                In the United States Court of Federal Claims
                                                           No. 14-388L
                                                   (Filed: December 14, 2018)

*************************************
WILLIAM C. HARDY & BERTIE ANN *
HARDY et al.,                       *
                                    *                                         Rails-to-Trails; Valuation Trial; Yellow
                  Plaintiffs,       *                                         Book; Value of Property Rights Remaining
                                    *                                         in the Servient Estate; Special Benefit;
      v.                            *                                         General Benefit; Severance Damages;
                                    *                                         Verification; Comparable Sales;
THE UNITED STATES,                  *                                         Adjustments
                                    *
                  Defendant.        *
*************************************

Elizabeth A. Gepford McCulley and Thomas S. Stewart, Kansas City, MO, for plaintiffs.

Amarveer Brar, United States Department of Justice, Washington, DC, for defendant.

                                                     OPINION AND ORDER

SWEENEY, Chief Judge

        In this Rails-to-Trails action, plaintiffs own real property adjacent to a rail corridor in
Newton County, Georgia. Until 2013, the Central of Georgia Railroad Company and its
predecessors held easements for railroad purposes that crossed their land. Defendant United
States then authorized the conversion of the railroad rights-of-way into recreational trails
pursuant to the National Trail Systems Act, conduct that resulted in a taking in violation of the
Just Compensation Clause of the Fifth Amendment to the United States Constitution. At issue is
the amount of compensation owed to plaintiffs for the taking. As explained below, the court
awards damages to plaintiffs in an amount to be determined in accordance with the court’s
findings and conclusions.

I. FACTS ....................................................................................................................................... 3
        A. Status of the Trail........................................................................................................... 4
        B. Plaintiffs’ Property Interests as of the Date of the Taking......................................... 5
        C. Size of the Land Taken .................................................................................................. 5
        D. Impact of the Trail on Landowners ............................................................................. 6
        E. Highest and Best Use .................................................................................................... 10
II. STANDARDS FOR DECISION .......................................................................................... 11
       A. Legal Standards ........................................................................................................... 11
       B. Appraisal Standards .................................................................................................... 12
III. THE EXPERTS ................................................................................................................... 14
IV. PROPERTY RIGHTS REMAINING IN BURDENED LAND ...................................... 15
       A. Defendant’s Position .................................................................................................... 15
       B. Plaintiffs’ Position ........................................................................................................ 17
       C. Analysis ......................................................................................................................... 18
V. BENEFITS AND DAMAGES TO THE REMAINDER ................................................... 21
       A. Defendant’s Position .................................................................................................... 21
               1. Sales Along Other Trails in Newton County ..................................................... 22
               2. Sales Along the Subject Trail .............................................................................. 23
               3. Impact of the Trail ............................................................................................... 24
               4. Data From Trails Outside of Newton County ................................................... 25
               5. Mr. Sheppard’s Conclusion Regarding Special Benefits ................................. 25
       B. Plaintiffs’ Position ........................................................................................................ 26
               1. Trail Proximity Damage Studies ........................................................................ 26
               2. Cost to Cure .......................................................................................................... 31
       C. Analysis ......................................................................................................................... 32
VI. COMPARABLE SALES AND ADJUSTMENTS ............................................................ 38
       A. Points of Error.............................................................................................................. 39
               1. Verification ........................................................................................................... 39
               2. Report Format and Supporting Data ................................................................. 42
               3. Math Errors .......................................................................................................... 45
       B. Small Residential Parcels ............................................................................................ 47
       C. Drapac’s Parcels........................................................................................................... 53
       D. Large Residential Parcels ............................................................................................ 60
       E. Agricultural/Timber Parcels ....................................................................................... 65
       F. Commercial Parcels ..................................................................................................... 69
       G. Industrial Parcels ......................................................................................................... 74
       H. Temporarily Taken Parcels ........................................................................................ 77
VII. CONCLUSION .................................................................................................................. 81

                                                                    -2-
                                              I. FACTS

        Detailed descriptions of the statutory and regulatory context of this case, initial
acquisition of the land in question, and proceedings before the Surface Transportation Board are
provided in the court’s summary judgment ruling on the issue of liability and need not be
repeated herein.1 See Hardy v. United States, 127 Fed. Cl. 1, 5-7 (2016). In that ruling, the court
determined that the Surface Transportation Board’s issuance of a Notice of Interim Trail Use or
Abandonment (“NITU”) on August 19, 2013, constituted a taking with respect to property
owners holding a cognizable Fifth Amendment property interest. Id. at 21-22. It further
determined which plaintiffs held such an interest. Id. at 10-21. The court later reconsidered its
ruling with respect to certain parcels, finding that additional plaintiffs held a cognizable Fifth
Amendment property interest as of the date of taking. Hardy v. United States, 129 Fed. Cl. 513,
518 (2016); see also Jt. Stip. 1 (discussing the parties’ stipulation regarding ownership).

        On November 18, 2016, the Surface Transportation Board issued a public notice of
correction of the NITU, modifying the NITU’s description of the location of the eastern terminus
of the portion of the rail line covered by the NITU—a modification that affected eleven plaintiffs
owning twelve parcels. Hardy v. United States, 131 Fed. Cl. 534, 536-37 (2017); see also Cent.
of Ga. R.R. Co.—Abandonment Exemption—in Newton Cty., Ga., No. AB 290 (Sub-No. 343X),
2016 WL 6839539 (S.T.B. Nov. 18, 2016). The court determined that the NITU’s modification
impacted the duration of the taking, not whether a taking had occurred, and that the plaintiffs
affected by the NITU’s modification suffered a temporary taking from August 19, 2013, to
November 18, 2016. Hardy, 131 Fed. Cl. at 539-40.

        The court then held an eight-day trial in Atlanta, Georgia from September 25 through
October 4, 2017, to ascertain the value of the property interests that were found to have been
taken. Six landowners, as well as experts for both sides, testified during the trial. During
posttrial briefing, the parties filed cross-motions for partial summary judgment as to the
appropriate interest rate necessary to provide just compensation. On June 21, 2018, the court
determined that “[p]laintiffs are entitled to delay damages between the date of taking and the
date of payment at an interest rate equivalent to the [Moody’s Composite Index of Yields on Aaa
Long Term Corporate Bonds (“Moody’s”)] rate, compounded quarterly.”2 Hardy v. United
States, 138 Fed. Cl. 344, 357 (2018). After posttrial briefing concluded, the court heard closing
arguments on August 16, 2018.

        1
          This section contains the court’s findings of fact as required by Rule 52(a)(1) of the
Rules of the United States Court of Federal Claims. The court derives these facts from the
parties’ Joint Stipulation of Facts (“Jt. Stip.”); the transcript of testimony elicited at trial (“Tr.”);
the exhibits admitted into evidence during trial (“PX” or “DX”); relevant statutes, regulations,
and prior decisions; and matters of which the court may take judicial notice pursuant to Rule 201
of the Federal Rules of Evidence. Citations to the trial transcript will be to the page number of
the transcript and the last name of the testifying witness.
        2
           The Moody’s rate for August 19, 2013, was 4.71%. Federal Reserve Economic Data,
Moody’s Seasoned Aaa Corporate Bond Yield, Federal Reserve Bank of St. Louis,
https://fred.stlouisfed.org/series/DAAA/ (last visited Dec. 14, 2018).

                                                   -3-
                                       A. Status of the Trail

         Newton County is a suburban/rural community in north central Georgia. PX 220 at 9;
DX 416 at 45. It comprises 279 square miles of land and had 105,473 residents in 2015. PX 220
at 9. The county seat, Covington, is a half-hour drive east from Atlanta, and thus serves as a
“convenient commuting bedroom community” for Covington’s 13,916 residents.3 Id. at 9-10.
The trail at issue extends approximately 14.9 miles from its eastern terminus near Newborn to its
western terminus in Covington. Id. at 9. On September 28, 2016, the Central and Georgia
Railway Company and the Newton County Trail-Path Foundation, Inc. (“Newton Trails”)
notified the Surface Transportation Board that they had executed a lease agreement for interim
trail use and railbanking. Cent. of Ga. R.R. Co., 2016 WL 6839539, at *1. At the time of trial,
the hiking and biking trail included three impassible trestle bridges, DX 416 at 41, and its
construction was not complete,4 Tr. 88, 113 (Greer); PX 138 at 1-2; PX 186 at 1.

                       First, access to the subject trail is constrained by the lack of
               trailheads (save Beaver Park, located between Manchester and
               Newborn), such that owners abutting the trail and subdivisions
               where community-specific access points were added are generally
               the only users that do not have to trespass to access the trail. . . .

                       Second, closed bridges effectively divide the subject trail
               into relatively short segments that are less conducive for users
               wanting longer stretches of trail . . . . Funding required to repair
               the bridges and open up larger segments of the subject trail appears
               to be a significant obstacle . . . . [I]t is highly unlikely that the trail
               will be more than 1.5± miles to 2.5± miles in length during the
               foreseeable future.

DX 416 at 170. Notwithstanding the lack of trailheads, “[t]he segment of trail between
downtown Covington and the Alcovy River bridge is accessible by several street crossings.” Id.
at 173.




       3
         Census figures indicate that the population of Covington was 13,116 in 2010. PX 220
at 10. The 13,916 figure reflects an extrapolation of the 6.1% growth in Covington’s population
from 2010 to 2015. See id.
       4
          The court recognizes that the current status of the trail is not relevant to valuation, see
infra Section II.B, but provides the information in this section for background purposes. See also
Tr. 1842 (Sheppard) (indicating that information regarding the status of the trail was included to
“bring the user of the appraisal to a point of understanding” the work performed).


                                                   -4-
                  B. Plaintiffs’ Property Interests as of the Date of the Taking

         The parties stipulate that all but one of the plaintiffs held a cognizable Fifth Amendment
property interest in one or more parcels adjacent to the former rail corridor as of August 19,
2013. Jt. Stip. Ex. A. The parties disputed whether an additional plaintiff, James Jackson,
owned the parcel identified as claim 106 as of the date of the taking. Id. at 15; Tr. 684
(Matthews). Although no deed conveying the property to Mr. Jackson could be located, an
appraisal report reflects that he held “[t]itle to the subject property” as of August 19, 2013, and
for at least ten years prior. DX 410 at 8. The appraisal report further reflects that Mr. Jackson
purchased the relevant parcel from its prior owner in the 1970s and a lot survey was performed
for Mr. Jackson in 1990. Id. at 9-10. Thus, Mr. Jackson held a cognizable Fifth Amendment
property interest in a parcel adjacent to the former rail corridor as of August 19, 2013.

                                    C. Size of the Land Taken

        The parties stipulate to the portion of each parcel situated within the former rail
corridor—i.e., the size of the taking—for the majority of the plaintiffs. Jt. Stip. Ex. A (listing the
stipulated measurements, where applicable, for all parcels); see also PX 112 (maps of all parcels
and the former railroad corridor).

        One of these stipulations—with respect to the area of the claims 21.A through 21.BB, all
owned by Drapac Group 28 LLC (“Drapac”)—contains an error. The parties’ joint stipulation
indicates that the aggregate land taken with respect to the Drapac parcels is 2,058 feet long and
25 feet wide, for a total area of 51,450 square feet, i.e., 1.181 acres. Jt. Stip. Ex. A at 4.
However, these figures conflict with the information for the individual Drapac parcels that is
contained within the joint stipulation. That information reflects that the width of the taking is 25
feet for all parcels and that the length of the taking varies from 33 feet to 130 feet, summing to
2,167 feet. See id. at 2-4. At 2,167 feet long and 25 feet wide, the total area taken is 54,175
square feet, i.e., 1.244 acres. Indeed, the experts for both parties used this latter figure in their
calculations, rather than 51,450 square feet. PX 220 at 21-24 (reflecting an area of “54,175 SF
or 1.244 acres”); DX 320 at 4 (noting that “[t]he subject has 54,174± SF of land area being
acquired”5), 18-44 (individual parcel maps reflecting lengths that match those listed in the joint
stipulation).

        The parties dispute the size of the taking for the following claims: 17, 26.A, 26.B, 69.A,
69.B, 70, 86, and 95. Jt. Stip. Ex. A; Tr. 521 (Matthews). In support of its position, defendant
offers the areas supplied by its expert, who did not perform his own measurements but merely
relied on the numbers provided by defense counsel.6 DX 316 at 9 (claim 17); DX 325 at 10

       5
           The difference of one square foot has no significance in the instant case.
       6
           During trial, defendant’s expert stated that he reviewed, for accuracy, all of the
measurements that were provided to him. Tr. 1016 (Sheppard). Further, in his expert report, he
describes having made adjustments to maps that reflected area adjustments. DX 416 at 34.
However, these remarks were relevant to the trail as a whole—not for individual properties along
the trail. None of his individual reports regarding the parcels for which the area of taking was

                                                 -5-
(claims 26.A and 26.B); DX 369 at 10 (claims 69.A and 69.B); DX 370 at 9 (claim 70); DX 391
at 9-10 (claim 86); DX 402 at 11 (claim 95). In contrast, plaintiffs offer the areas supplied by
their expert, who performed his own measurements and calculations. Tr. 520-22 (Matthews); PX
220 at 546 (claim 17), 556 (claim 26.A), 557 (claim 26.B), 606 (claim 69.A), 607 (claim 69.B),
608 (claim 70), 583 (claim 86), 617 (claim 95). The actual measurements and calculations of
plaintiffs’ expert are more credible. Thus, the sizes of the land taken at issue are as follows:

                                              Square
                                 Claim                      Acres7
                                              Footage
                                  17            6,425        0.147
                                 26.A           5,850        0.134
                                 26.B           6,550        0.150
                                 69.A           8,800        0.202
                                 69.B8        161,100        3.698
                                  70           14,350        0.329
                                  86           16,275        0.374
                                  95           35,850        0.823

                             D. Impact of the Trail on Landowners

        Six plaintiffs testified credibly regarding their concerns pertaining to the trail. Written
comments from all plaintiffs regarding the trail were also admitted into evidence. Plaintiffs
generally expressed concerns related to privacy, safety, crime, law enforcement response times,
trespassers, trash, farm animals being disturbed by trail users, and the trail negatively impacting
the value of the their property.

       Fred Greer owns a 250-acre farm near Mansfield that has been in his family for six
generations.9 Tr. 56 (Greer). His farm is bisected by the trail, and includes barns and other

not stipulated provides any indication that he made any adjustments to the measurements that
were provided by defense counsel.
       7
         One acre equals 43,560 square feet. Acre, Black’s Law Dictionary (10th ed. 2014); Tr.
397 (Matthews); see also U.S. Customary System of Weights and Measures: Commercial
Weights and Measures Units, 33 Fed. Reg. 10,755, 10,755 (July 27, 1968) (listing “common
weights and measures used in normal commerce throughout the United States”). The acreage
based on the square footage is rounded to the nearest thousandth (i.e., three decimal places).
       8
         The parties’ disagreement with respect to claim 69.B amounts to a rounding dispute.
Compare PX 69.D at 2 (reflecting an area equal to 161,100 square feet, i.e., 3,222 feet long and
50 feet wide), and PX 220 at 607 (same), with DX 369 at 10 (reflecting an area equal to 161,087
square feet, i.e., 3,221.73 feet long and 50 feet wide).
       9
        Mansfield is near Newborn, both of which are located in the southeastern portion of
Newton County. PX 220 at 9; DX 416 at 51.


                                                -6-
structures near the trail itself.10 Id. at 61, 75; PX 77.B; PX 77.C at 2; DX 376 at 11-12; DX 377
at 11-12; DX 379 at 10; DX 380 at 13. He described having items stolen from his barn, Tr. 66
(Greer), trespassers on his property, id. at 88, cattle being disturbed by trail users, id. at 72, a
“substantial” increase in trash along the trail, id. at 76, and feeling that safety will be impacted
once trail construction is complete, id. at 88.

         Jack Morgan owns a 32-acre residential property that is bisected by the trail on its
southern side. Id. at 118, 142, 148-49, 155 (Morgan); PX 68.E.1; DX 368 at 10. His home is
located approximately 600 feet from the trail, at the end of a half-mile private drive accessible
via a cul-de-sac. Tr. 119-20, 141 (Morgan); PX 68.E.1. His property includes a pond and other
structures. Tr. 120-21, 141 (Morgan); PX 68.E.1. Mr. Morgan also owns Morgan Plaza, which
is commercial property within the Covington city limits. Tr. 117-18 (Morgan). Along with other
neighbors, he formed a group opposed to recreational trails in Newton County. Id. at 130-32.
His primary concern with the trail is that it “opens up a right-of-way” through his property giving
users “blind access,” whereas people did not use the corridor when the railroad was running. Id.
at 121-22. He remarked that “interlopers” can determine whether he is home and then access his
barn. Id. at 128. Mr. Morgan explained that has to be “on guard more so now than ever before”
due to the ability of the public to use the trail, despite barriers that are in place surrounding a
trestle bridge just to the south of his property. Id. at 128, 150. In June 2017, for example, a cell
phone belonging to a registered sex offender was found near the pond. Id. at 123-26; PX 232. In
addition, although the trail “is not supposed to be used for vehicle traffic,” he occasionally hears
all-terrain vehicles on the trail. Tr. 122-23, 151 (Morgan).

        Jeremiah Frazier lives in a small Covington subdivision on approximately one-third of an
acre at the end of a cul-de-sac. PX 37.C; PX 37.D; DX 337 at 10. The trail corridor is located at
the back of his property adjacent to a street that is not safe to walk along. Tr. 170-71 (Frazier);
PX 37.C; DX 337 at 10. He and his wife purchased their property in December 2006 to be closer
to family members, and two adult children still live at home. Tr. 158, 165 (Frazier); PX 37.B.
Mr. Frazier’s primary concerns are privacy and safety because he spends “quite a bit of [his]
time” in the backyard. Tr. 165-68 (Frazier). Although his backyard is enclosed by a fence that is
“somewhere between six and seven feet tall,” trail users can see into the backyard and in his
windows due to the elevation of the trail and lack of foliage immediately off the ground, and he
can hear whenever people are using the trail. Id. at 166-68, 172; accord PX 37.E.3, 37.E.4,
37.E.5. Mr. Frazier noted that, at night, someone on the trail can see into his home if the lights
are on, but he would not be able to see outside since the trail is not lit. Tr. 167 (Frazier); PX 155
at 1. Mr. Frazier also described increased trash and trespassing, and explained that he recently
installed a security system, because of the presence of the trail.11 Tr. 168-70 (Frazier). He stated
that the trail “absolutely” impacted his property values because a potential buyer “would have
the same concerns.” Id. at 171-72.

       10
            Mr. Greer’s farm comprises several contiguous parcels, not all of which are adjacent
to the trail corridor. See, e.g., PX 220 at 21.
       11
           Mr. Frazier also referenced a break-in, but acknowledged that the perpetrators did not
access his property via the trail. Tr. 170, 179 (Frazier).


                                                 -7-
        Jim Anderson’s family owns approximately 170 acres of farmland that has been in his
family since the nineteenth century.12 Id. at 196, 208 (Anderson); PX 59.C; DX 358 at 8. The
property, which abuts a river, includes a small home, two barns, and a Native American
campground. Tr. 196-97 (Anderson); PX 59.B. Mr. Anderson raises cattle on the property,
which is approximately 80% open and 20% wooded. Tr. 195-96, 200 (Anderson). The property
is bisected by 5,087 feet of the trail on its western side, and another 467 feet of the trail abuts the
property’s southern edge. PX 59.C at 1; DX 358 at 9-10. There are two private crossings on the
property approximately 1,500 feet apart over the former rail corridor that were previously
maintained by the railroad, and a trestle bridge on the trail where it crosses the river just
northwest of the property. Tr. 199-200, 211 (Anderson). Mr. Anderson, like Mr. Morgan,
shared his concerns regarding the trail with his neighbors, and prefers to simply have his land
back instead of having a trail sever the property. Id. at 205. He described the loss of privacy due
to the public trail as “hurt[ing] the value of the property.” Id. at 206. Specifically, he listed
“gross trespassing,” “illegal hunting and poaching,” “unabated littering,” and “vandalism” as
concerns associated with “unauthorized persons . . . access[ing] a property.” Id. at 200. Mr.
Anderson recounted how people “began cruising the track” after the railroad ceased regular
service. Id. at 201. Since then, he has found trash along the trail and discovered campgrounds
where squatters “set up housekeeping” on multiple occasions. Id. at 201-02, 216. He has also
had tools stolen from the barns and fences along the former rail corridor cut, causing his cattle to
get loose and roam the trail. Id. at 202-03. Mr. Anderson noted that before the rail track was
removed, theft was higher during hunting season, but now thefts occur “year round.” Id. at
215-16. He remarked that law enforcement assistance has been unhelpful due to delayed
response times. Id. at 204.

        Michael Solomon lives next door to Mr. Frazier. Id. at 219 (Solomon); DX 336 at 10,
with DX 337 at 10. Similar to Mr. Frazier, Dr. Solomon’s property also comprises
approximately one-third of an acre and is located at the end of the cul-de-sac. Id. The trail
corridor is located at the back of his property, separated by a fence, and is adjacent to the same
street described by Mr. Frazier as not safe to walk along. Tr. 170-71 (Frazier), 227 (Solomon);
DX 336 at 10; DX 337 at 10. Dr. Solomon explained that he and his wife moved to Covington
for “seclusion and quiet.” Tr. 226 (Solomon). He expressed concerns with needing to “enhance
security” surrounding his property, despite having had a security system in place since building
the home, because he travels abroad for business approximately 90% of the year. Id. at 226,
230-31. Dr. Solomon has, similar to Mr. Frazier, seen people on the trail, including one occasion
in 2017 when he was upstairs showering. Id. at 228-29. He has also seen “significant trash built
up on [his] property” due to the presence of the trail. PX 154 at 1.

        Mark Sanders also lives in Covington. Tr. 238 (Sanders). His property is a ten-acre
single-family residential tract, with its east border abutting approximately 758 feet of the trail.
Id. at 244, 251; PX 16.B; PX 16.D; DX 315 at 8-10, 12. Mr. Sanders purchased the
five-bedroom home—a replica of an antebellum mansion—in a dilapidated state in 2012 at a
bankruptcy sale for $300,500 (the property having sold for $1.4 million in 2002) and has since
spent considerable funds on renovations. Tr. 240-41, 247 (Sanders); PX 16.B; DX 315 at 8. His

       12
            The record owner of the farmland is Jane Greer Anderson. PX 59.B; DX 358 at 8.


                                                  -8-
home is approximately 100 yards from the trail. Tr. 259 (Sanders). He also has a barn that is
approximately 25 yards from the trail. Id. at 248; PX 16.B; DX 315 at 11. Mr. Sanders
explained that he is concerned with people having “access to [his] property without [him] being
able to see them” since the trail is “very hidden,” although he has seen people walking the trail.
Tr. 249, 251-52 (Sanders). He remarked that he is worried about trespassing and vandalism
based on previous break-ins to his barn and the topography of his land, and averred that it would
be naïve to think that the trail would not provide a “platform” for nefarious activity. Id. at
249-54.

        Other plaintiffs provided sworn declarations that were admitted into evidence in which
they shared concerns similar to those expressed by the plaintiffs who provided live testimony
during trial. For example, Luckie Jerry Ward explained:

               The Trail above and well behind my home allows EXCESS water
               to flow down[,] therefore[] trash left by trail users ends up in my
               back yard. The trail is a huge nuisance because it is being used as
               a “shooting alley” by ATVs, motorcycles, and trail bikes.

PX 172 at 1. Similarly, Michael Lassiter averred:

                       We have continually cleaned the area between the old
               railroad track and our land ever since the [rail] line was abandoned.
               We have used a swing blade since a lawn mower would certainly
               be wrecked with rocks, branches jutting up from the ground[,] and
               trash thrown by “trail” users. The stretch of the abandoned track
               has not been prepared for a walking trail and yet we have
               experienced noisy walkers, bicycles, golf carts, and speedsters in
               Trailblazers, Explorers, three wheelers & motorcycles. The
               abandoned track is at a level that anyone can peer into our private
               backyard. The City of Covington has posted a sign stating
               “Primitive Path” but people still come through.

PX 138 at 1. Mr. Lassiter noted that there has been vandalism, graffiti, and trash along the trail.
Id. at 2. He further stated that “multiple walkers and people on bicycles” cut through his
property to access the trail. Id. Several other plaintiffs have also seen people trespass on their
property to access or leave the trail. See, e.g., PX 130 at 4; PX 140 at 1; PX 163 at 1. Wayne
Blackwell, who owns a grocery store that is adjacent to the trail, has had people treat his store’s
parking lot as a trailhead, leaving fewer parking spots for his customers. PX 206 at 1. Some
plaintiffs, similar to Mr. Frazier and Dr. Solomon, observed that trail users can see into their
homes. PX 132 at 1; PX 153 at 1. For Patricia Alexander, the safety concerns due to the trail
caused her to move away, PX 173 at 4, and Maxine Romeo Smith remarked that she may, if it
becomes necessary, do so as well, PX 150 at 4. Anthony Sinyard is currently considering selling
his property because of safety concerns. PX 190 at 1.




                                                -9-
         In addition, several plaintiffs emphasized that Newton Trails does not actively maintain
the trail. See, e.g., PX 145 at 1; PX 159 at 1; PX 167 at 1; PX 193 at 1. Thomas Fulton
explained that the trail is not safe for users:

               [T]here is a major concern with the trestle located on the west end
               of my parcel. [Newton Trails] put up some barriers and signs
               around the trestle, but they quickly were torn down. The trestle
               poses a serious liability issue[] for the trail users. . . . The trestle
               acts as an attractive nuisance for people.

PX 194 at 1. According to defendant’s expert, “most of the trail is inaccessible for trash
collection due to bridges that are out of service and impassible.” DX 416 at 173.

        Some plaintiffs indicated that they had no concerns regarding the trail, but specified that
their lack of concern was due to the fact that the trail was not fully operational. E.g., PX 125
at 1; PX 168 at 1. Ultimately, the general sentiment was that the trail had an adverse impact on
property values. See, e.g., PX 129 at 1; PX 147 at 1; PX 165 at 2; PX 171 at 2; PX 178 at 1; PX
180 at 2; PX 187 at 1.

                                     E. Highest and Best Use

        As a final matter, each of the parcels at issue can be placed in a category that reflects its
highest and best use. The relevant categories include small residential, large residential,
agricultural/timber, commercial, and industrial. Jt. Stip. Ex. A. The parties generally do not
dispute the highest and best use of any of the land in question. Tr. 335 (Matthews), 1411
(Sheppard). There are two exceptions: claims 91.C and 91.D.

       Mr. Matthews grouped claims 91.C and 91.D among the agricultural/timber parcels, and
averred that the highest and best use for each was residential. PX 220 at 634-35; PX 221.A at
10. He noted that both parcels are zoned for agricultural use, and specified that claim 91.C is
primarily wooded and that claim 91.D is used as a park for recreational purposes. Tr. 621
(Matthews); PX 220 at 634-35. Aerial maps support his assertions. See PX 112 at 24.

          Meanwhile, Mr. Sheppard grouped claim 91.CD (combined) among the industrial
parcels. DX 397 at 15. He observed that although the current zoning was “for agricultural use as
of the effective date . . . , future land use maps indicate a probable change to commercial or
industrial use.” Id. He remarked that “the subject site is of sufficient size, per current and
retrospective zoning regulations, to support agricultural, commercial, or industrial use” and that
“[i]t is logical that the subject site would be developed in an industrial capacity,” and concluded
that the highest and best use for claim 91.CD was industrial. Id.

        Mr. Matthews is correct. “To be a property’s highest and best use, the use must be
(1) physically possible; (2) legally permissible; [and] (3) financially feasible,” and “must result
in the highest value.” Interagency Land Acquisition Conference, Uniform Appraisal Standards



                                                 -10-
for Federal Land Acquisitions (“Yellow Book”) 23 (6th ed. 2016).13 Industrial use is not legally
permissible for claims 91.C and 91.D because those parcels are zoned for agricultural use. Of
course, rezoning can factor into the highest-and-best-use analysis. However, “[f]or any highest
and best use that will require a property to be rezoned, the probability of that rezoning must be
thoroughly investigated and analyzed.” Id. (emphasis added); accord Bd. of Cty. Supervisors of
Prince William Cty. v. United States, 276 F.3d 1359, 1365 (Fed. Cir. 2002) (“[A] proposed ‘use’
requires a showing of reasonable probability that, at the time of the taking, the land was both
physically adaptable for such use and that there was a need or demand for such use in the
reasonably near future.”). Mr. Sheppard failed to demonstrate that he thoroughly investigated
and analyzed the potential for claims 91.C and 91.D to be rezoned. He simply alluded to future
land use maps in stating that it was “logical” that the land would be developed for industrial use.
Although he indicated that it was “probable” that the land use would change, his report lacks any
analysis of the magnitude of such probability (including, for example, whether there was any
demand for industrial use). Further, claim 91.D is currently exempt from property taxes because
the land is developed as a park. DX 397 at 14. Its current use as a park is drastically different
from industrial use, thus further demonstrating the need for a thorough discussion of the
likelihood that such use would change.

