DEPARTMENT OF TRANSPORTATION v HAGGERTY CORRIDOR PARTNERS LIMITED PARTNERSHIP
Docket No. 124765
Supreme Court of Michigan
Argued January 12, 2005. Decided July 15, 2005.
473 MICH 124
In separate opinions the Supreme Court held:
Evidence of rezoning after a taking is not admissible in a trial to determine the just compensation due at the time of the taking. The trial court abused its discretion in admitting evidence of the rezoning after the taking. The decision of the Court of Appeals that set aside the judgment of the trial court must be affirmed and the matter must be remanded for a new trial at which the evidence that the property was rezoned after the taking is not to be admitted.
Justice YOUNG, joined by Chief Justice TAYLOR and Justice CORRIGAN, stated that a posttaking event or occurrence is irrelevant to the calculation of just compensation and cannot affect the price on the date of the taking. Evidence of a posttaking zoning change is irrelevant to the just-compensation calculation because it does not make the fact of consequence—that information regarding the reasonable possibility of a zoning change may have affected the
Justice KELLY, concurring, stated that evidence of posttaking rezoning is relevant because it corroborates a fact that is of consequence to the determination of the action—whether there existed a reasonable possibility of rezoning at the time of the taking. Evidence of rezoning following a taking is not admissible, however, because the probative value of such evidence is substantially outweighed by its prejudicial effect. Evidence of the rezoning was relevant to show that at the time of the taking a reasonable possibility of rezoning may have existed. It is not enough that posttaking rezoning is probative of an antecedent possibility of rezoning. The question is was the rezoning reasonably possible at the time of the taking. The fact that it occurred does not conclusively answer the question. To be relevant, the possibility must have arisen at or before the taking. Admission of such evidence risks that the jury will accord it weight wildly disproportionate to its probative value and treat rezoning when the taking occurred as a foregone conclusion. Thus, although such evidence can be relevant, it is unfairly prejudicial. The jury should not know of posttaking rezoning. It causes too great a danger of confusion of the issues and unfair prejudice to the taking party, substantially outweighing its probative value. The decision of the Court of Appeals should be affirmed and the matter should be remanded for a new trial at which the evidence of the rezoning should not be admitted.
Affirmed; case remanded to the circuit court for a new trial.
Justice WEAVER, joined by Justice CAVANAGH, dissenting, stated that evidence of the posttaking rezoning is relevant evidence that was admissible in this case to enable the jury to assess whether a reasonable possibility of rezoning existed on the date of the taking and whether the possibility would have affected the price a willing buyer would have offered at the time of the taking. The trial court
Justice MARKMAN, dissenting, stated that the evidence of the posttaking rezoning was relevant evidence that was admissible to demonstrate that a reasonable possibility of rezoning existed on the date of the taking, and, thus, the trial court did not abuse its discretion in admitting the evidence. The trial court did, however, abuse its discretion in prohibiting the plaintiff from introducing evidence that the posttaking rezoning was caused by the taking. The decision of the Court of Appeals should be vacated and the matter should be remanded to the trial court for a new trial at which the defendants should be allowed to introduce evidence of the posttaking rezoning and the plaintiff should be allowed to introduce evidence that the posttaking rezoning was caused by the taking.
EMINENT DOMAIN — EVIDENCE — POSTTAKING REZONING OF PROPERTY — JUST COMPENSATION.
Evidence of rezoning after a taking is not admissible in a trial to determine the just compensation due at the time of the taking.
Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, Patrick Isom, Assistant Attorney General in Charge, and Raymond O. Howd, First Assistant Attorney General, for the plaintiff.
Plunkett & Cooney, P.C. (by Mary Massaron Ross), Ackerman & Ackerman, P.C. (by Alan T. Ackerman and Darius W. Dynkowski), and Jaffe, Raitt, Heuer & Weiss, P.C. (by Brian G. Shannon and Mark P. Krysinski), for the defendants.
YOUNG, J. Defendants own land that was partially taken in condemnation proceedings initiated by plaintiff. At issue is whether the trial court properly allowed defendants to present, in support of their proffered calculation of just compensation, evidence that their
We conclude that the evidence of the posttaking rezoning was irrelevant to the issue of the condemned property‘s fair market value at the time of the taking. Because the trial court abused its discretion in admitting this evidence, and because the error was not harmless, we affirm the judgment of the Court of Appeals, which reversed the jury‘s verdict and remanded the case for further proceedings.
I. FACTS AND PROCEDURAL HISTORY
Defendant Haggerty Corridor Partners Limited Partnership owned approximately 335 acres of an undeveloped tract of land in Novi, Michigan, which it had assembled for the future purpose of building a high-tеch office park. Plaintiff, the Michigan Department of Transportation (MDOT), sought to condemn approximately fifty-one acres of this property for construction of a portion of the M-5 Haggerty Road Connector in the city of Novi. As required under
refused MDOT‘s offer.
In December 1995, MDOT initiated an eminent domain proceeding under the Michigan Uniform Condemnation Procedures Act (UCPA)4 to condemn the property. At trial, as might be expected, the parties presented widely divergent evidence with respect to just compensation.
Consistent with its theory that the highest and best use of the property was residential, MDOT presented evidence that, at the time of the taking, the property was not likely to be rezoned to permit the commercial use proposed by defendants.5 MDOT‘s appraiser testified that it was economically feasible to develop the parcel, both before and after the taking, as a residential subdivision, and that, in 1995, it was not reasonably possible that the land would be rezoned for commercial use. On the basis of an estimation that defendants’ land would support development of fifty-four residential lots, MDOT‘s appraiser testified that the difference in the value of defendants’ property before and after the taking amounted to $1,415,000.
Defendants, on the other hand, sought to establish that they, along with other knowledgeable participants in the commercial real estate market, knew at the time of the December 1995 taking that the property was likely to be rezoned to allow for its planned use as an
Consistent with their theory that the fair market value of the residential property on the date of the taking was increased because of the realistic prospect that it would soon be rezoned commercial, defendants sought to introduce evidence of the fact that the property had, in fact, been later rezoned. Defendants wished to show that in May 1998, apprоximately two and one-half years after the taking occurred, defendants’ property was rezoned for office/service/technology (OST) uses. MDOT filed a motion in limine to bar this evidence, arguing that it was irrelevant to the fair market value of the property as of the date of the taking. The trial court denied MDOT‘s motion. Additionally, the trial court refused to grant MDOT‘s alternative request to present evidence that the rezoning took place solely as a result of the taking.7
The jury was instructed that fair market value must be assessed as of the date of the condemnation, and not as of some future date. The jury was further instructed, with respect to the zoning reclassification, that
if there was a reasonable possibility, absent the threat of this condemnation case, that the zoning classification would have been changed, you should consider this possibility in arriving at the value of the property on the date of the taking.
