A basic principle of condemnation law is that the condemnee is entitled to have its property valued at its highest and best use on the date of condemnation. However, even when there is agreement by both sides on the highest and best use of the property, there can sometimes be breathtaking differences between the values put forth by the parties’ appraisers. This article will discuss several relatively recent cases where highest and best use was a central issue, in all but one of which the different approaches resulted in appraisals that differed by tens of millions of dollars.
“Highest and best use” is first and foremost an appraisal concept, and means “the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, and financially feasible and that results in the highest value.”1 In developing support for the appraiser’s highest and best use opinion, the appraiser considers four criteria: The use must be (1) legally permissible, (2) physically possible, (3) financially feasible, and (4) maximally productive.2
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