       In short, the highest and best use for claims 91.C and 91.D is residential, and they are
properly classified as agricultural/timber parcels.

                               II. STANDARDS FOR DECISION

                                       A. Legal Standards

        The Fifth Amendment to the United States Constitution prohibits the federal government
from taking private property for public use without paying just compensation. As relevant here,
the Surface Transportation Board’s issuance of a NITU effected a taking by preventing plaintiffs
from enjoying possession of their property unencumbered by a railroad easement. Hardy, 127
Fed. Cl. at 7, 21-22 (citing Ladd v. United States, 630 F.3d 1015, 1019, 1024 (Fed. Cir. 2010);
Barclay v. United States, 443 F.3d 1368, 1374, 1378 (Fed. Cir. 2006); Caldwell v. United States,
391 F.3d 1226, 1233-34 (Fed. Cir. 2004)). It is well settled that just compensation is measured
by the fair market value of the property taken. Bauman v. Ross, 167 U.S. 548, 574 (1897).
“Under this standard, the owner is entitled to receive what a willing buyer would pay in cash to a
willing seller at the time of the taking.” Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 10
(1984) (internal quotation marks omitted).

        In Rails-to-Trails cases, the “measure of damages for just compensation must be the
difference between the value of plaintiffs’ land unencumbered by a railroad easement and the
value of plaintiffs’ land encumbered by a perpetual trail use easement subject to possible
reactivation as a railroad.” Raulerson v. United States, 99 Fed. Cl. 9, 12 (2011). However,
courts have consistently found that such possible reactivation (i.e., “railbanking”) is not a
“relevant consideration of analysis” in Rails-to-Trails cases because the possibility is so remote.

       13
            Plaintiffs’ exhibit 124 is a complete copy of the 2016 version of the Yellow Book.


                                                -11-
Ingram v. United States, 105 Fed. Cl. 518, 540-41 (2012) (collecting cases describing
railbanking as “hypothetical,” a “vague notion,” “unlikely,” “speculative,” and “unrealistic”);
accord Howard v. United States, 106 Fed. Cl. 343, 367 (2012) (“[T]here is no real prospect that
the property owners will ever again have unencumbered use of their property.”).

                                     B. Appraisal Standards

        Having concluded that plaintiffs are owed just compensation, the court must determine
the value of the property interests taken from them. The approach that government appraisers
are to follow in opining on the value of land taken by the federal government is found in the
Yellow Book.14 Yellow Book 3. Specifically,

               [a]ppraisers must exercise sound judgment based on known
               pertinent facts and circumstances, and it is their responsibility to
               obtain knowledge of all pertinent facts and circumstances that can
               be acquired with diligent inquiry and search. They must then
               weigh and consider the relevant facts, exercise sound judgment,
               and develop an opinion that is completely unbiased by any
               consideration favoring either the landowner or the government.
               . . . [I]t is inappropriate for an appraiser to “give the benefit of the
               doubt” to either a landowner or the United States.

Id. at 204.

          Acquisitions in Rails-to-Trails cases are “partial acquisitions”—i.e., those in which the
federal government “acquires only part of a larger parcel.” Id. at 111. In partial acquisitions,
“compensation is measured by the difference between the market value of the larger parcel
before the government’s acquisition and the market value of the remainder after the
government’s acquisition.” Id. This approach is known as the “before and after method of
valuation,” id. at 151, and is the “conventional method of valuation” used in Rails-to-Trails
cases,15 Rasmuson v. United States, 807 F.3d 1343, 1345 (Fed. Cir. 2015) (internal quotation
marks omitted); accord Yellow Book 199. Appraisals utilizing the before-and-after method of
valuation “must analyze and reflect all compensable damages and direct (special) benefits to the
value of the remainder property due to the government’s acquisition and disregard all
non-compensable damages and indirect (general) benefits . . . in accordance with federal law.”
Yellow Book 151. In the “after” condition, appraisers are to assume that the hiking and biking
trail is in place and has been constructed. Tr. 324-25 (Matthews), 1404-05, 1409-10 (Sheppard).
All claimed damages must be “supported by actual market evidence.” Yellow Book 157. When

        14
          The standards set forth in the Yellow Book “have guided the appraisal process in the
valuation of real estate in federal acquisitions since their original publication by the Interagency
Land Acquisition Conference in 1971.” Yellow Book 1.

         The “before and after method of valuation” is often referred to as the “federal rule.”
        15

Yellow Book 152.


                                                 -12-
properly applied to partial acquisitions, the before-and-after method incorporates compensable
damages and benefits. Id. at 164. The amount of compensation due to each landowner is
“measured by the owner’s loss, not the government’s gain.” Id. at 154. The same rules apply to
both permanent and temporary takings. Id. at 160.

        Under the Uniform Standards of Professional Appraisal Practice (“USPAP”), there are
two written reporting options for appraisers—an “appraisal report” and a “restricted appraisal
report”—as well as the option to provide an oral report. Id. at 56. Oral reports are not permitted
under the Yellow Book. Id. Similarly, restricted appraisal reports, i.e., appraisals in which “the
intended user of the report is restricted to the client only,” are not permitted under Yellow Book
guidelines for “litigation matters” (although they may be used internally). Id. For partial
acquisitions, written appraisal reports must include an introduction; factual data, data analysis,
and conclusions regarding the “before” condition; factual data, data analysis, and conclusions
regarding the “after” condition; acquisition analysis; and exhibits and addenda. See generally id.
at 57-72. When multiple properties are acquired simultaneously, a project appraisal report (a
type of appraisal report) may be used to satisfy USPAP requirements. Id. at 56, 72-73.

        A project appraisal report “include[s] the appraisal of more than one parcel in a single
report.” Id. at 73. Such reports

               are not appraisal shortcuts; they are clerical shortcuts. A separate
               opinion of market value must still be developed for each
               acquisition[,] but the results of each valuation can be reported in a
               more efficient form.

Id. Project appraisal reports that “contain opinions of value of properties owned by persons not
parties to the lawsuit and introduce a myriad of collateral issues” are “rarely conducive to
litigation purposes.”16 Id. (emphasis added). Project appraisal reports must contain the same
information as appraisal reports, organized into three major parts: (1) “introduction, factual data,
and analysis relating to all properties included in the report”; (2) “individual parcel reports”; and
(3) “addenda and exhibits relating to all properties included in the report.” Id. at 73. See
generally id. at 73-79 (discussing the required contents of project appraisal reports).

        Regardless of whether a project appraisal report is used, appraisers must “report the
opinion of value of the land for its highest and best use as if vacant and available for such use.”
Id. at 65. The “sales comparison approach is the preferred valuation approach for forming an
opinion of the market value of the land.” Id.




       16
           In the instant case, all of the properties on which the appraisers offered opinions of
value are owned by one or more plaintiffs.


                                                -13-
                                      III. THE EXPERTS

        In addition to the six plaintiffs who testified as fact witnesses, each party presented the
testimony of an expert appraiser. David Matthews testified as an expert appraiser on behalf of
plaintiffs. Tr. 262-63, 294 (Matthews). Prior to trial, Mr. Matthews submitted appraisal reports
for each property at issue. See generally PX 220; PX 221. Mr. Matthews averred that his work
conformed to Yellow Book standards, Tr. 317 (Matthews); PX 220 at 6, although he was not
actually required to follow the Yellow Book since he was not a government appraiser, Tr. 1866
(Matthews). Mr. Matthews has been an appraiser since 1969, received his MAI designation in
1975 and his senior residential appraiser designation in 1991, and owned and actively managed
an appraisal business from 1980 through 2017. Id. at 264, 275-77, 280; PX 217 at 24. Mr.
Matthews is also a member of the Real Estate Counseling Group of America, an invitation-only
group of approximately thirty preeminent appraisers in the United States, and served as its
president and chair from 2008 through 2011. Tr. 281-83 (Matthews); PX 217 at 24. In addition
to his other qualifications, Mr. Matthews has appraised over 500 individual properties across
thirty Rails-to-Trails cases since 2000 as either a joint appraiser, consultant, reviewer, or
plaintiffs’ expert, and has experience appraising railroad corridors dating back to 1976. Tr.
286-89, 293 (Matthews).

        Andrew Sheppard testified as an expert appraiser on behalf of defendant. Tr. 992-93,
1009-10 (Sheppard). Prior to trial, Mr. Sheppard submitted appraisal reports for each property at
issue. Id. at 1010-11. See generally DX 305-416.A. Mr. Sheppard has been an appraiser since
1998, and received his MAI designation in 2007. Tr. 993, 1392 (Sheppard); DX 416 at 10. At
the time of trial, Mr. Sheppard served as president of the Atlanta-area chapter of the Appraisal
Institute.17 Tr. 995 (Sheppard); DX 416 at 10. Mr. Sheppard’s practice focuses on “atypical”
properties. Tr. 997, 1392 (Sheppard). His experience includes easement corridors, appraisal
review work, and six Yellow Book appraisals. Id. at 998-1007. However, his work in the instant
case was his first Rails-to-Trails project. Id. at 1418.

        The experts’ testimony revealed three major areas of dispute: (1) identifying the property
rights available to the landowners in the “after” scenario; (2) whether there were any
compensable benefits or damages to the remainder parcel in the “after” scenario; and (3) the
comparable sales analyses performed by the experts, including the adjustments made (or lack
thereof), verification, and reporting format. See, e.g., id. at 1900 (Matthews).




       17
         The Appraisal Institute is the “nation’s leading appraisal education organization.” Tr.
994 (Sheppard).


                                                -14-
              IV. PROPERTY RIGHTS REMAINING IN BURDENED LAND

         The first major area of dispute between the parties involves the scope of property rights
each plaintiff now holds in the land burdened by the trail easement in the “after” scenario. The
trail easement itself is the dominant estate; the land burdened by the trail easement is the servient
estate. Yellow Book 168. With respect to easement valuation, the Yellow Book provides that
the owner of the servient estate may “make any use of the realty that does not interfere with the
easement holder’s reasonable use of the easement and is not specifically excluded by the terms
of the easement.” Id. Therefore, appraisers must “carefully and precisely state what interest(s),
if any, will remain with the landowner” in the “after” scenario. Id. at 169 (emphasis added). In
other words, “the appraiser must clearly understand the specific terms of the easement involved
to analyze the burden the easement imposes on the servient estate and the resulting impact on the
value of the affected land.” Id. Mr. Matthews opined that, as a result of the taking effected by
imposition of the perpetual trail use easement, plaintiffs retained no valuable rights in the
servient estate. Tr. 329-31 (Matthews). Mr. Sheppard opined that plaintiffs retained 15%—and
conversely, lost only 85%—of their fee simple property rights. Id. at 1416, 1422-23 (Sheppard);
DX 416 at 200.

                                     A. Defendant’s Position

        Mr. Sheppard based his opinion that 85% of plaintiffs’ property rights in the servient
estate were taken primarily on what he described as the “Sherwood Matrix,” which is an
“easement valuation matrix [serving] as a general guide for the impact or allocation from fee
simple value a host of typical easement types may have on the total bundle of rights.” DX 416 at
199. The Sherwood Matrix emerged in an article titled “Easement Valuation” that was written
by Donald Sherwood and appeared in the May/June 2006 issue of the Right of Way magazine.18
Id. The Sherwood Matrix is reproduced here from Mr. Sheppard’s report:

                Percentage                                       Potential Types of
                                        Comments
                  of Fee                                             Easements
                                                                Overhead electric
                                                                Flowage easements
                   90% –       Severe impact on surface use
                                                                Railroad ROW
                   100%        Conveyance of future uses
                                                                Irrigation canals
                                                                Access roads
                                                                Pipelines
                               Major impact on surface use
                75% – 89%                                       Drainage easements
                               Conveyance of future uses
                                                                Flowage easements


       18
           Mr. Sheppard incorrectly stated during trial that Mr. Sherwood’s “Easement
Valuation” article was published in 2016. Tr. 1168 (Sheppard). The correct year of publication
is 2006, as reflected in Mr. Sheppard’s expert report. DX 416 at 199; Donald Sherwood,
SR/WA, Easement Valuation, Right of Way, May/June 2006, at 30, 33, available at
https://www.irwaonline.org/members/publications/archives-2000-2009/.


                                                -15-
                Percentage                                       Potential Types of
                                        Comments
                  of Fee                                            Easements
                          Some impact on surface use
                                                                Pipelines
                51% – 74% Conveyance of
                                                                Scenic easements
                          ingress/egress rights
                                                                Water or sewer lines
                               Balanced use by both owner
                    50%                                         Cable line
                               and easement holder
                                                                Telecommunications
                          Location along a property
                                                                Water or sewer line
                26% – 49% line, location across non
                                                                Cable lines
                          usable land area
                          Subsurface or air rights that
                          have minimal effect on use            Air rights
                11% – 25%
                          and utility                           Water or sewer line
                          Location with a setback
                          Nominal effect on use and             Small subsurface
                 0% – 10%
                          utility                               easement

Id. Mr. Sheppard stated that “a percentage of fee-simple value for the affected easement area
ranges between 75% and 89%, considering the severity of impact of the surface’s use.” Id. at
200. Specifically, he contended that that the trail use easement was a “major” impact rather than
a “severe” or “total” impact. Tr. 1424 (Sheppard). Mr. Sheppard explained that

               [t]he trail easement was not considered to be as onerous as
               overhead transmission lines, access roads, or railway right-of-way,
               because there is no aesthetic quality lost as a result of the trail,
               vehicles are precluded from using the trail, and there is no
               expectation that rail cars will use the trail.

DX 416 at 200. He further contended that the “permanent easement includes only limited
ownership rights benefitting [plaintiffs], and there is a stipulation that the trail . . . may be
converted back into an active rail line if needed.” Id. Mr. Sheppard averred that “sales
evidence” utilizing “high-percentage floodplain sales where there is little utility in the purchased
site” supports his conclusion that only 85% of property rights were taken because such examples
“illustrate how fallow or significantly unusable land is worth more than $0.” Id. In describing
the utility of floodplain land, Mr. Sheppard indicated that building thereon was generally
impractical, but owners could exclude others and use the land for parking and setback purposes.
Tr. 1428-31, 1823-24 (Sheppard).

        During trial, Mr. Sheppard acknowledged that “the right to use that land [underlying the
imposed trail easement] is restricted,” but posited that abutting property owners—i.e.,
plaintiffs—retained a “right to access” the trail that nonabutting property owners did not share.
Id. at 1170; accord id. at 1421. He also explained that, in the “before” scenario where plaintiffs
are assumed to have 100% of the fee simple rights, plaintiffs could have used the land underlying



                                                -16-
the perpetual trail easement for “whatever” purpose they desired, and provided the following
examples:

               •   as a factor in “density calculations” if the land was “in a more
                   densely populated area,” such as during the permitting process
                   when building an apartment complex;

               •   landscaping, including planting;

               •   setback requirements under zoning laws;

               •   erecting improvements;

               •   parking; and

               •   exclusion of others.

Id. at 1419-21. Mr. Sheppard then explained that, in the “after” scenario where the perpetual
trail use easement had been imposed and the trail was constructed, plaintiffs could not control
what the land was used for, but retained access rights. Id. at 1421. Specifically, he observed that
plaintiffs could not use the land for any purpose not shared by the general public—including
building, parking, landscaping, and exclusion—other than convenient access. Id. at 1170-71,
1427-28. He also assumed that, because plaintiffs technically retained “reversionary” interests in
the land underlying the trail easement in the “after” scenario, plaintiffs could potentially use the
land to meet setback requirements.19 Id. at 1826.

                                      B. Plaintiffs’ Position

        Mr. Matthews similarly considered the “value of the remaining rights in the easement.”
Id. at 329 (Matthews); accord id. at 324-25. He explained that the “value of the rights,” rather
than the “name of the rights,” was the proper focus. Id. at 327-28. Unlike Mr. Sheppard,
however, Mr. Matthews determined that there was no “remaining or residu[al] value” in the land
burdened by the perpetual trail use easement, id. at 330, because plaintiffs “lost all the rights of
use” of the land taken, id. at 325. Therefore, Mr. Matthews suggested, there was no need to
include in his reports a separate section that discussed the market value of retained rights. Id. at
877. He remarked that plaintiffs have no more rights in the land in the “after” scenario than do
members of the general public—most importantly, plaintiffs cannot exclude others from the
trail—except for more convenient access, which did not impact the land’s value. Id. at 330-31.
He observed that, in having conducted hundreds of appraisals in Rails-to-Trails cases, he has

       19
            Both parties use the term “reversionary interest” as shorthand for the possibility of
plaintiffs or their successors enjoying unencumbered ownership of the land in the event that the
trail easement is completely extinguished, i.e., not converted to another use upon its termination
(by abandonment or otherwise).


                                                -17-
consistently opined that the land underlying the easement “has no value” (beyond perhaps a de
minimis amount) because the land is simply not usable. Id. at 331-32. Mr. Matthews noted that
although plaintiffs maintain “reversionary” rights, such rights were too speculative to have any
value. Id. at 974. In short, he asserts, a buyer would not be willing to pay for land that is
burdened by a perpetual trail use easement since the buyer could “get no use out of it.” Id. at
975.

                                            C. Analysis

       The court agrees with Mr. Matthews that plaintiffs retained no valuable rights in the land
underlying the perpetual trail use easement.

         As an initial matter, Mr. Matthews recognized that the possibility of the trail easement
being extinguished was too remote to have any value. Id. at 974. Meanwhile, Mr. Sheppard
acknowledged that he was unaware that such a possibility was “totally speculative.” Id. at 1823
(Sheppard). Since Mr. Sheppard relied on the possibility of easement extinguishment as a
valuable right plaintiffs retain in the servient estate, his conclusion that plaintiffs retained 15% of
the value of their rights in the land burdened by the trail easement is flawed. Further, the
potential ability of plaintiffs to use the servient estate in density calculations (due to the
possibility of easement extinguishment) is similarly speculative and thus has, at best, negligible
value. The other valuable right that Mr. Sheppard relied on was more convenient access to the
trail than nonadjacent property owners. As explained below, the court is not persuaded that
typical buyers would pay a premium for abutting the trail, and agrees with Mr. Matthews that
such increased access did not increase the value of the remainder parcel or the servient estate.20
In any event, Mr. Sheppard double-counts the purported value of increased access, thus
undermining his overall approach, since his valuation opinions rely on both (1) proximity to the
trail as a special benefit to the unburdened portion of the remainder parcel and (2) special access
as a retained property right in the servient estate.21

        Second, even assuming, for the sake of argument, that the Sherwood Matrix constitutes
reliable authority, Mr. Sheppard’s reliance on it is inapposite. He testified that when a typical
drainage or flowage easement is present (a “major” impact on surface use in which 75% to 89%
of property rights are taken per the Sherwood Matrix), the owner of the servient estate is
typically able to use the surface land, subject to the parameters of the easement, and that it would
be unusual for a landowner to be completely prevented from using any portion of the surface. Id.

       20
          The land burdened by the trail easement—i.e., the servient estate—is actually part of
the remainder parcel, but in the “after” condition it has no value.
       21
            That Mr. Sheppard’s overall approach is internally inconsistent is also demonstrated
by his statements that, with respect to the temporarily taken parcels, “100% of the ownership
rights for land within the subject corridor were curtailed during the temporary easement.” DX
398 at 4 (claim 91.E); DX 405 at 4 (claims 101.A and 101.B); DX 406 at 4 (claim 102); DX 407
at 4 (claims 103.A and 103.B); DX 408 at 4 (claim 104); DX 409 at 4 (claim 105); DX 410 at 4
(claim 106); DX 411 at 4 (claim 107); DX 413 at 4 (claim 109).


                                                 -18-
at 1425. He also indicated that when a power easement is present (a “severe” impact on surface
use in which 90% to 100% of property rights are taken per the Sherwood Matrix), the owner of
the servient estate is restricted from building on the land, but can generally use the land for
parking and landscaping purposes.22 Id. at 1426. Here, however, both Mr. Sheppard and Mr.
Matthews recognize that plaintiffs cannot exclude others from the trail or make any use of the
trail (such as parking and landscaping), other than increased access and perhaps setback purposes
in density calculations, beyond that which members of the general public enjoy. See, e.g., Kaiser
Aetna v. United States, 444 U.S. 164, 176 (1979) (describing the “right to exclude others” as
“one of the most essential sticks in the bundle of [property] rights”). Accordingly, the
restrictions on plaintiffs’ use of the trail easement are greater than the restrictions on owners of a
servient estate underlying a power easement.

         Mr. Sheppard characterized an easement in which the owner of the servient estate could
only use the land for “a setback calculation” as a “worst-case example,” Tr. 1167-68 (Sheppard),
yet nevertheless opined that only 85% of plaintiffs’ property rights in the land underlying the
trail easement were taken. In fact, an access road easement is listed as a “severe” impact in the
Sherwood Matrix, and Mr. Sheppard remarked that in his experience with road condemnations,
he typically treats a “perpetual county road easement” as a “100 percent fee simple take.” Id. at
1432. Treating a county road easement as a 100% taking is appropriate because owners of land
underlying an access road easement have no rights to use the underlying land other than as a
member of the general public. Since plaintiffs similarly have no right to use the land burdened
by the trail use easement other than as a member of the general public, Mr. Sheppard’s analysis
should similarly have led him to treating the imposed trail use easement as a “100 percent fee
simple take.” Such testimony undermined the credibility of Mr. Sheppard’s analysis.

        Further, Mr. Sheppard’s comparison of the trail use easement to floodplain land misses
the mark. He is correct that “[t]here is some value associated with rights to unproductive land.”
Id. at 1760. Unlike plaintiffs’ inability to use the land burdened by the trail easement, however,
owners of floodplain land are able to use their land for significant, valuable purposes not
available to the general public. Morgan Plaza, for instance, is located on floodplain land—a fact
that Mr. Sheppard even noted in his claim 5 appraisal. DX 308 at 9.

         Defendant relies on several authorities for the proposition that imposed easements do not
effect a taking of all property rights. In particular, defendant relies on Childers v. United States
to demonstrate that other judges of this court have “rejected the argument that land burdened by
a trail easement is worthless.” Def.’s Posttrial Br. 40.

               Plaintiffs are asking the Court to find that the 35-foot buffered strip
               is valueless. But that is not the case. Plaintiffs still own the land
               under the 35-foot buffer, and they have not demonstrated how the
               buffer adversely affected the value of either the land underneath it
               or the valuation of the remainder.

       22
         A power easement is described in the Sherwood Matrix as an “[o]verhead electric”
easement. DX 416 at 199.


                                                -19-
Childers v. United States, 116 Fed. Cl. 486, 533 (2013), quoted in Def.’s Posttrial Br. 40. This
excerpt from Childers correctly states the law—as relevant here, that (1) the proper focus must
be on the valuation of property rights and (2) a 100% taking is only appropriate when there is no
value remaining—but defendant’s application of the excerpt to the instant case is misguided. In
Childers, a recreational trail easement was imposed on thirteen subject properties following
issuance of a NITU. 116 Fed. Cl. at 495. The court determined that the “record as a whole
establishe[d] that the Legacy Trail had a negative impact on the value of the land adjacent to the
Legacy Trail.” Id. at 512. One of the properties was subject to restrictive covenants requiring, in
part, a fifty-foot buffer between the trail and the remainder of the property. Id. at 514-15. Since
there was already a fifteen-foot setback assumed in the “before” condition, an additional
thirty-five-foot buffer was designated to comply with the restrictive covenants. Id. at 532. In
addition to the value of the land encumbered by the trail easement itself, the Childers plaintiffs
sought damages for the value of the land underlying the thirty-five-foot buffer, arguing that “the
buffered land could not be used for other purposes.” Id. The court observed that the plaintiffs
were required to show that “the taking caused a diminution in the value of the remainder” to be
compensable. Id. at 533. The court went on to explain that the plaintiffs failed to meet that
burden:

               While the Legacy Trail itself caused a diminution in value to the
               remainder by exposing landowners to noise, trespass, and
               nuisance, Plaintiffs have not established that mitigation of this
               harm in the form an additional 35-foot buffer would equate to a
               diminution in value of the remainder.

Id. The court then made the statement quoted by defendant above, and remarked that the
buffered areas had independent value. Id. Thus, with respect to the statement from Childers
quoted by defendant, the court was not discussing the value of the land underlying the trail
easement itself, but was discussing the effect of a buffer beyond the impact of the trail easement.
Indeed, with respect to the trail easement itself, the Childers court used 99% diminution (based
on the parties’ agreement) of the full market value of the land burdened to calculate damages.
Id. at 532, 551. In other words, the court effectively concluded that the NITU effected a taking
of 99% of the value of the property rights in the land burdened by the trail easement. This
conclusion stands in stark contrast to defendant’s position.

        Defendant’s position is further undermined by other precedent in Rails-to-Trails cases.
In Howard, for example, another judge of this court considered, among other issues, the extent of
property rights remaining in the servient estate after a perpetual trail use easement was imposed.
106 Fed. Cl. at 366-68. Although Howard was decided under Indiana law, and the property
rights at issue in the instant case are governed by Georgia law, the salient issue with respect to
the remaining property rights in both cases is the same: neither interim trail use nor railbanking
is considered a “railroad purpose.” Id. at 367. Indeed, the Howard court emphasized that the
land burdened by the trail easement “would appear to be lost to [plaintiffs] for all intents and
purposes in perpetuity.” Id.




                                               -20-
        In the instant case, the court similarly concludes that plaintiffs have no remaining use of
the land burdened by the trail easement that is not available to the general public. While
defendant is correct that the determination of remaining property rights is a question of law,
defendant fails to recognize that determining the value of those rights is a question of fact.
Although plaintiffs may indeed have nominal property rights in the burdened land, those rights
have no pecuniary value and thus cannot impact the just compensation analysis.

                  V. BENEFITS AND DAMAGES TO THE REMAINDER

        The next area in which the parties disagree concerns the benefits and damages to the
remainder parcels. As noted above, the Yellow Book provides that just compensation for each
plaintiff must be set off by any special benefits to the remainder parcel (i.e., the “after” condition
in which plaintiffs’ land is subject to a perpetual trail use agreement), whereas general benefits
do not offset the compensation due. See Yellow Book 162-63. A special benefit is present when
the “remainder property ‘is specially and directly increased in value by the public
improvement.’” Id. at 162 (quoting Bauman, 167 U.S. at 574). General benefits “are those
‘which result to the public as a whole.’” Id. at 163 (quoting Bauman, 167 U.S. at 581); accord
id. (describing a general benefit as a “general increase in the value of property in the
neighborhood” (quoting Bauman, 167 U.S. at 580)). Just compensation must also include, in
addition to the value of the property actually taken, severance damages, which “compensate for
the diminution in value in the owner’s remaining property resulting from the taking.” Boyer v.
United States, 135 Fed. Cl. 121, 127 (2017). As noted above, special benefits and severance
damages, if any, are taken into account by proper application of the before-and-after rule.
Yellow Book 155, 164.

        Plaintiffs argue that small, single-family residential lots in Covington lose one-third of
their land value due to the presence of a hiking and biking trail abutting the rear property line.
Tr. 588 (Matthews); PX 220 at 15. Plaintiffs also argue that the severance damages for other
property types can be measured by the cost of erecting a fence. Tr. 588 (Matthews); PX 220 at
15-16. On the other hand, defendant suggests that

               there is a premium of $5,000/lot coinciding with suburban
               residential lots along the subject trail and $0 for rural residential
               lots, but no discount. Further, there appears to be no premium or
               discount accruing to any commercial, industrial, agricultural, rural
               lot, or larger tracts of land along the subject corridor.

DX 416 at 169; accord Tr. 1115-17 (Sheppard).