The jury determined that just compensation was owed to defendants in the amount of $14,877,000.
On appeal to the Court of Appeals, MDOT contended that the trial court erred in denying its motion to exclude evidence of the posttaking rezoning decision and in further prohibiting MDOT from introducing evidence establishing that the zoning change was caused by the condemnation itself. The Court of Appeals majority agreed that the trial court abused its discretion in allowing the jury to consider evidence of the posttaking zoning change and that the error was not harmless:
The subject property was to be valued “as though the acquisition had not been contemplated.”
MCL 213.70(1) . Plaintiff attempted to introduce evidence establishing that the subject property was rezoned because of the condem-
nation. If so, the actual rezoning was irrelevant. Indeed, the value of condemned property should have been determined without regаrd to any enhancement or reduction of the value attributable to condemnation or the threat of condemnation. State Highway Comm v L & L Concession, 31 Mich App 222, 226-227; 187 NW2d 465 (1971). Defendants were not entitled to the enhanced value that resulted from the condemnation project, only the value of the property at the time of taking. In re Urban Renewal, Elmwood Park Project, 376 Mich 311, 318; 136 NW2d 896 (1965). Although the potential for rezoning on the date of taking was properly considered, evidence of the actual zoning change was irrelevant to the value of the property on the date of taking and should not have been disclosed to the jury. Moreover, we agree with plaintiff‘s contention that the evidence improperly contributed to the jury‘s finding that the rezoning was reasonably possible. At the very least, the improperly admitted evidence tainted the jury‘s resolution of the “reasonable possibility” question of fact. Therefore, we conclude that the trial court abused its discretion in admitting the evidence. We reject defendants’ contention that the evidentiary error was harmless. Had the evidence not been admitted, it is unlikely that the jury would have been exposed to the evidence that defendants now claim renders the improperly admitted evidence harmless.8 Consequently, we deem it appropriate to reverse and remand for further proceedings.9 [Unpublished opinion per curiam of the Court of Appeals, issued July 22, 2003 (Docket Nos. 234099, 240227), slip op, p 3.]
As the trial court concluded, evidence of the actual rezoning had the tendency to make the existence of the possibility of rezoning more probable than it would be without the evidence. MRE 401. More importantly, however, is the fact that there is no Michigan case on point regarding the admissibility of the subsequent fact of rezoning, and our Sister States’ case law provide [sic] divergent views. However, one respected source (also cited by the trial court) indicates that “[t]he fact that, subsequent to the taking, the zoning ordinance was actually amended to permit the previously proscribed use has been held to be weighty evidence of the existence (at the time of the taking) of the fact that there was a reasonable probability of an imminent change.” 4 Nichols, Eminent Domain (3d ed), § 12C.03[3]. Accordingly, it cannot be said that the decision to admit the evidence was an abuse of discretion when no prior case has so held, and there is respected authority that favors the ruling made by the trial court.
Moreover, even if the admission of the evidence was an abuse of discretion, it was harmless error in light of the jury instructions and other competent, admissible evidence that allowed the jury to properly conclude that rezoning was a reasonable possibility. Here, the jury was presented with sufficient evidence regarding whether there was a reasonable possibility that the subject property would be rezoned, independent of the evidence of the actual rezoning, a fact which the majority concedes. Further, the trial court properly instructed the jury on the principles of condemnation law set forth by the majority, and repeatedly stressed the principle that the jury must value the property as of the date of the condemnation, rather than at some future date . . . . [MURRAY, J., dissenting, slip op, pp 2-3 (citations omitted).]
The dissent further rejected MDOT‘s alternative argument that the trial court erred in refusing to allow it to introduce evidence establishing that the rezoning
This Court granted defendants’ application for leave to appeal, limited to the issues “(1) whether a posttaking zoning decision can be considered in determining value at the time of the taking, and (2) whether the Court of Appeals decision in this case is consistent with Dep‘t of Transportation v [VanElslander], 460 Mich 127 [594 NW2d 841] (1999).”11 We would hold that the evidence of a posttaking rezoning is irrelevant to a just compensation determination, that the error in the admission of such evidence in this case was not harmless, and that our conclusion is wholly consistent with VanElslander, supra, and we affirm the judgment of the Court of Appeals majority.
II. STANDARD OF REVIEW
Evidentiary rulings are reviewed for an abuse of
III. ANALYSIS
A. INTRODUCTION
As we have recently had occasion to reaffirm, fair market value is to be determined as of the date of the taking. See Silver Creek, supra (” ‘[A]ny evidence that
In keeping with these venerated principles concerning the calculation of just compensation, the UCPA specifically provides that fair market value “shall be determined with respect to the condition of the property and the state of the market on the date of valuation.”18 The UCPA prohibits, however, the consideration of any changes in market conditions that are substantially due to the general knowledge of the imminent condemnation of the property.19 Instead, with the exception of enhancement in value of the remainder of a partially taken parcel,20 “the
B. POSSIBILITY OF REZONING AS A FACTOR AFFECTING JUST COMPENSATION
A condemned parcel‘s fair market value must be determined ” ‘based upon a consideration of all the relevant facts in a particular case.’ ”22 Accordingly, evidence demonstrating the likelihood of a zoning modification, just like any number of circumstances that may affect a property‘s value on the open market, may be relevant in determining just compensation. However, because just compensation must be calculated on the basis of the market value of a property on the date of the taking, the relevance of any such evidence is wholly dependent on whether, and how, the particular factor at issue would have affected market participants on that date.
As explained in note 10 of this opinion, this portion of the UCPA is inapplicable to this dispute. MDOT raised no argument that the award of just compensation had to reflect any enhancement to the remainder of defendants’ property by virtue of the condemnation.
It must be noted that the principles set forth in
We look at the value of the condemned land at the time of the taking, not as of some future date. If the land is then zoned so as to exclude more lucrative uses, such use is ordinarily immaterial in arriving at just compensation. But, on the other hand, it has been held, “if there is a reasonable possibility that the zoning classification will be changed, this possibility should be considered in arriving at the proper value. This element, too, must be considered in terms of the extent to which the ‘possibility’ would have affected the price which a willing buyer would have offered for the property just prior to the taking.” [Emphasis supplied.]
