# Third District Court of Appeal

State of Florida

Opinion filed January 25, 2017

. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D15-1420

Lower Tribunal No. 12-26693

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### City of Sunny Isles Beach, etc.

,

Appellant,

vs.



### Calvary Corp., etc., et al.

,

Appellees.

An Appeal from the Circuit Court for Miami-Dade County, Jerald Bagley

, Judge.

Holland & Knight LLP, and Christopher N. Bellows, Rodolfo Sorondo, Jr.,

and Rebecca M. Plasencia; Hans Ottinot, City Attorney, and Fernando

Amuchastegui, Deputy City Attorney

, for appellant.

Akerman LLP and Gerald B. Cope, Jr.; Law Offices of Robin Bresky and

Joanne Rose Telischi and Michele K. Feinzig (Boca Raton); J. Wiley Hicks

, for

appellee, Karen P. Tucker, Trustee.

Before WELLS and SALTER, JJ., and SHEPHERD, Senior Judge.

SHEPHERD, Senior Judge.2

This is an appeal by the City of Sunny Isles Beach from the denial of its

motion for new trial, arising from a jury verdict in an eminent domain case setting

forth what the City owed the landowner as fair and just compensation for the

taking of a portion of a finger canal to build a bridge for use as an emergency

evacuation route to the mainland from the barrier island on which the city is

situated. The City claims evidentiary error in the proceeding. We find none and

write only to address the City’s contention that the trial court abused its discretion

by admitting into evidence conceptual site plans to establish the highest and best

use of the property as a private docking facility. A brief summary of the facts of

this case is necessary to explain our decision.

FACTS

The property in this case consists of 2.81 acres of predominantly submerged

land, created by dredge many years ago. The landowner or title holder of the fee is

Karen P. Tucker, Trustee (the “Owner”). The property today is one of many

natural or man-made canals which jut off larger water bodies in the state,

generating additional waterfront living and recreational opportunities for the

comfort and pleasure of its citizens. Like many of these finger bodies, especially

in South Florida, this finger canal dead-ends at one of its lengths. Before the

taking, the property included a bulkhead on its north side and a small upland strip

that connected it to North Bay Road, a major thoroughfare running along the3

eastern boundary of the barrier island on which the City is located, providing

access to other communities to the north and south, including the City of Miami

Beach. The canal also had unobstructed access to the Intracoastal Waterway. 1

In 2012, the City took .18 acres (approximately 7,900 square feet) of the

property to build a bridge to connect North Bay Road to the mainland. The bridge,

apparently well into the planning stages, intersects the canal property and will

impede marine access to the Intracoastal Waterway for most of the remaining canal

property. For all the years since the current owner acquired title to the property

and before, there has been no effort by an owner to develop the canal property. Its

use has been limited to casual use by private boaters who have motored into the

canal, jet skiers, and the like.

Although the Owner made no effort to develop the property before it

received the notice of taking from the City, it contended at trial, based upon

conceptual site plans prepared by one of its testifying experts, that the highest and

best use for valuation of the injury to the property caused by the taking is that of a

private docking facility for adjoining condominiums or homes. As evidence of the

economic viability of this use, the Owner points out that since it purchased the

property, the Winston Towers condominium complex, with 1,200 residential units,

1 An aerial photograph of the property showing the canal, its relationship to the

Intracoastal Waterway and development that has grown up around the property is

attached to this opinion. The canal runs in an east-west direction, with the east

end opening to the Intracoastal Waterway and the other a dead end.4

has been constructed along the property’s north side. The private docking facility

the Owner posits as the highest and best use for the property is proposed to be

comprised of forty-six boat docks.

The City counters that the proposed highest and best use has sprung forth

fully formed from the brow of one of its testifying experts solely for the purpose of

trial. The City accurately states the Owner of the property never took any

affirmative step to develop the property in any fashion, much less spent a single

cent to improve the underwater property or obtain an agreement with an adjoining

landowner to build parking, access and utilities to the hypothetical facility.

Despite testimony to the contrary, offered by the Owner’s experts, the City

proffered, somewhat disconcertingly, one might think, to those who regard the use

of one’s private property as a constitutional given, that the proposed facility is not

economically viable because it would require going through various permitting

agencies, including the U.S. Army Corps of Engineers, South Florida Water

Management District, Miami-Dade County (including its Manatee Protection

Plan), and numerous other commenting agencies that advise these permitting

agencies, such as the Florida Fish and Wildlife Conservation Commission, U.S.

