Takings/Just Compensation: Govt.’s Reasonability During Litigation Didn’t ‘Cure&rs

Tuesday, December 17, 2013 12:00 am
Land Use Law Report, Volume 41, Number 12

In a takings case, the government will pay attorney’s fees to two developers (the prevailing parties) after making an unreasonable pre-litigation determination of just compensation.

Facts: After developers won a jury verdict finding that property taken by eminent domain was worth more than twice the government’s initial valuation of the property, they sought attorney’s fees and expenses from the government under the Equal Access to Justice Act (EAJA). The developers, 515 Granby, LLC (Granby) and Marathon Development Group, Inc. (Marathon), planned to develop a 1.604-acre property in Norfolk, Virginia into luxury condominiums and retail/office space. Granby owned the land, and Marathon held a $3 million lien on the property as its manager. They never completed the project, but they did improve the land by preparing it for construction. These improvements included installing piles to support a high-rise building.

The United States wanted to acquire the land, and a 2009 appraisal valued the land at $6.175 million. However, when it ordered the appraisal, the United States specified that the appraiser should assess the property as if it were vacant--so ignore the improvements, ignore the property’s best use, and ignore any development incentives.

After failing to purchase the land, the United States set out to acquire it by eminent domain and initiated condemnation proceedings in 2010. It offered Granby $6.175 million as just compensation, basing the offer on the first appraisal. Granby rejecte[..]


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