Thus, we concluded in Eilender that a nonfrivolous, nonspeculative “reasonable possibility” of a zoning change, as evidenced by an already pending zoning modification, could properly be considered in determining just compensation.24
Similarly, we held in VanElslander, supra, that the trial court abused its discretion in refusing to allow plaintiff MDOT to present into evidence an appraisal of the condemnees’ property that was based on the possibility that a zoning variance could be obtained to cure the violations created by the condemnation. Noting that ” ‘any evidence that would tend to affect the market value of the property as of the date of condemnation is relevant,’ ”25 we held that the possibility of obtaining a variance, just like the possibility of a zoning modification, may be relevant to the just-compensation determination. We stressed, however, that such evidence was
Applying these longstanding principles as reaffirmed in Eilender, VanElslander, and Silver Creek, we would hold that the trial court here committed an error of law, and thus abused its discretion,27 when it denied MDOT‘s motion to exclude evidence of the posttaking zoning modification.
We of course agree with the Court of Appeals dissent, and with our dissenting colleagues,28 that relevant evidence is “evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.”29 Where we believe the dissenters have gone astray is in misidentifying the “fact that is of consequence.”
The dissenters frame this consequential fact as the existence of a “reasonable possibility” that the property would be rezoned. See post at 169. The possibility of a zoning modification must, indeed, be a “reasonable” one in order, as a matter of logic, for it to have any bearing on fair market value. However, this is only part of the equation. The “reasonable possibility” of a zoning change bears on the calculation of fair market value only to the extent that it could have affected the price that a theoretical willing buyer would have offered for
Any information that was available at the time of the taking may certainly be relevant in determining the price that a property might fetch on the day of the taking. For example, in this case, defendants were properly permitted to present evidence that they had met with city officials regarding their plans for the area, and that these officials had expressed a willingness to make the required zoning changes; that the Novi Chamber of Commerce and other members of the business community supported the proposed zoning change; that Novi‘s Economic Development Coordinator, Greg Capote, did not believe that the property was suitable for single-family development; that there was a dire need for zoning to accommodate high-tech office development; and that, at the time of the taking, Capote was already involved in the planning for an OST zoning classification to accommodate this type of development. All of this evidence pertains to information that might have affected the value of the property as of the date of
In contrast, a posttaking event or occurrence is utterly irrelevant to the calculation of just compensation. Market participants are, as a general rule, not omniscient, and would not be aware on the date of the taking that a posttaking event is absolutely certain to occur.33 A posttaking occurrence cannot possibly affect the fair market value of property on the day of the condemnation, because the occurrence has not yet come to pass and, thus, cannot contribute to the mass of information affecting the market value of the property on that day. In short, a posttaking zoning change is irrelevant to the just compensation calculation because it does not make the fact of consequence—that information regarding the reasonable possibility of a zoning change may have impacted the market value of property on the date of the taking—more probable or less
The trial court‘s ruling and the Court of Appeals dissenting position on the admission of posttaking evidence are informed by a common logical fallacy. As our dissenting colleague, Justice MARKMAN, argues: “That the property was, in fact, rezoned makes it ‘more probable’ that a ‘reasonable possibility’ of rezoning existed at the time of the taking. Post at 171-172. At its core, this argument supposes that the probability of a particular occurrence at a specific point in time is made stronger by after-the-fact events.35 This fallacy pre-
In ordеr to understand the flaw in the probability theory and rationale of the Court of Appeals dissent and the trial court, it is important to remember the context of the just compensation valuation goal. Although condemnation results in a “forced sale,” the price the condemning agency is required to pay must approximate that price which a willing buyer would have offered for the property at the time of the taking. Consequently, because information concerning events occurring after the condemnation could not possibly have influenced the conduct of a willing buyer on the date of the taking, it can never be logically, and thus legally, relevant in determining the price that the theoretical willing buyer and seller would have agreed upon on the date of the taking.
Consider the application of this theory of probability to an event—such as the toss of a die—the probability of which is known. That a six is rolled after one predicts this outcome does not increase the strength of the prediction beyond the usual one-in-six chance of being correct. However, contrary to conventional probability theory, the proffered dissenting probability theory suggests that the predictive force of a “six” call is made stronger by the mere fact that the thrown die actually revealed a six. It is hard to understand how such a “back to the future probability theory” works any more logically when an event less predictable than the roll of a die is at issue.
Compare this flawed ex ante probability logic with the common logical fallacy known, in the realm of causation theory, as “post hoc ergo propter hoc” (“after this, therefore because of this“). In each case, the subject assigns inflated significance to an after-the-fact event.
This case well illustrates the illogic of admitting evidence of postcondemnation events to influence the fact-finder‘s determination of just compensation under the statute. Here, the change in zoning occurred two and one-half years after the date of the taking. It is difficult to envision how a theoretical “willing buyer” of defendants’ property would have factored into his purchase offer in 1995 a zoning decision made by Novi36 more than two years after that date.37
As noted by the Court of Appeals dissent and by our dissenting colleague, post at 178, 4 Nichols, supra at § 12C.03[3], indicates that “[t]he fact that, subsequent to the taking, the zoning ordinance was actually amended to permit the previously proscribed use has been held to be weighty evidence of the existence (at the time of the taking) of the fact that there was a reasonable probability of an imminent change.”39 Although it is true that some courts have, indeed, permitted the introduction of posttaking rezoning evidence, for the reasons we have expressed, we reject the reasoning employed by these courts.40 We do not, for example, agree with the New Jersey Supreme Court that evidence of a posttaking zoning change may serve to “support the reasonableness of the factual claim that on the date of taking the parties to a voluntary sale would have recognized and been influ-
Our dissenting colleague, as evidenced by his lengthy discussion describing the “imperfect” nature of the eminent domain procedure in calculating just compensation, appropriately explains why condemnation, being a forced sale, can only approximate a real market real estate transaction. Although we are certainly not unsympathetic to the plight of the innocent landowner who is compelled to sell its property to the public, the governmental power of condemnation is one that is specifically condoned by our Constitution and regulated by the UCPA.
