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Department of Public Works & Bldgs. v. Hufeld

MARCH 11, 1966.




Appeal from the Circuit Court of Peoria County; the Hon. CHARLES W. IBEN, Judge, presiding. Judgment affirmed.


This action was commenced by Appellee, Department of Public Works and Buildings of the State of Illinois, under the provisions of the Eminent Domain Statute. The Circuit Court of Peoria County entered judgment on the verdict of a jury awarding Appellant $102,828 for land taken and $36,833 for damage to land not taken.

In November 1958, Appellant purchased the approximately 100 acre tract involved. The tract is generally rectangular extending on its northern boundary 1,010 feet along Farmington Road. The tract extends southerly 7/10 of a mile to Illinois Route 116. The property is located 3 miles west of the city limits of the city of Peoria and is 5 miles from the Peoria County courthouse. At the time Appellant purchased the property, a small racetrack was located on the northern portion of the premises and the balance was used for agricultural purposes. The property was zoned for residential use, a part for 1/2 acre residential sites and the balance for smaller residential lots. Appellant, a licensed real estate broker, purchased the property solely for residential real estate development purposes. After the purchase, the zoning of the premises was modified, permitting the entire tract to be used for the smaller residential lots, excepting two areas along Farmington Road, which were reclassified to permit commercial uses. The neighborhood is either residential or undeveloped land, one residential subdivision being located immediately to the west of the property and several others being located on the north side of Farmington Road.

In its plan for development of the tract, Appellant divided the property into three areas. A plat of area 1, being the most northerly 16 acres, was prepared and recorded. Area 1 was divided into 31 residential lots and 2 out lots, designated for commercial uses, said out lots fronting on Farmington Road and being located in the northeast and northwest corners of the property. At the time of the institution of this proceeding on October 10, 1961, the lots had been staked out, streets and curbs constructed and utility service extended into the area. Three houses had been constructed and fourteen of the lots had been sold, reducing the acreage, then owned by Appellant, to approximately 8 1/2 acres.

A plat of the middle portion of the tract consisting of 37 acres, which we shall refer to as area 2, was prepared and recorded. At the time of the institution of this proceeding nothing had been done in area 2 except rough grading.

Although a plat was prepared of the most southerly 47 acres, which we shall refer to as area 3, it was never recorded. Appellant claims that the plat was not recorded in order to avoid assessment of real estate tax on an individual lot basis. It appears however, that this plat was not prepared until approximately one month before the institution of this proceeding. At the time of the institution of this proceeding nothing had been done in area 3.

The above plans for the development of the entire area contemplated 193 residential lots, 2 commercial lots and a park of approximately 5 acres along the southern portion of the tract.

This proceeding was instituted on October 10, 1961, to acquire approximately 62 acres of the tract owned by Appellant to construct a highway. The part to be taken crosses all four boundaries of the property. The remainder of the property, after the taking and improvement, consists of a landlocked area in the southeast corner, an area in the southwest corner with no practical access and areas in the northeast and northwest corners with limited access, rendering each inappropriate for the original intended commercial use.

At the hearing, each party presented four valuation witnesses. All witnesses agreed that the highest and best use of the property was that of residential use and residential subdivision development either actual or potential.

Each of Appellee's valuation witnesses used the same approach in arriving at his opinion of value. The individual characteristics of each area were considered in arriving at a value of the whole tract. Although the values expressed by Appellee's valuation witnesses presented a range of difference of approximately thirty percent, the testimony of witness Thiemann is illustrative. He testified that in his opinion the entire tract had a value of $140,000. He arrived at this opinion by considering that the 17 lots still owned by Appellant had a completed value of $3,500 each or a gross value of $59,500. He then deducted his estimated cost of development of $26,000 leaving a net value, of area 1, of $33,500. He considered areas 2 and 3, a total of 83 acres, to be worth $1,000.00 per acre or $83,000 and that the two commercial lots were worth a total of $23,500. In his opinion the value of the 62 acres taken was $80,000 and the value of the remainder $60,000. His estimate as to the total damage to the remainder was $30,000, based on diminution in value of each of the four portions comprising the remainder.

Appellee's valuation witness Maurer, placed a value on area 1 of $65,750. He considered the value of area 2 to be $1,000 per acre and that of area 3, $700 per acre. His value of the part taken was $92,375 with the remainder being damaged in the amount of $32,650.

Summarizing the testimony of Appellant's valuation witnesses, the opinions of each concerning the value of the land taken and damage, ranged from $482,056 to $580,496. Each of Appellant's witnesses, other than Weinstein, testified in terms of present market value. In arriving at a valuation of the entire tract they estimated the value of each lot in the entire tract on a fully developed basis, including the developed lots in area 1, the platted lots in area 2 and the proposed lots in area 3. Each then deducted his estimate of development cost and an allowance for the period of time during which the lots would be sold in arriving at his present value.

Appellant, in seeking a reversal of the judgment of the lower court, contends: first, that under the circumstances it was error for the court to hold that the constitutional right of Appellant to just compensation for property taken or damaged, was satisfied by measuring such compensation in terms of fair cash market value; second, that the court erred in failing to strike testimony of Appellee's valuation witnesses when the opinions were based on hearsay; third, that the court erred in its rulings on evidence of comparable sales; fourth, that the court erred in admitting evidence of the price paid for the property by Appellant; fifth, that the court erred in excluding the valuation opinion of one of Appellant's witnesses; sixth, that the court erred in restricting Appellant's cross-examination of Appellee's valuation witness and seventh that the court erred in the giving and refusal of instructions.

Appellant strenuously urges that his right to just compensation was violated because, under the circumstances, his recovery based on the fair cash market value of his property did not constitute just compensation. Appellant argues that the "subdivision theory of valuation" is the only approach which produces just compensation. Under this theory once a subdivision has been planned, the value of the subdivision is to be determined by estimating the sales price of each lot as and when completed and sold, the gross value of the subdivision being the total of the values of the individual lots. From the gross value are deducted estimated cost of development, expenses of promotion, taxes, and an adjustment relating to the expected period required to sell the lots. Under this theory the net value so produced is the value of the subdivision. ...

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