Court Opinion

ID: 8203245
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:48:18.745199+00
Date Added: 2024-06-11T16:41:00.874862
License: Public Domain

DAVID T. PROSSER, J.
¶ 89. (dissenting). "Property must be secured or liberty cannot exist." John Adams 1791.1
¶ 90. The protection of private property is one of the principal objectives of the United States Constitution.2 The original constitution prohibited the states from passing any "law impairing the obligation of contracts."3 The Fifth Amendment added that "[n]o person shall... be deprived of... property, without due process of law; nor shall private property be taken for public use, without just compensation." The Fourteenth Amendment imposed the due process limitation upon the states, and the United States Supreme Court later interpreted this due process provision as incorpo*600rating just compensation.4 The prohibition against the impairment of contracts and the requirement of just compensation are embodied in the Wisconsin Constitution.5
¶ 91. This case concerns just compensation for a prepaid, long-term lease. The issue presented is whether the City of Milwaukee Redevelopment Authority (Redevelopment Authority) may take private property that is subject to a prepaid, long-term lease that has value, evict the leaseholder from the property, and demolish the property, impairing and terminating the leaseholder's contract and real property rights in the process, without paying the leaseholder any compensation whatever for the taking of its property. In short, may the Redevelopment Authority extinguish the leaseholder's rights without any compensation and still comply with all the constitutional requirements designed to protect private property rights?
¶ 92. The unusual circumstances of this case, culminating in zero payment for the taking of an 11-story building on historic Wisconsin Avenue in Milwaukee, as well as the termination of a valuable leasehold interest in that building, cry out for an exception to the "unit rule" because of the grossly unjust result that it visits upon the leaseholder. The majority will hear none of it. Indeed, the majority seizes the opportunity presented by this case to (1) disavow existing exceptions to the unit rule in Wisconsin law; *601(2) minimize Justice Oliver Wendell Holmes, Jr. and the Wisconsin cases citing his landmark decision in Boston Chamber of Commerce v. City of Boston, 217 U.S. 189 (1910); (3) repudiate the concept of consequential damages under the Wisconsin Constitution; and (4) validate the unprecedented proposition that no compensation is just compensation for the taking of valuable property. Thus, the majority decision represents a very different view of private property rights from what we are accustomed to in Wisconsin. For the reasons stated below, I respectfully dissent.
I
¶ 93. As noted, the facts in this dispute are unusual. The VFW was the sole owner of a parcel of real property situated on the south side of Wisconsin Avenue at 26th Street in downtown Milwaukee. In 1961, the VFW conveyed its land with improvements to Towne Metropolitan (Towne), a real estate development company that planned to construct a large hotel on the site. In return for the conveyance of its property, the VFW obtained a 99-year lease for 5,250 square feet on the ground floor of the new hotel. This lease contained an option to renew for another 99 years. It also provided that the VFW's space would be designed for VFW purposes and that all leasehold improvements and equipment would be furnished by the lessor. In addition, the annual rent was to be only $1.00, and the lessor would pay all real estate taxes, heating, air conditioning, and maintenance costs, and would redecorate the premises every seven years.
¶ 94. The terms of this lease were honored by Towne when the 11-story hotel was operated by Hilton Hotels, and later Holiday Inn, and then honored by Marquette University (Marquette), which acquired the property in 1986.
*602¶ 95. Over time, the neighborhood declined, and the 11-story building began to deteriorate. In 1994, Marquette sold the property, which was being used for student housing, to the Maharishi Vedic University (the Maharishi) for $600,000. The Maharishi never occupied the property.