Justice MARKMAN‘s proposal—that we allow in evidence of posttaking events in order to cоunterbalance the “artificial construct” of the hypothetical willing
C. HARMLESS ERROR
Defendants argue that any error was harmless because MDOT requested that the jury view the property and because, during the view, the jury saw evidence that a commercial office park was being constructed on defendants’ remaining property. The Court of Appeals majority held that this evidence would likely not have been admitted had defendants not been permitted to present evidence of the posttaking rezoning. We disagree; MDOT‘s motion for a jury view was granted before the trial court ruled that defendants could put on
We nevertheless conclude that the error was not harmless. Although the jury was properly instructed that it was to determine fair market value as of the date of the taking, it was not instructed that it was to consider only the information extant at the time of the taking. Rather, the jury no doubt believed that the fair market value of the property on the date of the taking was to be calculated as if rezoning were a fact, as it was at the time of the trial.
More important, the trial court sorely compounded the error by refusing to allow MDOT to rebut the posttaking evidence by demonstrating that the rezoning was directly attributable to the condemnation itself. In this regard, we agree with our dissenting colleague that the trial court erred in precluding the admission of such evidence. See post at 167. As we have noted, the UCPA provides that just compensation is nоt to be determined on the basis of changes in market conditions that are substantially due to the general knowledge of the imminent condemnation of the property; rather, as
IV. CONCLUSION
The trial court abused its discretion when it denied MDOT‘s motion to exclude evidence that defendants’ property was rezoned commercial after the property was condemned. Such evidence is irrelevant to the critical just compensation inquiry, which is what a willing buyer would pay for the property on the date of the taking. Because the trial court further compounded this error by refusing to allow MDOT to establish, as contemplated by the UCPA, that the zoning change was effectuated by the fact of the condemnation itself, the error in the admission of the evidence was not harmless. We affirm the decision of the Court of Appeals and remand for further proceedings.
TAYLOR, C.J., and CORRIGAN, J., concurred with YOUNG, J.
KELLY, J. (concurring). In this case, we consider whether evidence of rezoning after a taking is admissible to demonstrate that, when the taking occurred, a reasonable possibility of rezoning existed.1 We hold the evidence inadmissible.
A majority of the Court agrees that the evidence of rezoning is relevant because it corroborates a fact that is of consequence to the determination of the action: whether there existed a reasonable possibility of rezoning at the time of the taking.
A different majority agrees that the evidence is inadmissiblе. However, my reasoning differs from the other three justices comprising this majority. I would hold that the inadmissibility of the evidence lies in the fact that its probative value is substantially outweighed by its prejudicial effect.
The admission of the evidence of rezoning unjustly overwhelmed other relevant evidence that showed rezoning was not reasonably likely and that the parcel‘s reasonable value was as residential property. The jury‘s consideration of this evidence caused substantial injustice to plaintiff. Accordingly, it was an abuse of the trial court‘s discretion to admit it, and the error was not harmless.
I agree with the decision of the Court of Appeals to set aside the jury verdict, although for slightly different reasons. I also agree to remand the case for a new trial at which the evidence that the property was rezoned after the taking will not be admitted.
UNDERLYING FACTS
This controversy concerns land on which a portion of phase II of the M-5 Haggerty Road Connector in Novi
The issue concerns the reasonable market value of the land at the time of the taking. When it was expropriated, the land was zoned residential-agricultural and was undeveloped. At trial, defendants asserted that they had planned to seek to have it rezoned to commercial use. They hoped to develop the land into a technology park, as they had done with a tract in nearby Farmington Hills.
Plaintiff made an offer to buy the land from defendants based on its value for residential or agricultural use, consistent with its zoning classification at the time of the taking. Michigan law requires the government to make a good-faith offer to purchase land for its fair market value before filing a condemnation complaint.
THE COURT PROCEEDINGS
Plaintiff filed its condemnation complaint on December 7, 1995. It again asserted that the fair market value
Defendants planned to present significant evidence to show that rezoning for commercial use was reasonably possible at the time of the taking. Key to their argument was evidence that the portion of the tract not condemned was in fact later rezoned commercial. Two and a half years after the taking, Novi rezoned the noncondemned land for office/service/technology use.
Plaintiff made a motion to prevent introduction of this evidence.4 The trial court heard oral argument and concluded that it was admissible. The court found it relevant, not too remote in time, and not overly prejudicial. The evidence was admitted, and the jury awarded damages consistent with defendants’ evaluation, which was based on use of the land if zoned commercial.
On appeal, plaintiff argued that admission of the evidence was erroneous. The Court of Appeals held that the trial court had abused its discretion in admitting it because it “tainted the jury‘s resolution of the ‘reasonable possibility’ question of fact.” The Court reversed the judgment of the trial court and remanded the case for a new trial without the erroneously admitted evidence.5 Unpublished opinion per curiam of the Court of Appeals, issued July 22, 2003 (Docket Nos. 234099, 240227).
Defendants sought leave to appeal to this Court. Until today, no published decision of this Court or of the Court of Appeals has directly addressed the question presented, and it is susceptible to arising again. Recognizing its jurisprudential significance, we granted leave to appeal
limited to [the issues] (1) whether a posttaking zoning decision can be considered in determining value at the time of the taking, and (2) whether the Court of Appeals decision in this case is consistent with [VanElslander, supra]. [470 Mich 874 (2004).]
JUST COMPENSATION
We review decisions regarding the admissibility of evidence at trial for an abuse of discretion. VanElslander, supra at 129. It is basic to condemnation law that the government may take private property for public use as long as it pays just compensation for it.
“Just compensation” is a legal term of art. Silver Creek Drain Dist. v. Extrusions Division, Inc., 468 Mich. 367, 376; 663 N.W.2d 436 (2003). It is intended to place the property owner in as good a position financially as if the property had not been taken. This ensures that
Just compensation is the fair market value of land at the time of its taking. Id. Under the UCPA, what is just compensation is determined as of the date the condemnation complaint is filed and as if the government‘s acquisition of the land had not been contemplated.
The jury assesses the value of condemned land as of the date of condemnation through the eyes of those acquiring or losing it. The market participants cannot foresee the future. In the case under consideration, the participants would not have known that the land would be rezoned. The participants’ prediction of whether there was a reasonable possibility of rezoning could be based only on information available at the time of the taking.7 Current property values are based in part on potential changes discounted for their uncertainty.