Fish and Wildlife Service and National Oceanographic Administration. Opining

that the property “essentially had no economic use potential”

– sounding in

substance like a categorical taking

– the City appraiser opined the fair-market5

value for the entire parcel was $1,000. 2 Rejecting the City’s proffer, the jury

awarded the Owner the exact amount it sought, $855,000, as fair and just

compensation for the taking, including the reduction in value to the remaining

parcel resulting from lack of access to the Intracoastal Waterway. We find no error

in the jury verdict.

ANALYSIS

The United States and Florida Constitutions safeguard private property

rights. Daniels v. State Rd. Dep’t.

, 170 So. 2d 846, 849 (Fla. 1964). The Florida

Constitution guarantees that “[n]o private property shall be taken except for a

public purpose and with full compensation therefor paid to each owner.” Art. X, §

6(a), Fla. Const.

Where less than the entire property is sought to be appropriated, any

damages to the remainder caused by the taking must be included in the

compensation awarded. Partyka v. Fla. Dep’t of Transp.

, 606 So. 2d 495, 496 (Fla.

4th DCA 1992). “These ‘damages to the remainder’ are called ‘severance

damages’ and are measured by the reduction in value of the remaining property.”

Kendry v. Div. of Admin., State Dep’t of Transp.

, 366 So. 2d 391, 393 (Fla. 1978).

2 The City’s most recent valuation for property tax purposes was $1,300.

However, tax-assessed value is not conclusive evidence of market value, and is not

typically admissible in an eminent domain proceeding against a private landowner.

The Florida Bar, Florida Eminent Domain Practice and Procedure § 10.70 (9th ed.

2014).6

Thus, “full compensation [is required] for both the property taken and for damages

to the remaining property.” Fla. Power & Light Co. v. Jennings

, 518 So. 2d 895,

898 (Fla. 1987).

The Owner’s expert appraiser employed the “development approach,”

sometimes also referred to as “discounted cash flow” method, to determine the

market value of the property. 3 Although recognized in authoritative eminent

domain treatises, the first Florida court that dealt in any detail with this approach

for the valuation of an undeveloped tract of land was the First District Court of

Appeal in Boynton v. Canal Authority

, 265 So. 2d 722 (Fla. 1st DCA 1972). See 4

Julius L. Sackman, Nichols’ The Law of Eminent Domain § 12B.14 (rev. 3rd ed.

2001); The Florida Bar, Florida Eminent Domain Practice and Procedure

, § 9.62

3 Both the Owner’s appraiser and City’s appraiser explored using the sales

approach for valuing the property, but found insufficient data to support use of this

methodology. The Owner’s appraiser found only one comparable sale of vacant

canal property with no permitting in place, no uplands, no agreements with

adjacent landowners, and subject to the Manatee Protection Plan in nearby

Aventura, which had sold in 2006 for $300,000. The City’s appraiser found a

vacant canal parcel equal in size to the one here where the owner had obtained

County approval to building a private docking facility with approximately 120

slips and obtained an easement from nearby condominium owners for uplands

access. Although listed for sale, it had not sold by the time of the trial. While not

useful, strictly speaking, for determining market value of the instant property, this

evidence tended to confirm the testimony of the Owner’s environmental expert that

the issuance of the permits necessary to install a private docking facility on the

property was “reasonably probable.” See Bd. of Comm’rs of State Institutions v.

Tallahassee Bank & Trust Co.

, 100 So. 2d 67, 69 (Fla. 1st DCA 1958) (holding

this to be the standard for valuation of vacant land where prohibitions or

restrictions on use are modifiable or removable within a reasonable time).7

(9th ed. 2014). Boynton teaches that under the development approach: (1) the

property is valued as of the date of the taking; (2) the question for the appraiser is

what a willing buyer would pay for the property in its then-existing condition on

that date, for development into its highest and best use; and (3) the highest and best

use may be a prospective use. Id. at 724.