¶ 96. One of the major fact questions in this case is why the Maharishi never occupied the building. Counsel for the Redevelopment Authority explained that the new owner was never given occupancy permits, presumably because the building had building code violations. Counsel for the VFW asserted that the City of Milwaukee refused to act on repeated demands by the VFW that the City enforce the building code against the new owner. Instead, the City simply continued to assess and tax the property at a value near the 1994 purchase price, while the Redevelopment Authority sent signals of its intention to condemn the property as part of an urban redevelopment project. In February 1998, the Redevelopment Authority held a public hearing to consider creating a redevelopment district, and after the hearing, it issued a relocation order. All these factors contributed to the deterioration of the building and its eventual abandonment by the Maharishi.
¶ 97. On January 18, 2001, after identifying three comparable properties and utilizing the unit rule, the Redevelopment Authority issued a jurisdictional offer in the amount of $440,000 to be divided between two named owners, the Maharishi and the VFW On February 28, 2001, the $440,000 proposed Award of Damages was deposited with the Milwaukee County Clerk of Circuit Court. The award covered not only the land, the hotel building on the land, the personal property in the building, and the lease, but also an adjoining parking lot owned exclusively by the Maharishi.
*603¶ 98. On December 7, 2001, the Milwaukee County Circuit Court divided the Award of Damages. The Maharishi was awarded $140,000, less delinquent taxes, for the adjoining parking lot and its personal property in the hotel; the VFW was awarded $300,000, less taxes due, for the value of its leasehold interest.
¶ 99. The City had assessed the former hotel property at $566,000 for tax purposes in the year prior to the taking. It reduced the assessment to $1,000 for the year of the taking.
¶ 100. On February 15, 2002, the VFW appealed the adequacy of the Award of Damages to the Condemnation Commission (the Commission) pursuant to Wis. Stat. § 32.05(9). The Maharishi did not join this appeal, having accepted an award of $140,000, less delinquent taxes. After litigation to determine how the Commission should value the property, the Commission valued the total property, using a strict application of the unit rule, at $425,000; that is, $15,000 less than the Redevelopment Authority's jurisdictional offer. This award was made in December 2004.
¶ 101. The VFW appealed to Milwaukee County Circuit Court. After a four-day trial in September 2006, a jury determined that the hotel building had no value. The jury was not permitted to consider the value of the VFW's leasehold. The court thereupon entered judgment against the VFW in the amount of $387,348.24, taking back the $300,000 that was paid to the VFW as part of the allocation of the Award of Damages, plus accumulated interest and costs.
¶ 102. The VFW appealed, and the court of appeals, in a unanimous decision, reversed. The court of appeals remanded the case to the circuit court for a determination of the value of the VFW's prepaid, long-term lease. It determined that the unit rule, as applied *604to the unusual facts of this case, was unconstitutional because it permitted a taking of the VFW's entire leasehold interest (as well as the building and underlying land) for zero compensation.
¶ 103. The Redevelopment Authority sought review in this court on grounds that the unit rule was and is the only appropriate method of valuing the combined interests in the property taken. The Redevelopment Authority asserts that it was acting prudently in condemning the property, evicting the VFW, and razing the building (as it did in 2003). It asserts that the building had become unsafe to its tenants and an impediment to area renewal and that it spent hundreds of thousands of dollars to raze the building and the adjoining parking ramp to prepare the area for future development.6 The Redevelopment Authority claims that the court of appeals decision is unprecedented and will adversely impair the legitimate interests of public condemnation throughout Wisconsin.
II
¶ 104. The Fifth Amendment to the United States Constitution and Article I, Section 13 of the Wisconsin Constitution require that just compensation be paid when the government takes private property for a public purpose. This requirement bars the government " 'from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'" Dolan v. City of Tigard, 512 U.S. 374, 384 (1994) (quoting Armstrong v. United States, 364 U.S. 40, 49 (1960)).
*605¶ 105. "It has long been established that the holder of an unexpired leasehold interest in land is entitled, under the Fifth Amendment, to just compensation for the value of that interest when it is taken upon condemnation . . . ." Alamo Land & Cattle Co. v. Arizona, 424 U.S. 295, 303 (1976) (internal footnote omitted); Maxey v. Redevelopment Auth. of Racine, 94 Wis. 2d 375, 400, 288 N.W.2d 794 (1980) ("It is well settled that a lessee has a property interest; and, when that interest is completely taken by a condemning authority, the lessee is entitled to compensation."); see also United States v. Petty Motor Co., 327 U.S. 372 (1946); A.W. Duckett & Co. v. United States, 266 U.S. 149 (1924).
