City Council Agenda and Packet 2013 05 21 - PG 160 - ATTACHMENT #3

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Colorado 7—Step Partial Take Appraisal Process — Eminent Domain The purpose of this appraisal was to develop a compensation estimate for the reasonable market value of the property actually taken; compensable damages, if any, to the residue after take; and special benefits, if any, to the residue after take. Referred to as the modified state before—and—after rule, steps to develop a compensation estimate for the acquisition of real property are: 1. Larger Parcel Value Before Take The first step in the appraisal process is to develop the reasonable market value of the subject larger parcel had there been no taking or any effect on value due to the proposed transportation project. The Jurisdictional Exception Rule of USPAP applies to Standards Rule 1-4(f) in this step. In Standards Rule 1- 4(f), anticipated public or private improvements must be analyzed for their effect on value as reflected in market actions. This is contrary to law for eminent domain appraisal. Jurisdictional exception authorities are Uniform Act, Title III, § 301(3); 49 CFR § 24.103(b); 5 24-56-117(1)(c), C.R.S.; and CJI — Civ. 4th, 36:3. "Any decrease or increase in the fair market value of real property prior to the date of valuation caused by the public improvement for which such property is acquired, or by the likelihood that the property would be acquired for such improvement, other than that due to physical deterioration within the reasonable control of the owner, shall be disregarded in determining the compensation for the property." (§24-56-117(1)(c), C.R.S.) 2. Value of Part Taken (including easements acquired) The second step involves the same USPAP Jurisdictional Exception Rule as in step 1. In this step, the reasonable market value of the land or property actually taken is developed. The value of land taken is based on its value as part of the whole or the larger parcel. Value of improvements taken is based on their contributory value to the larger parcel, (49 CFR § 24.103(a)(2)(iv), 55 38-1-114(2) and 115(b), C.R.S.,and CJI—Civil 4th, 36:3) 3. Residue Value Before Take The third step is the reasonable market value of the residue before the property actually taken has been acquired. This step sets the initial basis for the ascertainment of damages and/or special benefits to the residue. The reasonable market value of the residue before the take is the mathematical difference of step 1(larger parcel value before take) minus step 2 (value of part taken). 4. Residue Value After Take (including encumbered easement areas acquired) The fourth step is to develop the reasonable market value of the residue after the real property actually taken has been acquired and proposed project improvements have been constructed. In this step, the reasonable market value of the residue after the taking is no longer subject to the Jurisdictional Exception Rule to USPAP Standards Rule 1-4(f). Any decrease or increase in the reasonable market value, if any, of the residue after take due to the proposed public project needs analyses. The influence of the proposed public improvement is considered except for any damages or benefits shared in common with the community at large. The market value of the residue after take is predicated on the "as is" or "uncured" condition of the residue after the acquisition. Any decrease or increase in value of the residue after take is based on market evidence, Damage to the residue must be established before a cost to cure can be considered to mitigate some or all damage. Special benefits may accrue to the residue after take as a result of the project. Bonnie Roerig &Associates, LLC Real Estate .Analysts - 'Valuation Consultants