                                     A. Defendant’s Position

        Specifically, defendant posits that even assuming that the trail provides a general benefit
to the surrounding community, such a general benefit “does not somehow negate direct and
special benefits experienced by properties directly adjoining the trail.” Def.’s Posttrial Br. 29;
accord Tr. 1451 (Sheppard). Defendant also emphasizes that special benefits can be the same “to


                                                -21-
‘each and every lot of land upon the same street’ where the same advantages ‘are direct and
special to each lot.’” Def.’s Posttrial Br. 29 (quoting United States v. River Rouge Improvement
Co., 269 U.S. 411, 416 (1926)). Mr. Sheppard explained that he analyzed property sales to
determine whether there was any evidence of damages or premiums based on the presence of a
trail. Tr. 1093 (Sheppard). He separately examined “commercially oriented” sales, “industrial-
oriented sales,” and “suburban residential sales.” Id. at 1093-94.

                         1. Sales Along Other Trails in Newton County

         Mr. Sheppard examined sales abutting trails in Newton County other than the subject
trail: the 0.5-mile Yellow River Trail, the 1.2-mile Oxford College Trail, and the 2.4-mile
Eastside Trail (which is located less than a mile east of the trail at issue). Id. at 1119; DX 416 at
159-60. The only available sales along these trails were “residential-oriented.” DX 416 at 160.
Mr. Sheppard noted three large-acre sales along the Eastside Trail to owners who planned to sell
off subdivided portions of their tracts. Id. He also noted that an access path was added to the
Highgrove subdivision, which is located along Fernhill Court and Westwood Drive, to connect
the subdivision to the Eastside Trail. Id. Mr. Sheppard discussed the following sales along the
Eastside Trail:

               •   40 Fernhill Court, built in 2016 at 1,622 square feet with three
                   bedrooms and two bathrooms, is located approximately 25 feet
                   from the trail (separated by county-owned land), and sold on
                   December 16, 2016, for $146,600. Id.

               •   30 Fernhill Court, built in 2016 at 1,690 square feet with three
                   bedrooms and two bathrooms, is located ten feet from the trail
                   (separated by privately-owned land), and sold on December 19,
                   2016, for $157,500. Id.

               •   20 Fernhill Court, built in 2016 at 1,622 square feet with three
                   bedrooms and two bathrooms, is located “a similar distance
                   from the trail” as 40 Fernhill Court, and sold on December 30,
                   2016, for $146,900. Id. at 161.

               •   10 Fernhill Court, built in 2016 at 1,690 square feet with three
                   bedrooms and two bathrooms, is located approximately 75 feet
                   from the trail but adjacent to the access path, and sold on
                   December 20, 2016, for $146,000. Id. In addition, this
                   property “includes a ‘corner’ lot along a curve.” Id.

Mr. Sheppard observed that a $10,900 premium was paid for 30 Fernhill Court relative to the
adjacent 40 Fernhill Court. Of that premium, he allocated $5,100 to the “bricks and sticks” by
assuming $75 per square foot in construction costs according to the Marshall & Swift index, a
“national costing service that every appraiser uses,” and the remaining $5,800 to the lot itself.
Tr. 1102-04 (Sheppard); accord DX 416 at 160-61. Mr. Sheppard made no references to the lot


                                                -22-
sizes of any of the Fernhill Court properties in his expert report, but during trial he testified that
if the “only difference is location” of the land, assuming the same lot size, then the $5,800
difference could be attributed to being closer to the trail. Tr. 1102 (Sheppard). He averred that
30 Fernhill Court “effectively abutt[s] the trail” because, despite the ten-foot buffer owned by a
third party, it is “pragmatically three or four steps” away, and “[u]nless signage was posted or
surveys were examined in detail, most people would expect that they owned up to the corridor
when there was only an intervening 10′ strip of land owned by someone else.” DX 416 at 161.
Further, Mr. Sheppard asserted that because “the same sized house [10 Fernhill Court] sold
contemporaneously for $11,500 less than 30 Fernhill Court,” he “inferr[ed] a premium for
effectively abutting the trail.” Id. He concluded that “suburban residential lots along the paved
Eastside Trail command a $5000± premium.” Id.

                                 2. Sales Along the Subject Trail

        Mr. Sheppard also examined sales along the subject trail after the August 19, 2013
effective appraisal date to determine the effect of the trail on property values. He found “no
instance of a different (higher or lower) price being paid for unimproved land sales along the
subject corridor,” including commercial, industrial, suburban residential, rural residential, bulk
lot, and other types. Id. at 158-59. He also reviewed improved sales taking place after August
19, 2013, finding twenty-nine such sales (including three outliers).23 Id. at 162. In the Brookline
subdivision consisting primarily of homes along Baltusrol Way that were both “on and off the
subject corridor,” he calculated an “$18,563 premium for abutting the subject corridor . . . prior
to considering time aspects,” and a $15,000 time-adjusted premium, for sales between August 6,
2013, and December 7, 2016. Id. at 164. He allocated $10,000 of this difference to the
“woods-view aspect” of abutting homes and the remaining $5,000 being “attributable to the
underlying land . . . associated with owning a suburban residential develop[ed] lot along the
unpaved subject corridor.” Id. at 164-65.

                        So in the world of reasonableness, if you [have a] $15,000
                spread that includes two variables and you’re trying to account for
                one of the variables and you have data that says 5,000 is a
                reasonable allocation of that $15,000, it makes sense to me that
                within that 15,000 that 5,000 associated with the trail is reasonable.

Tr. 1115 (Sheppard). He also noted that the developer of the Brookline subdivision indicated
that the presence of the trail “had no impact” on the timing of either development or sales. DX
416 at 165. Mr. Sheppard concluded that “improved sales with the same age, type, and scale of
construction provide evidence of a $5,000 premium being applicable for suburban residential lots
along the subject corridor.” Id. at 166.




        23
          Mr. Sheppard provided a chart listing thirty sales, one of which was listed as having
taken place prior to the August 19, 2013 effective appraisal date. See DX 416 at 162.


                                                 -23-
       Mr. Sheppard’s anecdotal evidence—consisting of conversations with purchasers of three
homes adjacent to the trail and nine homes that were not adjacent to the trail—suggested that
“[n]o premium or discount was paid by any of the respondents . . . from any of the unimproved
or improved sales along the subject corridor (or other trail corridors in Newton County)
occurring after the effective date of appraisal.” Id. at 168.

                                     3. Impact of the Trail

        Continuing further in his proximity study, Mr. Sheppard “analyzed the potential impact
of the subject trail,” id. at 171, and opined as follows:

              •   “The trail easement does not appear to create a less usable or
                  less marketable site between the Before and After scenarios
                  unless otherwise noted . . . .” Id.

              •   “[T]he corridor would not directly cause lesser-quality
                  development or preclude[] better-quality development . . . .”
                  Id.

              •   “I considered the potential loss in value due to increased noise
                  and/or decreased privacy resulting from the corridor’s trail use.
                  Pragmatically, the mere existence of a rear or side neighbor
                  invites the potential for noise and the lack of privacy on any
                  given property. Noise and privacy issues from adjoining
                  uses/properties all have legal remedies.” Id. at 172.

              •   There is a “general tendency toward homes ‘on’ trails having
                  security systems.” Id. The present value of the cost of
                  installing and maintaining a security system for fifteen years is
                  approximately $3,256. Id. In addition, “[s]ales and evidence
                  from ‘after’ sales along the subject and other Newton County
                  trails suggest[] that a small premium (up to $1,000/lot) is being
                  paid for suburban/downtown residential lots.” Id. Therefore,
                  in places “where the trail is paved and it is more obvious that
                  the trail exists, . . . there is the potential for a buyer and seller
                  to negotiate a price that is $2,250/lot lower than what would be
                  expected at lots not abutting the trail.” Id.

              •   Considering the cost of trash cleanup “in reflection of an
                  expected $1,000/lot premium noted from an analysis of after
                  sales of lots and homes abutting trails in Newton County, it
                  does not appear reasonable that the typical buyer or seller
                  would negotiate the purchase price of a home or suburban
                  residential lot abutting the subject corridor upward or
                  downward.” Id. at 173.


                                                -24-
               •   There was “no evidence that an insurance company would
                   charge more for a site being on a corridor.” Id. at 174.

                        4. Data From Trails Outside of Newton County

        Mr. Sheppard also reviewed data related to trails outside of Newton County. He
acknowledged that he could not obtain sufficient data from the Silver Comet Trail or the
Suwanee Greenway for meaningful analysis of “a comparison for being on or off the trail.” Id.
at 178-79. However, he determined that the Big Creek Greenway showed a $15,000 premium
for “suburban residential lots abutting an existing paved trail.” Id. at 178. He averred that the
$15,000 premium “should be adjusted downward to reflect the location and population
differences between the case study areas and the subject’s submarkets between Covington and
Manchester.” Id. at 184.

                   5. Mr. Sheppard’s Conclusion Regarding Special Benefits

       After discussing his research with respect to the subject trail and its impact, other trails in
Newton County, and trails in areas outside of Newton County, Mr. Sheppard summarized his
findings:

                      My conclusion, from “after” sales data is that the trail
               corridor likely commands a negligible/small premium in certain
               instances, but not a discount. Sales along the paved Eastside Trail
               suggest a $5,000/lot premium. Sales along the unpaved subject
               corridor provide evidence of a $5,000± lot premium.

                         It is important to note that the subject’s trail will likely only
               be paved over the first “segment” of area, between downtown
               Covington and the Alcovy River bridge, for the foreseeable future.
               . . . [I]t appears unreasonable to assume that most of the trail will
               be paved or accessible to the public at large over [the next fifteen
               years].

                      Considering the unpaved nature of the subject trail,
               comments from buyers, and matched pair analysis from sales along
               both the subject trail corridor and the nearby Eastside Trail in
               Covington, there is a premium of $5,000/lot coinciding with
               suburban residential lots along the subject trail and $0 for rural
               residential lots, but no discount.24 Further, there appears to be no



       24
         Mr. Sheppard remarked that “[t]he distinction between suburban and rural,
pragmatically, reflects properties north of and south of the Alcovy River bridge, respectively.”
DX 416 at 169.


                                                  -25-
               premium or discount accruing to any commercial, industrial,
               agricultural, [or] rural lot, or larger tracts of land along the subject
               corridor.

DX 416 at 169 (footnote added).

                                       B. Plaintiffs’ Position

         Plaintiffs argue that “the small residential urban properties sustained 33% damage to the
land due to the proximity of the hiking and biking trail.” Pls.’ Posttrial Br. 30. Plaintiffs also
argue that “the large residential parcels generally could be cured by building a fence that was
fairly inexpensive, for either privacy or security depending on the circumstance, and that the
commercial and industrial parcels would generally require a chain link fence for security
purposes.” Id. Finally, plaintiffs contend that there is no damage, “either diminution in value to
the land or cost to cure damages, for parcels across the road from the hiking and biking trail or
where a substantial buffer already existed.” Id.

                               1. Trail Proximity Damage Studies

         To reach his conclusions, Mr. Matthews conducted seven studies to analyze the impact of
the trail on property values, and found that “the overwhelming results were that the properties
abutting the trail did tend to sell for less than the homes without a trail in their back yard.” PX
220 at 13. He noted that in four decades of appraising, he has completed “studies in multiple
states for the construction of local roads, highways, interstates, pipelines, power lines, local
utility lines[,] and trails,” and that such studies “also show loss in value to abutting single family
residential properties if the corridor is fairly close to the home and privacy is lost.” Id. at 14.

        Mr. Matthews began by searching trails in the surrounding area to find a similar trail that
would provide “meaningful” results, and identified the Fall Line Trail in Columbus, Georgia as
such a trail. Tr. 361-62 (Matthews). He explained that the Fall Line Trail is an excellent
comparable because it is located approximately 50 to 100 feet away from houses, at grade, and at
the rear of residential parcels. Id. at 362.

        His first study examined the “overall average difference in adjusted price per square foot
of the house, comparing homes with and without trails in the backyard.” Id. at 536-37. He
compared sixteen sales of properties located off the trail with eight sales in which the trail was
located at the back of the property with “light trees” as a buffer. PX 221 at 828. In each sale,
Mr. Matthews first applied a time adjustment utilizing the Case-Schiller Index applicable for the
date of sale. Id. Mr. Matthews explained that the Case-Schiller Index is used by appraisers “to
make market condition adjustments.” Tr. 355 (Matthews). He noted that there is a separate
index for each large metropolitan area in the United States, and that the Atlanta area index
includes Newton County. Id. at 354-55; see also PX 221 at 684 (providing a list of the Case-




                                                 -26-
Schiller Index values for each month from November 2006 through November 201425). To use
the Case-Schiller Index, Mr. Matthews indicated that he would “find the date of sale, find the
index for that date of sale, find the date of valuation, find the index for [the date of valuation],
and calculate a percentage change.” Tr. 356 (Matthews). After adjusting the sale price by the
appropriate percentage change in the Case-Schiller Index from the date of sale to the date of
valuation,26 Mr. Matthews applied additional adjustments to the sales to account for the age of
the house and whether the house had a garage, a basement, or a large lot. PX 221 at 828. Mr.
Matthews then divided the adjusted sale price for each transaction by the square footage of the
house to compute the price per square foot. Id. He then computed the average price per square
foot for all of the homes abutting the trail ($76.65) and for all of the homes not abutting the trail
($79.96) before comparing the two. Id. The difference between these two values ($3.31)
represents a 4.1% decrease from the “no trail” condition to the “abutting a trail” condition. See
id. Mr. Matthews opined that the land itself, and not the house, is what actually loses value
based on proximity to the trail, and thus he “had to convert the damage to the entire property to
damage to the land.” Tr. 369 (Matthews); accord id. at 371 (“[T]he land takes all the damage
and the house is not damaged at all.”). He explained that he used a 5:1 ratio of total value to land
value to perform his allocations—in other words, the land value was 20% of the total value—
based on the literature and his prior experience. Id. at 371; see also PX 221 at 826 (“Both local
data and national data indicate that a reasonable . . . ratio of total property value to land value is
5:1 which means land contributes 20% to the total property.”). Using this ratio, Mr. Matthews
determined that a 4.1% decrease in overall property value reflected a 20.5% decrease in land
value because the decrease in overall property value was entirely allocable to the land. PX 221
at 826.

       In his second study, Mr. Matthews used the adjusted sale price per square foot values
from his first study to perform two linear regressions: one for sales of homes abutting the trail

       25
          As reflected in the addenda to Mr. Matthews’s expert report, the Case-Schiller Index
provides values to the nearest hundredth, i.e., two decimal places. See PX 221 at 684. Mr.
Matthews generally appears to have used these values to the nearest tenth, i.e., to one decimal
place. The distinction had no material impact on his conclusions since he rounded correctly.
       26
           For example, a December 2012 (Case-Schiller Index of 96.0) sale price of $139,000 is
adjusted to August 2013 (Case-Schiller Index of 113.5), the baseline valuation date, as follows:
(1) 113.5 – 96.0 = 17.5, the increase in the Case-Schiller Index from the sale date to the valuation
date; (2) 17.5 ÷ 96.0 = 0.182, reflecting an 18.2% increase; (3) $139,000 × 0.182 = $25,339, the
amount of the adjustment; and (4) $139,000 + $25,339 = $164,339 (without rounding at
intermediate steps). Thus, all else being equal, a $139,000 sale price in December 2012 is
equivalent to a $164,339 sale price in August 2013. See PX 221 at 684, 828. Alternatively, the
                                                                                     139,000   𝑥
adjusted sale price can be computed by solving for x in the following proportion: 96.0 = 113.5 .
(In each ratio, the numerator represents the price on a given date, and the denominator represents
the Case-Schiller Index for that date. The variable, 𝑥, represents the price for the second date
that would be equivalent to the given price for the first date.) Either approach yields the same
$164,339 result.


                                                -27-
and one for sales of homes not abutting the trail. See id. at 829. He then used the linear
regressions to predict that an “average” home—1,500 square feet—would sell for $88.23 per
square foot if located “off” of the trail and $77.53 per square foot if located “on” the trail. Id.
The decrease from $88.23 to $77.53 reflects “12.1% of the house value.” Id. at 826. Using the
5:1 ratio, the decrease in land value was 60.5%. Id. Mr. Matthews noted that the average loss in
value per square foot between his first two studies was 8.1%, reflecting an average land value
loss of 40.5%. Id. at 829.

         For his third study, Mr. Matthews performed a matched pair analysis of the “sale and
resale of the same property before and after the trail was built,” which he described as “an ideal
situation.” Tr. 538 (Matthews). Prior to the construction of the Fall Line Trail, 5360 McCaghren
Drive sold for $160,000 on March 1, 2006; after the construction of the trail, it sold for $124,500
on December 19, 2013. PX 221 at 838. Using Case-Schiller Index values of 130.0 and 113.4,
respectively,27 see id. at 684, 838, Mr. Matthews computed the time-adjusted sales prices to be
$139,692 and $125,051,28 id. at 830. After applying additional adjustments for age and other
property characteristics, and dividing by 1,576 square feet, Mr. Matthews computed that, as
adjusted, the property sold for $70.41 per square foot before the trail was built and $63.03 after
the trail was built. Id. Therefore, the “loss to the total property” was 10.5%, and land damage
was 52% using the 5:1 allocation ratio. Id. at 826; Tr. 538 (Matthews).

           Studies four and five were also matched pair analyses following the same format as the
third study. Tr. 538-39 (Matthews). In study four, Mr. Matthews compared “a property on the
trail . . . to a similar home off the trail.” PX 221 at 826. The off-trail property was 5940 Fornof
Road, a 1,382-square-foot property built in 1972 that sold for $125,350 on March 8, 2012, when
the Case-Schiller Index was 82.5. Id. at 684, 830, 854. The on-trail property was 5356
McCaghren Drive, a 1,664-square foot property built in 1992 that sold for $160,000 on June 24,
2013, when the Case-Schiller Index was 109.2. Id. at 684, 830, 837. The time-adjusted sales
prices for March 2012 and June 2013 were $172,451 ($124.78 per square foot) off of the trail
and $166,606 ($100.12 per square foot) on the trail.29 Id. at 830. The time-adjusted difference in
price per square foot thus reflected a 19.8% decrease in total value, and 99% decrease in land
value, due to the presence of the trail. Id.; Tr. 538-39 (Matthews). After applying age and
characteristics adjustments, the adjusted sales prices were $140.93 per square foot off of the trail
and $84.54 per square foot on the trail, reflecting a 40.0% decrease in total value, and 200%
decrease in land value, due to the presence of the trail. PX 221 at 830.


       27
         As he did in his first study, Mr. Matthews appears to have used August 2013 (with a
Case-Schiller Index value of 113.5) as the baseline value.
       28
          In providing the backup computations for his third and fourth studies, Mr. Matthews
rounded to the nearest ten cents (i.e., one decimal place) for the time-adjusted sale price values.
The court refers to the values as rounded to the nearest whole dollar.
       29
          As in his other studies, Mr. Matthews appears to have used August 2013 as the
baseline valuation date.


                                                -28-
        In study five, Mr. Matthews utilized 5900 Fornof Road as the off-trail property and 5881
Fornof Road as the on-trail property. Id. The off-trail property was built in 1968, was 1,653
square feet, and sold for $104,586 on August 17, 2016, when the Case-Schiller Index was
approximately 133. Id. at 830, 855. The on-trail property was built in 1969, was 1,412 square
feet, and sold for $88,795 on September 30, 2016, when the Case-Schiller Index was
approximately 133. Id. at 830, 842. The time-adjusted sales prices were $89,252 ($53.99 per
square foot) on the trail and $75,776 ($53.67 per square foot) off of the trail, a loss of 0.6% in
total value, and 3.0% in land value, due to the presence of the trail. Id. at 830. After applying
age and characteristic adjustments—5900 Fornof Road contained a finished basement of 826
square feet—the adjusted sales prices were $62.06 off of the trail and $66.24 on the trail. Id.
The difference reflected a 6.3% increase in total value due to the presence of the trail. During
trial, Mr. Matthews testified that study five “indicated a loss of 15.1 percent” to the total property
value, or “75 percent loss” to the land value after utilizing the 5:1 ratio. Tr. 539 (Matthews).

        For his sixth study, Mr. Matthews attempted to find pairs of sales of houses in Covington
that were both on and off a trail. Id. After finding no such pairs that were reliable, Mr.
Matthews used a pair of sales “with one house abutting the highway and the other identical house
three lots in from the highway.” PX 221 at 827. He explained that although a highway had a
somewhat “different impact” than a trail, it was “still a transportation corridor next to a house”
and was “the best [he] could find in Covington to show some local flavor to it.” Tr. 539-40
(Matthews). Mr. Matthews then compared 15 Magan Court and 35 Magan Court. Id. at 540; PX
221 at 827. There are a total of nine houses on Magan Court, which is accessible only via
Crowell Road. PX 221 at 865. The “on” property, 15 Magan Court, is located at the intersection
of these two streets. Id. It was built in 2007, is 1,656 square feet on 0.14 acres, and sold on
April 13, 2010, for $129,000. Id. at 866. The “off” property, 35 Magan Court, is the third house
on the left side of Magan Court after entering Magan Court from Crowell Road. Id. at 862. It
was also built in 2007, is 1,668 square feet on 0.13 acres, and sold on March 2, 2010, for
$134,900.30 Id. at 863. Mr. Matthews opined that “[t]hese are similar enough that no adjustment
is required,” id. at 827, because the two sales reflect that “same date, same size, [and] same lot
size,” Tr. 541 (Matthews). He attributed “[t]he difference in price of $5,900 . . . to the location”
of 15 Magan Court. PX 221 at 827; accord Tr. 541 (Matthews). Because the $5,900 drop in
price due to being adjacent to the highway represented 4.4% of the total property value, Mr.
Matthews used the 5:1 allocation ratio to determine that the land value declined by 21.9%. Tr.
541 (Matthews); PX 221 at 827.

        The seventh study was similar to the sixth study, but examined pairs of sales of vacant
lots along Magan Court instead of improved properties. Tr. 541 (Matthews). The “on” property,
10 Magan Court, is located at the intersection of Crowell Road and Magan Court. PX 221 at
858. It comprises 0.21 acres, is wooded on the back half of the property, and was purchased by
Thomas Singleton from The People’s Bank on October 31, 2008, for $20,000. Id. at 858-59.

       30
          In the discussion section of his expert report and during trial, Mr. Matthews
inadvertently indicated that the sales price was $139,400. PX 220 at 15; PX 221 at 827; Tr. 540
(Matthews). However, his backup documentation clearly indicated that the sales price was
$134,900. PX 221 at 862-63.


                                                -29-
The “off” property, 40 Magan Court, is the fourth house on the right side of Magan Court after
entering Magan Court from Crowell Road. Id. at 860. It comprises 0.14 acres, has some
wooding at the back of the property, and was also purchased by Thomas Singleton from The
People’s Bank on October 31, 2008, for $20,000. Id. at 860-61. Mr. Matthews explained that
“[t]hese are similar enough that no adjustment is required.” Id. at 827. He emphasized that the
lot abutting the highway sold for $95,238 per acre and that the lot not abutting the highway sold
for $142,857 per acre, demonstrating that the loss in land value due to being located adjacent to
the highway was 33.3%. Id.; Tr. 541 (Matthews). He remarked that no allocation was necessary
because the entire value was in the land (since there were no improvements at the time of sale).
Tr. 541 (Matthews). He also acknowledged that “a small size adjustment if made would bring
the damage down slightly.” Id. Even if such an adjustment were made, he explained, the paired
sales nevertheless suggested a loss in value for being next to the highway and therefore provided
“additional data to show that if you lose privacy, you’re going to suffer some loss in the value of
the property.” Id. at 541-42; accord PX 221 at 827.

       After completing the seven studies, Mr. Matthews reconciled the results as follows:

                Study #1: 20.5%
                Study #2: 60.5%
                Study #3: 52%
                Study #4: 99%
                Study #5: 75%
                Study #6: 21.9%
                Study #7: 33.3%
                Range: Low 20.5% High 99%
                Average: 51.8%

                        The Covington sales indicated a loss from 20% to 33%, and
                are given heavy weight, but not total weight since they do not
                measure the influence of a trail. Study #1 is a good indicator since
                it measures the impact on a single property before and after the
                trail was built. [Studies one, six, and seven] indicate an average
                loss of 25.2%. The others which measure loss due to a rear trail
                [studies two through five] average 71.6%. It is my opinion that the
                probable loss to the land value lies within the range of 25% and
                50% with my best estimate in the middle of that range at 33.3%
                loss. This is supported by the lot sales in Covington impacted by
                the abutting highway.

                        Estimated loss in residue lot value for small single family
                lots due to rear trail is 33.3%.

PX 220 at 15.




                                                -30-
        Although Mr. Matthews opined that certain properties along the trail can expect to lose
“about a third of [their] land value,” he did not apply the one-third loss of value to all of the
parcels. Tr. 543 (Matthews). Rather, he only applied the one-third loss “[w]here it was
appropriate,” as in “a close setback and a shallow lot [and] the trail’s in the backyard” or if the
trail was “alongside the house.” Id. He noted that, in a few instances, the proximity damages
would be higher or lower depending on “proximity [to the trail] and . . . what is done to the lot.”
Id. at 588-89; accord id. at 1954. On the other hand, Mr. Matthews explained, if the trail was
“across the street” or “500 feet away from any kind of probable improvement,” then the
one-third diminution would be inapplicable. Id. at 543.

                                         2. Cost to Cure

        Mr. Matthews testified that in some of the instances where proximity damages would not
apply, “there might be a security or trespass concern” which could be ameliorated by erecting a
fence, id. at 372, but averred that privacy fences would be “inadequate” for the small residential
parcels in Covington, id. at 590. Thus, if fencing was appropriate, the type of fencing that was
needed varied:

               [T]he cost to cure is a method of estimating damages to make the
               land owner whole again. For example, if there is a loss of security
               created by an unfenced trail along the property line of an industrial
               property where materials or personal property are stored that might
               attract trespassers, graffiti artists[,] or thieves[,] the safety and
               security can be reinstated by paying to erect a 6 foot chain link
               fence with top rail and barbed wire as is frequently seen in
               industrial areas. A 6 foot solid board privacy fenc[e] is more
               appropriate for single family residential property and woven wire
               security fencing is more appropriate for agricultural and woodland
               property.

PX 220 at 15-16.

       Mr. Matthews calculated the cost to cure, where appropriate, by multiplying the length of
property taken by the cost per linear foot for the type of fence needed. Tr. 591 (Matthews). He
obtained the costs per linear foot by consulting the Marshall Valuation Service Cost Manual,
which he stressed is “widely used by appraisers throughout the [United States] as a reliable cost
resource.” PX 220 at 16. The costs for each type of fencing are as follows:

               •   $25 per linear foot for privacy fencing, Tr. 365 (Matthews);
                   e.g., id. at 600; PX 63.D;

               •   $5 per linear foot for woven-wire security fencing in
                   agricultural/timber areas, e.g., PX 220 at 629-30; PX 61.D; PX
                   72.D; and



                                                -31-
               •   $20 per linear foot for chain-link security fencing in
                   commercial and industrial areas, e.g., PX 220 at 36; PX 1.D at
                   8.31

These costs are for installation only; they do not include expected future maintenance. Tr.
591-93 (Matthews). Finally, Mr. Matthews emphasized that in choosing between proximity
damages or cost to cure, he applied “whichever is less expensive.” Id. at 590.

                                             C. Analysis

       In resolving the dispute concerning the benefits and damages to the remainder parcels,
the court first addresses the issue of special (i.e., direct) and general (i.e., indirect) benefits.

                        Distinguishing between special and general benefits is not
               always an easy task. [A]s a general matter, special benefits are
               those which inure specifically to the landowner who suffered the
               partial taking and are associated with the ownership of the
               remaining land. In contrast, benefits that inure to the community
               at large are considered general. [In other words,] special benefits
               are those which arise directly and proximately to the remaining
               land as a result of the public work on the part taken, due to the
               peculiar relation of the land in question to the public work. In
               contrast, resulting benefits that are more or less common to all
               lands in the vicinity of the land taken are general.

Hendler v. United States, 175 F.3d 1374, 1380 (Fed. Cir. 1999) (citations omitted).

        While the parties appear to agree on the definitions of special and general benefits, they
disagree on how they apply in the instant case. Defendant contends that “the recreational trail
presents the special benefit of access to abutting residential property owners.” Def.’s Posttrial
Br. 26. Plaintiffs argue that “the hiking and biking trail in the after condition is a general
benefit” and that “[b]etter access than the public as a whole is not a special benefit as a matter of
law and is also false in most instances as a matter of fact.” Pls.’ Posttrial Br. 22.