¶ 106. The United States Supreme Court has said that just compensation "normally is to be measured by 'the market value of the property at the time of the taking contemporaneously paid in money.’" United States v. 50 Acres of Land, 469 U.S. 24, 29 (1984) (quoting Olson v. United States, 292 U.S. 246, 255 (1934)). The Court has explained that just compensation could be measured in various ways depending on the circumstances. "In an effort... to find some practical standard, the courts early adopted, and have retained, the concept of market value." United States v. Miller, 317 U.S. 369, 374 (1943). "Deviation from this measure of just compensation has been required only 'when market value has been too difficult to find, or when its application would result in manifest injustice to owner or public.'" 50 Acres of Land, 469 U.S. at 29 (quoting United States v. Commodities Trading Corp., 339 U.S. 121, 123 (1950)); Kirby Forest Indus. v. United States, 467 U.S. 1, 10 n.14 (1984).
¶ 107. The unit rule is a valuable tool in determining market value in a condemnation involving a *606single parcel of property that is encumbered by more than one interest, such as a lease. Specifically, "[t]he unit rule requires that [the] real estate be valued in respect to its gross value as a single entity as if there was only one owner." 4 Nichols on Eminent Domain § 13.01[16][a] (3d ed. 2007). "[The] rule exists for the protection of the condemnor," as it ensures that the aggregate value of the separate interests in the property cannot exceed the property's value as an unencumbered whole. Id., § 13.08[2]. "Ordinarily no difficulty (or apparent injustice) arises from the application of the [unit] rule. The value of a lease is paid to the lessee and deducted from the compensation of the owner of the fee." Id., § 12.05[1].
¶ 108. Although the unit rule is the generally accepted method for valuing condemned property that is encumbered by various interests, its operation cannot displace the constitutional mandate of just compensation. State v. Platte Valley Pub. Power & Irrigation Dist., 23 N.W.2d 300, 312 (Neb. 1946).7 Accordingly, the unit rule cannot dictate the determination of just compensation in all cases involving multiple interests. United States v. 6.45 Acres of Land, 409 F.3d 139, 147 (3d Cir. 2005) ("[T]he unit rule is [not] to be applied rigidly in all cases."); Nebraska v. United States, 164 *607F.2d 866, 869 (8th Cir. 1947) ("[T]he [unit] rule is not one that is autocratically absolute."); Nichols on Eminent Domain, supra, § 13.08[4] ("Despite statements indicating broad acceptance of the unit rule, other methods have been approved by courts in valuing a leasehold interest."); see also majority op., ¶ 45 (discussing a host of jurisdictions that have departed from the unit rule).8
¶ 109. In some cases, "a departure [from the unit rule] may be necessary to avoid grossly unjust results. See, e.g., United States v. Welch, 217 U.S. 333, 338 (1910)." 6.45 Acres of Land, 409 F.3d at 148 (emphasis added); United States v. 499.472 Acres of Land, 701 F.2d 545, 549 (5th Cir. 1983); United States v. Corbin, 423 F.2d 821, 828 (10th Cir. 1970); Nebraska, 164 F.2d at 869; Arkansas State Highway Comm'n v. Fox, 322 S.W.2d 81, 82-83 (Ark. 1959); People ex rel. Dep't. of Pub. Works v. Lynbar, Inc., 62 Cal. Rptr. 320, 327 (Ct. App. 1967); State Highway Dep't. v. Thomas, 154 S.E.2d 812, 815-16 (Ga. Ct. App. 1967); Wilson v. Fleming, 31 N.W.2d 393, 401-02 (Iowa 1948); Mayor of Baltimore v. Latrobe, 61 A. 203, 205-06 (Md. 1905); State ex rel. McCaskill v. Hall, 28 S.W.2d 80, 82 (Mo. 1930); Platte Valley, 23 N.W.2d at 307-08; see also majority op., ¶¶ 41, 49 ("Departure from the unit rule may be made in rare and exceptional circumstances.").9
*608¶ 110. There are rare exceptions to fair market value as the appropriate measure of just compensation, and there are rare exceptions to the unit rule as the appropriate way to determine fair market value. As the Supreme Court observed in Mississippi & Rum River Boom Co. v. Patterson, 98 U.S. 403, 408 (1878), "[exceptional circumstances will modify the most carefully guarded rule."
¶ 111. The court of appeals decision in this matter identified three Wisconsin cases where courts have recognized exceptions to the unit rule.