The law accepts that a reasonable possibility that the zoning classification will be changed ” ‘should be considered in arriving at the proper value.’ ” Eilender, supra at 699, quoting United States v. Meadow Brook Club, 259 F.2d 41, 45 (CA 2, 1958). In Eilender, the state presented an appraisal based on the property‘s
Commercial use of the property in Eilender would have been consistent with the zoning of property in some of the surrounding area. But the city commissioners awarded compensation that reflected the state‘s assessment. In so doing, they failed to consider the reasonable possibility that the property would be rezoned. We held that an application for rezoning, submitted before the taking, was relevant to show the reasonable possibility of rezoning and should be considered in determining the property‘s market value.8 Eilender at 699-700.
THE RELEVANCE OF THE FACT OF FUTURE REZONING
At trial in this case, defendants submitted evidence suggesting that Novi might rezone defendants’ land to a use higher than residential. Because if there was a possibility of rezoning at the time of the taking, it affected the property‘s fair market value. Hence, any possibility of rezoning it was relevаnt.9
Similarly, I agree with Justices MARKMAN and WEAVER that the rezoning was relevant to show that two-and-
However, Justice YOUNG erroneously relies on the fact that a market participant could not have known of the rezoning at the time of the taking. This confuses the temporal relationship between the events with their legal relationship. Although the market participant could not have known that an event would occur in the future, the fact that it did occur shows that it was reasonable to believe beforehand that its occurrence was likely.
Justice YOUNG‘s example of the roll of a die is misplaced. When one is asked beforehand the result of the roll of a die, six is among the guaranteed results. Each of the six alternative results has an equal chance of occurring with every roll. The fact that a six was rolled is unnecessary to prove that six was possible or that it was reasonable to believe before the roll that six was possible.
Rezoning is more like a horse race than the roll of a die. The probability of a certain horse winning depends on many factors. They include, among others, the condition of the horse on race day, the condition of the other horses, and the condition of the track. The odds on a bet placed on that horse, which are an expression of the perceived probability of that horse winning, are based on these factors known before the race. If the horse wins, the victory corroborates the strength of the
Similarly, there are no guaranteed outcomes when one estimates whether property will be rezoned.10 Rezoning is one of several possibilities. The probability of it occurring may never become a reality. But the fact of rezoning corroborates the assertion that the belief it would be rezoned was reasonablе, just as a winning bet corroborates the belief that a horse would win. As Justice YOUNG notes, rezoning suggests that the prognostication is more accurate than another‘s that was to the contrary. Ante at 143. Hence, the evidence of rezoning is legally relevant.
THE PREJUDICIAL EFFECT OF A FUTURE FACT
Just because evidence is relevant does not mean that it is admissible. The trial court may exclude relevant evidence “if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury....”
We have noted that “[e]vidence is not inadmissible simply because it is prejudicial. Clearly, in every case, each party attempts to introduce evidence that causes prejudice to the other party.” Waknin v. Chamberlain, 467 Mich. 329, 334; 653 N.W.2d 176 (2002). “In this context, prejudice means more than simply damage to an opponent‘s cause. A party‘s case is always damaged by evidence that the facts are contrary to his contentions, but that cannot be grounds for exclusion.” People v. Vasher, 449 Mich. 494, 501; 537 N.W.2d 168 (1995).
THE DISTINCTION BETWEEN FACT AND REASONABLE POSSIBILITY
The mischief here is that, once a juror hears evidence that rezoning occurred, the juror will have difficulty concluding anything but that rezoning was reasonably possible when the taking occurred. As noted earlier in this opinion on pp 154-155, it is not necessarily true that the possibility reasonably existed at the time of the taking. Rezoning might have become reasonably possible only upon the happening of one or more events after the taking. The taking itself could be one such event, as plaintiff argued at trial.
Moreover, it does not follow from the fact that something occurs that people could have reasonably believed beforehand that it would occur. Consider these illustrations: In January 1968 one could have predicted that it was reasonably possible that Neil Armstrong would set foot on the moon in July 1969. Similarly, one could say today that it is reasonably possible that man will visit Mars in future years.
Merely because an event occurred does not mean that it was reasonably possible on a given date beforehand. Reasonable predictions of space exploration require one to know much аbout the status of our space program at
The distinction between the fact of an occurrence and whether it was reasonably possible on a given date before it occurred has eluded many. For example, one prominent treatise, cited by the trial court, the dissent in the Court of Appeals, and Justice MARKMAN, characterized the fact of posttaking rezoning as “weighty evidence.” 4 Nichols, supra at § 12C.03[3].
It is not enough that posttaking rezoning is probative of an antecedent possibility of rezoning, as Justice MARKMAN argues. The question is was it reasonably possible at the time of the taking? In this case, the taking was two-and-one-half years before rezoning occurred. The fact that rezoning did occur does not mean that it was reasonably possible at the time of or before the taking that it would occur.
At first blush, posttaking rezoning is compelling evidence that there was a strong possibility of rezoning at the time of the taking. But the admission of this evidence was unfair because of the significant danger that the jury would not properly limit its consideration of it. Admission of this evidence risks that the jury will accord it weight wildly disproportionate to its probative value and treat rezoning when the taking occurred as a foregone conclusion.11 This is the “hindsight bias” dis-
cussed by Justice YOUNG that leads the jury to give the evidence undue weight and render it unfairly prejudicial. See ante at 141 n 36. Rather than prove Justice YOUNG‘s point, this bias demonstrates why the evidence can be relevant yet unfairly prejudicial.
Evidence of posttaking rezoning also tends to confuse the value of property once rezoned and its value when it was only reasonably possible that it would be rezoned. In a takings case, the amount that the property owner is entitled to be paid is the latter value. However, the jury may improperly award just compensation based on the value of the land as rezoned as if the property had already been rezoned before the taking.
Justice MARKMAN proceeds on the faith that the jury can limit the evidence to its proper sphere. See рost at 178-179. However, this approach negates the trial court‘s role as a gatekeeper, under
In every case, the fact of subsequent rezoning is unavailable to the market participant at the time of the taking. As Justice MARKMAN points out, it allows one party the benefit of the skyscraper or stadium looming overhead whereas the market participant was limited to imagination and someday plans. It is highly prejudicial because it gives one party an unfair advantage over the other by giving the jury information that the hypothetical market participant could not have obtained.12
Just as the market does not have the benefit of twenty-twenty hindsight, neither do litigants. The jury must assess the value of the property ” ‘on the basis of facts as they then would have appeared to and been evaluated by the mythical buyer and seller.’ ” Roach v. Newton Redevelopment Auth., 381 Mass. 135, 138; 407 N.E.2d 1251 (1980), quoting New Jersey v. Gorga, 26 N.J. 113, 118; 138 A.2d 833 (1958).13
In the interest of having the same availability of information as the market participants at the time of the taking, the jury should not know of posttaking rezoning. It causes too great a danger of confusion of the issues and unfair prejudice to the taking party, outweighing its probative value.14
The highly prejudicial tendency of posttaking evidence to confuse and mislead substantially outweighed its minimal probative value in this case. Plaintiff estimated that the land was worth $2,758,200. Defendants set their damages at $18,586,000. The jury substantially agreed with defendants and awarded them $14,877,000.