         The court agrees with plaintiffs that the presence of the trail represents a general benefit
to residential landowners in the neighborhood surrounding the trail. The court also agrees with
defendant that the presence of a general benefit does not, in and of itself, mean that properties
directly adjoining the trail cannot also be specially impacted. Indeed, plaintiffs’ position that
residential properties in Covington that abut the trail lose a portion of their land value supports
such a conclusion. In other words, a particular parcel can experience special benefits or damages
even while a general benefit is also present. Because the landowners of parcels adjacent to the
trail are specially situated vis-à-vis nonadjacent landowners, it is legally possible for special
       31
           During trial, Mr. Matthews also alluded to a cost of $23 per linear foot for chain-link
fencing in one particular instance. See Tr. 649 (Matthews); see also PX 220 at 399.


                                                 -32-
access not enjoyed by others to be a benefit. It is also legally possible for direct proximity not
experienced by others to result in damages. Of course, whether there is such a benefit or damage
is a question of fact.

         The court finds that in general, landowners place value on having trails nearby, but do not
want trails adjacent to (or running through) their properties. This value judgment, in turn,
impacts their property values. In other words, the presence of the trail is a general benefit to the
community, while the trail’s proximity is a special damage to adjacent landowners. Although
Mr. Sheppard identified one landowner (who is not a plaintiff because she purchased her home in
August 2015) who “thinks the trail will be good to have in her back yard,” “cannot wait until the
trail is paved,” and “plans to add a gate to [her] existing fence” to access the trail once it is
paved, DX 416 at 168, that perspective is an anomaly. Mr. Sheppard also noted that another
landowner “wants a buffer/barrier between her house and the trail.” Id. All three responses that
he received from trail-adjacent landowners—none of whom is a plaintiff because the respective
properties were purchased after the NITU was issued—indicated that they were not even aware
of the presence of the trail when they purchased their homes. Id. Meanwhile, at the time of trial,
one plaintiff had already moved away due to safety concerns related to the trail, and at least two
others were considering doing so. Further, plaintiffs testified credibly regarding their myriad
concerns pertaining to safety, security, privacy, trespassing, vandalism, trash, and noise due to
the creation of the hiking and biking trail. Mr. Sheppard candidly acknowledged that there are
multiple homes where people walking along the trail can see into backyards and windows, and
those people would not have the access to do so absent the trail. Tr. 1498 (Sheppard). Mr.
Sheppard also acknowledged that although he was not aware of any such occurrences, bringing
people into proximity with homes via the trail had the potential to increase vandalism and theft.
Id. at 1503-04. Even if plaintiffs’ concerns are unfounded or misplaced, as defendant attempted
to demonstrate through cross-examination, the salient issue with respect to valuation is whether
those concerns are genuinely held. That plaintiffs’ concerns are indeed authentic cannot
reasonably be disputed.

        Of course, there is more to the inquiry. As Mr. Sheppard correctly observed with respect
to special benefits and damages, “even if it’s common sense, you have to have evidence.” Id. at
1094. In other words, whether being adjacent to the trail is a special benefit or damage must be
supported by market evidence.

         The court cannot credit Mr. Sheppard’s benefit analysis, in which he relies primarily on
the Fernhill Court sales to arrive at $5,000 benefit. His analysis of those four sales is
fundamentally flawed for two main reasons. First, none of the Fernhill Court parcels is actually
adjacent to the Eastside Trail. Id. at 1476; PX 222.1 at 1. Mr. Sheppard treated 30 Fernhill
Court as “pragmatically” adjacent despite it being separated from the trail by a ten-foot strip of
land owned by a private individual and thus requiring a trespass in order to utilize the purported
special access. Tr. 1099 (Sheppard). Yet he treated 40 Fernhill Court as being nonadjacent to
the trail because it was separated by a 25-foot buffer and thus “is a little bit further removed,” id.
at 1101, and similarly viewed both 10 Fernhill Court and 20 Fernhill Court as nonadjacent
because of their distance from the trail. For each parcel, however, he only considered the
property lines—for example, he emphasized that “10 feet’s kind of two or three steps” away, id.


                                                 -33-
at 1099—rather than the distance between the house and the trail. From a “pragmatic”
standpoint, the distance between the house and the trail should have factored into Mr. Sheppard’s
analysis, but he admitted that he did not measure it. Id. at 1475. Since he stressed that 30
Fernhill Court was “visually” near the trail (according to its property line) in arguing that it was
effectively adjacent, id. at 1099, he should have used the same approach with respect to the other
properties and explained why they either met or failed to meet that same criteria. Therefore,
even under (for the sake of argument) the dubious assumption that the need to trespass in order
to directly access the trail is a nonissue, his basis for treating only 30 Fernhill Court as
“pragmatically” adjacent to the trail is unsupported.

         Second, although Mr. Sheppard properly made no time adjustments in comparing the four
Fernhill Court sales and properly allocated total sale prices between improvements and land, he
failed to consider other land characteristics. For example, he noted that 10 Fernhill Court was a
corner lot along a curve, but apparently assumed that such status did not impact the land value in
either direction. Such an assumption should at least be clearly stated. He also failed to account
for the topography of the land, neglecting to consider that there were varying amounts of dense
wooding between the street and the trail on each of the four Fernhill Court properties before the
houses were built. Id. at 1932 (Matthews); PX 222.1. Most importantly, Mr. Sheppard simply
assumed that each parcel had “the same size lot and its only difference is location” with respect
to the trail, Tr. 1102 (Sheppard), but did not actually reference the individual lot sizes anywhere
in his expert report or during trial. Indeed, the properties all have different shapes and sizes,
although the extent of the size differences is unclear. Id. at 1931-32 (Matthews); PX 222.1 at 1.
It is entirely possible that 30 Fernhill Court commanded a premium because of the size and/or
shape of its lot. Given that both experts focused on per-acre values in their appraisals, it is
beyond peradventure that the lot size is a vital component of land value. Therefore, Mr.
Sheppard’s failure to consider lot sizes in comparing the Fernhill Court sales to one another
renders his conclusions regarding those sales unreliable.

        In any event, it is entirely unclear how Mr. Sheppard reconciles the $5,800 difference in
sale price between 30 Fernhill Court and 40 Fernhill Court after accounting for the “bricks and
sticks,” Tr. 1102 (Sheppard), with the $11,500 difference in sale price between 10 Fernhill Court
and 30 Fernhill Court where no adjustments were appropriate, id. at 1105, to conclude that
“suburban residential lots along the paved Eastside Trail command a $5000± premium,” DX 416
at 161. The court simply cannot credit a conclusion where the path to that conclusion is opaque.

        The remainder of Mr. Sheppard’s conclusions regarding the value of parcels being
directly proximate to the trail are unreliable because they incorporate this $5,000 premium.
After finding that there was a $15,000 time-adjusted premium for sales along Baltusrol Way in
the Brookline subdivision, he allocated $5,000 of that premium to being adjacent to the trail and
the remaining $10,000 to the view available to trail-abutting homes. Id. at 164-65. Mr.
Sheppard explained that, in deciding how to allocate the $15,000 total between trail proximity
and the “natural backyard versus not having a great backyard,” it was reasonable to allocate
$5,000 to the trail proximity where he had “other evidence” showing that “[$]5,000 associated
with the trail is reasonable.” Tr. 1115 (Sheppard). He similarly found a $15,000 premium with



                                               -34-
respect to the Big Creek Greenway, but averred that it “should be adjusted downward.” DX 416
at 184.

          Ultimately, Mr. Sheppard’s summary of his conclusions demonstrates that his analysis
lacked the appropriate foundation. Mr. Sheppard explained that in addition to anecdotal
evidence and his matched pair analyses from Fernhill Court and the Brookline subdivision, he
considered “the unpaved nature of the subject trail” in reaching his conclusions because it
“appear[ed] unreasonable to assume that most of the trail will be paved or accessible to the
public at large” for the “foreseeable future.” Id. at 169. As stated above, appraisers are to
assume that in the “after” condition, the hiking and biking trail is in place and has been
constructed. During trial, Mr. Sheppard repeatedly recognized this basic principle of
Rails-to-Trails valuation, e.g., Tr. 1404-05, 1410 (Sheppard), and asserted that he “assume[d] the
trail is there in existence,” id. at 1125, yet in his expert report he explained that his conclusion
regarding special benefits was based, in part, on his perception of the current condition of the
trail and its likely future development, DX 416 at 169. His attempt to reconcile having
considered the unpaved nature of the trail (in relying on the Brookline subdivision sales) with the
requirement to assume that trail construction is complete was wholly unavailing:

               So, at the end of the day, yes, assume the trail is there in existence,
               but have evidence that shows both ways. Have as much evidence
               as possible because more is more.

Tr. 1125-26 (Sheppard). In short, Mr. Sheppard’s finding of a special benefit is unreliable and
the court gives it no weight.

        Having rejected Mr. Sheppard’s analysis, the court must examine the reliability of the
conclusion reached by Mr. Matthews that the small residential parcels in Covington experienced
a decrease of one-third of their land value due to their adjacency to the trail. The court agrees
that these parcels experienced a decrease in value, but it remains plaintiffs’ burden to quantify
that decrease with market evidence.

        The court finds that Mr. Matthews’s first study is reliable. First, Mr. Matthews used
twenty-four sales as data points. It is axiomatic that, all else being equal, using more data points
will produce more accurate results when searching for average values. Second, since both
experts used price per square foot as a measure of property values at various points in their work,
the parties do not dispute the propriety of such a measure. Third, the Case-Schiller Index is a
reasonable proxy for time and market conditions adjustments. Mr. Matthews used the correct
baseline date of August 2013 (the baseline date was apparent based on his computations even
though it was not explicitly stated), used the correct values for each date, and computed the
adjustments correctly. Fourth, Mr. Matthews applied adjustments for the age of each home, as
well as other property conditions. Those adjustments appear reasonable, and it would have been
improper not to account for those characteristics. Fifth, based on the inputs, Mr. Matthews
accurately computed the 4.1% decrease in price per square foot. Sixth, his use of a 5:1 ratio of
total property value to land value was supported. Finally, his determination that the decrease in
property value due to trail proximity should be entirely allocated to the land was reasonable.


                                                -35-
        The court cannot credit the findings of Mr. Matthews’s second study, which involved a
linear regression of the values obtained from the first study. The linear regressions themselves—
one each for trail-adjacent and nonadjacent homes—appear to have been performed correctly.
However, Mr. Matthews based his finding of a 12.1% decrease in total property value, and thus
60.5% decrease in land value, on a hypothetical 1,500-square-foot home by comparing the
predicted values in each of the two linear regressions. While his computations are correct, the
assumption of a 1,500-square-foot home appears to have been somewhat arbitrary. The average
size of the “on trail” homes was 1,514 square feet, but the average size of the “off trail” homes
was 1,622 square feet. PX 221 at 828. The composite average, based on the number of homes in
each category, is 1,586 square feet. The median size is 1,503 square feet for “on trail” homes,
1,615 square feet for “off trail” homes, and 1,576 square feet for all homes. Accordingly,
although there appears to be some factual support for using 1,500 square feet as the hypothetical
average sized home, there is also factual support for using other figures, and Mr. Matthews did
not explain his selection of the 1,500 figure either in his expert report or during trial.

        Mr. Matthews’s third study compared the sale of the same property both before and after
the Fall Line Trail was constructed. As with the first study, Mr. Matthews did not explicitly state
that he used a baseline date of August 2013, but it is apparent from his computations.32 The
main problem with the third study is the age adjustment. Since 5360 McCaghren Court was built
in 1992, id. at 838, Mr. Matthews correctly observed that the home was twenty-one years old on
the hypothetical baseline valuation date, id. at 830. Based on its date of construction, the home
was only fourteen years old on the date it was sold in the “off trail” condition in March 2006
(before trail completion), and was twenty-one years old on the date it was sold in the “on trail”
condition in December 2013 (after trail completion). See id. at 830, 838. Despite this disparity,
Mr. Matthews applied the same age adjustment to both sales. Thus, the court cannot credit the
findings of his third study.

        Studies four and five suffer from the same defect as one another. These two studies
appear to have been properly performed, but the reporting of the results is deficient.33 In stating
that studies four and five showed losses of 19.8% and 15.1% in total property value (and thus

       32
            Mr. Matthews computed a time-adjusted sales price of $125,051 for August 2013
vis-à-vis the unadjusted sales price of $124,500 from December 2013. PX 830. His calculation
of the $125,051 figure reflects a change in the Case-Schiller Index from 113.5 to 113.0 between
the two dates. The Case-Schiller Index, rounded to the nearest tenth (i.e., one decimal place)
was indeed 113.5 for August 2013, but was actually 113.4 for December 2013. Id. at 684. A
change in the Case-Schiller Index from 113.5 in August 2013 to 113.4 in December 2013 would
yield a time-adjusted sale price of $124,610 (rather than $125,051). The slight discrepancy
reflects a 0.3% difference from the “off trail” time-adjusted sale price, which is immaterial.
       33
           In study four, Mr. Matthews used a Case-Schiller Index value of 109 to compute the
time-adjusted sale price of $166,606 for the “on trail” sale. See PX 221 at 830. Using the
correct value of 109.2 for June 2013, see id. at 684, would have yielded a time-adjusted sale
price of $166,300. The discrepancy is immaterial, as it would have resulted in insignificant
changes to the results.


                                                -36-
losses of 99% and 75% in land value), respectively, see id. at 828, Mr. Matthews was not making
a true apples-to-apples comparison. The 19.8% figure from study four represents the decrease in
the time-adjusted price per square foot, before any other adjustments (i.e., age and other property
characteristics) were made. Id. at 830. The 15.1% figure from study five represents the decrease
in time-adjusted price, before figuring in the square footage or making any other adjustments
such as age and other property characteristics. Id. If the same values were compared across
studies three, four, and five, the resulting change in total property values—before allocating any
or all of the decrease to the land—due to the presence of the hiking and biking trail would be as
follows:

               •   time-adjusted price per square foot, plus adjustments for
                   property characteristics
                      o study three: 10.5% decrease
                      o study four: 40.0% decrease
                      o study five: 6.7% increase

               •   time-adjusted price per square foot, without additional
                   adjustments for property characteristics
                       o study three: 10.5% decrease
                       o study four: 19.8% decrease
                       o study five: 0.6% decrease

               •   time-adjusted overall home price, without additional
                   adjustments for size or other property characteristics
                       o study three: 10.5% decrease
                       o study four: 3.4% decrease
                       o study five: 15.1% decrease

Id. Notably, Mr. Matthews’s 20.5% decrease in land value due to the presence of the trail from
study one (which was much more rigorous as that study involved twenty-four properties) was
based on a time-adjusted price per square foot, after adjusting for property characteristics, id. at
828, which seems to be the most authentic approach out of the three listed above. Thus, while
his approach in studies three, four, and five—analyzing the same house both before and after the
trail was constructed (study three); comparing two houses on different streets, one that was off
the trail and one that was on the trail (study four); and comparing two houses on the same street
sold almost contemporaneously with one another, one abutting the trail and one off the trail
(study five)—was sound, Mr. Matthews’s results from those three studies as reported are not
reliable.

        The sixth study that Mr. Matthews performed correctly included no adjustments because
the two properties compared were built and sold at the same time, were approximately the same
size, and had essentially identical characteristics. Thus, it was appropriate to simply examine the
sale price of each. Although neither property on Magan Court abutted a trail, as Mr. Matthews
candidly acknowledged, one of the properties abutted a highway, so the sixth study appropriately
provides context for the impact of a transportation corridor on property values in Covington.


                                                -37-
The court credits the findings of this study because the data was properly selected, properly
analyzed, and properly reported.

        The seventh study also involved a matched pair analysis on Magan Court, but considered
vacant lots rather than improved properties. The approach of comparing vacant lots, one
abutting the highway and one not, for the purpose of providing context (like the sixth study) is
sound, but the court cannot credit the findings. Mr. Matthews did not make any adjustments to
either sale because both parcels were vacant lots at the time and sold on the same date. Although
Mr. Matthews compared the per-acre values, both lots were sold by the same seller to the same
buyer on the same date. Additionally, the record reflects that other vacant lots on Magan Court
were transferred from the same seller to the same buyer on that same date.34 See id. at 858-67.
Mr. Matthews did not consider whether the “bulk” aspect of the purchase impacted the price,
such that a per-acre comparison would be inappropriate, nor did Mr. Matthews consider the
amount of wooded land that was available on each lot and its impact on the sale price.

        On balance, the court finds that plaintiffs have demonstrated that small residential parcels
in Covington lose 20.5% of their land value if they are adjacent to the trail. This result is based
on the credible data from the comparable Fall Line Trail (study one).35 The result from study six
is not directly applicable because that study analyzed the impact of properties abutting a highway
rather than a trail, but its 21.9% result provides context showing that the 20.5% decrease from
study one is a reasonable figure.

        In addition, the court finds that Mr. Matthews’s findings regarding the cost to cure are
entirely reliable. He accurately analyzed whether the cost to cure was appropriate for each
property at issue, utilized the suitable type of fencing for each scenario and its associated cost,
based those costs on reputable data that is routinely relied upon by appraisers throughout the
nation, and meticulously applied such damages where proper.

                     VI. COMPARABLE SALES AND ADJUSTMENTS

        Having addressed property rights remaining in the burdened land and the benefits and
damages to the remainder, the court now turns to the comparable sales selected, and adjustments
made, by each expert to opine on property values. The Yellow Book provides that appraisers
“may need to adjust each comparable sale through quantitative and/or qualitative analysis to
derive an indication of the market value of the subject property.” Yellow Book 121. Whether a
particular sale is sufficiently comparable to be helpful “is largely a function of three variables:

       34
         These other lots were later improved before the sales analyzed in the sixth study took
place. PX 221 at 858-67.
       35
           The court’s finding that trail-adjacent residential homes in Covington suffer a decrease
in property values is buttressed by an individual property appraisal for 9121 Dearing Street in
Covington with a June 16, 2016 effective date. See generally PX 156 at 6-24. That appraisal,
which utilized the sales comparison approach, contained an $8,000 adjustment to the value of
one of the comparable sales for “r-rd noise” due to its proximity to the trail. Id. at 8.


                                                 -38-
characteristics of the properties, their geographic proximity to one another, and the time
differential.” Id. at 120. The veracity of the comparable sales selected, and adjustments made,
by each expert is perhaps the most significant area of disagreement between the parties.

        Both experts utilized the sales comparison approach. Plaintiffs argue that defendant’s
expert, Mr. Sheppard:

               artificially limited the scope of his search for comparable sales,
               intentionally chose comparable sales at the very low end of the
               market or simply missed potential comparable sales within his
               artificial time restriction, and then failed to make proper
               adjustments based on size and other factors to make the
               comparable sales he chose as comparable as possible to the actual
               parcels at issue.

Pls.’ Posttrial Br. 32. Defendant asserts that plaintiffs’ expert, Mr. Matthews, failed to follow
Yellow Book standards by failing to verify comparable sales, making inappropriate adjustments
and failing to make property-specific adjustments, and “inappropriately complet[ing] a project
appraisal rather than individual appraisals of each subject property and [failing] to provide the
appropriate data to explain his results.” Def.’s Posttrial Br. 13. Defendant also contends that
Mr. Matthews’s “math is incorrect” in several instances and thus his value conclusions are
unsupported. Id. at 25-26.

       The court will first address the disputes concerning verification, report format and
supporting data, and math errors, since those issues pertain to all parcels. The court will then
address the issue of comparable sales and adjustments with respect to each parcel type.

                                       A. Points of Error

                                          1. Verification

         The court begins by examining the dispute pertaining to verification. As relevant here,
the Yellow Book includes a directive that all sales used by appraisers in forming their value
conclusions “must be confirmed by the buyer, seller, broker, or other person having knowledge
of the price, terms, and conditions of sale.” Yellow Book 25. The Appraisal of Real Estate
treatise provides that the Yellow Book standards “require an appraiser to talk directly to a party
to the transaction to verify data . . . , which is a higher level of verification than is usually
necessary . . . for mortgage lending purposes.” DX 60 at 34.

       Mr. Sheppard explained that verification is “a cornerstone of the appraisal process”
because “there could be issues that are behind the scenes that you learn through the verification
process.” Tr. 1019-20 (Sheppard). He relied primarily upon speaking directly with someone
involved in the sale, and also used data available through the county tax assessor’s office,
LoopNet (which he described as a “broker provided data service” that is “helpful in rural



                                                -39-
counties where there aren’t any subscription based data services”), and other commercial
sources. Id. at 1023-26.

        Mr. Matthews agreed that the “verification process is important,” id. at 306 (Matthews),
and stated that “[a]ll sales” were verified with a “party with first-hand knowledge of the facts of
the sale,” PX 220 at 7; accord Tr. 825 (Matthews). He explained that although he did not verify
the data personally with buyers, sellers, brokers, or bankers, he utilized the data from LoopNet
and the local tax assessor. Tr. 824-26 (Matthews). He described such information as “good” and
“excellent,” respectively, and asserted that it was “verified data” because it was supplied by
attorneys on a PT-61 form under the threat of misdemeanor for providing false information. Id.
at 306.

        The court agrees with Mr. Matthews that his underlying data was sufficiently reliable
such that further verification was unnecessary. The Appraisal of Real Estate treatise provides
that a “primary purpose of verifying a sale of real property is to make sure that the sale occurred
under conditions that meet the definition of value used in the appraisal.” DX 60 at 34.
According to the treatise, when verifying sales, appraisers should seek the following “essential”
information regarding each sale:

               •   Is the data correct?

               •   Is the data complete?

               •   Was the sale or rental an arm’s-length transaction?

               •   Were there any contingencies?

               •   Were any concessions involved?

               •   Does the data conform to relevant standards or regulatory
                   requirements?

               •   Did any special or unusual conditions affect the sale or rental?

Id. Although the “most common verification technique is interviewing market participants,” id.
at 35, there is no specific requirement that verification be accomplished through the interview
process. Indeed, “the reliability of the original data source” impacts “the scope of data
verification.” Id. at 34.

        Mr. Matthews is correct that, for purposes of this case, tax assessor data is verified data.
In Georgia, a real estate transfer tax is “determined on the basis of written disclosure of the
actual consideration of the interest in the property.” Ga. Code Ann. § 48-6-4(c) (2015). This
disclosure “shall be made on a form or in electronic format prescribed by the [state revenue
commissioner].” Id. Accordingly, the Georgia Administrative Code provides that “any deed,
instrument[,] or other writing which conveys any lands, tenements, or other realty must be

                                                -40-
accompanied by Form PT-61.” Ga. Comp. R. & Regs. 560-11-2-.16(1) (2016). A properly
completed Form PT-61 must contain the following information:

              (a) Seller’s Information – The form shall contain the complete
                  name, street mailing address, city, state[,] and zip code of the
                  seller and month, day[,] and year the sale occurred.

              (b) Buyer’s Information – The form shall contain [the] complete
                  name, street mailing address, city, state[, and] zip code of the
                  buyer for the purpose of receiving tax notices and billings.
                  The intended use of the property by the buyer at the time of
                  the transfer shall be listed and designated as being residential
                  (R), agricultural (A), commercial (C), or industrial (I).

              (c) Property Information – The complete description of the
                  property being conveyed, the county name where the property
                  is located[,] and the city name (if the property lies within the
                  limits of a city) [shall be listed]. The number of acres of
                  property, map and parcel number, district, land lot and
                  sublot[,] and block shall be shown.

              (d) Value and Tax Information – The actual value of the
                  consideration received by the seller for the real and personal
                  property conveyed to the buyer shall be shown separately on
                  the form[ ](PT-61) prescribed in subsection (c) of Code
                  section 48-6-4. This consideration total should reflect all
                  cash, other property or goods, and the assumption of
                  mortgages or other obligations. . . .

              (e) Other Information – Any other information requested on the
                  most current version of form PT-61 shall be listed.

              (f) Certification – The seller or seller’s authorized agent shall
                  certify that all items of information entered on the transfer
                  form PT-61 are true and correct (to the best of his knowledge
                  and belief) and that he is aware that the making of any willful
                  false statement of material facts will subject him to the
                  provision of the penal law relative to the making and filing of
                  false instruments. . . .

Id. A false statement on a Form PT-61 subjects the declarant to a misdemeanor. Ga. Code Ann.
§ 48-6-10. The declarant submitting the Form PT-61, which is typically the closing attorney
managing the transaction, Tr. 307 (Matthews), certainly qualifies as a “person having knowledge
of the price, terms, and conditions of sale” per Yellow Book standards, Yellow Book 25.



                                              -41-
         Because Georgia law requires accurate sales prices to be contemporaneously disclosed
under the threat of criminal penalty, the court finds that the data maintained by the tax assessors
is more reliable than data provided by parties to a transaction several years after the fact. See Tr.
956-60 (Matthews). The tax assessor data is inherently reliable since it was effectively verified
at the time of sale; further verification is unnecessary.36 This conclusion comports with the
Appraisal of Real Estate’s edict that the scope of verification needed is informed, at least in part,
by the reliability of the available data. Indeed, Mr. Sheppard acknowledged that (1) in all of his
conversations with parties to real estate transaction, he did not find a single discrepancy in the
sales price reported to the tax assessor via Form PT-61; and (2) in many instances, he was unable
to speak with either a buyer or seller, so he relied on the information available through the
county tax assessor. Id. at 1836-37 (Sheppard). Further, appraisers are generally able to
ascertain whether a transaction is “a good arm’s length sale, qualified or not qualified” based on
data from the tax assessor. Id. at 307 (Matthews).

       In short, defendant’s argument that Mr. Matthews did not appropriately verify his data is
unavailing.

                            2. Report Format and Supporting Data

        Next, the court addresses the dispute concerning the sufficiency of Mr. Matthews’s
reporting format and supporting documentation. Defendant avows that “Mr. Matthews
inappropriately completed a project appraisal rather than individual appraisals of each subject
property and did not provide the appropriate data to explain his results.” Def.’s Posttrial Br. 13.
Therefore, defendant proclaims, his data cannot be verified and thus the court “is left in the
dark.” Id. at 21. Plaintiffs, on the other hand, stress that even though Mr. Matthews was not
bound by the Yellow Book, he nevertheless comported with its requirements. Further, plaintiffs
argue, Mr. Matthews “developed complete and consistent conclusions of value for each and
every parcel.” Pls.’ Posttrial Resp. Br. 32.

        As an initial matter, the parties are correct that, as a matter of law, Mr. Matthews was not
bound by the Yellow Book. The Yellow Book applies only to appraisers hired by the federal
government for condemnation purposes; it is not mandatory with respect to appraisers not hired
by the government. See Tr. 1865-66 (Miller). However, the Yellow Book standards are relevant
as pertaining to Mr. Matthews’s credibility since he testified that his work complied with those
standards. Id. at 880 (Matthews); see also PX 220 at 6.




       36
           The court observes that this conclusion would not be applicable if the underlying data
was not sufficiently reliable. For instance, Mr. Matthews remarked that—unlike in the instant
case—tax assessor and LoopNet data for some geographic areas is not always accurate or even
available. Tr. 306-06 (Matthews).


                                                -42-
       In discussing the application of the sales comparison approach, the Yellow Book
provides:

                       In reporting the results of the sales comparison approach
               for land valuation, the appraiser shall provide detailed descriptions
               of confirmed sales of lands that have the same or similar highest
               and best use as the subject property. The description of each sale
               transaction used as a comparable sale should at a minimum include
               the date of the transaction, the price paid, the name of the seller,
               the name of the buyer, the size of the property, the location of the
               property, the zoning or other legal restraints on the property, and a
               description of the physical characteristics of the property. The
               person with whom the transaction was verified should also be
               identified.

                       Differences between the comparable sales and the subject
               property should be considered and adjustments made to the sales to
               address these differences. Items of comparison shall include
               property rights conveyed, financing terms, conditions of sale,
               market conditions, location, physical characteristics, economic
               characteristics, legal characteristics, and non-realty components of
               value. The adjustments must be summarized in an adjustment grid
               and each adjustment (whether qualitative or quantitative) should be
               supported with market data. The data and analysis must provide
               sufficient detail for the client and intended users to understand the
               data, the analysis, and the logic of the appraiser’s opinion of
               market value for the subject land as if vacant.

Yellow Book 65. The Yellow Book standards “address the content and level of information and
analysis required to communicate the results of an appraisal prepared for federal property
acquisitions,” and are “intended to establish requirements for appraisal report content and
documentation.” Id. at 56. In other words, the standards exist to ensure that appraisers include
sufficient information within their reports.