¶ 112. First is Luber v. Milwaukee County, 47 Wis. 2d 271, 177 N.W.2d 380 (1970). In Luber, this court interpreted Article I, Section 13 of the Wisconsin Constitution to award $11,200 in lost rent to the condemnees for 32 months of vacancy leading up to condemnation of their building. Id. at 273, 276, 284. The Milwaukee County Expressway Commission, which had condemned the building for a public purpose, was livid that it was being asked to pay for something more than the fair market value of the building. See id. at 276. "The question," this court stated, "is whether there are any interests, other than the building itself, for which appellants are constitutionally entitled to compensation." Id. at 278. The court answered with the following:
We think that under property concepts one's interest in rental income is such as to deserve compensation under the "just compensation" provision of the Wiscon*609sin Constitution. In the instant case it is undisputed that the pendency of the condemnation was the sole cause of the appellants' rental loss. The reason for formerly denying compensation for such interest was that the condemnor received no benefit from the taking thereof. This court, however, departed from such thinking when it said in Volbrecht v. State Highway Comm[ission, 31 Wis. 2d 640, 647, 143 N.W.2d 429 (1966),] that "Just compensation is what the owner has lost, not what the condemnor has gained...."
We believe that one's interest in rental loss is such as is required to be compensated under the "just compensation" clause of art. I, sec. 13, Wisconsin Constitution.
Id. at 279, 283 (internal footnote omitted) (first ellipsis in original).
¶ 113. Luber represented a departure from the unit rule when it recognized lost rents as a compensable loss and described the "inadequacy of merely awarding the fair market value of the property actually taken." Id. at 280. Luber is the flip side of this case, because here, the "rent" was prepaid when the VFW conveyed its entire property to the developer for its leasehold interest. The Luber case is also valuable in illuminating how a tenant can be scared off by the "imminent" threat of acquisition of the leased property, just as here the Maharishi was motivated not to repair the hotel property, and ultimately to abandon the property because of the actions of the City and the Redevelopment Authority.
¶ 114. The second case is Maxey, 94 Wis. 2d 375. The facts in Maxey are complicated, but in essence, Maxey's 99-year lease in a building that was con*610demned by the Racine Redevelopment Authority rendered Maxey the owner of the building for purposes of a potential inverse condemnation award. Id. at 384. Maxey filed an inverse condemnation action three days before the Redevelopment Authority filed a direct condemnation action. Id. at 381.
¶ 115. The facts and reasoning of the Maxey case present striking parallels to the present case:
A. The unanimous court cited Luber with approval. Id. at 392.
B. The court reiterated that "long-term leasehold interests constitute ownership of land." Id. at 387-88.
C. The court closely tracked the conduct of the City of Racine and the Racine Redevelopment Authority leading up to formal condemnation. The City placed a moratorium on the issuance of theater licenses in the central business district of Racine, directly affecting a theater in Maxey's building which was denied renewal of its license. Id. at 385. The Redevelopment Authority and the City made published statements that the building "would be taken" through eminent domain. Id. The City and the Redevelopment Authority contacted tenants and told them that the property would be condemned and encouraged tenants to vacate the premises. Id. Some of these actions occurred more than three years before the actual petition for condemnation was filed. Id. The circuit court determined that a taking had effectively occurred two years before the Redevelopment Authority formally filed its petition for direct condemnation. Id. at 386. This court stated that "there was some impingement upon Maxey's uninhibited use of the property almost from the time the redevelopment project was proposed in 1973," id. at 388, which was well over three years before formal condemnation. The circuit court *611found that "the City of Racine and the Redevelopment Authority were responsible for each other's acts." Id. at 386. This court summed up the circuit court's finding with the comment that "the City of Racine and the Redevelopment Authority were to be considered as alter egos in respect to the condemnation of the Baker Block Building." Id. at 390. The parallels to this case are self-evident.