The award suggests a high likelihood that the jury was overwhelmed with the evidence of the posttaking rezoning. The jury appears to have ignored significant evidence that rezoning was not foreseeable. Novi‘s chief planning consultant testified that, in 1993, the planning commission recommended that the land not be rezoned commercial. He revealed that the city had no plan to rezone the land because there was a demand for large-lot, million-dollar homes. He told the jury that the intention of the city council and the planning commission was to maintain the property for residential purposes. As of the date of the taking, he would not have recommended a change in zoning. Also, defendants had no pending petition for a zoning change, unlike the defendant in Eilender.
The evidence of posttaking rezoning was not harmless, as defendants argue. Plaintiff presented sufficient evidence to the jury that it could have concluded that there was little reasonable possibility of rezoning at the time of the taking. But defendants’ damages award, which was substantially in agreement with their claim, demonstrates that the jury likely gave the posttaking evidence far more weight than it merited. Therefore, its admission here violated
Michigan takings law has long recognized that a condemnation award may be disturbed on appeal where erroneously admitted evidence caused substantial injustice in the result. Michigan Air Line R. v. Barnes, 44 Mich. 222, 227; 6 N.W. 651 (1880);
THE EFFECT OF THE VIEW OF THE LAND BY THE JURY
It bears noting that, contrary to the Court of Appeals dissent, plaintiff did not open the door to evidence of posttaking rezoning or render its admission harmless by requesting a jury view. Plaintiff filed its motion in limine opposing the evidence of subsequent rezoning on March 6, 2001. At a March 15 hearing, although the court did not rule, its language suggested that ultimately it would deny the motion.
By March 28, the trial court had not ruled on the motion. Plaintiff feared that it would receive an adverse ruling. Therefore, it moved for a jury view. Plaintiff argues that it did so to provide some evidence that the property, most of which remained undeveloped at the time, was more akin to residential property than commercial property. Plaintiff asserted that it would have withdrawn the motion if, before the jury view, the court had announced its decision to exclude defendants’ posttaking rezoning evidence. Plaintiff did not preclude
Moreover, the jury view did not render harmless the erroneous admission of the evidence of posttaking rezoning. There is no record evidence of what the jury saw when it viewed the property. It may have seen some commercial construction and inferred that part of the parcel had been rezoned. But I agree with plaintiff that the jury view was not the equivalent of uncontroverted evidence that the entire parcel had been rezoned.
DEP‘T OF TRANSPORTATION v. VANELSLANDER
My view is not inconsistent with our decision in VanElslander, supra. In that сase, the Department of Transportation took a portion of the defendants’ land. As a consequence, a building on the remainder of the land was in violation of local set-back requirements. The department attempted to introduce evidence that it was reasonably possible for the defendants to mitigate the effect of the taking on the uncondemned building by obtaining a zoning variance. A variance could have cured the set-back violation and avoided loss of the building. On appeal to this Court, the department argued that the defendants’ appeal was moot because the building had been demolished.
We held that the evidence showing the possibility of obtaining a variance was admissible. Also, the fact that the building had been demolished did not render the appeal moot. VanElslander, supra at 132.
In determining just compensation, the jury in VanElslander was entitled to hear of the likelihood that, at the time of the taking, a variance might have been sought and granted. Similarly, the jury in this case was entitled to hear evidence showing the likelihood of rezoning. But just as subsequent demolition was not an
CONCLUSION
The government must pay just compensation when it takes land for public use.
The prejudicial effect of evidence of subsequent rezoning on the determination of fair market value substantially outweighs its relevance.
I agree with the conclusion of the Court of Appeals. Plaintiff is entitled to a new trial without the admission of evidence of the posttaking zoning change.16 I agree with the decision to remand the case to the trial court and not retain jurisdiction.
WEAVER, J. (dissenting). I dissent from the majority‘s conclusion that evidence of a posttaking rezoning is inadmissible in this case. I agree with Justice MARKMAN‘S conclusion that the evidence of a posttaking rezoning is relevant evidence that is admissible in this case to enable the jury to assess whether a “reasonable possibility” of rezoning existed on the date of the taking and whether the possibility would have affected the
I also agree with Justice MARKMAN‘S conclusion that the trial court did abuse its discretion in excluding plaintiff‘s evidence that the posttaking rezoning was caused by the taking, where this evidence was offered to counter defendants’ argument that there was a reasonable possibility of a zoning change.
Therefore, I would vacate the Court of Appeals decision and remand this case for a new trial.
Just compensation for private property that is condemned for public use is intended to “put the party injured in as good position as he would have been if the injury had not occurred.” State Hwy Comm‘r v Eilender, 362 Mich 697, 699; 108 NW2d 755 (1961). Determining just compensation “is not a matter of formula or artificial rule but of sound judgment and discretion based upon the relevant facts in the particular case.” Id. We have held that a reasonable possibility that a zoning classification will be changed is relevant and should be considered when determining just compensation to the extent that the ” ‘possibility’ would have affected the price which a willing buyer would have offered for the property just prior to the taking.” Id. at 699 (citation omitted); see also Dep‘t of Transportation v VanElslander, 460 Mich 127, 130; 594 NW2d 841 (1999). A posttaking change in zoning is relevant1
Additionally, just as the defendants in this case should be permitted to introduce evidence of a posttaking change in zoning to demonstrate the possibility of a zoning change at the time of the taking and how the possibility would have affected the price, plaintiff in this case should be permitted to offer evidence to counter defendants’ evidence. Such evidence includes evidence that the rezoning in this case was a result of the taking. Therefore, I would conclude that the trial court abused its discretion in excluding evidence that the rezoning was a result of the taking.
Consistent with this opinion, I would remand the case to the trial court for a new trial.
CAVANAGH, J., concurred with WEAVER, J.