         The court finds that project appraisal reports meet Yellow Book standards if
appropriately compiled. As explained above, USPAP standards allow for two types of written
reports—appraisal reports and restricted appraisal reports—and also for oral appraisal reports.
However, only unrestricted written appraisal reports are acceptable pursuant to the Yellow Book.
Project appraisal reports are a type of unrestricted written appraisal report that is allowable under
Yellow Book guidelines. While the Yellow Book contains a warning that project appraisal
reports are “rarely conducive to litigation purposes,” that warning is premised on the notion that
project appraisal reports “typically contain opinions of value of properties owned by persons not
parties to the lawsuit.” Id. at 73. Here, Mr. Matthews’s project appraisal report included
opinions of value for 156 parcels; each of these properties is owned by one or more plaintiffs,
i.e., a party to the instant suit. PX 220 at 2. Thus, not only does the Yellow Book not actually


                                                -43-
foreclose project appraisal reports from being utilized in litigation, the stated reasons against
such use are not applicable here. Further, Mr. Matthews’s project appraisal report (including its
addenda) fully satisfied the Yellow Book requirements for such reports. Compare id. at 5
(containing the Table of Contents for Mr. Matthews’s project appraisal report), with Yellow
Book 72-79 (outlining the Yellow Book standards for project appraisal reports).

         Finally, and most importantly here, the court agrees with plaintiffs that nobody is “‘in the
dark’ as to how Mr. Matthews made his adjustments.” Pls.’ Posttrial Resp. Br. 32. An
individual one-page report, standing alone, is certainly insufficient, but none of the reports stands
alone. The full report, including the addenda, contain all of the backup documentation
supporting the valuation opinions reached for “[e]ach and every one” of the 156 parcels at issue
in this case. Tr. 303 (Matthews); accord PX 220 at 16 (“The sales data upon which these values
and the damages are based are shown in the addenda by property type.”). Mr. Matthews’s
project appraisal report, including the addenda, is by no means a model of stellar organization,
but the data is all available. Mr. Matthews’s deficiencies with respect to organization do not
equate to any deficiencies with respect to the information itself. A holding to the contrary would
be improper because the Yellow Book standards address content and documentation, but “are
not, however, intended to establish an absolute requirement for appraisal formatting.” Yellow
Book 56. It is the content—not the organization—that matters. Even Mr. Sheppard, who issued
a separate written appraisal report for each property, observed that his addenda was “integral to
each individual appraisal report.” DX 416 at 37. Contrary to defendant’s averment that the court
was left in the dark regarding how Mr. Matthews arrived at his conclusions of value, the court is
able (with a few exceptions, each of which is discussed below) to follow Mr. Matthews’s
reasoning. See, e.g., infra Section VI.A.3 (addressing defendant’s suggestion that Mr.
Matthews’s approach with respect to certain parcels was mathematically unsound).

        As specified in the Yellow Book, project appraisal reports “are not appraisal shortcuts;
they are clerical shortcuts.” Yellow Book 73 (emphasis added). The project appraisal approach
followed by Mr. Matthews was just that—a clerical shortcut. Mr. Sheppard emphasizes that he
completed “in excess of 100” individual appraisals, i.e., one for each parcel, Tr. 1012
(Sheppard), but he overstates the importance of having done so. Mr. Sheppard’s individual
reports, which are in the record as defendant’s exhibits 305 through 415, average just over thirty
pages each.37 However, the majority of the information within each of his reports is either
boilerplate, duplicative, or both. Most importantly, as discussed below, he used the same
comparable sales across groups of properties with the same highest and best use. See DX 416 at
190-97. Mr. Sheppard could easily have taken a “clerical shortcut” and issued one project
appraisal report utilizing the same data as is reflected in his 110 individual reports while still




       37
           Defendant did not offer an exhibit numbered 326. Compare Tr. 1245 (Sheppard)
(reflecting that claims 26.A and 26.B were both addressed in one appraisal report, i.e.,
defendant’s exhibit 325), with Def.’s Ex. List 18 (reflecting that claims 26.A and 26.B would be
addressed in two separate appraisal reports, i.e., defendant’s exhibits 325 and 326).


                                                -44-
comporting with Yellow Book standards.38 There was no substantive difference between the
manners in which each expert presented his appraisals.

        In short, Mr. Matthews did not err by completing a project appraisal report. Further,
although his report could have benefited from better organization and presentation, the report’s
overall content was not deficient or unclear. Mr. Matthews included sufficient documentation in
his report and the addenda referenced therein to support his opinions of value.

                                         3. Math Errors

         In addition to charging that Mr. Matthews erred by failing to properly verify comparable
sales, issuing a project appraisal report, and failing to provide backup documentation, defendant
suggests that Mr. Matthews’s math is incorrect in several places. Specifically, defendant
identifies a list of parcels for which Mr. Matthews’s “purported methodology for determining
damages did not add up.” Def.’s Posttrial Reply Br. 12.

        Mr. Matthews succinctly described his methodology in his expert report. After
comparing the “before” and “after” values of the land based on per-acre value and size, he then
factored in residual damages where applicable to determine the net “after” value. PX 220 at 16.
The difference between the “before” and “after” values “is the compensation estimate owed the
land owner,” which he “allocated between the value of the part taken and the residu[al]
damages.” Id. He noted that, for some parcels, the per-acre value in the “after” condition (where
there is a smaller land size due to the taking) can be higher than the per-acre value in the
“before” condition. Id. The increased per-acre value in the “after” condition, if applicable,
“creates a benefit which offsets some or all of the damages created by the take.” Id.

       Defendant identifies twenty-two specific parcels for which it asserts that Mr. Matthews’s
“formula does not add up to his remainder damages conclusions.” Def.’s Posttrial Reply Br. 13
(containing a list of twenty-one parcels); see also Def.’s Posttrial Br. 25-26 (discussing an
additional parcel). Each will be addressed below.39

        With respect to claim 6, the land had a fair market value of $67,485 (0.409 acres at
$165,000 per acre) in the “before” condition. In the “after” condition, the land had a fair market
value of $38,533 (0.340 acres at $170,000 per acre, i.e., $57,800, less $19,267—one-third of
$57,800—for proximity damages), for a net per-acre value of $113,333 ($38,533 divided by
0.340 acres). The diminution in value was thus $28,952. Of that amount, $11,385 is allocable to
the value of the property taken (0.069 acres at $165,000 per acre), and the remaining $17,567 is

       38
          Pursuant to the Yellow Book, “the larger parcel is the tract or tracts of land that
possess a unity of ownership and have the same, or an integrated, highest and best use.” Yellow
Book 110 (emphasis added). For both experts, there are fewer appraisals than total parcels
because “some of those parcels were combined.” Tr. 303 (Matthews).
       39
          For the sake of simplicity, the court uses figures rounded to the nearest dollar;
however, there was no rounding at intermediate steps in the computations.


                                               -45-
allocable to the damages to the remainder. As with many claims, Mr. Matthews shows slightly
different numbers due to differences in rounding. See PX 6.D; see also Tr. 387 (Matthews)
(discussing rounding). The discrepancy between the $19,267 in proximity damages and $17,567
in damages to the remainder equals $1,700—the increase in per-acre value of the land in the
“after” condition, i.e., 0.340 acres multiplied by the $5,000 per-acre increase in value. In other
words, the one-third proximity damages ($19,267) were partially offset by $1,700 to reflect the
increase in per-acre value. Although Mr. Matthews perhaps should have “left the light on” by
explicitly explaining each step in his computations within his one-page summary report, the
descriptions of his process and supporting documentation “flip the switch” (so that nobody is left
“in the dark”) by making it easy to recreate his work, thus demonstrating that his process is
reliable.

        Of the remaining claims for which defendant posits that Mr. Matthews’s “formula does
not add up,” claims 20.B, 27, 28, 29, 30, 33, 34, 37, 46, 48, 49, 50, 51, and 55 follow the same
pattern as claim 6. In these fifteen claims (including claim 6), the difference between the
one-third proximity damages and the damages to the remainder is equal to the per-acre increase
in value multiplied by the acres remaining in the “after” condition. Simply put, Mr. Matthews’s
formula does, in fact, add up.

        The math employed by Mr. Matthews in the remaining seven claims identified by
defendant, none of which experienced a per-acre increase in land value in the “after” condition,
also adds up. Mr. Matthews’s appraisals reflect damages that, while not immediately apparent
due to a lack of explanation on the one-page summary reports, become clear when considering
the entirety of his expert report (including the supporting data in the addendum). Whether such
damages are appropriate for each parcel is a separate issue from the mathematics, and is
addressed below in the discussions regarding comparable sales and adjustments with respect to
each parcel type. See infra Sections VI.B (small residential parcels), VI.D (large residential
parcels).

       For claim 12, Mr. Matthews doubled the proximity damages. PX 12.D. As noted above,
he explained that proximity damages could be higher or lower than the typical one-third
depending on how close a home was in relation to the trail. Tr. 588-89 (Matthews); see also PX
12.E.1 (showing a photograph of the trail vis-à-vis the home); PX 12.E.5 (same); Tr. 428-30
(Matthews) (discussing the photographs). When the normal one-third proximity damages are
doubled, the math is correct.

         For claim 22, Mr. Matthews opined that the damages to the remainder parcel were $8,600
(after rounding). PX 22.D; Tr. 446 (Matthews). This figure represents proximity damages of
20% (rather than one-third) plus the cost of privacy fencing. Before factoring in special
damages, the land value in the “after” condition was $36,900 (0.410 acres at $90,000 per acre).
Twenty percent of $36,900 is $7,380. The cost of privacy fencing is $1,260—50 feet, the length
of the property taken, multiplied by $25 per linear foot. See Jt. Stip. Ex. A at 5 (reflecting the
length of the property taken). The sum of the proximity damages ($7,380) and privacy fencing
($1,260) equals $8,640, which rounds to the $8,600 figure for total residual damages used by Mr.
Matthews.


                                               -46-
         For claim 24, Mr. Matthews opined that the damages to the remainder parcel were $7,300
(after rounding). PX 24.D; Tr. 449 (Matthews). This figure represents proximity damages of
20% (rather than one-third). Before factoring in special damages, the land value in the “after”
condition was $36,400 (0.280 acres at $130,000 per acre). Twenty percent of $36,400 is $7,280,
which rounds to the $7,300 figure used by Mr. Matthews.

         For claim 86, Mr. Matthews opined that the damages to the remainder parcel were $2,200
(after rounding). PX 86.D; Tr. 519 (Matthews). This figure represents the cost of privacy
fencing ($25 per linear foot) for approximately 88 feet, subject to a slight rounding adjustment,
which is less than the length of the property taken.40 Mr. Matthews did not find that proximity
damages were applicable to any of the residential parcels, like this one, located in Mansfield.

         For claim 87, Mr. Matthews opined that the damages to the remainder parcel were $4,500
(after rounding). PX 87.D; Tr. 523 (Matthews). This figure represents the cost of privacy
fencing ($25 per linear foot) for approximately 180 feet, subject to a slight rounding adjustment,
which is less than the length of the property taken. See Jt. Stip. Ex. A at 12 (reflecting that the
property taken was 278 feet long and 25 feet wide).

         For claim 88, Mr. Matthews opined that the damages to the remainder parcel were $5,800
(after rounding). PX 88.D; Tr. 580 (Matthews). This figure represents the cost of privacy
fencing ($25 per linear foot) for 233 feet, the length of the property taken, for a total cost of
$5,825 before rounding. See Jt. Stip. Ex. A at 13 (reflecting that the property taken was 233 feet
long and 25 feet wide).

        Finally, for claim 89, Mr. Matthews opined that the damages to the remainder parcel
were $3,100 (after rounding). PX 89.D; Tr. 525 (Matthews). This figure represents the cost of
privacy fencing ($25 per linear foot) for approximately 124 feet, subject to a slight rounding
adjustment, which is greater than the length of the property taken. See Jt. Stip. Ex. A at 13
(reflecting that the property taken was 117 feet long and 25 feet wide).

        In sum, defendant’s argument that Mr. Matthews’s math does not add up, and therefore
leaves the court and the parties “in the dark,” is wholly meritless.

                                   B. Small Residential Parcels

        The majority of claims in this case concern small residential parcels, i.e., parcels that are
smaller than one acre. Each expert selected comparable sales and performed various analyses to
reach their conclusions regarding the value of such land.



       40
           The parties did not stipulate to the size of the property taken with respect to claim 86.
However, Mr. Sheppard suggested that the property taken—which is smaller than both the
court’s finding and the figure used by Mr. Matthews—was approximately 400 feet long and 25
feet wide. DX 391 at 9.


                                                -47-
        After discarding outliers and nonqualified sales, Mr. Matthews found over 100
comparable sales, identified each with a reference number, and organized them by highest and
best use.41 Tr. 338-39 (Matthews). He found forty-nine total comparable sales in Newton
County for small residential parcels that took place between January 1, 2008, and December 31,
2013. Id. at 340; PX 221 at 676. Mr. Matthews explained that he chose this time frame because
he did not want to go beyond the valuation date. Tr. 340 (Matthews). He then applied a time
adjustment for each sale using the Case-Schiller Index and divided by the number of acres to
compute the time-adjusted, per-acre value for each comparable sale before graphing the results.
Id. at 340-41; PX 221 at 676-77. Using the graph, Mr. Matthews divided the market into high
quality, average quality, and inferior quality locations. Tr. 342 (Matthews); PX 221 at 677. He
emphasized that his graphical analysis “show[ed] the entire universe of all the comparable sales
and how they fall into patterns,” which allowed him to “be consistent from beginning to end.”
Tr. 343 (Matthews). Mr. Matthews asserted that an important trend shown by his graph was that
buyers “pay less per acre for large properties.” Id.

        From the graph, Mr. Matthews selected specific properties from among the forty-nine
small residential comparable sales to be used in the sales grids for each representative appraisal.
For example, he selected comparable sales 106, 116, and 121 for the Bouchillon representative
appraisal because those three comparable sales were all in Covington and of average quality,
similar to the Bouchillon property (claim 14). Id. at 384. He opined that Bouchillon property
had a fair market value of $90,000 per acre in the “before” condition and $90,000 per acre in the
“after” condition before considering proximity damages. PX 220 at 131 (sales grid for the
“before” condition), 137 (sales grid for the “after” condition). As another example, Mr.
Matthews selected comparable sales 124, 128, 176, and 216 for the Pierre representative
appraisal because those four comparable sales were located in “higher end residential
subdivisions,” similar to the Pierre property (claim 48). Tr. 394-95 (Matthews). He opined that
the Pierre property had a fair market value of $165,000 per acre in the “before” condition and
$170,000 per acre in the “after” condition before considering proximity damages. PX 220 at 265
(sales grid for the “before” condition), 271 (sales grid for the “after” condition).

        After calculating the per-acre value in the “after” condition for each of the small
residential parcels, Mr. Matthews multiplied that value by the acreage in the remainder to
compute a preliminary “after” value. He then applied proximity damages where applicable. As
discussed above, Mr. Matthews opined that the following small residential properties in
Covington (designated by claim number) lost one-third of the market value of their land in the
“after” condition due to proximity to the trail: 6, 7.B, 13, 14, 15, 17, 18, 19, 20.A, 20.B, 20.C,
23, 25, 26.A, 26.B, 27, 28, 29, 30, 31, 33, 34, 35, 36, 37, 44, 45, 46, 47, 48, 49, 50, 51, 54, 55,
and 110.42 E.g., PX 220 at 541. As noted above, the one-third proximity damages were doubled
for claim 12. Mr. Matthews applied 20% in proximity damages for claims 24 and 32. Id. at 554,

       41
         For example, comparable sale number 128 referred to the September 29, 2009 sale of
250 Stonecreek Parkway. See PX 221 at 676, 750-51.
       42
           Some of these claims were larger than one acre, but were discussed at trial with the
small residential properties.


                                               -48-
562.1. Claim 22 experienced 20% in proximity damages plus cost-to-cure damages (for
fencing). Id. at 552. Claims 2 and 16 experienced only cost-to-cure damages for fencing. Id. at
539, 545. Claims 38.A and 38.B experienced neither proximity nor cost-to-cure damages
because the trail is located on the other side of Dearing Street. Id. at 568-69; Tr. 492-93
(Matthews). For the small residential properties in Mansfield, the following claims experienced
no proximity damages because the trail is located across the highway: 81.B, 81.C, 83, and 84.
PX 220 at 579-82; Tr. 512-17 (Matthews). The following claims experienced cost-to-cure
damages for fencing: 86, 87, and 89. PX 220 at 583-85. Mr. Matthews applied his standard
one-third in proximity damages to claim 93.43 Id. at 586. In addition, there were five small
residential properties in Newborn: claims 104, 105, 106, 107, and 109. Id. at 646-49, 52. Mr.
Matthews applied 20% in proximity damages for claims 104, 105, 106, and 109, and found that
claim 107 experienced no proximity damages. Id.

        Mr. Sheppard found a total of thirty-seven comparable sales, including nine industrial, six
commercial, twelve residential, five agricultural, and five bulk lot sales, and identified each
comparable sale with a reference number.44 Tr. 1528-30 (Sheppard); DX 416 at 70 (listing
industrial sales), 92 (commercial), 108 (residential), 135 (agricultural), 147 (bulk). All thirty-
seven of his comparable sales took place from January 2010 to August 2013. Tr. 1017
(Sheppard). Mr. Sheppard explained that he limited his search accordingly because going further
back in time would require more adjustments. Id. He averred that in 2008 and 2009, many
buyers and sellers had yet “to come to the realization that we were in a decline” since the
beginning of the Great Recession in September 2008. Id. at 1017-18. After finding comparable
sales, Mr. Sheppard applied a time adjustment reflecting a straight-line 2% annual increase in
property values, which he based on the average rate of inflation from 2010 to 2013 of 2.1% per
year in the United States Department of Labor national Consumer Price Index for all goods. DX
416 at 186.

         Of Mr. Sheppard’s twelve residential comparable sales, only three were small residential,
i.e., less than one acre: comparable sales 17, 23, and 24. Id. at 108-10. Mr. Sheppard utilized
comparable sales 17, 23, and 24 for all suburban residential properties that were smaller than
three acres: claims 2, 6, 7.B, 12, 13, 14, 15, 17, 18, 19, 20.A, 20.B, 20.C, 22, 23, 24, 25, 26.A,
27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 41, 44, 45, 46, 47, 48, 49, 50, 51, 54, 55, and 110. DX
416 at 193. He utilized comparable sales 19, 21, and 26 for all rural (generally, those outside of
Covington) residential and agricultural lots smaller than ten acres, which includes both small and
large residential parcels. Id. at 195. With respect to the suburban residential lots, Mr. Sheppard
applied a “slight upward adjustment” to lots that were smaller than one-third of an acre: claims
12 and 24. Id. at 193. For the remaining suburban residential lots, he made no size adjustments.
Id. He determined that the suburban residential parcels had a typical land market value of

       43
           Mr. Matthews described the location of claim 93 as being in Newborn. PX 93.D.
However, the Newton County parcel map indicates that claim 93 is located in Mansfield. PX
93.C at 2; see also PX 112 at 23 (parcel location map).
       44
          For example, comparable sale number 17 referred to the August 25, 2010 sale of 5150
Lewis Street. See DX 416 at 113.


                                               -49-
$25,000 per acre, claims 12 and 24 had land market values of $30,000 per acre, and claims 54
and 55 had land market values of $20,000 per acre. Id.; DX 416.A. He further determined that
all of the rural residential lots had land market values between $6,000 and $7,500 per acre, with
smaller properties commanding values at or near the top of this range. DX 416 at 195; DX
416.A.

        Mr. Sheppard’s across-the-board treatment of all suburban residential properties smaller
than three acres, and similar across-the-board treatment of all rural residential properties smaller
than ten acres, render his value conclusions unreliable. For instance, Mr. Sheppard found that
both the Bouchillon and Pierre properties (claims 14 and 48) had a land value of $25,000 per
acre, and that no adjustments were needed because both properties were “similar in size” to the
comparable sales, had “full access to city services,” and were “zoned for residential purposes.”
Compare DX 313 at 20 (Bouchillon), with DX 347 at 21 (Pierre). He stated that there were
“aspects” of being “in the old town City of Covington area versus being outside closer to the golf
communities . . . that are similar.” Tr. 1573 (Sheppard). Beyond classifying each property as
being suburban or rural, Mr. Sheppard utterly failed to account for location despite
acknowledging, in discussing special benefits, that location and view aspects of a property need
to be considered as part of the valuation analysis. Id. at 1112-13. Meanwhile, Mr. Matthews
emphasized that the Bouchillon property is located in an “average quality neighborhood,”
whereas the Pierre property is located in a “high-end” neighborhood. Id. at 394-95 (Matthews).
Mr. Sheppard also failed to adjust for property size beyond assigning a higher per-acre value for
claims 12 and 24 for being smaller than one-third of an acre. His own figures indicated that
claim 14 was under this threshold in the “before” condition, and that claims 46, 47, 48, 49, and
50 were under this threshold in the “after” condition, yet he applied no size adjustments to any of
those claims. Therefore, it appears that Mr. Sheppard did not properly apply his own
methodology (at least with respect to claim 14).

        In addition, Mr. Sheppard’s time adjustment reflecting a straight-line 2% annual increase
in property values based on the overall rate of inflation is flawed for two reasons. First, Mr.
Sheppard’s figures are based on the increase in prices for all goods nationally, rather than real
estate locally. DX 416 at 186. Mr. Matthews emphasized that the Consumer Price Index has not
been in sync with real estate values since at least the early 2000s. Tr. 1921 (Matthews). Second,
even assuming that the inflation rate for all goods nationally is a reasonable proxy for the rate of
increase in real estate values locally, the inflation rate between 2010 and 2013 was not a flat 2%
each year. In fact, Mr. Sheppard’s own figures indicate that the inflation rate was 1.6% in 2010,
3.2% in 2011, 2.1% in 2012, and 1.5% in 2013. DX 416 at 187. Even within each year, the rate
fluctuates monthly.45 Id. Therefore, a flat rate for the entire time period from 2010 to 2013 is an
improper shortcut. As Mr. Matthews explained, “to use a straight-line method through [that time
period] totally ignores what was going on.” Tr. 821 (Matthews).

       The Case-Schiller Index is a much more reliable benchmark by which to make time
adjustments. Because its value changes monthly, any two sales can be compared using the index

       45
            These annual figures for the inflation rate are not disputed. See Hardy, 138 Fed. Cl. at
353.


                                                -50-
regardless of market trends in the interim. Id. Further, it is focused on real estate within the
greater Atlanta metro area, which includes Newton County. Id. Mr. Sheppard criticizes Mr.
Matthews’s use of the index because the index includes the entire Atlanta metropolitan area;
indeed, Mr. Matthews acknowledged that the Case-Schiller Index includes twenty-eight counties.
Id. at 819. However, Mr. Matthews also remarked that Newton County is the “approximate
average” of those twenty-eight counties, an assertion that Mr. Sheppard does not contest. Id. at
821. Therefore, the court finds that Mr. Sheppard’s criticism of the Case-Schiller Index rings
hollow, and agrees with Mr. Matthews that the index “is the best indication of what the [Newton
County real estate] market was doing.” Id. at 820-21.

        Because the Case-Schiller Index allows for property sales to be adjusted for market
conditions, Mr. Matthews did not err by including comparable sales from 2008 and 2009 in his
analysis. On the other hand, Mr. Sheppard artificially limited the number of comparable sales
available by restricting his search to 2010 through 2013 and summarily ignoring 2008 and 2009
sales. Despite his good intentions in doing so, he ran afoul of the Yellow Book’s edict that “an
appraiser may not discard an entire market as aberrational.”46 Yellow Book 96 (internal
quotation marks and alteration omitted). Had he found a sufficient number of comparable sales
from 2010 to 2013, his time restriction might not have been improper, but he did not. Further,
had he utilized a proper market adjustment mechanism, such as the Case-Schiller Index rather
than a straight-line method, he would not have needed to set aside sales from 2008 and 2009.

        Mr. Sheppard’s selection of the comparable sales themselves is even more fundamental
to the unreliability of his value conclusions than any of his shortcuts. Comparable sales 23 and
24 provide one example. These parcels were both sold on May 24, 2012, from the same seller to
different buyers. DX 416 at 109. Both lots are located in an “older established neighborhood,”
and were unimproved when sold for $5,000 each. Id. at 109, 126, 128. Comparable sale 23,
located near the end of a cul-de-sac at 7233 Louise Street in Covington, is 0.3445 acres,
reflecting a May 24, 2012 per-acre sale price of $14,514. Id. at 125-26. Comparable sale 24, a
corner lot at 7226 Louise Street in Covington, is 0.3714 acres, reflecting a May 24, 2012 per-acre
sale price of $13,463. Id. at 127-128. Mr. Sheppard indicated that both comparable sales—i.e.,
23 and 24—appear to have taken place upon arm’s-length, cash-equivalent terms. Id. at 125,
127. Just as Mr. Sheppard erred in treating different properties the same (with respect to the
Bouchillon and Pierre properties), he repeated that error in treating 7233 and 7226 Louise Street
the same. They are not the same. For instance, one was a corner lot and the other is at the end of
a cul-de-sac, yet Mr. Sheppard failed to make any adjustments for location and view. Further,
and more importantly, comparable sales 23 and 24 more closely resemble one bulk sale than two
individual lot sales. While both sales ostensibly took place upon arm’s-length, cash-equivalent
terms, the seller sold two different size lots that are in close proximity to one another on the same
day for the same price to different buyers. In other words, Mr. Sheppard failed to consider the
seller’s circumstances with respect to those two sales.


       46
             Mr. Sheppard’s casting aside of sales from 2008 and 2009 as being “inflated by the
fact that . . . nobody wanted to come to the realization that we were in a decline,” Tr. 1018
(Sheppard), amounts to discarding the 2008 and 2009 markets as aberrational.


                                                -51-
        The court finds that Mr. Matthews’s per-acre value conclusions are reliable and adopts
them, with some exceptions discussed herein. Mr. Matthews found forty-nine small residential
comparable sales and was able to separate them into subsets based on neighborhood quality.
Such separation allowed him to render accurate valuation opinions without having to make
further adjustments. The primary adjustments to comparable sales that Mr. Matthews did
make—time adjustments and computing per-acre values based on total sales price—were purely
mathematical, and correctly performed. Mr. Matthews also made qualitative adjustments where
appropriate. Quantitative adjustments are generally preferable, but qualitative adjustments can
be particularly useful in certain circumstances. See Yellow Book 121-22. If excessive
adjustments are necessary, a comparable sale should generally be discarded, but Mr. Matthews
did not reach that threshold.

        The exceptions to Mr. Matthews’s per-acre value conclusions are limited to three parcels:
claims 14, 20.C, and 54. There was no increase to the per-acre value in the “after” condition for
any of these three parcels. Mr. Matthews should have applied a $5,000 upward adjustment to the
per-acre value of each of these parcels in the “after” condition to remain consistent with his
valuations for the other small residential parcels, based on their relative “before” and “after”
sizes.

        With respect to damages to the remainder, the court has already determined that small
residential parcels in Covington lose 20.5% of their land value if they are adjacent to the trail,
rather than one-third of their value as championed by plaintiffs. Therefore, the court will
substitute 20.5% for the one-third diminution in value. Mr. Matthews also applied proximity
damages other than one-third to a handful of small residential parcels. With respect to claim 12,
the evidence in the record clearly demonstrates that the trail is located immediately adjacent to
the home rather than a typical distance away. See, e.g., PX 12.E.5. Therefore, the court finds
that doubling the typical proximity damages is a reasonable qualitative adjustment, and will
substitute 41% (which is twice 20.5%) for the two-thirds diminution in value. Similarly, Mr.
Matthews applied lower proximity damages of 20%, rather than one-third, to claims 22, 24, 32,
104, 105, 106, and 109 due to somewhat further than typical setbacks. See PX 112 at 7. Since
20% equals three-fifths of one-third, a reduction of 12.3% (three-fifths of 20.5%) will be applied
to claims 24, 32, 104, 105, 106, and 109. However, proximity damages are improper for claim
22. In addition to proximity damages, Mr. Matthews found that cost-to-cure damages for a
privacy fence were appropriate for claim 22. Since Mr. Matthews failed to explain why both
cost-to-cure and proximity damages would simultaneously be appropriate, the lesser amount is
applicable. Here, the cost to cure ($1,260) is less than the proximity damages ($4,539, which is
12.3% of $36,900, the land value in the “after” condition before accounting for special damages).
Further, proximity damages are not appropriate for claim 93. Mr. Matthews applied his standard
one-third proximity damages that he found were applicable to small residential properties in
Covington, but parcel 93 is located in Mansfield, and none of the residential properties in
Mansfield experienced proximity damages.