The Boynton decision is very similar to the case before us. In Boynton

, the

highest and best use of the property before the taking was “water oriented

recreational development,” but the taking eliminated the water access. The court

approved the use of the development approach to the facts of this case, explaining:

[T]he testimony sought to be adduced was based on the actual value

of the property at the time of the taking if sold for recreational

development, its highest and best use. Nothing had to be done to the

property in order to enhance its value. In arriving at his opinion as to

the present value of the property, the appellants’ appraiser took into

consideration the profit ratio of the developer, the time in which the

developer could sell the lots, and the number of lots the developer

could sell and at what price. These considerations were based on the

appraiser’s experience and were specifically considered in order to

show present value of the property in terms of what a developer would

be willing to pay at the present for the land. Therefore, the value

opinion was based on the property being sold at that time for

development

, not what the property would be worth if developed and

then sold, although the yield to the future developer was taken into

consideration by the appraiser in determining present value.

. . . .

The development approach is an acceptable method of valuation and

although no Florida case has dealt with it in detail, it is recognized in

Nichols on Eminent Domain, Second Edition, and Florida Eminent

Domain Practice and Procedure, Second Edition. The appraiser for8

appellants testified that the lack of comparable sales in the area

required the use of the development approach for an accurate

valuation. Accordingly, it is our view that the appraiser should have

been allowed to testify as to what the property could be sold for, with

the riparian rights attached, in keeping with his opinion that the

property is presently suitable for sale to a recreational developer.

Id. at 723-24 (emphasis added). Just as in Boynton

, the expert appraisal testimony

offered by the Owner under the “development approach” method for determination

of fair and just value in the case before us “was based on the actual value of the

property at the time of the taking if sold for [development as a private docking

facility], its highest and best use.” Id. The conceptual plans were plainly

admissible to illustrate and support the expert appraiser’s testimony.

The City argues that under Yoder v. Sarasota Cnty.

, 81 So. 2d 219 (Fla.

1955), overruled in part

, State Rd. Dep’t v. Chicane

, 158 So. 2d 753 (Fla. 1963),

the Owner’s appraisal evidence should have been excluded as speculative. The

City is mistaken. As the Boynton court explained, the development approach is

not speculative, and does not violate Yoder

. Boynton

, 265 So. 2d at 723-24.

Yoder is different. In Yoder

, the property owner, who was disappointed

with her fair and just compensation award in an eminent domain case, argued that

the trial court erred by excluding evidence of the greater value the property would

have if filled to a level sufficient to adapt it to various uses. The Supreme Court9

held the trial court correctly excluded this proffered evidence of the value,

explaining:

We have consistently ruled that the amount of compensation to be

awarded to a property owner when his property is sought to be taken

in an eminent domain proceeding is the value of the land taken at the

time of the lawful appropriation. It is appropriate to show the uses to

which the property was or might reasonably be applied, and the

damages, if any, to adjacent lands. Nevertheless, the value must be

established in the light of these elements as of the time of the lawful

appropriation. It is not proper to speculate on what could be done to

the land or what might be done to it to make it more valuable and then

solicit evidence on what it might be worth with such speculative

improvements at some unannounced future date.

. . .

Yoder

, 81 So. 2d at 220-21 (citations omitted). In the case before us, the Owner

did not violate Yoder because the Owner did not seek compensation based upon

what could or might be done to make the land more valuable and then solicit

evidence on what it might be worth. Rather, borrowing from language used in

Boynton itself, “the testimony [] adduced [in the case before us] was based upon

the actual value of the property at the time of the taking if sold for development [as

a private docking facility], its highest and best use.” 4

We note in passing that the valuation methodology used by the Owner in this

case, relying on a highest and best prospective use, even though the Owner has no

4 The Boynton court also held inapplicable Coral Glade Co. v. Bd. of Public

Instruction of Dade Cnty.

, 122 So. 2d 587 (Fla. 3d DCA 1960), where the owner

wanted compensation based on additional cost for the owner to complete a

development. The Boynton court explained the distinction, “[T]he opinion as to

the value was based on present value for recreational development, not on the

value of the property when developed.” 265 So. 2d at 724.10

plans to sell the property or use it for that use, is precisely the same strategy long

employed by county appraisers in appraising property for tax assessment purposes.

See

, e.g.

, Vero Beach Shores, Inc. v. Nolte

, 467 So. 2d 1041 (Fla. 1985); Miami

Atlantic Dev. v. Blake

, 334 So. 2d 29 (Fla. 3d DCA 1975). We affirm the award

made to the Owner of the canal property in this case.

Affirmed.11