D. The court cited Just v. Marinette County, 56 Wis. 2d 7, 201 N.W.2d 761 (1972), Howell Plaza, Inc. v. State Highway Commission, 66 Wis. 2d 720, 226 N.W.2d 185 (1975), and Howell Plaza, Inc. v. State Highway Commission, 92 Wis. 2d 74, 284 N.W.2d 887 (1979), to illustrate how government actions that effectively deprive a property owner of practically all beneficial use of his property, amount to a constructive taking or an inverse condemnation. Maxey, 94 Wis. 2d at 389-91. In this case, when the Redevelopment Authority acknowledges that the City would not give the Maharishi occupancy permits for the hotel building, it reveals similarities to the Maxey case.
E. The court said that "under ordinary circumstances, a lessee is entitled to some portion of the condemnation award." Id. at 401. It construed a "condemnation clause" in Maxey's lease to avoid a forfeiture: "The Wisconsin law, like the law generally, abhors a forfeiture." Id. at 403. "We conclude that the court erred when it interpreted the clause to completely deprive the lessee of any interest." Id. at 400.10
F. The court remanded the case to the circuit court so that Maxey could proceed on an inverse condemna*612tion claim. Id. at 406. The effect of this ruling was to avoid a narrow interpretation of condemnation damages under the unit rule because it recognized damages that were incurred before the formal taking.
¶ 116. The third case is Redevelopment Authority of Green Bay v. Bee Frank, Inc. (Bee Frank II), 120 Wis. 2d 402, 355 N.W.2d 240 (1984). In Bee Frank II, the circuit court, interpreting condemnation statutes, considered the separate appeal of a lessee who owned immovable fixtures in a condemned building. Id. at 404-05. The Green Bay Redevelopment Authority offered $282,000 to the owner of the building and offered $168,000 to Bee Frank for loss of its immovable fixtures. Id. at 405-06. Both parties rejected the offer. Id. at 406. The circuit court scheduled a hearing before the Condemnation Commission. Before that hearing, the owner of the building settled for $296,100. The Condemnation Commission then awarded Bee Frank $210,000, "an amount $41,592 (approximately 25 percent) in excess of the Redevelopment Authority's jurisdictional offer." Id. When Bee Frank asked for litigation expenses, the Redevelopment Authority objected. Id.
¶ 117. The court recounted the procedural history:
The trial court rejected the Redevelopment Authority's argument that the total amount of the property as a whole should be involved in determining Bee Frank, Inc.'s entitlement to litigation expenses ....
The Redevelopment Authority appealed .... In a published opinion, the court of appeals held that immovable trade fixtures were an integral part of the building and could not be considered separately from the purchase price for the land and building in determining entitlement to litigation expenses.
*613Id. at 406-07 (citing Redevelopment Auth. of Green Bay v. Bee Frank, Inc. (Bee Frank I), 112 Wis. 2d 1, 331 N.W.2d 840 (Ct. App. 1983)).
¶ 118. In its decision, the court of appeals stated that a separate award could not be made for fixtures because of the unit rule. Bee Frank I, 112 Wis. 2d at 7. But this court disagreed:
Respondent... argues that the unit rule of damages for real estate valuation mandates a finding that awarding separate litigation expenses to the owner of the immovable fixtures is impermissible. The unit rule requires improved real estate to be valued as a single entity for purposes of determining the total value of property taken through condemnation .... [However, w]hile the unit rule of damages is a controlling principle in eminent domain actions, its application in determining entitlement to litigation expenses ... contravenes the public policy.
Bee Frank II, 120 Wis. 2d at 413-14 (emphasis added) (internal citations omitted).
¶ 119. The plain truth is, in Bee Frank II, the value of immovable fixtures was determined separately from the value of the whole property, and litigation expenses were not keyed to the value of the whole property. The unit rule was disregarded in fact while it was being affirmed in rhetoric.11 The rule was set aside because its application would have contravened public policy.
*614¶ 120. The majority opinion in this case is quick to dismiss exceptions to the unit rule without coming to *615grips with the fact that exceptions were recognized in Luber, in Maxey, and in Bee Frank II. The majority is quick to borrow snippets from cases like Maxey and Green Bay Broadcasting Co. v. Redevelopment Authority of Green Bay, 116 Wis. 2d 1, 342 N.W.2d 27 (1983), which preceded Bee Frank II, to resist any relief to a property owner whose property was taken without any compensation whatever, as though addressing a grossly unjust result on highly unusual facts is somehow an illegitimate undertaking. Permitting a limited exception to the unit rule on the extreme facts before us would not undermine the rule any more than three previous exceptions have undermined the broad and general application of the rule.
