.  Thus, the valuation date was not January 2003, but July 2004, a date when values were significantly higher.

The settlement was reached using the July 2004 date of value.

This case also has significance to every condemnation case that is filed by Arizona Public Service or other governmental entities that do not have the right to take immediate possession of property.  In all of these cases, the property owner will be able to argue for a later date of value.  APS had filed amicus curiae briefs opposing using the later date of valuation throughout the appellate process.

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The National Law Journal recognized Dale Zeitlin's jury verdict in City of Scottsdale v. Toll Brothers as one on the top 100 verdicts for 2008. In fact, the verdict, which was for $81,903,496, plus pre-judgment interest in the amount of $9,826,023, was the 26th largest jury verdict in the United States during 2008.

The City of Scottsdale condemned 383 acres of vacant desert land in 2004.  The property had a highest and best use for low density single family residential development  The City valued the property at $33,800,000. 

The jury verdict stands as the largest eminent domain verdict in Arizona history.

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The Town of Gilbert, using a portion of $80 million of bond money, has agreed to purchase 63 acres of land near Germann and Greenfield Roads from a landowner for a special events center.  Town Manager George Pettit said that "[t]he opprotunity was there, the land was there", but that the Town needed to issue bonds to fund the purchase.  In addition to the private land, the Town purchased or leased an additional 121 acres from the Maricopa County Flood Control District. 

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The Arizona Republic reports that Gilbert set aside money as a cushion to help repay the bonds if system development fees are not sufficient, the Town was able to take advantage of favorable interest rates and a less aggressively priced real estate market than has existed in the past few years. 

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The City of Chandler authorized condemnation against Trails, a smoke shop, which is the final holdout in the City's plans to acquire land for the expansion of an intersection at Ray Road and Alma School Road.  The City's real estate manager reports that the City has reached agreement with the owners of all affected property except Trails.  The City budgeted $10.6 million for land acquisition, design and construction on the project scheduled to begin in 2010.   

The City has additional plans to extend Washington Street in downtown Chandler to Pecos Road, which would require the acquisition of homes, unoccupied properties, part of a park and parking lot.  The City also plans to spend $36 million to widen Gilbert Road, which would require acquisition of parts of 83 properties and the likely relocation of several businesses.  The projects are intended to alleviate traffic congestion now and in the future. 

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The Arizona State Transportation Board announced recently that 41 "shovel ready" projects previously shelved because of a lack of funds, may proceed with federal stimulus money.  Five of the projects are in Maricopa County, four of which will benefit the west Valley and one of which will benefit the north Valley.   

The Board chose two projects on the Maricopa Association of Governments' list of priority projects: the widening of the I-10 freeway in the west Valley between Sarival Avenue and Verrado Way, and the addition of one lane in each direction on Interstate 17 between the Carefree Highway and Anthem Way.  Although it is unclear whether stimulus grant money can be used to pay for these projects, but ADOT plans to try to use grant money for the projects and is awaiting the rules governing stimulus money.  Two other projects are in the area of the US 60 and Grand Avenue and one is the construction of an interchange for Loop 101 at Beardsley Road and Union Hills Drive.  

Apparently much of the federal stimulus money designated for transportation projects will be used by the State of Arizona for projects that were funded by the legislature and under way, but that had funding pulled because of budget constraints. 

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