The Emporia Gazette

May 27, 2012

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Appraiser Reg Cordry spent all morning and part of the afternoon on the witness stand Thursday as attorneys tried to pin down the value of a property owned by the DeBauge family.

The 61.52 acre site sits on U.S. Highway 50 west of Emporia near the Americus Road. The Kansas Turnpike Authority took nearly 10 acres of it last year for road improvements. An appraisal board awarded DeBauge Family Investments nearly $360,000 as compensation, but the family considered the total low and appealed it to a jury trial.

The family plans to use the site for commercial development.

Cordry, who owns Cordry Appraisal Services in Overland Park, evaluated the property for the KTA. His own estimate of the damages came to about $375,000 for the property taken and a narrow strip of land that he said was rendered useless.

Cordry based that estimate on sales of six other properties in Kansas and Missouri that he considered comparable. But finding a comparable property wasn’t easy, he said, because the DeBauge tract is somewhat unique.

“It’s really unusual for a fairly small jurisdiction like this to include such a huge piece of ground with commercial zoning,” he said.

His comparison properties were a Home Depot in Belton, Mo.; a Lowe’s in Salina; three lots used for a Sutherland’s site in Harrisonville, Mo.; a Wal-Mart in Butler, Mo; and other sites in Hays and Peculiar, Mo.

From that, he set the DeBauge land at $32,000 an acre, or about $1,969,000 before the taking. After the taking, he set its value at $1,594,000.

The site had challenges as a commercial property when he viewed it, Cordry said. It could be seen from the turnpike but not easily reached because of the “spaghetti bowl” of access roads that the KTA is now trying to remove. The south side needed to be leveled off, an undertaking Cordry said would require about $375,000 of dirt beyond what was already available on the property. And its U.S. 50 entrance is about 40 feet wide, which Cordry said couldn’t really be called an access as it was half of what a big box retailer would want.

The DeBauge’s attorney John Hamilton challenged Cordry on that, going back to a deposition he had given.

“Do you recall this question?” Hamilton asked, reading, “‘Did you agree that the subject property has a connecting entrance off of U.S. Highway 50?’ Your answer was ...”

“Yes,” Cordry said, reading back through the document.

“Did you qualify that in any way by saying you couldn’t call it an access?”

“No, sir.”

Under questioning by Hamilton, Cordry said he didn’t know of any commercial developments along Industrial Road that had required 80-foot entrances.

Hamilton also said Cordry had misstated the cost of the dirt work. Based on notes from the appraisal file, Hamilton said, it should be $539,000. Cordry checked the calculations and agreed. But as it turned out, Hamilton said, the leveling happened before the July 2006 ruling and the DeBauge family ended up having more than enough dirt.

“Had you been told by Mr. (Eldon) Shields (the KTA’s attorney) that the south end was completely leveled, graded and compacted to engineering standards and that no dirt was hauled in?” Hamilton asked.

“You mentioned that at the deposition,” Cordry responded.

“And that on the north end, there was excess dirt that had been sold.”

“Yes,” Cordry said. He said he hadn’t known any of that before the report was finished.

Overall, Cordry told Shields in testimony later, the dirtwork wouldn’t make that much of a difference on the value anyway. He estimated the effect at about 2 to 3 percent of the total property, which would have made the damages $386,000 instead of $375,000.

“In terms of this property, it’s insignificant,” he said.

But a fair amount of fencing went on over what numbers should have been reached. Hamilton produced a number of documents from the appraisal for comparison, some of which Cordry said he had never seen before. He testified that about 95 percent of the writing and 40 percent of the reasoning in the appraisal was done by one of his employees.

“You review every appraisal that pertains to commercial property?” Hamilton asked.

“Yes,” Cordry said.

“The whole project, not just the final report?”

“Yes, but not every document in the file,” Cordry said.

The documents included a set of handwritten calculations by the employee based on portions of the site that estimated a $1.7 million impact on the total property and a typed worksheet that figured the possible loss at just over $1 million. In one case, Hamilton produced a list of nine different properties that were used to reach a higher per-acre total than the six Cordry had used.

In a redirect examination by Shields, Cordry said that 40 to 45 different properties had been looked at before finding six that seemed to fit Emporia’s situation. All nine of the ones mentioned by Hamilton had been discussed and rejected.

Cordry hadn’t seen the handwritten notes, but said he and his employee had discussed some figures that turned out to be unsupportable. The worksheet, he said, came from figures that had been plugged into a spreadsheet and was clearly incomplete.

Shields noted that some of the figures brought up by Hamilton would put the land around $2 to $3 per square foot, bringing the property’s total value to around $6 million.

“Are you aware of any appraiser in this case that has taken the position that the property is worth $6 million or more?” Shields asked.

“No,” Cordry said.