Ill
¶ 121. In its decision, the court of appeals sought to provide a rationale for an exception to the unit rule in this case. It cited several different federal and state cases, including Boston Chamber of Commerce, in which Justice Oliver Wendell Holmes, Jr., penned an oft-quoted aphorism pertaining to just compensation:
[T]he Constitution does not require a disregard of the mode of ownership .... It does not require a parcel of land to be valued as an unencumbered whole when it is not held as an unencumbered whole. It merely requires that an owner of property taken should be paid for *616what is taken from him. It deals with persons, not with tracts of land. And the question is what has the owner lost, not what has the taker gained.
Boston Chamber of Commerce, 217 U.S. at 195 (emphasis added). The court of appeals observed that, in this case, "the taker gained, according to the jury.. ., a building that was worthless when measured against fair market value. But what has the VFW lost? The jury was not allowed to consider the value of the leasehold because of the unit rule." City of Milwaukee Post No. 2874 Veterans of Foreign Wars of the United States v. Redevelopment Auth. of Milwaukee, 2008 WI App 24, ¶ 26, 307 Wis. 2d 518, 746 N.W.2d 536.
¶ 122. The majority leaps to fend off any unfair question about what the VFW has lost: "[T]he VFW errs in relying upon Boston Chamber of Commerce, stating in part that 'the question is, What has the owner lost? not, What has the taker gained?'" Majority op., ¶ 67 (citation omitted). The majority tries to dismiss the statement by Justice Holmes as "not persuasive" and taken out of context. Id. 67-79.
¶ 123. In fact, several Wisconsin Supreme Court cases have recognized the Holmes standard when determining just compensation in condemnation cases. See, e.g., Luber, 47 Wis. 2d at 279-80; Besnah v. City of Fond du Lac, 35 Wis. 2d 755, 758, 151 N.W.2d 725 (1967); Volbrecht, 31 Wis. 2d at 647. Despite the expressed acceptance of this standard in Wisconsin case law, the majority attempts to minimize the import of Justice Holmes's statement on the constitutional issue of just compensation. See majority op., ¶¶ 67-79.
¶ 124. The majority opinion dissects the Boston Chamber of Commerce case as though a penetrating new look at the facts will wipe out a century of legal *617decisions adhering to the Holmes standard. The Holmes standard is not irrelevant, as evidenced by the Supreme Court's decision in Brown v. Legal Foundation of Washington, 538 U.S. 216, 235-36 (2003), where Justice Stevens wrote as follows: ”[T]he just compensation' required by the Fifth Amendment is measured by the property owner's loss rather than the government's gain. This conclusion is supported by consistent and unambiguous holdings in our cases." (Emphasis added.) Similarly, in City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 710 (1999), Justice Kennedy observed that "[j]ust compensation .. . differs from equitable restitution and other monetary remedies available in equity, for in determining just compensation, 'the question is what has the owner lost, not what has the taker gained.'" (Quoting Boston Chamber of Commerce, 217 U.S. at 195.)
¶ 125. The majority contends that determining just compensation by evaluating what the owner has lost and not what the taker has gained "would be inconsistent with the Court's oft-repeated endorsement of the market approach to determining just compensation." Majority op., ¶ 77. This overgeneralization is grounded in the fiction that the VFW lost nothing when its leasehold interest was taken, and it fails to appreciate that the individual valuation advocated by this dissent would measure the fair market value of what the owner (VFW) has lost. See infra, ¶ 132.
IV
¶ 126. The majority opinion makes the following statement: "[T]he 'fairness award' doctrine adopted by the court of appeals conflicts with the principle that damages lacking a direct relationship to the fair market value are incidental or consequential damages and are *618not considered when determining just compensation under the constitution." Majority op., ¶ 52. This statement serves little purpose except to reopen hostilities over issues considered at length in City of Janesville v. CC Midwest, Inc., 2007 WI 93, 302 Wis. 2d 599, 734 N.W.2d 428, and to drive another nail into this court's notable decision in Luber.
V
¶ 127. The most disturbing element of this case is that the majority approves the unprecedented proposition that no compensation is just compensation for the taking of valuable property.