        Mr. Matthews found that proximity damages were not applicable to claims 2, 16, 38.A,
38.B, 81.B, 81.C, 83, 84, 86, 87, 89, 103.A, 103.B, and 107. Among those claims, he found that
cost-to-cure damages for a privacy fence were appropriate for claims 2, 16, 86, 87, and 89. The


                                              -52-
court credits these conclusions, with one exception. With respect to claim 89, the cost-to-cure
damages advanced by Mr. Matthews reflect a privacy fence that is 124 linear feet, which is
greater than the stipulated length of the property taken of 117 feet. Mr. Matthews did not
provide support for the excess amount. Accordingly, the cost-to-cure damages for claim 89 must
be reduced to reflect a privacy fence that is 117 linear feet.

       In sum, the court rejects the per-acre opinions of value for small residential parcels
suggested by Mr. Sheppard. The court adopts the per-acre opinions of value and damages to the
remainder for small residential parcels suggested by Mr. Matthews, with the adjustments noted
above.

                                      C. Drapac’s Parcels

      The court turns next to the twenty-seven parcels owned by Drapac: claims 21.A through
       47
21.BB. PX 220 at 213. Drapac acquired these parcels as part of a bulk lot purchase of
unimproved land on July 9, 2013. Id. at 215; DX 320 at 54-55.

        Mr. Matthews completed a full appraisal with respect to the Drapac bulk lot acquisition.
See generally PX 220 at 176-246. He noted that Drapac owns a total of forty parcels in the
Dorchester Place residential subdivision that are part of the “larger parcel” he appraised, which
was 10.704 acres in the “before” condition and 9.460 acres in the “after” condition. Id. at 177,
195, 202. The “entire subdivision under Drapac ownership” includes additional parcels beyond
those forty that were included in his appraisal. Id. at 221. Mr. Matthews explained that the
Drapac bulk lot ownership was a “very difficult property [to] appraise because there’s just not a
lot of good comparable sales.” Tr. 408 (Matthews). He utilized the same comparable sales for
both the “before” and “after” condition in his Drapac appraisal, which he identified as 1A, 2A,
3A, 1S, 2S, 3S, and 4S. Id.; PX 220 at 195, 202. He noted that the “A” referred to agricultural
land, while the “S” referred to subdivisions. Tr. 408-09 (Matthews).

        Comparable sales 1A, 2A, and 3A were large rural tracts.48 Id. at 409. Comparable sale
1A is a 21.13-acre unimproved agricultural parcel that sold for $73,900 on December 10, 2013.
PX 220 at 202; PX 221 at 756-57. Comparable sale 2A is a 30-acre unimproved agricultural
parcel that sold for $93,000 on December 6, 2013. PX 220 at 202; PX 221 at 759-60. These two
parcels are adjacent to one another. Compare PX 221 at 756, with id. at 759. Comparable sale
3A is a 34.73-acre unimproved agricultural parcel that sold for $317,000 on October 28, 2013.
Id. at 762-63; PX 220 at 202. Because the Drapac subdivision already has utilities and roads,
comparable sales 1A and 2A received upward adjustments; comparable sale 3A needed no such
adjustment because it “had a road through the middle of it already.” Tr. 410 (Matthews). Mr.


       47
            There is no claim 21.E. PX 220 at 213; DX 320 at 18-44.
       48
           Mr. Matthews also utilized these three sales to appraise the Fulton property (claim 79),
an agricultural tract. Compare, e.g., PX 220 at 195 (Drapac appraisal), with id. at 325 (Fulton
appraisal). See also PX 221.A at 8 (describing the Fulton property as an “Ag/Timber” tract).


                                               -53-
Matthews made no time adjustments to these three sales because they took place close to the
effective appraisal date. Id. at 409.

        Comparable sales 1S, 2S, 3S, and 4S were partially developed subdivisions that were sold
out of foreclosure and were in “suburban comparable locations” to the Drapac lots. Id. at 411.
Comparable sale 1S comprises 5.56 total acres and sold for $63,172 in July 2013. PX 220 at
195. Comparable sale 2S comprises 51.3 acres and sold for $235,000 on July 17, 2013. Id.; PX
221 at 724-25. Comparable sale 3S comprises thirty-four lots and 256 total acres, and sold for
$655,000 on January 14, 2014. PX 220 at 195; PX 221 at 730-36. Comparable sale 4S
comprises 29 lots and 12.23 total acres, and sold for $85,000 on December 28, 2011. PX 220 at
195; PX 221 at 737-41. Mr. Matthews made no time adjustments to these four sales, but made
various adjustments for size and conditions. Tr. 411-412 (Matthews); PX 220 at 195-97, 202.
Based on all of these comparable sales, Mr. Matthews calculated that the Drapac land would
have sold for $11,000 per acre as of the date of the taking in both the “before” and “after”
conditions. PX 220 at 195, 202.

         Mr. Matthews also employed an alternative “discounted subdivision lot value” method.
Tr. 412 (Matthews); PX 220 at 197. Under that approach, he estimated that the individual
parcels would normally sell for $25,000 per lot, but a 70% discount would apply for a bulk sale
of all twenty-seven lots. Tr. 414 (Matthews); PX 220 at 197. The net result then rounds to
$19,000 per acre.49 Tr. 414 (Matthews); PX 220 at 197. He opined that the discounted
subdivision lot value method “is a better approach since the typical buyer would give it more
weight.” PX 220 at 197. After opining that the Drapac land was worth $19,000 per acre in both
the “before” and “after” condition, he then considered damages. Mr. Matthews concluded that
fencing “will not totally cure the loss” and thus his standard one-third proximity damages for
small residential properties in Covington were applicable. Id. at 203. His valuation opinion for
the Drapac properties can be summarized as follows:

              •   “Before” scenario: 10.704 acres × $19,000 per acre =
                  $203,376 (rounded to $203,000)

              •   “After” scenario:

                      o Without damages: 9.460 acres × $19,000 per acre =
                        $179,740 (rounded to $180,000)

                      o Proximity damages: one-third of $180,000 = $60,000

                      o Net: $180,000 – $60,000 = $120,000



       49
          Mr. Matthews explained his calculations as follows: (1) $25,000 per lot × 27 lots =
$675,000; (2) $675,000 × 30% (to reflect a 70% discount) = $202,500 total price; and (3)
$202,500 ÷ 10.704 acres = $18,918 per acre. Tr. 414 (Matthews); PX 220 at 197.


                                              -54-
               •   Diminution: $203,000 – $120,000 = $83,000

               •   Allocation:

                       o Property taken: 1.244 acres × $19,000 per acre =
                         $23,636 (rounded to $23,600)

                       o Proximity damages: $83,000 – $23,600 = $59,40050

Tr. 417 (Matthews); PX 220 at 197-98 (“before” values), 203 (“after” scenario), 204 (total
diminution).

         Mr. Sheppard followed a similar comparable sales approach. He found five comparable
sales, which he numbered 33 through 37. DX 416 at 147. Comparable sale 33, located along
Alcovy Reserve Way in the Sauntee Bluff subdivision in Newton County, occurred on June 12,
2012, and included eight unimproved, unsewered lots varying in size from 0.59 acres to 1.32
acres. Id. at 148-49. The total sales price for 6.42 acres was $30,000, which is $3,750 per lot
and $4,673 per acre. Id. at 148. Comparable sale 34, located in the Riverstone subdivision in
Newton County, occurred on April 29, 2013, and included fourteen unimproved, unsewered lots
varying in size from 0.25 to 0.33 acres. Id. at 150-51. The total sales price for 4.00 acres was
$112,000, which is $8,000 per lot and $28,000 per acre. Id. at 150. Comparable sale 35, also
located in the Riverstone subdivision, occurred on July 12, 2013, and included twenty-one
unimproved lots ranging in size from 0.23 acres to 0.42 acres, with all utilities available
including sewer. Id. at 152-53. The total sales price for 5.85 acres was $125,000, which is
$5,952 per lot and $21,368 per acre. Id. at 152. Comparable sales 34 and 35 had the same
buyer. Id. at 150, 152. Comparable sale 36, located on Line Drive in Newton County, occurred
on May 10, 2013, and included four unimproved, unsewered lots ranging in size from 0.59 acres
to 1.13 acres. Id. at 154-55. The total sales price for 3.00 acres was $37,500, which is $9,375
per lot and $12,500 per acre. Id. at 154. Comparable sale 37, located along King Street in the
Dorchester subdivision, occurred on July 9, 2013, and included 108 total lots—including the
twenty-seven parcels owned by Drapac identified as claims 21.A through 21.BB—with all
utilities available including sewer. Id. at 156-57. The total sales price for 14.704 acres,
including common areas, was $920,000, which is $8,519 per lot and a ratable share of the
common areas and $62,568 per acre for the lots and common areas.51 Id. at 156.


       50
            The proximity damages allocation does not match the $60,000 figure computed in the
earlier step due to intermediate rounding. Without rounding at any step, the math adds up
correctly to a total diminution of $83,549, of which $23,636 is allocated to the property taken
and the remaining $59,913 (which is one-third of $179,740) to proximity damages.
       51
           In his addenda, Mr. Sheppard indicated that each of the 108 lots were approximately
0.3 acres, and that the total of 14.704 acres included 6.024 acres “with [l]ots” and 8.88 acres of
common areas. DX 416 at 156. A total of 6.024 acres across the twenty-seven subject lots
provides an average lot size of 0.223 acres.


                                                -55-
        Mr. Sheppard utilized comparable sales 34, 35, and 37 in his sales grid for the Drapac
appraisal.52 DX 320 at 57; see also DX 416 at 197 (reflecting that Mr. Sheppard used
comparable sales 34, 35, and 37 to appraise the Drapac claims). As with the small residential
parcels discussed above, he applied a time adjustment reflecting a straight-line 2% annual
increase in property values. DX 320 at 56-57. He also noted that that “[s]ales 34 and 35 were
most applicable” because they were “similarly-sized and similarly-located lots,” and thus they
needed no further adjustments.53 Id.; accord Tr. 1806 (Sheppard). He applied adjustments to
comparable sale 37 to account for its inclusion of “additional lots[] and additional
greenspace/common-area land” beyond the “subject lots.” DX 320 at 56-57. Ultimately, he
concluded that the Drapac land was worth $25,000 per acre. Tr. 1572 (Sheppard); DX 320 at 56.
He also concluded that no premium was applicable to the Drapac land. Tr. 1572 (Sheppard); DX
320 at 5. He then opined that the diminution in value was $26,428 by assuming a taking of 85%
of property rights in the land burdened by the trail easement. Tr. 1240 (Sheppard); DX 320 at 4,
56. His calculations are as follows:

               •   Drapac land: 316,579 square feet ÷ 43,560 square feet per acre
                   = 7.268 acres

               •   Size of the property taken: 54,174 square feet ÷ 43,560 square
                   feet per acre = 1.244 acres

               •   Unencumbered land in the “after” condition: 316,579 square
                   feet – 54,174 square feet = 262,405 square feet

                       o 262,405 square feet ÷ 43,560 square feet per acre =
                         6.024 acres54

       52
            During trial, Mr. Sheppard testified that he used comparable sales 33, 34, 35, and 36,
but his incorrect description of comparable sale 36 as “the sale of the subject property and
additional common area and additional lots,” Tr. 1239 (Sheppard), indicates that he intended to
refer to sales 34, 35, 36, and 37, which more closely match the comparable sales included in his
sales grid. Mr. Sheppard did not explain—during trial, in his appraisal report for the Drapac
parcels, or in his addenda—why comparable sale 36 was not included in his sales grid. He
merely indicated that comparable sales 34 and 35 were the “most applicable.” DX 320 at 56.
       53
          Mr. Sheppard did not apply an upward adjustment to comparable sale 34 for being
unsewered. DX 320 at 57. The court assumes that, since he was aware of the available utilities
with respect to the subject property and each comparable sale, he determined that a 0%
adjustment for the lack of sewage availability was proper.
       54
           In the addenda to his appraisal report, Mr. Sheppard indicated that the Drapac land
included 6.024 acres “with lots” plus other land. DX 416 at 156. This area is consistent with his
figures for (1) the Drapac land including the property taken and (2) the size of the property taken
itself. His statement within the Drapac appraisal that the lots comprise approximately 6.017
acres, DX 320 at 8, is unsupported.


                                               -56-
               •   Rights taken: $25,000 per acre × 1.244 acres × 85% =
                   $26,42855

DX 320 at 3-4; DX 416.A at 1.

        The court finds that Mr. Matthews’s comparable sales with respect to his Drapac
appraisal are insufficient. First, the backup documentation that is labelled as comparable sale 1S
is both incomplete and unclear. See PX 221 at 721-23. It is incomplete because it refers to only
one specific lot sale, rather than a bulk lot purchase. Id. at 722. It is unclear because it shows
that the individual lots may have been sold to multiple entities and in separate transactions.
Specifically, there are twenty-one lots listed by address for comparable sale 1S, nineteen of
which are owned by Victory at Riverwalk Farm LLC, and two of which are owned by Victory at
Riverwalk Land LLC.56 Id. at 723. The latter two lots owned by Victory at Riverwalk Land
LLC (the grantee with respect to comparable sale 2S) appear to be included within the land
transferred in conjunction with comparable sale 2S. Compare id. at 721-23, with id. at 724-29.
Moreover, comparable sales 1S and 2S appear to have been made to related entities on the same
date and include contiguous parcels of land.57

        Second, Mr. Matthews’s decision not to make time adjustments to his comparable sales is
flawed. The Case-Schiller Index for August 19, 2013 (the effective appraisal date) was 113.47.
PX 221 at 684. Two of Mr. Matthews’s comparable sales took place in December 2013, two
others in July 2013, and one each in January 2014, October 2013, and December 2011. PX 220
at 195, 202. The Case-Schiller Index for each of these months, as well as the adjustment needed
to equate each month’s price to its August 2013 equivalent, was as follows:

                                           Case-Schiller     Adjustment
                            Month
                                              Index           Needed
                        December 2011          87.3           +29.98%
                           July 2013          111.54          +1.73%
                         August 2013          113.47            N/A
                         October 2013         113.72           –0.22%
                        December 2013         113.35          +0.11%
                         January 2014         113.23          +0.21%


       55
           Mr. Sheppard used the exact acreage represented by 54,174 square feet, rather than the
rounded figure of 1.244 acres, in his computations. He did not explicitly calculate the acres in
the area of the property taken. Further, he rounded the acreage in the Drapac land to eight
decimal places rather than three.
       56
          Victory at Riverwalk, Victory at Riverwalk LLC, and Victory at Riverwalk Land LLC
appear to be the same entity. See PX 221 at 724-29.
       57
           Victory at Riverwalk Farm LLC appears to be a different, albeit related, entity
vis-à-vis Victory at Riverwalk Land LLC. Compare PX 221 at 722, with id. at 724.


                                               -57-
PX 221 at 684. However, the error is largely harmless because, except for comparable sale 4S
with its December 2011 sale date (which was disregarded as being an outlier), the adjustments
would have been de minimis. The adjustment to comparable sale 4S would have increased its
per-acre value from $6,950 to $9,035, which is more in line with the remaining amounts.

       Third, Mr. Matthews made adjustments of 100% or greater to four of his seven
comparable sales. See PX 220 at 195, 202. The necessity of making such large adjustments,
while not disqualifying per se, renders the resulting value conclusions less reliable. Had Mr.
Matthews utilized comparable sales showing greater similarity to the Drapac land, his valuation
opinion with respect to that land would carry more weight. His failure to do so cannot be
disregarded because, as discussed below, such comparable sales were indeed available.

        At first glance, these failures would appear to be immaterial because Mr. Matthews
ultimately utilized the values derived from his discounted subdivision lot value method.
However, because his discounted subdivision lot value method was based, in part, on the “value
graphs [he] developed from lot sales,” id. at 197, the foundation of his alternative analysis with
respect to the Drapac land is shaky at best. Further, his calculation of proximity damages is
overstated. Mr. Matthews properly included lots beyond the abutting lots as part of the “larger
parcel.” He then computed the proximity damages as being one-third of the value of the
unencumbered land in the “after” condition. His computations are mathematically correct, but
only land abutting the trail is damaged. The portion of the larger parcel representing nonabutting
lots and common areas should not factor into the calculation of proximity damages.

        Mr. Sheppard, meanwhile, used comparable sales in his sales grid for the Drapac land
that required no location or condition adjustments because they were close in time and type to
the subject property—except for the Drapac bulk lot acquisition itself, which necessitated
significant adjustments due to common areas and improvements. Indeed, Mr. Sheppard
indicated that two other comparable sales—34 and 35—were “most applicable” because they
“involve[ed] similarly-sized and similarly-located lots,” DX 320 at 56, and accordingly received
greater weight. The midpoint of these two comparable sales, as well as the average of all three
comparable sales that Mr. Sheppard used in his sales grid, was close to his reconciled value
conclusion of $25,000 per acre.

        The main weakness of Mr. Sheppard’s comparable sales is his straight-line time
adjustment. As discussed above, the Case-Schiller Index is a superior approach to making time
adjustments. The shortcoming in Mr. Sheppard’s approach to valuing the Drapac land can be
rectified mathematically. The comparable sales that he used in his sales grid—34, 35, and 37
(the Drapac bulk lot acquisition)—took place on April 29, 2013, July 12, 2013, and July 9, 2013,
respectively. His straight-line adjustments versus the appropriate adjustments utilizing the
Case-Schiller Index are as follows:




                                               -58-
                                   Straight-Line     Case-Schiller     Case-Schiller
                     Month
                                    Adjustment          Index          Adjustment
                   April 2013         +0.61%            102.01           +10.10%
                   July 2013          +0.21%            111.54           +1.70%
                  August 2013           N/A             113.47             N/A

Compare id. at 57 (Mr. Sheppard’s adjustment grid), with PX 221 at 684 (Case-Schiller Index
values). Had Mr. Sheppard instead applied the Case-Schiller time adjustments rather than the
straight-line adjustments, his “per-acre value indications” for comparable sales 34, 35, and 37
would have been $30,828, $21,731, and $26,091, respectively, rather than $28,172, $21,412, and
$25,083, respectively.58 See DX 320 at 57. Because utilizing the appropriate time adjustment
would have increased the comparable sale per-acre values by approximately $2,000, $0, and
$1,000, respectively, including $2,000 and $0 for the two most relevant comparable sales, the
reconciled per-acre value should be increased by $1,000.

        In addition to his failure to utilize a proper time adjustment, Mr. Sheppard only included
7.268 acres in the Drapac land. He agreed with the explanation that his use of 7.268 acres, as
opposed to the 10.704 acres used by Mr. Matthews, was “because [he] only utilized the
properties that were actually abutting the trail as opposed to the other properties that were
included . . . that were technically part of the larger parcel but were not affected by the trail.” Tr.
1571 (Sheppard). In other words, Mr. Sheppard utilized an improper size for the Drapac land.
However, that error did not impact his overall valuation opinion because the increased acreage
would have been added to both the “before” and “after” condition. Even had he determined that
special benefits or damages applied to the Drapac land, such special benefits and damages would
only apply to parcels adjacent to the trail.

         In sum, the court finds that the Drapac land is worth $26,000 per acre in both the
“before” and “after” condition. Proximity damages of 20.5%, see supra Section V.C, apply only
to the land contained within the individual parcels that are directly adjacent to the trail, i.e., 6.024
acres.




        58
           No adjustments, other than a time adjustment, were applied to comparable sales 34
and 35. DX 320 at 57. Thus, the $28,000 per-acre sale price for comparable sale 34 need only
be increased by 10.10%; the $21,368 per-acre sale price for comparable sale 35 need only be
increased by 1.70%. Meanwhile, comparable sale 37 received a 35% downward adjustment for
land area and a 25% downward adjustment for zoning and land use. Id. Thus, when combined
with the appropriate Case-Schiller Index time adjustment for July 2013, the $62,568 per-acre
sale price for comparable sale 37 should be decreased by 58.3%.


                                                 -59-
                                  D. Large Residential Parcels

        The court next considers the large residential parcels, which are the residential parcels
that are larger than one acre.

         Mr. Matthews selected fifteen comparable sales for his analysis of the large residential
parcels. See PX 221 at 678. He chose these particular sales “because they were rural in nature
and not in the city or close suburbs which affects the value by location” and generally “happened
to sell very close to the date of valuation.” Tr. 545 (Matthews). He explained that “minimal
adjustments were needed” because rural land does not experience speculation in the same
manner as single-family residential properties.59 Id. After selecting the comparable sales, he
computed the per-acre sale price for each transaction and graphed the per-acre price and the
number of acres for each property, with the number of acres as the independent variable and the
per-acre price as the dependent variable. Id.; PX 221 at 678. Mr. Matthews averred that, with
the exception of two outliers, the sales “fall into a reasonable pattern.” PX 221 at 678. With
respect to the outliers, he explained that comparable sale 10A was “benefited by it[s] proximity
to a commercial development,” id., and comparable sale 3A had a center road passing through it,
Tr. 546 (Matthews).

         Mr. Matthews also accounted for cost-to-cure damages, where applicable, of $5 per linear
foot for a woven-wire security fence and $25 per linear foot for a privacy fence. Id. at 588-89;
see also supra Section V.B.2. Mr. Matthews emphasized that a fence would only be built “for
the area that is going to be impacted,” which is not necessarily the entire length of a particular
property. Tr. 589 (Matthews). He observed that privacy fences were typically insufficient in
town, and hence proximity damages applied, because trail users could still see and hear activity
on adjacent properties even if such a fence had been installed. Id. at 590. See generally supra
Part V (discussing the benefits and damages to the remainder). On the other hand, he asserted,
because large residential parcels tend to have natural buffers, a woven-wire security fence is
often sufficient to cure damages to the remainder parcel; for parcels with a house located near the
trail corridor, a privacy fence is necessary. Tr. 588-89 (Matthews).

        Using his comparable sales and graphs, Mr. Matthews determined per-acre values for
each of the large residential parcels. Id. at 545-47. None of the parcels experienced an increase
in per-acre value due to being reduced in size by the taking. He determined that the following
cost-to-cure damages were appropriate:

               •   privacy fence for the entire length of the property taken:
                   claims 57.B, 88, and 90;




       59
           Mr. Matthews applied a slight downward adjustment to comparable sale 13A because
it was located “on a small river.” Tr. 545 (Matthews); see also PX 221 at 678.


                                                -60-
               •   privacy fence for less than the length of the property taken:
                   claims 57.A, 63.AB (combined), and 78;60

               •   security fence for the entire length of the property taken:
                   claims 52.AB (combined), 56.A, 56.B, 62, 64, 65, 66, 67, 68,
                   69.B, 70, 71, 74, 75, and 80;

               •   security fence for greater than the length of the property taken:
                   claims 60, 69.A, and 108.AB (combined); and

               •   no cost-to-cure damages: claims 39, 40, 41, 58, 85.ABC
                   (combined), 95, 103.A, and 103.B.

PX 220 at 590-618, 626, 650-51. In addition, he explained that access damages of $44,000
applied to claim 69.B, in addition to security fencing along the length of the property taken, due
to “loss of access after construction of the trail.” Id. at 607.

        Mr. Sheppard found a total of twelve residential comparable sales that sold between July
30, 2010, and February 26, 2013. DX 416 at 106-08. Of these, comparable sales 16, 20, and 25
were deemed “large” parcels due to their land areas of 15.950, 13.765, and 27.094 acres,
respectively. Id. at 108, 110. The six “average” residential parcels (comparable sales 18, 19, 21,
22, 26, and 27) ranged in size from 1.670 acres to 5.000 acres. Id. The three “small” residential
parcels (comparable sales 17, 23, and 24) ranged in size from 0.320 acres to 0.371 acres. Id. In
addition, comparable sales 20, 22, and 27—the latter two of which were described by Mr.
Sheppard as “average” parcels at 1.670 and 3.840 acres, respectively—were classified as
lakefront property. Id. He also found five comparable sales of properties that were zoned as
agricultural, with sale dates ranging from August 5, 2010, to December 6, 2013. Id. at 135. The
agricultural tracts he described as “large” (comparable sales 28 and 30) were 88.100 and
1,095.466 acres, respectively. Id. at 135-36. The “average” agricultural tracts (comparable sales
29 and 32) were 33.973 and 33.458 acres, respectively. Id. The single “small” agricultural tract
(comparable sale 31) was 10.000 acres. Id. Comparable sale 32 also contained frontage along
Melody Lake. Id. at 136, 146.




       60
           Mr. Matthews stated that cost-to-cure damages for claim 63.AB (combined) were
$12,900 due to the necessity of a 516-foot privacy fence (516 feet × $25 per foot = $12,900). PX
220 at 600. He also determined that the cost to cure for claims 57.A and 78 were $5,900 and
$10,400, respectively, and noted for both claims that “[d]amages were based on the study in the
addenda.” Id. at 595, 612. At $25 per linear foot, these figures reflect privacy fencing of
approximately 236 feet and 416 feet (subject to slight rounding adjustments) for claims 57.A and
78, respectively. The length of the property taken in claim 57.A is 800 feet; the length of the
property taken in claim 78 is 782 feet. Jt. Stip. Ex. A at 8, 11.


                                               -61-
        Mr. Sheppard utilized comparable sales 20, 25, 28, and 32 to appraise properties
containing a pond or lake. DX 416 at 195; Tr. 1293-94 (Sheppard) (claim 59), 1309-10 (claim
68), 1311 (claim 69.AB combined),61 1333-34 (claim 77.C), 1336 (claim 79); see also DX 358 at
22 (describing claim 59 as “includ[ing] two water amenities from both a pond and the river
frontage”); DX 368 at 11 (describing claim 68 as being “improved with a man-made lake” and
other features); DX 369 at 18 (describing claim 69 in the same manner); DX 380 at 14
(describing claim 77.C as being “improved with a lake” and other features); DX 382 at 13
(describing claim 79 in the same manner). He also described claim 85 as being “improved with a
lake” and other features, but utilized comparable sales 25, 28, 29, and 32 to appraise that
property. Tr. 1346-47 (Sheppard); DX 389 at 15, 26-27; see infra Section VI.E (discussing
agricultural/timber parcels).

        Mr. Sheppard’s appraisal for claim 68, the Morgan residential property, reflects that the
subject property was just under 33 acres in the “before” condition, including approximately
0.867 acres that were part of the trail corridor in the “after” condition. DX 368 at 4, 6. Mr.
Sheppard applied a time adjustment reflecting a straight-line 2% annual increase in property
values to each comparable sale, and made no other adjustments. Id. at 22-23. His results are as
follows:

                                Comp.          Size      Per-acre
                                 Sale        (Acres)      Value
                                  20          13.765     $15,390
                                  25          27.094      $6,341
                                  28          88.100      $4,515
                                  32          33.458      $7,602

Id. at 23. Ultimately, he determined that the Morgan residential property had a land value of
$12,500 per acre. Id. at 22. Mr. Sheppard explained that he “estimated the value at the higher
end of the range” due to the “size of the subject property.” Id. He then used the same sales grid
for claim 69—making a time adjustment reflecting a straight-line 2% annual increase in property
values, and no other adjustments—before estimating that claim 69, at approximately 104 acres,
had a land value of $10,000 per acre. DX 369 at 8, 29-30. He did not explain his $10,000
estimate beyond noting that “[n]o specific property adjustments applied” and that “[t]he adjusted
range exhibited by the sales data indicates a per-acre value between $4,515 and $15,390.” Id. at
29. Similarly, with respect to claim 77.C (with an area of approximately 72 acres), Mr. Sheppard
estimated a land value of $10,000 per acre after finding that “[n]o adjustment for property
differences was warranted” and using the same sales grid. DX 380 at 8, 25-26. Mr. Sheppard
did not discuss property adjustments, or the lack thereof, in his appraisal for claim 79 (with an
area of approximately 82 acres), but again found a $10,000 per-acre value based on the same
sales grid. DX 382 at 8, 24-25.

       61
           Mr. Matthews treated claims 69.A and 69.B separately, while Mr. Sheppard treated
claims 69.A and 69.B as if they were one parcel. Compare, e.g., PX 220 at 606-07, with DX 369
at 8, 16-19.


