Who sets the purchase price when a municipality opts to acquire needed land by eminent domain?

At first, the town itself determines the compensation to be paid. If unsatisfied with the amount, the owner may challenge it. The Superior Court then appoints a panel of three referees to hear both sides and examine all evidence, including testimony of appraisers. Finally, the referees set the property's fair market value. Upon court acceptance of this recommendation, the compensation amount is finalized.

A common objection to "taking" land by eminent domain is that the court-decided value could be so high as to impose an intolerable burden on the town. Could such a scenario come to pass if Ridgefield condemns Bennett's Pond? No one can predict with 100% certainty. However, by examining the same evidence the referees are likely to consider, taxpayers and town officials can arrive at an informed basis for decision-making.

Evidence #1: Recent sale price

The first way to value any property is to consider its most recent sale price. IBM sold its 680-acre property in February of 1998 for $8 million. In early 1999, IBM's legal counsel justified this sale price by noting:

"IBM relied on an experienced appraiser who determined in 1997 that the property was worth substantially less than $8,000,000. And, at the time, IBM had received several offers for $8 million or less. All of these offers, except from Eureka, were contingent upon receiving the Town's permission to construct a high-density residential development. Because of the Town's stated refusal to approve increased residential development on this property, IBM accepted Eureka's unconditional $8 million offer."

The counsel summarized, "I have concluded that IBM received a fair price for this property." Indeed, it would be hard to argue in court that IBM, its appraisers and the other bidders were all misguided in their thinking!

Sale price modifications

Of the 680 acres purchased by Eureka V LLC, 69 acres -- or roughly 10% of the total -- lie in Danbury. This acreage clearly could not be included in a Ridgefield action since it lies outside the town's borders. Assuming that the Danbury parcel is worth at least 10% of the property's total value, the Ridgefield portion would have a market value of approximately $7.2 million, or 90% of the most recent sale price.

On the other side of the ledger, Eureka can reasonably argue that it spent an additional $319,000 to buy the Burton house and its two-acre site in April, 1999. This sum must be added to the value of the Ridgefield parcel.

Thus, on the basis of recent transactions, Ridgefield's 611-acre portion of the Bennett's Pond property may be worth just over $7.5 million, or about $12,300 per acre. Eureka has announced its willingness to sell the entire parcel for $32.5 million, or $47,800 per acre -- a fourfold increase over what was paid less than two years ago. The developer has not disclosed the basis of its valuation, which State Representative John Frey recently labeled "a pipe dream."

Next week: More on what the referees are likely to consider in determining the fair market value of Bennett's Pond .

This is the sixth in a series of columns prepared by the Ridgefield Open Space Association (ROSA), a non-profit, grassroots organization dedicated to the preservation of the Bennett's Pond property and open space throughout Ridgefield. For ROSA information, contact: P.O. Box 492, Ridgefield; email: ROSA@mags.net; phone: 431-6662.