¶ 128. Like Justice Holmes, Justice Hugo Black had the facility for putting profound truths into simple words. In Commodities Trading Corp., 339 U.S. at 123, he wrote the following in regards to just compensation: "[T]he dominant consideration always remains the same: What compensation is 'just' both to an owner whose property is taken and to the public that must pay the bill?"
¶ 129. Zero compensation is not "just" to the leaseholder in this case. It exposes the absence of any balance between the interests of the leaseholder whose property is taken and the interests of the Redevelopment Authority that willfully moved to condemn the property. It takes the position that "compensation may be just although it does not provide full indemnification to a condemnee"12 to its extreme, as though it were some inexorable rule that Stepford judges are powerless to resist regardless of the circumstances.
¶ 130. The majority cites Green Bay Broadcasting with approval. This is the case in which the court *619admits, "The unit rule is designed to protect the interests of the condemnor and not to protect the interests of a condemnee." Green Bay Broadcasting, 116 Wis. 2d at 11. This quote is unnerving to people who believe that our constitutions were designed to protect property owners, not property takers.
¶ 131. The unit rule usually works well, but it is not part of either the federal constitution or the state constitution, as the Redevelopment Authority insists, and it is unconstitutional when it deprives a property owner of just compensation. In this instance, we must fashion and apply something other than strict adherence to the unit rule to comply with constitutional provisions protecting property.
¶ 132. Rather than employing the unit rule at the expense of the U.S. and Wisconsin constitutions, this court should recognize an exception to the unit rule in this case so that the VFW's leasehold interest is valued independently of the property's fee simple interest. Specifically, the VFW's leasehold interest should be valued separately from the rest of the property by subtracting the value of the contract rent for the period remaining on the lease (what the VFW was obligated to pay during the lease period) from the value of the market rent for the period remaining on the lease. See, e.g., Maxey, 94 Wis. 2d at 400-01; see also Nichols on Eminent Domain, supra, § 13.08[6]; majority op., ¶¶ 22 n.10, 45.13 This method "will adequately compensate *620[the VFW] for any pecuniary loss resulting from the taking."14 Nichols on Eminent Domain, supra, § 13.08[6].
¶ 133. There may be other ways to arrive at just compensation. For instance, there ought to be some reasonable relationship between the assessed value of property for tax purposes and fair market value. The assessed value of the hotel property was $566,000 in 2000, two years after the Redevelopment Authority signaled its intent to condemn the property. The Redevelopment Authority offered $300,000 for the VFW's leasehold interest, a figure close to what its appraiser later testified the land alone would be worth. None of these three approaches will yield "just compensation" of zero.
¶ 134. The majority has given no attention to the most appropriate method of measuring the value of the VFW's leasehold interest because it is committed to the proposition that, on these facts, zero compensation is just compensation.
¶ 135. To sum up: (1) the VFW had a prepaid, long-term lease of real value; (2) the lease was a recognized property interest, the taking of which requires just compensation; (3) there was no "condemnation clause" in the lease that forfeited the VFW's right to receive just compensation; (4) the City and the Redevelopment Authority together contributed to the decline of the underlying real property by their actions and inactions and by the lengthy delay between the *621condemning authority's announced intention to take the property and the filing of the condemnation petition; (5) the VFW was given no opportunity before the jury to prove the separate value of its leasehold interest, i.e., no opportunity to show what it lost; and (6) the VFW is being awarded no compensation whatever for the taking of its property.
¶ 136. Would that John Adams could rise from his grave to speak for the VFW, and for property rights in twenty-first century America. I believe he would observe that, if the VFW's property can be taken without compensation, no property is secure.
¶ 137. For the foregoing reasons, I respectfully dissent.
¶ 138. I am authorized to state the JUSTICE N. PATRICK CROOKS and JUSTICE PATIENCE DRAKE ROGGENSACK join this dissent.

