Virginia Lawyers Weekly VA Lawyers Weekly
Evidence of the probability that appellant’s farmland would be rezoned for commercial use was admissible in this condemnation case to determine the compensation due for land taken to construct a highway interchange.
Background
The highway commission sought to take a portion of appellant Helmick Farms property to build a highway interchange. Helmick refused the commissioner’s $20,281 offer. The commissioner filed a condemnation petition in circuit court.
On the commissioner’s motion, the trial court excluded Helmick’s evidence relating to the probability that the land would be rezoned as commercial property to establish the condemned land’s fair market value.
The commissioner’s appraiser valued the land at $22,464.
There was evidence that the Culpepper County Comprehensive Plan designated a portion of Helmick Farms, including the portion taken, as “Commercial.” A future land use map, a part of the comprehensive plan, also designated the property as commercial.
Helmick’s general manager was allowed to testify and opined that the taken land was worth $640,435, noting that the land was near sewer and water utilities, and that there was much commercial development in the area.
The trial court gave the condemnation commissioners two jury instructions that are at issue in this case.
Jury Instruction 7 provided that in determining fair market value, only the land’s current zoning, agricultural, could be considered, and that a “hypothetical” rezoning to a different category could not be considered. Jury Instruction 8 provided that the Culpepper County Comprehensive Plan was merely a guide for future development and did not permit or restrict how land could be used.
Helmick objected to both instructions. The condemnation commissioners awarded Helmick $22,592.
We reverse.
Rezoning probability
“Helmick argues that he should have been permitted to introduce evidence concerning the reasonable probability of a rezoning of the land taken. We agree.” We have not directly addressed this issue but the bulk of the authorities conclude that the “reasonable prospect of a favorable rezoning has an effect on the market value of the property and is, therefore, relevant. …
“[T]he Commissioner acknowledges that evidence of the reasonable possibility of a rezoning is relevant … but contends that the testimony here was properly excluded because the evidence offered was remote and speculative. The Commissioner understands Virginia law to reflect the following categorical proposition: ‘testimony on conditions which are dependent on the acts of third parties is remote, speculative, and therefore inadmissible.’ …
“Even on this generalized statement, the proposition does not withstand scrutiny. The entire enterprise of assessing the market value of land hinges on proof concerning the acts of a hypothetical third party, namely, a person who would purchase the land.”
Admissibility framework
“First, ‘the burden of proving a reasonable probability of rezoning rests on the property owner.’ … In addition, the reasonable probability of rezoning must be in the near future. … The trial court must ‘make the preliminary determination of whether there is sufficient evidence of a reasonable probability of rezoning to permit [the owner to offer testimony regarding] market value based on such a probability.’ …
“Factors that are relevant to establish a reasonable likelihood of rezoning include: ‘the rezoning of nearby property, growth patterns, change of use patterns and character of neighborhood, demand within the area for certain types of land use, sales of related or similar properties at prices reflecting anticipated rezoning, physical characteristics of the subject and of nearby properties and, under proper
circumstances, the age of the zoning ordinance.’ …
“Finally, our holding comes with ‘an important caveat to remember’: ‘the property must not be evaluated as though the rezoning were already an accomplished fact. It must be evaluated under the
restrictions of the existing zoning and consideration given to the impact upon market value of the likelihood of a change in zoning.’”
Application
“[W]e conclude that Helmick’s evidence was sufficiently concrete to create a jury issue concerning the reasonable probability of a future rezoning.
“Helmick pointed to the Comprehensive Plan which, although not binding, ‘identifies those areas planned for future growth and the anticipated land use associated with such growth.’ The land use map designated the property as commercial. Helmick pointed to land nearby being used for light industrial purposes.
“He proffered evidence that the Board of Supervisors had approved recent rezoning applications to change the zoning of properties from agricultural to commercial.
“The property benefitted from road frontage and proximity to water and sewer services. This evidence, if believed by the factfinder, would mean that a willing buyer would pay more because of the realistic, indeed probable, prospect of rezoning. …
“Because Helmick presented sufficient evidence concerning the reasonable probability of a rezoning to create a jury issue, it follows that Instruction 7, which instructed the jury not to consider such evidence, should not have been given.”
Reversed and remanded for a new trial.
Helmick Family Farm v. Commissioner of Highways. Record No. 180691 (McCullough; Goodwyn, joined by McClanahan and Powell, dissenting in part and concurring in part) Aug. 29, 2019 (Culpepper Circuit Court). Michael John Coughlin, Matthew Allen Westover for Appellant. Jeffrey Rodgers Allen, Nancy Catherine Auth, Andrea Azuka Tochukwu Adibe, Robert Ray Dively, Stephen Andrew Cobb for Appellee. VLW 019-6-069, 26 pp.
