The opinion of the court was delivered by: Sylvia H. Rambo United States District Judge
On March 14, 2006, following the Third Circuit's opinion in U.S. v. 6.45 Acres of Land, 409 F.3d 139, 141 (3d Cir. 2005), this court held a telephonic conference with counsel for the United States, Overview Limited Partnership ("Overview"), and Hans and Christina Enggren ("the Enggrens"). For the reasons that follow, the court will amend the judgment of March 17, 2003 and enter judgment of 3.932 million dollars against the United States and order Overview and the Enggrens to proceed to arbitration to determine the distribution of the award.
On November 27-29, 2001, the court conducted a non-jury trial for the purpose of determining the fair market value of 6.45 acres of land that were the subject of a condemnation action brought by the United States.*fn1 During the non-jury trial, the court heard from three experts: Robert Von Ancken on behalf of Overview; David Lenhoff on behalf of the Government; and William Siverling on behalf of the Enggrens. Following the non-jury trial, the court issued Findings of Fact and Conclusions of Law. (Doc. 216.) On March 17, 2003, the court ordered the United States to pay 2.7 million dollars to the Enggrens and 3.932 million dollars to Overview. (Doc. 266.) The Government timely appealed, and the Third Circuit reversed and remanded the court's March 17, 2003 order.
During the March 14, 2006 telephonic conference, the following issues were raised: 1) whether the court should assess the value of Tract 4-203 and Tract 4-204 collectively or separately; 2) whether the court's assessment of the value of the Tracts should include lease payments from Overview to the Enggrens; and 3) whether the court should hold an additional hearing to determine if 3.932 million dollars accurately reflects the value of the Tracts as calculated under the unit rule.*fn2
The court will address each issue in turn.
A. The Collective or Separate Assessment of Tract 4-203 and Tract 4-204
The Third Circuit provided that the court could have "separately valued Tract 4-203 and Tract 4-204 while still adhering to the unit rule." Id. at 148 n.15. However, for the reasons that follow, the court finds that there is no practical approach to value the Tracts separately from one another, and the court will not do so.
On Tract 4-204, which is owned in fee simple by the Enggrens and leased to Overview, is the National Tower. On Tract 4-203, which is owned in fee simple by Overview, is a gift shop, a restaurant, and a parking lot. The court finds that without the parking lot located on Tract 4-203 the potential revenue generated by the National Tower, and thus the value of Tract 4-204 is substantially diminished. Likewise, the revenue of the gift shop and the restaurant, and thus the value of tract 4-203 would be substantially diminished without the attraction of the National Tower.
Suffice it to say, the values of Tract 4-203 and Tract 4-204 are interrelated in such a way that it is practically impossible to appraise their value without reference to one another. For this reason, and because the Third Circuit did not rule otherwise, the court will consider Tract 4-203 and Tract 4-204 along with the right of way easements designated as Tract 4-108, Tract 4-109, Tract 4-220 as one unit for purposes of determining their value.
The court recognizes that valuing the Tracts as one unit necessitates a further dividing of the interest in the value of the award between the Enggrens and Overview. Because the lease between the Enggrens and Overview contains an arbitration clause, the court will order the parties to proceed to arbitration to apportion the value of the award.
B. Inclusion of the lease Payment From Overview to the Engrrens
In accordance with the Third Circuit's opinion, the court will vacate its award of 2.7 million dollars to the Enggrens based upon the lease payments paid by Overview. According to the Third Circuit, this court erred when "it strayed from the clear path of the unit rule and, . . . 'double counted' a key component of its estimate of the land's value . . . ." Id. at 141. Specifically, the Third Circuit found that the Government's expert, Lenhoff, valuation of the fee as a whole did not include lease payments as an expense to Overview because the lease payments were "merely a transfer of funds between interest holders that would cancel out under a unit valuation." Id. at 149. Thus, Lenhoff's valuation of the fee "did not exclude-but ...