 6 The Works of John Adams 280 (Charles Francis Adams ed., 1850).

 "One great obj [ective] of Gov[ernment] is personal protection and the security of Property." 1 The Records of the Federal Convention of 1787, 302 (Max Farrand ed., Yale Univ. Press rev. ed. 1937 (quoting Alexander Hamilton)); see also Adam Smith, Lectures on Jurisprudence 1 (Ronald L. Meek et al. eds., Oxford University Press 1978) (1762-63)
The first and chief design of every system of government is to maintain justice: to prevent the members of society from encroaching on one another's property, or seizing what is not their own. The design here is to give each one the secure and peaceable possession of his own property

 U.S. Const, art. I, § 10, cl. 1.

 Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 160 (1980); Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 122 (1978); Chicago, Burlington & Quincy R.R. Co. v. Chicago, 166 U.S. 226, 239 (1897).

 Wis. Const, art I, §§ 12 ("No ... law impairing the obligation of contracts[] shall ever be passed ... ."), 13 ("The property of no person shall be taken for public use without just compensation therefor.").

 The parcel of land at issue remains vacant and undeveloped after six years of ownership by the Redevelopment Authority. As a result, the parcel has yielded no tax revenue to local governments since it was condemned in 2001.

 The rule requiring just compensation to each owner for that which is taken must be applied in all instances under our Constitution. [A]ny rule that may be laid down must itself be measured by the rule given in the Constitution, and any rule that so limits the damages in such case as that the result will be in fact less than just compensation for the injury suffered falls short of the constitutional measure.
State v. Platte Valley Pub. Power & Irrigation Dist., 23 N.W.2d 300, 312 (Neb. 1946) (internal quotations omitted).

 See also majority op., ¶ 38 ("The constitutional requirement of just compensation cannot be reduced to a formula or expressed in inexorable rules." (citing United States v. Toronto, Hamilton & Buffalo Navigation Co., 338 U.S. 396, 402 (1949); United States v. Cors, 337 U.S. 325, 332 (1949))).

 See also 4 Nichols on Eminent Domain § 12.05[2] (3d ed. 2007)
The method of valuation based upon the undivided fee has been criticized where there was a great disparity between the *608value of the undivided fee and the aggregate value of the separate interests. Valuation of the separate interests, under such circumstances, has been held to be constitutional. It has, in fact, been intimated that where the [unit] rule operates to the prejudice of the interest of the condemnee it might be considered unconstitutional.
(Emphasis added.)

 There was no "condemnation clause" in the VFW's lease. Consequently, the leasehold interest of the VFW was not disqualified by contract from receiving all or part of any condemnation award.

 To understand the significance of Green Bay Redevelopment Authority v. Bee Frank, Inc. (Bee Frank II), 120 Wis. 2d 402, 355 N.W.2d 240 (1984), one must consider the case in relation to the analysis employed by the court of appeals in Green Bay Redevelopment Authority v. Bee Frank, Inc. (Bee Frank I), 112 Wis. 2d 1, 331 N.W.2d 840 (Ct. App. 1983). There, the court of appeals stated the following:
*614In eminent domain proceedings, Wisconsin has adopted the "unit rule of damages" approach for improved real estate, which requires that the real estate be valued as a single entity. "Buildings and improvements are not valued in isolation from the market value of the land, but are considered only to the extent that they enhance the value. The proper measure of damages is therefore the market value of the land with the improvements on it. ..." Milwaukee & Suburban Transport Corp. v. Milwaukee County, 82 Wis. 2d 420, 448-49, 263 N.W.2d 503, 518 (1978). A condemnation award should be based on the property's value as a whole as if there were only one owner, and it is only after the appropriated property's total value is determined that the award is apportioned among the various interests in the property.
In Milwaukee & Suburban Transport, the court also approved an instruction similar to Wisconsin Civil Jury Instruction 8135 used in eminent domain proceedings involving buildings with improvements. Both instructions require the jury to value the property as a single unit comprised of the various components... . The first question asked for the fair market value of the property taken. The remaining questions merely asked what calculations had gone into the jury's determination of overall value.
The State of New York, which has occasionally criticized the unit rule, nevertheless acknowledges that there is no dispute "that a separate award cannot be made for fixtures if what are claimed to be fixtures have become an integral part of the real property." Marraro v. State, 189 N.E.2d 606, 609 (N.Y. 1963). We agree. An appropriation of land is an appropriation of everything annexed to the land, whether classified as buildings or fixtures. Although the value of fixtures must be included in determining the appropriated property's total value, when a fixture has lost its identity by becoming a structural part of the building, it can no longer become the subject of a separate award.
Bee Frank I, 112 Wis. 2d at 5-7 (second emphasis added) (internal footnote omitted).
The court of appeals added in a footnote:
*615It appears questionable under a § 32.06 condemnation proceeding, however, whether a tenant who owns immovable fixtures in a building is entitled to a separate hearing before the commission or circuit court. It also appears questionable whether a non-titleholder to the property, such as a tenant, is ever entitled to litigation expenses in a § 32.06 condemnation proceeding.
Id. at 8 n.3.

 Majority op., ¶ 78.

 "The generally accepted measure of compensation for such a taking is the fair market value of the leasehold for the unexpired lease term.... A lessee is, therefore, entitled to a sum which will adequately compensate it for any pecuniary loss resulting from the taking." 4 Nichols on Eminent Domain, supra, § 13.08[6] (internal footnotes omitted).

 The majority opinion implicitly accepts that, if the VFW's property were valued separately according to this method, there would be some fair market value to the VFW's leasehold that would need to be compensated. See majority op., ¶ 22 n.10 ("[W]e accept for purposes of our review the VFW's contention that its leasehold interest had value.").