How much was it worth, and when was it worth it? That’s the question being fought out in Maricopa Superior Court in a heated battle between Toll Brothers Homebuilders and the City of Scottsdale [Thanks M!]
Luxury home builder Toll Brothers Inc. faced off Wednesday with Scottsdale, opening one of the priciest condemnation lawsuits in Arizona history.
The $73 million, high-stakes case launched on an emotional note, with Toll Brothers attorney Dale Zeitlin objecting twice to Scottsdale’s opening statement and then demanding a mistrial.
It was denied by Maricopa Superior Court Judge Paul A. Katz.
Both attorneys agreed that the nine jurors will decide one single point after a two-week battle of appraisers – what was the fair market value of a piece of land Scottsdale seized on Jan. 16, 2004, for the city’s McDowell Sonoran Preserve.
Toll says the site at Thompson Peak Parkway and Bell Road was worth $107 million.
Scottsdale values it closer to $34 million.
In a nutshell, here’s what happened:
Toll bought the 783-acre parcel at a state trust-land auction in 2002, after Scottsdale had informed bidders that the city would take the eastern half of the site for the Gateway entrance to the preserve.
Scottsdale had hoped for a quick flip, not much above the final auction price of $87,000 an acre.
Toll had other calculations for the fair market value of the land, and the two sides have been locked in a bitter feud ever since.
The Republic allows readers to blog this article, and I kind of liked the solution offered by poster "marcy4053":
Nice trick, buy the entire parcel knowing that the city wants 1/2 and then offer to sell them that 1/2 for more than you paid for the whole thing.
Toll just needs the cash because their business is coming apart at the seams and they are bleeding red ink.
Scottsdale might want to consider dropping the condemnation lawsuit and picking up the parcel at a bankruptcy sale. In the meantime they could short sell $87M worth of TOL stock and reap double the rewards when they go belly up.
It sounds like a possible solution to me. : )
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True story: A friend of the family used to work for Toll Brothers. The poor quality of their construction caused him to create the following slogan:
Toll Brothers Homes: Guaranteed for Five Years. Then They Fall Apart.
The cities intent, as declared, is not binding. After all eminent domain is not a given or mandatory thing, as recent court cases have decided.
Toll Brother’s value is at $136,653 per acre. Not so ridiculous for prime real estate. And if Scottsdale wanted the property, they could have purchased it at the land trust auction. Instead they hoped to get some sucker to buy it, then pull down the price with eminent domain.
Why should we expect Toll Brothers to take a hit, or criticize them for standing up for their interests. Should we criticize those who attempt to reduce parking tickets, or deduct charitable donations?
$136,653 is a ridiculous price for the date of valuation that is at issue in the trial. It’s not about what “prime real estate” (even if this is that) is worth now, it’s about what it was worth when it taken by the City under its eminent domain power. Why should taxpayers pay more than what the land was fairly valued for? It’s the fair price at the time the land was taken that the jury will have to determine.