By: Wendy S. Cell
In January 2008, Shenehon Company was part of a team offering expert testimony on behalf of SJC Properties, LLC, et al, concerning the special benefit conferred as a result of the 40th Street project in Rochester, Minnesota. The Olmsted County District Court found the evidence established that the city’s special assessment exceeded the special benefit on SJC’s property and set aside the levied special assessment, remanding the matter for reassessment. The court found the appraisal opinion of plaintiff’s expert (Shenehon Company) to be credible, and relied on its valuation analysis in concluding the city’s special assessment levied against the property exceeded the special benefit conferred. Special assessment cases are difficult to prevail in court. In that case, the appraiser’s attention to details successfully persuaded the District Court.
The city of Rochester appealed the decision arguing the District Court erred in setting aside the special assessment and challenging several of the District Court’s findings, none of which had to do with valuation issues. The Court of Appeals examined the record to determine whether the evidence fairly supported the District Court’s findings and whether those findings supported its conclusions of law. In sum, the Court of Appeals rejected the city’s arguments pertaining to the District Court’s findings and found the District Court did not err in determining that the assessment must be set aside. In its July 2009 decision, the Court of Appeals specifically noted that both parties offered expert witness testimony but that the District Court relied on the testimony and appraisal offered by Shenehon Company.
This is an example of how important it is to prepare a thorough and complete analysis. As is often the case in valuing real estate, one of the primary issues was the determination of the highest and best use. Plaintiff’s expert carefully studied the legally permissible factors, such as zoning and plat approval, and relied on the input of collateral experts, namely, a civil engineer and a traffic engineer, who prepared a site plan, cost estimates for transportation improvements, and a traffic study, among other things. Respondent’s expert did not consult with any engineers nor did he consider the rezoning of the property, the city’s plat approval, sound barriers, the other local access interchange, or the build-out of residential property. Further, plaintiff’s expert valued the property using three methodologies, while respondent’s expert used only one. Plaintiff’s appraiser identified key factors, considered all the available data, applied proper appraisal techniques, and prepared a careful and logical analysis. Along with the other experts, Shenehon Company had successfully persuaded the District Court that the special assessment exceeded the benefit to the property. After considering the appeal issues raised by the city, the Court of Appeals affirmed the decision.