                                               -62-
        Mr. Sheppard used comparable sales 19, 21, and 26 to appraise claims of rural residential
properties that were smaller than ten acres and lacked water features. DX 416 at 195; see, e.g.,
DX 370 at 22 (claim 70); DX 371 at 21 (claim 71); DX 374 at 22 (claim 74); DX 381 at 22
(claim 78); DX 411 at 23 (claim 107); DX 412 at 24 (claim 108). For each of these claims, he
used the same sales grid and made no adjustments—other than a time adjustment reflecting a
straight-line 2% annual increase in property values—to arrive at the following results:

                                 Comp.          Size      Per-acre
                                  Sale        (Acres)      Value
                                   19          4.720       $4,271
                                   21          2.330       $8,125
                                   26          2.090       $3,146

Id. His final opinions of value for each of these claims is provided below:

                                                Size      Per-acre
                                  Claim
                                              (Acres)      Value
                                    70         5.261       $6,000
                                    71         7.385       $6,000
                                    74         5.537       $6,000
                                    78         3.467       $6,000
                                   107         5.968       $6,000
                                   108         5.841       $6,000

DX 416.A at 2.

         The court cannot credit Mr. Sheppard’s opinions of value with respect to properties
containing water features. He utilized comparable sales 20, 25, 28, and 32 to appraise claims 68,
69, 77.C, and 79.62 He explained that lakefront properties, like properties featuring a pond or
river, are typically at the “higher end of the range” and that properties with water features such as
ponds are “certainly different than vacant land without a pond.” Tr. 1081-82 (Sheppard). Mr.
Sheppard is correct that ponds are unique property features, but frontage along a lake—as with
comparable sales 20 and 32—is a poor proxy for either “natural or man-made ponds.” Id. at
1082. Given that he made no adjustments to the comparable sales he used to appraise any of the
large residential properties, beyond time adjustments that were insufficient for reasons
previously discussed, his selection of comparable sales demonstrates that the per-acre value for
such properties depended primarily on the presence of a pond. See id. at 1627. Even assuming,
for sake of argument, that lake frontage is a viable proxy for a pond, Mr. Sheppard’s analysis
failed to adjust the comparable sales that did not include lake frontage. Instead, he simply chose
per-acre values ($12,500 for claim 68 and $10,000 for claims 69, 77.C, and 79) that were within

       62
           Mr. Sheppard appraised claim 85, which was “improved with a lake” and other
features, utilizing comparable sales 25, 28, 29, and 32. DX 389 at 15, 27; see infra Section VI.E
(discussing agricultural/timber parcels).


                                                -63-
the range ($4,515 to $15,390) and above the average ($8,462) of the per-acre values for the
comparable sales used.63

        Similarly, the court cannot credit Mr. Sheppard’s opinions with respect to the remaining
large residential parcels, which he appraised using comparable sales 19, 21, and 26 for two
reasons. First, his time adjustments were insufficient. Second, he selected the same per-acre
value ($6,000) for claims 70, 71, 74, 78, 107, and 108. Although that value was within the range
($3,146 to $8,125) and above the average ($5,181) of the per-acre values for the comparable
sales used, he failed to explain why he selected the particular value that he did. That Mr.
Sheppard selected the same value for all six of these claims is also troublesome given their
relative sizes.

        On the other hand, the court finds Mr. Matthews’s per-acre value conclusions for large
residential properties to be credible. He utilized a total of thirteen comparable sales (having
found fifteen but deeming two of them to be outliers) in his analysis,64 compared with the three
or four comparable sales used by Mr. Sheppard. Mr. Matthews’s failure to make time
adjustments is mitigated by the timing of his comparable sales; the majority of his comparable
sales occurred in 2013, whereas Mr. Sheppard used comparable sales that were more spread out.
Further, with two exceptions, the court agrees with Mr. Matthews’s assessment regarding
cost-to-cure damages because those damages were adequately explained, well supported, and
were determined in accordance with the unique characteristics of each property. Mr. Matthews
demonstrated that he considered each property individually, rather than applying a blanket
approach, by applying different types of special damages (i.e., security fencing, privacy fencing,
and access damages) in different amounts (i.e., not necessarily the full length of the property
taken, and none at all for certain claims).

         The first exception is Mr. Matthews’s determination of cost-to-cure damages for fencing
that is greater than the length of the property taken. While it is possible that such extra fencing
could be necessary, Mr. Matthews failed to provide any explanation for the extra fencing either


       63
           Plaintiffs argue that Mr. Sheppard’s valuation opinions with respect to the large
residential properties containing water features should be discarded because his opinions were
formed under the assumption that size was largely immaterial. See, e.g., Tr. 1627 (Sheppard).
Indeed, Mr. Sheppard found that claims 69, 77.C, and 79—comprising 104, 72, and 82 acres,
respectively—each had the same land value of $10,000 per acre. However, he opined that claim
68—comprising 33 acres—had a higher land value of $12,500 per acre due to its size. Further,
although Mr. Matthews stated that smaller properties are generally worth more per acre, he
recognized that this pattern “flattens out” after approximately 30 acres. Tr. 546 (Matthews); PX
221 at 678. Thus, it appears that Mr. Sheppard did incorporate size into his analysis with respect
to the claimant parcels containing water features to some extent.
       64
          The R2 value for the regression line on Mr. Matthews’s graph of the per-acre price
versus acreage for the large residential parcels is artificially low because the two outliers are
included. See PX 221 at 678.


                                                -64-
during trial or within his reports and addenda that were admitted into evidence. Where
necessary, the amount of fencing shall be reduced to reflect the length of the property taken.

       The second exception is Mr. Matthews’s determination of access damages for claim
69.B. Unlike the extra fencing, he explained the inputs and calculations for his $44,000 figure,
and the court finds no reason to question their accuracy. However, the court also finds that Mr.
Matthews failed to demonstrate the necessity of constructing a gravel road connecting the
buildings to Elks Club Road. It appears that access would still be available to Morgan Road
even after construction of the trail. See PX 68.E.1; PX 112 at 16.

        Mr. Matthews also made a computation error with respect to claim 57.A. Although he
indicated that the size of the property taken was 36,125 square feet in accordance with the
parties’ stipulations, Jt. Stip. Ex. A at 8; PX 220 at 595, he erred in stating that the size of the
property taken was equal to 0.280 acres, Tr. 556 (Matthews); PX 220 at 595. The correct
acreage for the size of the property taken is 0.829.65 The discrepancy resulted in Mr. Matthews
understating the damages for area of the take.

        In sum, the court rejects the per-acre values for large residential parcels suggested by Mr.
Sheppard, and adopts the per-acre values suggested by Mr. Matthews. Further, the court adopts
the cost-to-cure damages suggested by Mr. Matthews, except that (1) fencing in excess of the
length of the property taken shall be reduced to reflect the length of the property taken, (2) access
damages to build a gravel road for claim 69.B shall not be awarded, and (3) the acreage in the
property taken for claim 57.A shall be corrected to 0.829.

                                 E. Agricultural/Timber Parcels

       The next category of parcels at issue is the agricultural/timber parcels.

        Mr. Matthews found nine comparable sales of agricultural land, PX 221 at 678, and
focused on comparable sales 1A, 2A, 3A, and 4A as the most relevant, see id. at 755-68. Indeed,
Mr. Matthews used these four comparable sales in his sales grid to determine the per-acre value
for claim 79, the Fulton property, which he selected as the representative agricultural/timber

       65
           For claim 57.A, the land area was 3.220 acres exclusive of the area of the property
taken. PX 220 at 595; DX 356 at 8. Therefore, claim 57.A is deemed to comprise 4.049 acres,
including the trail corridor, in the “before” condition. Mr. Matthews incorrectly utilized 3.500
acres for the larger parcel, i.e., 3.220 acres exclusive of the property taken plus 0.280 acres for
the (incorrect) size of the property taken. PX 220 at 595. For claim 57.B, the land area was
1.000 acres exclusive of the property taken. PX 220 at 596; DX 356 at 8. The size of the
property taken for claim 57.B was stipulated to be 5,250 square feet, Jt. Stip. Ex. A at 8, which
equals 0.121 acres. Therefore, claim 57.B is deemed to comprise 1.121 acres, including the trail
corridor, in the “before” condition. For his part, Mr. Sheppard utilized the correct acreage for the
property taken in appraising claims 57.A and 57.B when combined—41,375 square feet total
(36,125 square feet for claim 57.A and 5,250 square feet for claim 57.B), i.e., 0.950 acres. Jt.
Stip. Ex. A at 8; DX 356 at 8, 11-12.


                                                -65-
parcel. Tr. 597-98 (Matthews); PX 220 at 325. As noted above, comparable sale 1A is a
21.13-acre unimproved agricultural parcel that sold for $73,900 on December 10, 2013. PX 220
at 358-60. Comparable sale 2A is a 30-acre unimproved agricultural parcel that sold for $93,000
on December 6, 2013. Id. at 361-63. These two parcels are located next to one another. Id. at
357. Compare id. at 358, with id. at 361. Comparable sale 3A is a 34.73-acre unimproved
agricultural parcel that sold for $317,000 on October 28, 2013. Id. at 364-66. Comparable sale
4A is 21.36-acre agricultural parcel with a center road that sold for $85,000 on December 18,
2012. Id. at 367-69.

        Claim 79, the Fulton property, is an agricultural tract encompassing 82.430 acres in the
“before” condition and 79.690 acres in the “after” condition. Id. at 324-25, 329. Although the
subject property is larger than any of the comparable sales, Mr. Matthews did not make size
adjustments because the comparable sales and the subject property were all above the point at
which “prices level off.” Id. at 326. He also did not make time adjustments because all of the
sales took place close to the effective appraisal date “during a slowly recovering market.” Id.;
accord Tr. 350 (Matthews) (noting that “[f]armland didn’t really take a big hit” due to the
recession, unlike residential properties). He applied location adjustments to comparable sales 3A
and 4A due to those parcels being in areas with greater development potential. PX 220 at 326.
He also adjusted comparable sale 4A to reflect the presence of a paved road on site. Id. After
making these adjustments, he computed per-acre values of $3,251, $3,100, $6,389, and $3,382,
respectively, for each of his comparable sales. Id. at 325. Ultimately, Mr. Matthews opined that
the Fulton property was worth $4,000 per acre in both the “before” and “after” conditions, which
was near the average for the comparable sales. Id. at 325, 331; Tr. 597-98 (Matthews).

        In addition to damages for the area of the property taken, Mr. Matthews opined that
access damages were appropriate. He observed that the trail corridor must be crossed to access
the Fulton property from 2nd Avenue (County Highway 213). PX 220 at 332, 340-41, 345. Mr.
Matthews noted the existence of a crossing “near the mid-point of the property,” but explained
that “there is no guarantee that there will be a legal crossing [there] after the take” because
“[t]here are no signed documents after the date of valuation to indicate that there is a guaranteed
access from 2nd Avenue over the trail.” Id. at 332. He contended that property for which there
was literally no access would experience a 100% loss in value because “nobody’s going to buy it
if you can’t get there.” Tr. 600-01 (Matthews). He then remarked that “there’s always a demand
by the adjacent property owner for good quality cropland,” id. at 601, and that ten or more
adjacent property owners is generally sufficient “to create a normal market demand resulting in
no probable value loss,” PX 220 at 332. He further explained:

               The greater the number of adjacent owners the lower the damage
               and the greater the residue value. A sliding scale is used as a
               reasonable way to measure loss with between 0 and 10 adjacent
               owners. So 1 adjacent owner results in a 90% loss, 2 result in 80%
               loss[,] and so on.

Id. Because the Fulton property had eight adjacent landowners, Mr. Matthews expected the
remainder parcel to lose 20% of its value. Id.; Tr. 602 (Matthews). He also specified that, as of


                                               -66-
the date of valuation, it was a “yes or no, 50-50” probability that access would actually be lost; in
other words, the owner “may or may not be able to cross” the trail. Tr. 602 (Matthews). Thus,
he multiplied the 20% loss based on eight adjacent property owners by the 50% probability of
lost access to conclude that the Fulton property experienced a 10% diminution in value in the
“after” condition “because of that potential loss in access.” Id.; see also PX 220 at 331-32.

        Mr. Matthews followed the same approach in applying access damages of 5% and 15%,
respectively, to claims 76.ABCD (combined) and 100. PX 220 at 631 (claim 76.ABCD), 640
(claim 100). He also applied access damages of $40,000 for claim 53.AB (combined) and
$20,000 for claim 59. Id. at 628 (claim 53.AB), 638 (claim 59). In addition, Mr. Matthews
applied damages due to irregular parcel shapes in the amounts of $8,000 for claim 77.ABC
(combined) and $2,000 for claim 96.B. Id. at 632 (claim 77.ABC), 636 (claim 96.B). He opined
that special damages for security fencing were applicable to claims 53.AB, 61, 72, 76.ABCD,
77.ABC, 91.D, and 96.B.66 Id. at 628-32, 635-36. Finally, he opined that no special damages of
any type were applicable to claims 73, 81.A, 91.C, and 111.67 Id. at 588, 633-34, 639.

        Mr. Sheppard utilized comparable sales 25, 28, 29, and 32 for most of the
agricultural/timber parcels.68 Specifically, he utilized these particular comparable sales for
parcels that he described as “large agricultural,” “large agricultural/residential,” and
“agricultural/residential.”69 E.g., Tr. 1320 (Sheppard), 1323-24. One such example is his
appraisal for claim 73, which Mr. Sheppard classified as “large agricultural.” Id. at 1320. The
pertinent data from the comparable sales used is summarized in the following table:

       66
            The amount of security fencing necessary is equal to the length of the property taken,
with two exceptions: claims 76 and 77. For claim 76, where the property taken was 4,876 feet
long and 50 feet wide, Jt. Stip. Ex. A at 10-11, Mr. Matthews opined that only 1,000 linear feet
of security fencing at $5 per foot was appropriate, PX 220 at 631. For claim 77, the amount of
security fencing necessary is equal to the entire length of the property taken on both sides, for a
total of 5,824 linear feet—the sum of 860 feet for claim 77.B (which abuts the trail on one side
only) and twice the amount of 2,482 feet for claim 77.C (which is bisected by the trail). Jt. Stip.
Ex. A at 11; PX 220 at 632; DX 379 at 10; DX 380 at 13.
       67
           Mr. Matthews acknowledged that claim 111 was improperly classified as
agricultural/timber, and should have been designated as a residential parcel. Tr. 626-27
(Matthews); see PX 220 at 588.
       68
           Mr. Sheppard used comparable sales 25, 28, 29, and 32 to appraise the land value for
each of the following claims: 40, 56.AB (combined), 61, 62.AB (combined), 63.A, 72, 73, 75,
76.AB (combined), 76.CD (combined), 77.B, 80, 81.A, 85.ABC (combined), 95, 96.B, 100, and
103.AB (combined). DX 355 at 29; DX 416 at 194, 196.
       69
           Mr. Sheppard used comparable sales 18, 25, and 31 to appraise claim 52.AB
(combined), which he described as “large residential/agricultural.” Tr. 1283-84 (Sheppard). He
used comparable sales 27, 28, and 32 to appraise claim 72, which he described as “large
agricultural/residential.” Id. at 1318-19.


                                                -67-
                Comp     Acres      Sale Date             Sale Price   Price/Acre
                 25      27.094  January 15, 2013         $169,798       $6,267
                 28      88.100   August 5, 2010          $375,000       $4,257
                 29      33.973 November 15, 2013         $157,000       $4,621
                 32      33.458 December 6, 2013          $255,870       $7,647

DX 373 at 24. Comparable sale 25 is zoned as “Agricultural Residential.” Id. at 15.
Comparable sale 28, a multi-tract sale, is zoned partially as “Agricultural Residential” and
partially as “Agricultural.” Id. at 17-18. Comparable sales 29 and 32 are both zoned as
“Agricultural,” and each is “part of a multi-parcel assemblage.” Id. at 19-21. In addition,
comparable sale 29 previously sold on July 7, 2011, for $125,000 ($3,679 per acre). Id. at 20.
Mr. Sheppard applied a time adjustment reflecting a straight-line 2% annual increase in property
values to each comparable sale, and no other adjustments, to arrive at per-acre values of $6,341,
$4,515, $4,600, and $7,602, respectively. Id. at 23-24. With that data, he concluded that the
land value for claim 73 was $5,500 per acre as of the date of the taking. Id. His per-acre value
conclusions for the other agricultural parcels appraised utilizing the same comparable sales are as
follows:

                                                      Per-Acre
                                      Claim
                                                       Value
                                        40             $5,500
                                      56.AB            $7,000
                                        61             $6,500
                                      62.AB            $6,500
                                       63.A            $6,500
                                        72             $6,500
                                        73             $5,500
                                        75             $6,500
                                      76.AB            $6,500
                                      76.CD            $6,000
                                       77.B            $6,500
                                        80             $6,500
                                       81.A            $5,000
                                     85.ABC            $6,500
                                        95             $6,500
                                       96.B            $6,000
                                       100             $5,000
                                     103.AB            $5,500

DX 416.A at 1-2. Each of these values is greater than the per-acre value conclusions that Mr.
Matthews champions.70 Mr. Sheppard did not find any special benefits or damages to any of
these claims. Id.; Tr. 1402 (Sheppard).
       70
          Mr. Matthews appraised the land in claims 56.A and 56.B separately. His per-acre
land values were $8,000 for claim 56.A and $6,000 for claim 56.B. Using his “after” condition

                                               -68-
        The court finds that both experts utilized sufficient comparable sales for the
agricultural/timber parcels and that Mr. Matthews sufficiently supported his lack of time
adjustments. Meanwhile, Mr. Sheppard applied the same straight-line time adjustments to his
agricultural/timber comparable sales that he did to other parcel types. However, with respect to
the agricultural/timber parcels, his comparable sales were close in time to the valuation date and
thus the time adjustments did not significantly impact his valuation opinions.

        The court further finds that Mr. Matthews performed a more robust analysis with respect
to the agricultural/timber parcels than did Mr. Sheppard. Mr. Matthews considered the unique
circumstances of each property and computed access and/or cost-to-cure damages only where
appropriate. For instance, with respect to claim 76.ABCD (combined), Mr. Matthews
determined that only 1,000 feet of fencing was necessary, rather than the full 4,876 feet
representing the length of the property taken.71 See Jt. Stip. Ex. A at 10-11. Regarding time
adjustments, Mr. Matthews (unlike Mr. Sheppard) treated agricultural/timber properties different
from small residential properties for specific reasons. Mr. Sheppard, meanwhile, went no further
in his analysis by choosing per-acre values and then simply inserting those numbers, along with
the sizes of each larger parcel and the property taken, into his spreadsheets. The only differences
he recognized were the properties containing water features. See supra Section VI.D. In other
words, his methodology with respect to the agricultural/timber parcels more closely resembles a
one-size-fits-all approach. Further, because Mr. Sheppard improperly classified claims 91.C and
91.D as industrial parcels rather than agricultural/timber parcels, his valuation opinions for those
claims are not useful.

        In sum, the court adopts Mr. Matthews’s valuation opinions in full with respect to the
agricultural/timber parcels, and rejects those of Mr. Sheppard.

                                     F. Commercial Parcels

       The next category to be addressed is the commercial parcels: claims 1.B, 5, 43, 85.D,
92.A, 92.B, 92.C. Mr. Matthews provided full appraisal reports with respect to claims 1.B and
92.C, and provided one-page summary reports regarding claims 5, 43, 85.D, 92.A, and 92.B.
Mr. Sheppard provided full appraisal reports for each claim.




acreages of 9.750 and 15.710, respectively, the total land value for claim 56.AB (combined) per
Mr. Matthews is $172,260—(1) $8,000 per acre × 9.750 acres plus (2) $6,000 per acre × 15.710
acres—before applying cost-to-cure damages. See PX 220 at 593-94. At $7,000 per acre (the
value assigned by Mr. Sheppard), the combined 25.460 acres would have a total value of
$178,220.
       71
           Mr. Matthews did not explicitly show many of his computations in his summary
sheets, but the court was able to discern his calculations from the record as a whole. Therefore,
his computations are supported, even if not always presented in the most straightforward manner.


                                                -69-
         Claim 1.B contains retail and office buildings and an auto service garage, while claim 1.C
contains a small industrial warehouse building and is used for parking. PX 220 at 35, 47; see
infra Section VI.G (discussing industrial parcels). Both parcels are owned by George W. Hart,
Jr. Jt. Stip. Ex. A at 1. The trail corridor cuts northwesterly between the two parcels along the
southern edge of claim 1.B and the northern edge of claim 1.C. PX 220 at 29, 73, 81; DX 305 at
12; DX 306 at 11. Mr. Matthews appraised both claims in the same report, but addressed each
separately. See generally PX 220 at 28-112.72

        Mr. Matthews found a total of ten comparable sales of commercial land. See PX 221 at
706-10 (comparable sales C-7 through C-10), 791-803 (comparable sales C-1 through C-6). He
grouped the comparable sales into “prime” and “secondary” subgroups to examine trends for
each. Id. at 679-80. He utilized comparable sales C-1, C-2, C-4, and C-6 to appraise the land in
claim 1.B. PX 220 at 54. He indicated that no time adjustments were needed because Newton
Country sales data “indicated a stable market for commercial land with no measureable change
during [the relevant] period.” Id. at 51-52; accord Tr. 349 (Matthews). In addition, no
adjustments for shape, topography, or highest and best use were necessary. PX 220 at 51-52.
However, he applied size adjustments to “reflect the tendency of larger tracts to sell for less per
acre than smaller tracts.” Id.; accord Tr. 634-35 (Matthews). He also applied location
adjustments to “all sales but C-1 due to their much inferior locations” plus other “appropriate
adjustments such as corner premiums.” PX 220 at 51-52. He explained that commercial land in
Covington “is at least twice as valuable . . . than [that in] Mansfield because [of] the greater
population numbers, greater traffic flows,” and other factors. Tr. 632 (Matthews). He gave
comparable sale C-1 the most weight because it was the most similar, and ultimately opined that
the land value for claim 1.B was $365,000 per acre in both the “before” and “after” conditions.
PX 220 at 51, 61. Mr. Matthews remarked that he made size adjustments in the “after” condition
to reflect the small size, but determined that the land was still worth $365,000 per acre. Tr.
636-37 (Matthews). He noted that the subject parcel sold in July 2014 for $750,000, which
reflected $474,405 for improvements and $275,595 for land ($382,770 per acre, which would
have been roughly equivalent to $364,000 in August 2013). Id. at 633-34; PX 220 at 87. In
addition, Mr. Matthews determined that a chain-link security fence costing $6,000 (i.e., 300 feet
at $20 per linear foot) was necessary to alleviate potential theft, trespass, and vandalism,
emphasizing that “[t]he loss in value without the fence is greater than the cost to fence.” PX 220
at 36, 61; accord Tr. 637 (Matthews).

        Mr. Matthews followed a similar approach for claim 92.C, Mr. Blackwell’s grocery store
in Mansfield. Tr. 651 (Matthews); PX 220 at 461. He used comparable sales C-1 through C-6,
made no time or access adjustments, and made adjustments for size, location, and unique factors.
Tr. 654 (Matthews); PX 220 at 465-67. He gave the most weight to comparable sales C-2 and
C-6 because they most closely resembled the subject property, and concluded that the land was
worth $125,000 per acre in the “before” condition. Tr. 655 (Matthews); PX 220 at 465-67. He
also determined that, because the entire property as improved was worth approximately $100,000
on the date of the taking in the “before” condition, the improvements themselves were worth

       72
            Mr. Matthews’s appraisal for claims 1.B and 1.C is also reproduced in its entirety at
PX 1.D.


                                                -70-
$79,000 after subtracting out the land value. Tr. 655-56 (Matthews); PX 220 at 468-70. In the
“after” condition, Mr. Matthews opined that the land was worth $128,000 per acre, reflecting a
slight upward adjustment to reflect sensitivity to size. Tr. 657 (Matthews); PX 220 at 478-79.

        The imposition of the trail easement also eliminated six improved parking spaces across
the street from the grocery store building. PX 220 at 471-73. Mr. Matthews calculated that these
six spaces contributed $1,700 towards the value of the improvements, and thus the improvements
were worth $77,300 in the “after” condition before applying special damages.73 Id. at 480, 533.
He then explained that “the loss of parking hurts the value of the retail building” because such a
loss can make a building “functionally obsolete.” Tr. 656-57 (Matthews). He remarked that
because a retail building the size of the subject grocery store would typically have twenty-four
parking spaces, and the store only had fourteen spaces before the taking, “parking [was] already
tight.” PX 220 at 480. Thus, the loss of six of the fourteen available parking spaces would
damage the building by the same percentage. Id.; Tr. 659 (Matthews). In other words, the
$77,300 remaining improvements value was reduced by 43% (the ratio of six to fourteen,
rounded to the nearest whole percent), for a decrease of $33,239. Tr. 659 (Matthews); PX 220 at
480. The total diminution in value for claim 92.C was therefore allocated among the land taken,
improvements taken, and damages to the remaining improvements, and was partially offset by
the increase in the per-acre value of the remaining land. PX 220 at 482.

        Two of the other commercial properties—claims 92.A and 92.B—are also owned by Mr.
Blackwell. Tr. 660-61 (Matthews). Mr. Matthews indicated that although claims 92.A and 92.B
are located “in very close proximity” to claim 92.C, they were not appraised as one “larger
parcel” because they are “separated physically and legally by another building in between the
two.” Id. For claim 92.A, which was unimproved, the land value was $90,000 per acre in the
“before” condition and $100,000 per acre in the “after” condition. Id. at 662; PX 220 at 623.
For claim 92.B, the land value was $150,000 in both the “before” and “after” conditions, and the
improvements were worth $25,000 in the “before” condition. Tr. 663 (Matthews); PX 220 at
624. Similar to claim 92.C, Mr. Matthews found that $1,100 of the total improvements value
was attributable to the parking taken, and that the remaining improvements experienced a 40%
diminution in value based on the lost parking. Tr. 664 (Matthews). Mr. Matthews further
indicated that the remaining commercial claims—5, 43, and 85.D—experienced neither residual
damages nor any changes in per-acre values between the “before” and “after” conditions. Id. at
664-68; PX 220 at 620-22.

        Mr. Sheppard completed separate written appraisal reports for each commercial property.
He found a total of six comparable sales of commercial properties, one of which he discarded as
an outlier, after “exclud[ing] all commercial sales [that] reflect considerabl[y] superior
locations.” DX 416 at 91-93. Sales with lower per-acre values reflected “less developed” and
“more rural” locations. Id. at 92. His commercial comparable sale with the highest per-acre
value is located “along a main corridor near the more urban area of Covington.” Id. at 93.


       73
          Mr. Matthews appears to have used “building” as shorthand to refer to the sum total of
all improvements on the property, i.e., both improved parking and the constructed building.


                                              -71-
        From among his commercial comparable sales, Mr. Sheppard used sales 12, 13, and 15 to
appraise claim 1.B. DX 305 at 23. He applied a time adjustment reflecting a straight-line 2%
annual increase in property values to all three comparable sales in his sales grid and a 25%
upward adjustment to comparable sale 12 to reflect its inferior location relative to that of Mr.
Hart’s commercial parcel. Id. Comparable sales 13 and 15 each had both inferior and superior
aspects and thus “warrant[ed] no net adjustment.” Id. at 22. Reconciling the data, Mr. Sheppard
opined that Mr. Hart’s commercial parcel had a land value of $105,000 per acre as of the date of
the taking. Id. at 23.

        Mr. Sheppard used comparable sales 10, 11, 12, and 13 to appraise claim 92.A. DX 399
at 23. He applied a time adjustment reflecting a straight-line 2% annual increase in property
values to all four comparable sales in his sales grid, a 20% upward adjustment to comparable
sales 11 and 12 to reflect their inferior locations, and a 20% downward adjustment to comparable
sale 13 to reflect its superior location. Id. at 24. Reconciling the data, he opined that the land
value was $85,000 per acre. Id. He found that no special benefits or damages applied. Id. at 4.
He also used the same four comparable sales to appraise claims 85.D and 92.BC (combined).
DX 390 at 22 (claim 85.D); DX 400 at 2, 24 (claim 92.BC). He made the same adjustments,
similarly found that no special benefits or damages applied, and reached the same conclusion
that the land value for claims 85.D and 92.BC was $85,000 per acre. DX 390 at 4, 22; DX 400 at
5, 25.

