In this case, the Road Commission offered a pittance to acquire a drainage easement and paid a small fortune because it actually destroyed a developable lot.
Early in my career, I handled what on its face appeared to be a minor acquisition of a drain easement to service 14 Mile Road. The easement was acquired by the Road Commission to allow drainage from 14 Mile Road, where the road was dirt and needed to drain towards a branch of the Rouge River. The property from which the easement was taken has on the top of a valley overlooking the river.
The Road Commission assumed that the property was not buildable due to the steep grade. However, the property was located in Franklin, near the Franklin Cider Mill, and overlooked a mansion that was over 10,000 square feet. It was also just down the street from the mansion of a major real estate developer that was built into the hillside. Here is area in question.
A civil engineer was hired to determine whether the lot was buildable. It turned out that the one place on the lot that was buildable was where the Road Commission acquired its easement, because that was the one spot with some level ground off the road (which is probably why it was chosen by the Road Commission). An appraiser determined what the value of the lot was, assuming it was buildable. The civil engineer estimated the extraordinary construction costs that would have been incurred. The appraiser deducted this from the value of the lot, which still resulted in a value in the hundreds of thousands of dollars because of the premium location. Since the easement prevented construction in that area, the value after the taking was next to nothing.
The Road Commission settled this case by paying several hundred thousands of dollars over its offer when reimbursement of the expert expenses, property owners’ attorney fee, and statutory interest was included.
Sometimes condemnation cases involving nominal offers are nominal cases. But sometimes the offer is nominal because the agency did not understand how it was impacting the property. It takes years of experience to be able to identify one from the other.
Please let me know if you have any questions about this or any other eminent domain issue.