City of Wichita v. Denton
294 P.3d 207
| Kan. | 2013Background
- This is an eminent domain proceeding by the City of Wichita to condemn Denton’s land at the northwest corner of Kellogg and Rock Roads for highway purposes.
- Clear Channel Outdoor, Inc. leased about 500 square feet on the tract for a two‑sided billboard; lease renewals extended the term for 20 years with a 30‑year automatic extension on condemnation.
- Appraisers valued the entire tract at $1,075,600, with no separate compensation for the billboard structure or its advertising income.
- The City and Denton accepted the appraisers’ award; Clear Channel appealed under K.S.A. 26-508.
- The district court granted partial summary judgment determining the billboard and related assets were personal property and noncompensable, and later granted summary judgment affirming the appraisers’ award.
- The appeal concerns whether the valuation should include the billboard as a real property improvement and whether advertising income is admissible in determining just compensation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the billboard a compensable real property improvement or noncompensable personal property? | Clear Channel contends the billboard is a fixture attached to land and should be valued as part of the realty. | City/Denton argue the billboard is a trade fixture/personal property removable by lessee and not compensable. | Billboard is noncompensable personal property; not included in valuation. |
| Whether advertising income from the billboard is admissible to determine the tract’s value? | Clear Channel argues income reflects value and should be considered. | City argues income is business profits, not rents, and not admissible. | Advertising income is not admissible; it reflects profits, not rental value of the land. |
| Whether the unit rule prevents considering the leasehold’s income separately from the whole tract in valuation? | Clear Channel seeks to show leasehold value enhanced the tract’s value. | City argues the unit rule requires a single value for the property as a whole. | Unit rule applied; evidence of the billboard’s separate income was excluded; valuation affirmed. |
Key Cases Cited
- Eisenring v. Kansas Turnpike Authority, 183 Kan. 774, 332 P.2d 539 (1958) (Kan. 1958) (leases/owner interest compensable; rental income treated accordingly)
- Phillips Petroleum Co. v. Bradley, 205 Kan. 242, 468 P.2d 95 (1970) (Kan. 1970) (valuation of leased property ordinarily treated as single ownership for award)
- Urban Renewal Agency v. Naegele Outdoor Advertising Co., 208 Kan. 210, 491 P.2d 886 (1971) (Kan. 1971) (tenant’s leasehold rights may be recognized in condemnation awards)
- City of Bonner Springs v. Coleman, 206 Kan. 689, 481 P.2d 950 (1971) (Kan. 1971) (rents from real estate may be considered as income in valuation, but business profits are generally excluded)
- City of Overland Park v. Jenkins Revocable Trust, 263 Kan. 470, 949 P.2d 1115 (1997) (Kan. 1997) (rental income admissible as evidence of value of income produced by property)
- Water Co. v. Irrigation Co., 64 Kan. 247, 67 P. 462 (1902) (Kan. 1902) (permanence/adaptation/intention considerations for fixtures)
- City of Roeland Park v. Jasan Trust, 281 Kan. 668, 132 P.3d 943 (2006) (Kan. 2006) (distinction between rental income and business profits in valuation)