MARKMAN, J. (dissenting). The majority concludes that evidence of a posttaking rezoning is inadmissible to demonstrate that a “reasonable possibility” of rezoning
I. FACTS AND PROCEDURAL HISTORY
Defendant partnership, a partnership that develops real estate, owned 335 acres of vacant property in Novi.2 In 1995, the Michigan Department of Transportation (MDOT) began proceedings to condemn fifty-one acres of defendants’ property for use in the construction of the M-5 Haggerty Road Connector in Novi. On the date of the taking, the property was zoned for residential use, but in 1998 the property was rezoned for commercial use. At trial, at which the jury was charged with determining the “just compensation” due defendants,
II. ANALYSIS
A. RELEVANCE OF EVIDENCE OF POSTTAKING REZONING
It is well established and uncontested that one of the factors relevant to market value is the ” ‘reasonable possibility’ that the zoning classification will be changed.” Eilender, supra at 699 (citation omitted). As this Court held in Eilender, supra at 699, ” ‘if there is a reasonable possibility that the zoning classification will be changed, this possibility should be considered in arriving at the proper value.’ ”4 (Citation omitted.) In other words, if, at the time of the taking, there existed a “reasonable possibility” that the property would be rezoned to allow “more lucrative uses,” this “reasonable possibility” should be considered.5 Id. This factor ” ‘must be considered in terms of the extent to which the “possibility” would have affected the price which a
The majority does not disagree that the “reasonable possibility” of rezoning is a factor that must be considered when determining “just compensation.” However, the majority concludes that the fact itself that the property was rezoned after the taking cannot be considered in determining whether there was, at the time of the taking, a “reasonable possibility” of rezoning. I disagree. Instead, I believe that such evidence may afford compelling evidence that a “reasonable possibility” of rezoning existed at the time of the taking.
In this case, one of the primary issues for the jury to resolve was whether, at the time of the taking, there was a “reasonable possibility” that the subject property would be rezoned from residential to commercial. MDOT argues that the trial court abused its discretion when it allowed defendants to introduce evidence that, although the property was zoned residential at the time of the taking, 2 1/2 years later the property was rezoned
The Court of Appeals dissent, on the other hand, concluded that the trial court did not abuse its discretion in admitting evidence of the posttaking rezoning. I agree with this dissent.
As already discussed, whether a “reasonable possibility” of rezoning existed at the time of the taking is of consequence to the determination of “just compensation.”8 That the property was, in fact, rezoned makes it
The majority, however, would, in every case, deny the property owner the ability to introduce evidence of an actual rezoning, regardless of the strength of the inference raised by the rezoning either by itself or in conjunction with other evidence. Because I believe that evidence of actual rezoning gives rise to the wholly logical inference that the genesis of that rezoning may have preceded the taking, I would not bar the introduction of such evidence.9 Indeed, the leading treatise on eminent domain observes that evidence of a posttaking rezoning “has been held to be weighty evidence of the existence (at the time of the taking) of the fact that
B. MARKETPLACE TRANSACTIONS VERSUS CONDEMNATION PROCESS
As the majority explains, the jury is charged in cases of this sort with determining what a “mythical,” “hypothetical,” “theoretical,” “fictional,” “willing” buyer, would have paid a “mythical,” “hypothetical,” “theoretical,” “fictional,” “willing” seller for the property in a “voluntary,” transaction at the time of the taking. Ante at 137, 138, 142, 143 n 38, and 145; ante at 160. However, in truth, the condemnation process does not involve a typical willing buyer,11 a willing seller, or a voluntary transaction.12 Instead, it involves a transaction in which the government takes property without the permission or consent of the property owner, in what is essentially a “forced sale.” The property owner is not a willing seller, and the government is not a typical willing buyer. The condemnation process bears little in common with a voluntary sale of property in the market between a willing seller and a willing buyer.
It is a source of its confusion that the majority fails to give significance to these differences. Yet, they are determinative of the very issue before this Court. The majority provides that the jury is to “suppose” that the property owner is indistinguishable from a willing seller, that the government is indistinguishable from a typical willing buyer, and that both have entered into a market transaction. Next, the jury is asked to “imagine” the value that a “reasonable” buyer and seller
Moreover, not only is the jury to “imagine” a market transaction where in reality there is none, but in calculating the “fair market value” of the property being “sold” the jury must imagine a particular moment in time at which the taking, or “forced sale,” occurred, placing itself in the shoes not of any real parties involved in the taking, but of a nonexistent “reasonable” buyer and seller. This is in further contrast to a genuine market transaction in which the buyer and the seller stand in their own shoes, and there is no need for a jury, or any other third party, to imagine anything concerning the value of property.
What is the significance of the fact that the condemnation process is not truly equivalent to a market transaction? Its significance lies in its demonstration that the majority operates on a faulty premise when it insists that the jury, in making its “fair market value” determination, can have access only to such information as would have been possessed by a “real” buyer and seller at the time of the “real” transaction. In the instant case, this means, according to the majority, that the jury must be deprived of the information that the
In the market transaction, the buyer and the seller will typically possess considerable information that is distinctive or unique to themselves—sentimental considerations concerning property, subjective assessments of value, and estimations of worth that are a function of their personal experiences, their varied speculations of the future, and their diverse financial circumstances and ambitions. Such “subjective” factors are inaccessible to the jury, which can only make a “fair market value” determination on the basis of “objective” factors.13 Just as the participants in the “subjective” transaction may then possess information that is un-
For the reasons set forth earlier, I believe that evidence of posttaking rezoning is relevant to “fair market value.” Such relevance is not diminished by the fact that this information might not have been available to participants in a “subjective” transaction. Although the “objective” transaction of the condemnation process can never truly replicate the “subjective” transaction of the marketplace, it can nonetheless be made as perfect as possible on its own terms. This can be achieved only by making available as much relevant information as possible to the fact-finder.
