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<br />Mr. Dennis Welsch <br />January 6,2004 <br />Page 3 <br /> <br />damages. As a matter of appraisal methodology, however, that argument does not work. <br />Either the income approach or the land valuation (sales comparison) approach is used; they are <br />not cumulative. To add the two numbers together would constitute double-counting. The <br />income producing potential of the land being condemned was already taken into consideration <br />when the $55,000 value was determined. Indeed, the land's ability to produce income is what <br />gives it that value in the first place. If this land was not able to produce income given its <br />location, its value would have been much lower. By paying $55,000, the City will already be <br />paying for the income potential of the condemned land. <br /> <br />In short, there is no bona fide reason for paying an additional $20,000. Having said <br />that, however, there are other factors that must be considered. First, appraising is hardly an <br />exact science. Even if Mr. Garley's appraiser accepts the above argument, that will not stop <br />him from coming up with his own figures for land value that are higher. After all, if you ask <br />three different appraisers about a property value, you will get three different answers. <br /> <br />Second, there is a cost to disputing their position. If a settlement is not reached, we will <br />proceed to a commissioners' hearing, with all of its attendant attorney fees, appraisal fees and <br />commissioner fees. These costs will continue to rise if the issue is appealed to district court for <br />a full trial. <br /> <br />Thus, while we can fight them on the merits, it will be more efficient and cost-effective <br />to find some middle ground and call it good. Our suggestion is to (1) clarify the parking issue, <br />and then (2) give them a counteroffer while at the same time informing them of our view of <br />their arguments. Counsel for the landowners has stated several times that the Garleys do not <br />want to litigate. If that is true, then we should be able to find some figure that both sides can <br />accept. <br /> <br />Please give me a call to discuss this. I would like to see the parking issue clarified as <br />soon as possible and a counteroffer proposed. The case proceeds to its initial hearing in early <br />February. <br /> <br />Very truly yours, <br /> <br /> <br />Enc. <br /> <br />RRM: 56997 <br />