LARS  LIEBELER  PC

Case Study

 

After several years of planning, a Washington D.C. developer’s vision for a parcel of land on the Eastern side of the city paid off. The developer had secured a $10 million contract to build and lease a building to an agency of the federal government. But, shortly after the contract was signed the local District of Columbia government threatened to condemn the property for use as a local government center. The project the developer had worked so hard to bring to fruition was now in jeopardy. Worst of all, the D.C. government refused to recognize the value of the federal lease when assessing the value of the parcel of land.

 

The developer asked Lars Liebeler PC to analyze the situation. The firm retained an expert appraiser who valued the land and the federal lease at $6 million. The firm filed suit alleging inverse condemnation and tortious interference with the federal lease.The D.C. government argued that the court should ignore the existence of the $10 million federal lease and value the parcel independently for under $300,000. After extensive discovery, motion practice, and two days of trial, the District of Columbia agreed to settle the case.

 

The developer received $6 million for his interest in the land and lease.

 

Principles

 

• The takings clause of the Fifth Amendment states “nor shall private property be taken for public use without just compensation.”  There is no question that the sovereign may take private property for public use. The critical question is the measure of compensation. 

• The type of property protected by the just compensation clause is not confined to real property. Shipping containers, timber and mineral rights, even swine and poultry stock may constitute protectable property interests. 

• A governmental taking is frequently in the form of a physical exercise of possession. But, a taking may also occur by regulatory or other non-possessory form of government action. 

• Experienced eminent domain counsel should be consulted to determine the existence of a protectable property interest, and the effect of government action upon that property interest. Specific procedural and jurisdictional requirements must be met in order to bring a valid takings claim.