C. PROBATIVE VALUE VERSUS DANGER OF UNFAIR PREJUDICE
MDOT argues that, even if evidence of the posttaking rezoning is relevant evidence, it should be excluded pursuant to
D. PRACTICAL VALUE OF EVIDENCE OF POSTTAKING REZONING
At trial, MDOT argued that there was no “reasonable possibility” that the property would be rezoned. Not permitting defendants to respond to this argument with the fact that the property has, in fact, been rezoned undermines the integrity of the judicial process by
The premise of our justice system is that providing more, rather than less, information will generally assist the jury in discovering the truth. Relevant evidence sustains the truth-seeking process. “In the American judiciаl system, a jury is called upon to assume the important role of fact-finder and the massive responsibility that the role entails: searching for the truth. ‘The purpose of trial is to find the truth and exact justice through the transmission of information to the jury.’ ” Comment, Speaking out: Is Texas inhibiting the search for truth by prohibiting juror questioning of witnesses in criminal cases?, 32 Tex Tech L R 1013, 1014 (2001) (citation omitted). The costs to our justice system are almost always much greater, in my judgment, when the jury is deprived of relevant evidence than when the consideration of such evidence is enabled and a risk incurred that it will be considered for improper pur-
Finally, knowing that a jury will be apprised of all relevant information also may serve felicitously to encourage those who testify and who argue before the jury to do so in a more accurate and precise fashion. For example, a government witness may be more hesitant to tell the jury that there was no “reasonable possibility” of a rezoning if the witness knows that the jury will eventually be informed that the property has, in fact, been rezoned. In other words, a government witness may well be less cocksure in his or her assertion that there was no “reasonable possibility” of a rezoning if there is a real-world check upon the witness‘s testimony. Under the majority‘s approach, the government will remain free to tell the jury that absolutely no
E. EVIDENCE THAT POSTTAKING REZONING WAS CAUSED BY TAKING
A posttaking rezoning is admissible only as evidence that a “reasonable possibility” of a rezoning existed at the time of the taking.20 A rezoning that was caused by
The Court of Appeals dissent relied on
(1) Enhancement in value of the remainder of a parcel . . . shall be considered in determining compensation for the taking.
(2) When enhancement in value is to be considered in determining compensation, the agency shall set forth in the complaint the fact that enhancement benefits are claimed and describe the construction proposed to be made which will create the enhancement.
The dissent concluded that because MDOT “did not plead in its complaint any benefit to defendants’ remaining property as a result of its construсtion project,” the trial court did not abuse its discretion “when it prevented [MDOT] from presenting evidence that the rezoning occurred as a result of its construction project . . . .” Slip op at 4. I respectfully disagree.
Because I believe that evidence of a posttaking rezoning is admissible to demonstrate that a “reasonable possibility” of rezoning existed on the date of the taking, I do not believe that the trial court abused its discretion in admitting such evidence. However, I do believe that the trial court abused its discretion in prohibiting plaintiff from introducing evidence that the posttaking rezoning was caused by the taking. Therefore, I would vacate the decision of the Court of Appeals and remand this case for a new trial, in which defendants would be allowed to introduce evidence of the posttaking rezoning and plaintiff would be allowed to introduce evidence that this posttaking rezoning was the result of the taking.
Notes
The hypothetical nature of this “value” should be obvious. Moreover, the condemnee is assumed to be not only a “willing seller” but also a person who will act as a purely economic creature, when in fact neither assumption may be true. One inescapable result of imposing the purely economic “willing seller” persona onto the condemnee is that the formula permits no compensation for subjective or sentimental attachment that the condemnee may have to the property. Only objective transferable value is considered. Subjective nontransferable value, such as . . . sentimental value generally [is] not included in the just compensation calculation. [13 Powell, Real Property, § 79F.04[2][a][i], pp 37-38.]
Your award must be based upon the market value of the property as of the date of taking. . . .
* * *
The Court has instructed you on the subject of highest and best use. One of the things that must be considered in deciding what the highest and best use of the property was at the time of the taking is the zoning clarification—zoning classification of the property at that time. However, if there was a reasonable possibility, absent the threat of this condemnation case, that the zoning classification would have been changed, you should consider this possibility in arriving at the value of the property on the date of taking. . . .
In this case, the market value of the property, both before and after the taking, must be determined as of December 7th, 1995, and not at an earlier or later date. [Emphasis added.]
Justice KELLY has determined that “the jury was overwhelmed with the evidence of the posttaking rezoning,” that it “ignored significant evidence that rezoning was not foreseeable,” and that it “likely gave the posttaking evidence far more weight than it merited.” Ante at 161. There is no evidence to sustain this determination, other than the fact that the jury‘s calculation of fair market value was closer to that proposed by defendants than by plaintiff. Moreover, “just compensation” is a factual question that is normally left to the jury to decide, not the judges of this or any other court.
Moreover, gamesmanship outside the courtroom is far less likely to arise than gamesmanship within the courtroom. Many factors play a role in a government‘s decision whether or not to rezone property; how much the government will have to pay for property that has already been condemned is only one of these factors. On the other hand, during a trial in which the exclusive issue is how much does the government have to pay for the condemned property, the government‘s dominant interest will always be to paint a picture of property of as little market value as possible.
[A]n amendment of the ordinance which came into being after the date of taking should not be excluded solely because of the time sequence. But such evidence should be carefully confined to its proper role. It may serve only to support the reasonableness of the factual claim that on the date of taking the parties to a voluntary sale would have recognized and been influenced by the probability of an amendment in the near future in fixing the selling price. The fact would still remain that on the date of taking the property was otherwise zoned, and the value as of that date must still be reached on the basis of facts as they then would have appeared to and been evaluated by the mythical buyer and seller. [Gorga, supra at 118.]
In determining the weight to be given to a posttaking rezoning in considering whether there existed a “reasonable possibility” of a rezoning at the time of the taking, the jury should consider the totality of the circumstances, including the time that has elapsed between the taking and the rezoning, the complexity of the project and the extent to which planning for such project must have predated the taking, changed circumstances within the jurisdiction creating or affecting the need for such rezoning, the nature of changes in the composition of the pertinent zoning body and within the relevant political jurisdiction and the extent to which such changes were foreseeable, the credibility of public authorities on the circumstances surrounding a rezoning, the extent to which the taking itself caused the rezoning, and any reasonable inferences that can be drawn from the fact of an actual rezoning.(1) Enhancement in value of the remainder of a parcel, by laying out, altering, widening, or other types of improvements; by changing the scope or location of the improvement; or by either action in combination with discontinuing an improvement, shall be considered in determining compensation for the taking.
(2) When enhancement in value is to be considered in determining compensation, the agency shall set forth in the complaint the fact that enhancement benefits are claimed and describe the construction proposed to be made which will create the enhancement. . . .
* * *
(4) The agency has the burden of proof with respect to the existence of enhancement benefits.
A change in the fair market value before the date of the filing of the complaint which . . . was substantially due to the general knowledge of the imminence of the acquiring by the agency . . . shall be disregarded in determining fair market value. Except as provided in section 23, the property shall be valued in all cases as though the acquisition had not been contemplated.