        Mr. Sheppard used comparable sales 11, 12, and 13 to appraise claim 43. DX 342 at 26.
Besides his time adjustment reflecting a straight-line 2% annual increase in property values, the
only adjustment he applied was a downward adjustment to comparable sale 13 to reflect its
superior location. Id. He also found that no special benefits or damages applied, and concluded
that the land value was $65,000 per acre. Id. at 5, 26.

        Finally, Mr. Sheppard used comparable sales 11, 12, and 14 to appraise claim 5, Mr.
Morgan’s commercial plaza. DX 308 at 21. For each comparable sale, he applied a time
adjustment reflecting a straight-line 2% annual increase in property values and a 25% downward
adjustment “in recognition [that they are not in a] floodplain, which is superior to the condition
at the subject property.” Id. at 21-22. In addition, he applied a 20% upward adjustment to
comparable sale 14 due to its shape and a 25% upward adjustment based on “Conditions of
Sale.” Id. at 22. Although Mr. Sheppard did not allude to the “Conditions of Sale” adjustment
within his explanation of sale-specific and property-specific adjustments, see id. at 21, he
indicated, in his remarks regarding comparable sale 14, that the buyer “also purchased the
adjacent properties” on both sides, including the store on the west-adjacent property, id. at 20.

        As with the agricultural/timber parcels, the court finds that Mr. Matthews performed a
more robust analysis of the individual commercial parcels than did Mr. Sheppard. For instance,
Mr. Sheppard treated all of the commercial properties in Mansfield exactly the same despite his
assertion that claim 92.A encompassed an area two-and-one-half times that of claim 85.D.
Compare DX 390 at 4 (stating that claim 85.D included approximately 5,000 square feet of
unencumbered land in the “after” condition), with DX 400 at 4 (stating that claim 92.A included
approximately 12,500 square feet of unencumbered land in the “after” condition). Meanwhile,


                                               -72-
Mr. Matthews found that each claim had a different land value based on its unique
characteristics, including increases to 92.A and 92.C in the “after” condition based on a reduced
size. Further, Mr. Matthews considered the impact of parking on Mr. Blackwell’s grocery store
in Mansfield as well as Mr. Hart’s retail and office buildings in Covington. Mr. Sheppard only
“conceptually” considered the impact of lost parking upon the value of improvements; the lost
parking did not actually impact his valuation opinions. Tr. 1400-02 (Sheppard). He averred that
Mr. Blackwell had other “existing parking spaces” and “additional land” that provided ample
parking near his store, and suggested that the presence of the trail could even create “new
business . . . on what would normally be a piece of property with no parking.” Id. at 1401.
Finally, Mr. Matthews’s contention that 300 feet of chain-link security fencing is needed for
claim 1.B appears reasonable. See PX 220 at 69, 83.

        The court does not, however, accept Mr. Matthews’s opinions in full. First, his rounding
at intermediate steps skewed his computations of the difference in property values between the
“before” and “after” conditions. For example, with respect to claim 1.B, Mr. Matthews rounded
his $268,640 “before” value to $270,000, id. at 53, and his $262,800 “after” value (before
cost-to-cure damages) to $260,000, id. at 61, and thus he showed a “net” difference of $10,000
instead of $5,840 due to intermediate rounding. In other words, although his process is solid, his
presentation of that process is lacking.

        Second, Mr. Matthews erred in his computation of damages due to the loss of parking
with respect to claim 92.B. He computed damages to the improvements in claim 92.B as 40% of
$25,000, or $10,000, of which he allocated $1,100 to the parking taken and the remaining $8,900
to damages to the remaining improvements, for an improvements value of $15,000 after the
taking. Tr. 663-64 (Matthews); PX 220 at 624. Applied properly based on the approach that he
followed for claim 92.C, the value of the improvements in the “after” condition should have been
calculated as follows:

               •   Improvements in the remainder: $25,000 improvements
                   value – $1,100 parking lost = $23,900

               •   Damages to the remaining improvements: 40% × $23,900 =
                   $9,560

               •   Improvements value after the taking: $23,900 – $9,560 =
                   $14,340

Thus, because he overstated the value of improvements in the “after” condition, Mr. Matthews’s
computation error understated the just compensation due to Mr. Blackwell with respect to claim
92.B.

        In sum, the court rejects Mr. Sheppard’s opinions of value with respect to the commercial
parcels. The court adopts Mr. Matthews’s opinions of value with respect to the commercial
parcels, with the mathematical computation adjustments noted above.



                                               -73-
                                      G. Industrial Parcels

       Next, the court considers the industrial parcels: claims 1.C, 91.AB (combined), 91.E,
101.A, 101.B, and 102. DX 416 at 192. As discussed above, Mr. Sheppard also (improperly)
included claims 91.C and 91.D among the industrial parcels. See supra Section I.E.

        Mr. Matthews found a total of seven comparable sales of industrial land in Newton
County. PX 221 at 686, 769; see also id. at 696-705, 770-90. He determined that size
adjustments were not necessary, nor were adjustments appropriate for shape, topography, and
tree cover, because those variables did not appear to impact pricing. Id. at 686. He found that a
time adjustment reflecting a straight-line 2% annual increase in property values was appropriate
for industrial parcels because industrial real estate “did not suffer the steep declines in value as
the [housing market] did since there was no pre-recession bubble.” Id.; accord Tr. 639-40
(Matthews). He also found that a suburban location was inferior to land located within
Covington city limits, and that properties further removed from the city center would require
greater adjustments. PX 220 at 686. His seven comparable sales ranged in size from 1.0 to 8.5
acres and had unadjusted sale prices of $40,000 to $60,000 per acre. Id.

        Claim 1.C, located within Covington, includes an occupied warehouse and a paved area
for parking. Id. at 47; DX 306 at 12. It was zoned “Corridor Mixed Use District, for various
commercial uses including retail, goods and services, offices, [and] residences” as of the date of
the taking. DX 306 at 12. Mr. Matthews utilized two commercial comparable sales, C-2 and
C-10, and three industrial comparable sales, I-3, I-5, and I-6, to appraise claim 1.C. PX 220 at
54. He explained that some commercial land can be used for light industrial purposes, such as
with claim 1.C itself, and thus it was appropriate to consider comparable sales of both
commercial and industrial land. Tr. 639 (Matthews). Mr. Matthews applied a time adjustment
reflecting a straight-line 2% annual increase in property values to all five comparable sales, size
adjustments to all comparable sales due to the size of the subject property, location adjustments
to C-2 and I-6 due to their locations outside of Covington, and conditions adjustments to each of
the commercial comparable sales. PX 220 at 54; see also Tr. 639-42 (Matthews) (discussing the
adjustments). He gave comparable sale C-10 the most weight due to its similarity in size and
location to the subject parcel. PX 220 at 54. Mr. Matthews then determined that the land value
for claim 1.C was $95,000 per acre in both the “before” and “after” conditions. Id. at 54, 62. In
addition, Mr. Matthews determined that a chain-link security fence costing $2,000 (i.e., 100 feet
at $20 per linear foot) was necessary to alleviate potential theft, trespass, and vandalism, and
emphasized that “[t]he loss in value without the fence is greater than the cost to fence.” Id. at
61-62; accord Tr. 642-43 (Matthews).

        To appraise claim 91.AB, the representative industrial parcel, Mr. Matthews used all
seven of his industrial comparable sales. PX 220 at 393. He applied a time adjustment reflecting
a straight-line 2% annual increase in property values plus a location adjustment to each sale, and
no other adjustments. Id. at 393-94. He then determined that the land value was $30,000 per
acre in both the “before” and “after” conditions. Id. at 395, 400. He also explained that the trail
corridor “is located through the middle of the property and separates the manufacturing and
parking,” thus creating a security issue that could be addressed by erecting a chain-link security


                                                -74-
fence along the manufacturing portion. Id. at 400; Tr. 649 (Matthews). He remarked that an
alternative fencing option would be a “solid wood board” (i.e., privacy) fence, and that the costs
of the two different types of fencing are “very similar.” PX 220 at 399. He then calculated that
497 feet of fencing at $23 per linear foot would cost $11,431, which he rounded to $11,000. Id.;
Tr. 649 (Matthews).

         Mr. Matthews then utilized claim 91.AB as a model for the remaining industrial parcels:
claims 91.E, 101.A, 101.B, and 102. PX 220 at 642-45. He opined that the land value was
$7,500 per acre for claims 91.E, 101.A, and 101.B, and $10,000 per acre for claim 102. Id. In
addition, Mr. Matthews computed access damages of 20% for claim 91.E,74 explaining that the
trail corridor bisects the property and landlocks approximately ten acres on the south side of the
corridor with two adjacent landowners. Id. at 642; see also PX 91.C at 9 (Newton County parcel
map of claim 91.E); PX 112 at 25 (Google Earth map of claim 91.E and surrounding parcels);
DX 398 at 10 (survey with respect to claim 91.E), 12 (Google Earth map of claim 91.E).

       Mr. Sheppard found a total of nine potential comparable sales of industrial land in and
around Newton County, but discarded three of them as outliers. DX 416 at 72. Of the remaining
six comparable sales, four are located in Newton County and two are in Rockdale County. Id. at
69-72. He explained that he expanded his search for comparable sales into Rockdale County
because “there were too few sales to cover the breadth of industrial properties that we needed to
appraise.” Tr. 1041 (Sheppard). These six comparable sales of industrial land ranged in size
from 0.970 to 8.580 acres and unadjusted sale prices of $26,224 to $50,515 per acre. DX 416 at
70-72.

        Mr. Sheppard used comparable sales 4, 5, and 9 to appraise claim 1.C. Id. at 192; see
also DX 306 at 21-22 (discussing the adjustments made to comparable sales for Mr. Sheppard’s
appraisal of claim 1.C). He applied a time adjustment reflecting a straight-line 2% annual
increase in property values to each comparable sale. DX 306 at 21-22. He also applied a
downward adjustment to each comparable to account for their larger sizes, explaining that the
larger sizes “would allow more outside storage and parking, relative to the smaller subject
property.” Id. Mr. Sheppard made no further adjustments to his comparable sales, and
determined that the land was worth $45,000 per acre. Id. He also found that no special benefits
or damages applied in the “after” condition. Id. at 23; Tr. 1402 (Sheppard).

        Mr. Sheppard utilized comparable sales 1, 6, and 9 to appraise the remaining industrial
parcels: claims 91.AB, 91.CD (combined), 91.E, 101.AB (combined), and 102. DX 416 at 192;
see also DX 396 at 22 (claim 91.AB); DX 397 at 23 (claim 91.CD); DX 398 at 22 (claim 91.E);
DX 405 at 23 (claim 101.AB); DX 406 at 21 (claim 102). He followed the same process, used
the same adjustments, and came to the same value conclusions for each of these claims.
Specifically, he applied a time adjustment reflecting a straight-line 2% annual increase in

       74
           In his appraisal report, Mr. Matthews indicates that the access damages with two
adjacent landowners was 50%. PX 220 at 642. However, his numbers appear to reflect that
“50%” was a typo, and that 20% was actually used in computations (along with rounding at
intermediate steps). See id. Therefore, the court will refer to the access damages as 20%.


                                               -75-
property values to each of the three comparable sales and a 25% downward adjustment to
comparable sale 9 to reflect its superior location relative to the subject property. E.g., DX 396 at
22-23. He did not apply any other adjustments, nor did he find that any special benefits or
damages applied. Id. at 4, 22-23. After adjustments, his per-acre values for comparable sales 1,
6, and 9 were $28,158, $15,843, and $29,894, respectively. He then concluded that the land
value was $20,000 per acre for claim 91.AB and $17,500 per acre for claims 91.CD, 91.E,
101.AB, and 102. DX 416.A at 2; see also DX 396 at 23 (sales adjustment grid for claim
91.AB); DX 397 at 24 (sales adjustment grid for claim 91.CD); DX 398 at 23 (sales adjustment
grid for claim 91.E); DX 405 at 24 (sales adjustment grid for claim 101.AB); DX 406 at 22 (sales
adjustment grid for claim 102).

          Mr. Sheppard’s value conclusions for the industrial parcels are not reliable, and therefore
his testimony with respect to those parcels is not credible, because his comparable sales are
insufficient.75,76 Comparable sale 9, for instance, has an elongated shape and limited road access.
DX 416 at 72, 90. Both of these conditions potentially call for adjustments, but none were
applied, nor did Mr. Sheppard explain why such adjustments would have been inappropriate.
Comparable sale 9 also lies along an abandoned rail corridor and was sold to an individual—“the
adjoining property owner that owns the parcels on either side of the line”—who had been
attempting to buy the land for twenty-five years because he was already using the site for part of
a recycling operation. Id. at 72, 89. Therefore, the buyer’s assertion that the purchase price “was
based on prevailing prices for industrial land in the area,” id. at 89, is somewhat suspect because
the buyer appears to not have been a typical arms-length purchaser. Comparable sale 6 is even
more problematic. Mr. Sheppard remarked that it was an “outlier[] due to the conditions of sale
. . . , the larger size, and the amount of floodplain on site.” Id. at 71. Despite discarding it as an
outlier, Mr. Sheppard utilized comparable sale 6 to appraise all of the industrial parcels except
claim 1.C. Making matters worse, its adjusted value appeared to weigh most heavily in his value
conclusions.

        The court finds that Mr. Matthews’s comparable sales for the industrial parcels are
reliable and adopts his per-acre value conclusions. His appraisal for claim 1.C properly included
both commercial and industrial comparable sales due to the nature of the subject property.
Because the use of both commercial and industrial comparable sales was appropriate, Mr.
Matthews properly applied adjustments to his comparable sales for claim 1.C, noting that his
assertion that no adjustments to his industrial comparable sales did not apply to claim 1.C
because he also used commercial comparable sales to appraise that property. With respect to
claim 91.AB, however, Mr. Matthews overstated the cost to cure for fencing. He averred that
497 feet of chain-link security fencing, or privacy fencing in the alternative, was necessary and

       75
            In addition, Mr. Sheppard’s incorrect classification of claim 91.CD (combined) as
industrial, see supra Section I.E, requires the court to give no weight to his value conclusions for
that parcel.
       76
           Both experts applied a time adjustment reflecting a straight-line 2% annual increase in
property values to their comparable sales for the industrial parcels. Due to their agreement in
this regard, the court accepts that portion of their conclusions as undisputed.


                                                -76-
would cost $23 per linear foot. Since he used $20 per linear foot as the cost for chain-link
security fencing for other parcels, the cost to install fencing must be reduced to this lower
amount. The higher cost for privacy fencing is not appropriate because only the lowest cost to
cure that will actually cure the damage can be awarded; Mr. Matthews noted only that privacy
fencing was an alternative, not a necessity. However, in asserting that a chain-link security fence
along the manufacturing portion of the property was necessary, he also appears to have slightly
understated the amount of fencing necessary. The stipulated lengths of the property taken are
500 feet for claim 91.A (the manufacturing portion) and 272 feet for claim 91.B (the parking
portion). Jt. Stip. Ex. A at 13; PX 220 at 405-06. Therefore, the court finds that 500 feet is an
appropriate figure to utilize in computing cost-to-cure damages for claim 91.AB.

        In sum, the court rejects Mr. Sheppard’s opinions of value for the industrial parcels. The
court adopts the value opinions of Mr. Matthews, except that the cost-to-cure damages for claim
91.AB shall be computed using 500 feet of chain-link security fencing at $20 per linear foot.

                                 H. Temporarily Taken Parcels

        Finally, the court turns to the temporarily taken parcels. Pursuant to the Yellow Book,
just compensation for a temporary taking is “measured by the market rental value for the term of
the easement.” Yellow Book 171. Based on the court’s prior rulings, the following parcels were
subject to a temporary taking from August 19, 2013, to November 18, 2016: claims 91.E, 101.A,
101.B, 102, 103.A, 103.B, 104, 105, 106, 107, and 109. See PX 221.A at 10-11.

        A twelfth parcel, claim 100, was potentially subject to a both a permanent and temporary
taking because it was unclear where the eastern terminus of the portion of the rail line covered by
the amended NITU was located in reference to the property line separating claim 100 from
claims 91.E and 101.A. See PX 112 at 25; DX 404 at 15. However, claim 100 was treated by
both experts as being subject only to a permanent taking. Jt. Stip. Ex. A at 14; PX 220 at 640;
DX 404 at 4. Accordingly, the court finds that as a matter of law, claim 100 is subject to a
perpetual recreational trail use easement along the entire length of the property taken. In other
words, the location of the eastern terminus of the portion of the rail line covered by the amended
NITU coincides with Margaret A. Harker’s property line.

        Mr. Matthews explained that the “rental value of the property is paid for the term of the
easement.” PX 220 at 16. His approach was to “estimate the value of the property taken and
apply a rate of return to estimate the rental value.” Id.; accord Tr. 669 (Matthews). After
determining the annual rental value, he “then discount[ed] the net rent [for the entire term of the
easement] to present value based on typical and appropriate discount rates.” PX 220 at 16;
accord Tr. 669 (Matthews). Mr. Matthews relied on Realty Rates, which he described as a
national database “which provides reliable rates of return or capitalization rates for land uses and
discount rates for various land uses,” to determine the annual rental value and appropriate
discount rate. PX 220 at 16. He explained that the capitalization rate is the expected annual
income of the property expressed as a percentage of the property value, and that the discount
rate, which is the sum of the capitalization rate and the expected inflation rate, represents the
necessary return on investment to keep pace with inflation. Tr. 694-95 (Matthews). He included


                                                -77-
Realty Rates data for land leases for the third quarter of 2013 in his addenda. PX 221 at 899.
The average capitalization rate, i.e., the “rent factor,” for all property types for July through
September 2013 was 7.27%, which he rounded down to 7%. Id.; PX 220 at 16; Tr. 674
(Matthews). Mr. Matthews then multiplied the “permanent” diminution in value by 7% to
determine the annual rental value. PX 220 at 16; Tr. 674 (Matthews). The average discount rate
for all property types for July through September 2013 was 8.19%, which he rounded down to
8%. PX 220 at 16; PX 221 at 899. He used the discount rate of 8% per year and a taking of 3.25
years to compute a discount factor of 2.53 using an HP 12C financial calculator. PX 220 at 16.
His final step was to multiply the annual rental value by a discount factor of 2.53 to determine
the net present value (as of the date of the taking) for the hypothetical stream of rental payments.
Id.; Tr. 674 (Matthews). With respect to claim 91.E, for example, Mr. Matthews determined that
the diminution in value for a permanent taking would be $58,500, and then determined the
compensation owed for a temporary taking as follows:

                 The rent is estimated based on a 7% rate of return which is then
                 discounted 3.25 years at 8%/year based on “Realty Rates”
                 research. The factor is 2.53. So, $58,500 × 7% rent × 2.53 =
                 $10,400 compensation.

PX 220 at 642.

         Mr. Sheppard similarly estimated the just compensation that would be due under a
permanent taking, calculated an annual rental value, and then discounted the annual rent for the
term of the easement to the present value as of the date of the taking. DX 416 at 212. Mr.
Sheppard utilized Realty Rates land lease data for the third quarter of 2016. Id. He observed
that “[n]one of the subject properties, save the few commercial- and industrial-oriented
properties within the pool of [temporarily taken] properties requiring appraisal, correlate to the
list.” Id. He then determined that 8% was an appropriate discount rate, noting that the average
discount rate for all property types was 8.13%. Id. He used his 8% discount rate and his
estimate of a straight-line 2% annual increase in property values that he applied as time
adjustments to comparable sales to opine that the appropriate annual rent factor is 6%. Id. Mr.
Sheppard indicated that the present value of the hypothetical stream of annual rent payments also
should reflect an appreciation rate and the length of time for the temporary taking. Id. He then
input an appreciation rate of 2% to represent his estimate of the annual increase in property
values, 3.25 years, and the annual rent payment amount into the present value function in a
Microsoft Excel spreadsheet (“Excel”) to compute the compensation due for the term of the
temporary taking. Id.

        Both experts therefore followed the correct steps to determine the just compensation
owed for a temporary taking: compute the value of a hypothetical permanent taking, multiply
that by a rent factor to determine the annual rent, and then discount the stream of annual rent
payments to the present value as of the date of the taking. The property values themselves have
already been addressed within the appropriate categories above; those discussions need not be
repeated herein. The court need only address the rent factors and present value discount factors
used by each expert.


                                                -78-
        As an initial matter, the court finds that it was reasonable for the experts to rely on Realty
Rates data; indeed, both experts did so. Mr. Matthews used a rent factor based on the average
capitalization rate for all property types, which he then rounded, for the time frame that included
the date of the taking (August 19, 2013). He correctly used the time frame corresponding to the
effective appraisal date because the constructive rental agreement for the term of the temporary
taking would have been entered into at the beginning of that term, not the end (or some point in
between). He also correctly used the capitalization rate to determine the annual rental value
because the capitalization rate measures the expected income—which, for land leases, is rent.
Further, he correctly based his rent factor for the residential and agricultural/timber parcels on
the average capitalization rate for all property types because there was not an appropriate
category for those parcels contained within the list. However, there is a separate “Industrial”
category contained within the list, PX 221 at 899, and four of the temporary taking claims—
91.E, 101.A, 101.B, and 102—are industrial parcels. Mr. Matthews should have applied the
average capitalization rate for industrial properties to the industrial parcels. In addition, his
rounding of the capitalization rate, which he then properly used as the rent factor, skewed his
final results. He should not have rounded the capitalization rate.

        Mr. Sheppard used a rent factor based on the average discount rate for all property types,
which he then rounded, for the time frame from July through September 2016. He should have
used the Realty Rates data from the third quarter of 2013 to coincide with the effective date of
valuation, whereas the third quarter of 2016 is close to (but does not include) the end of the term
of the temporary taking. In addition, like Mr. Matthews, Mr. Sheppard’s results are somewhat
skewed due to rounding his rent factor and not using the industrial rate for the industrial parcels.
More fundamentally, Mr. Sheppard should have used the Realty Rates capitalization rate to
determine a rent factor rather than combining the discount rate with his own appreciation (i.e.,
inflation) rate. The discount rate is relevant with respect to the timing of payment, whereas the
capitalization rate is relevant with respect to the amount of the payment (here, the annual rental
value) in the first instance. In other words, an appreciation or discount rate is used to determine
the present value of a stream of payments, whereas the capitalization rate is the appropriate
benchmark to use in determining the amount of those payments. Mr. Sheppard’s rent factor is
therefore unreliable.

        After determining the annual rental amount, the present value of the hypothetical stream
of those payments must be determined, and is calculated using two numbers: the discount rate
and the length of time for which payments will be made. As Mr. Sheppard explained, “[t]he
term of the temporary easement equates to how long use of the corridor was curtailed,” and there
were 1,187 days between August 19, 2013, and November 18, 2016. DX 416 at 212. Both
experts thus correctly used 3.25 years as the length of time.77 E.g., PX 220 at 643; DX 405 at 4.




       77
          Mr. Sheppard incorrectly referred to the 1,187 days as “3.64959 years” in his
addendum, DX 416 at 212, but correctly used 3.25 years in his individual property appraisals,
e.g., DX 405 at 4.


                                                 -79-
        The discount rate that should be applied to reduce the hypothetical stream of payments to
a lump-sum present value as of the August 19, 2013 date of taking is the discount rate for the
relevant property type. The discount rate varies based on the type of investment because
investors expect different types of investments to grow at different rates. The discount rate is
separate from the interest rate necessary to make plaintiffs indifferent to the timing of that
lump-sum payment (which the court previously determined is the Moody’s rate). In other words,
the discount rate is used to collapse a future stream payments into cash on one specific date, and
the interest rate is then used to compensate plaintiffs for the delay in receiving that payment.78

        Mr. Matthews used the average discount rate for all property types in deriving his present
value discount factor, but should have used the separate industrial discount rate for the industrial
properties. Moreover, although it is unclear, his present value discount factor of 2.53 appears to
be based on a discount rate of 9% for a three-year period, rather than 3.25 years at 8% as he
explained. Mr. Sheppard’s use of Excel rather than a present value discount factor is easy to
replicate.79 However, Mr. Sheppard’s present value analysis is flawed because he utilized his
appreciation rate instead of the appropriate discount rate for each property type.

        In addition, both experts’ calculations appear to reflect annual rental payments paid in
arrears, i.e., at the end of each year, rather than in advance, i.e., at the beginning of each year.
Whether the hypothetical rent payments are to be paid in arrears or in advance impacts the
present value calculations because payments in advance have a higher present value. No
evidence was presented during trial by either party regarding whether the hypothetical rent
payments should be treated as being paid in arrears or in advance. It is plaintiffs’ burden to
establish that they are entitled to the higher amount, and they have failed to meet this burden.
Further, under Georgia common law, it is well settled that “where the contract of rental does not
specify the day upon which rent is due, rent is not due until the end of the term.” Hinton v.
Jackson, 50 S.E.2d 254, 256 (Ga. Ct. App. 1948). That presumption can be rebutted by a
specific contractual provision to the contrary, “necessary implication from the acts and
circumstances of the parties,” or by “custom and usage in the community,” id., but there is no
such evidence before the court.

        In sum, the court finds that the appropriate rent factors for the temporarily taken parcels
are 6.32% for the industrial properties and 7.27% for the remaining properties, which reflect the
Realty Rates capitalization rates in effect on the date of the taking. See PX 221 at 899. (As
described above, the annual rent amount for each parcel is calculated by multiplying the total
diminution in value by the applicable rent factor.) The court also finds that the proper discount
rates to be used in computing the net present values are 7.32% for the industrial properties and
8.19% for the remaining properties, which reflect the Realty Rates discount rates in effect on the
date of the taking. See id. Finally, the court finds that the net present values should be

       78
           Once converted into cash, the type of investment becomes irrelevant. See Hardy, 138
Fed. Cl. at 349, 353.
       79
         It is well understood that replication is an indicia of reliability. Cf., e.g., Daubert v.
Merrell Dow Pharm., 509 U.S. 579, 593 (1993).


                                                 -80-
calculated using Excel’s present value function under the assumption that the hypothetical annual
rent payments are paid in arrears for 3.25 years. In other words, the annual rent amounts should
be multiplied by a present value discount factor of 2.802 for the industrial properties and 2.756
for the remaining properties.80

                                      VII. CONCLUSION

        The court has considered all of the parties’ arguments. To the extent not discussed
herein, they are unpersuasive, without merit, or unnecessary for resolving the issues currently
before the court.

        Plaintiffs have no remaining valuable property rights in the land burdened by the
perpetual trail use easement. The presence of the trail is a general benefit to the community as a
whole. The presence of the trail also results in special damages to several remainder parcels due
to the loss of privacy and security. Plaintiffs are therefore entitled to just compensation based on
the diminution in value between the “before” and “after” conditions as discussed above, plus
proximity damages, access damages, and/or cost-to-cure damages where appropriate. Finally,
plaintiffs are entitled to delay damages at the Moody’s rate, compounded quarterly, from August
19, 2013, through the date of payment.

       Because the court did not adopt either party’s position on damages in its entirety, it
cannot enter judgment until plaintiffs’ damages are recalculated in accordance with the court’s
findings and conclusions. To facilitate the prompt entry of judgment, the court shall use the
following procedure:

               •   By no later than Monday, January 14, 2019, the parties shall
                   file a joint status report proposing the amount of judgment that
                   should be entered in this case. The parties shall specify how
                   much of the proposed amount is to compensate for the
                   diminution in value of each parcel and how much of the
                   proposed amount is attributable to delay damages, assuming
                   that the judgment will be paid on Tuesday, February 19,
                   2019.81 In addition, the parties shall indicate the specific

       80
           The present value of a stream of $1.00 annual payments paid in arrears for 3.25 years
at 7.32% is $2.802, which is calculated in Excel using the formula =PV(7.32%, 3.25, -1.00, 0, 0).
The formula can be truncated to =PV(7.32%, 3.25, -1.00) because the last two inputs are zero. If
paid in advance, the present value becomes $3.008, i.e., =PV(7.32%, 3.25, -1.00, 0, 1). The
present value of a stream of $1.00 annual payments paid in arrears for 3.25 years at 8.19% is
$2.756, i.e., =PV(8.19%, 3.25, -1.00, 0, 0) or =PV(8.19%, 3.25, -1.00). If paid in advance, the
present value becomes $2.982, i.e., =PV(8.19%, 3.25, -1.00, 0, 1).
       81
           Interest to compensate plaintiffs for delay damages runs from the August 19, 2013
date of taking and is to be compounded quarterly. Hardy, 138 Fed. Cl. at 357. Therefore, as of
February 19, 2019, interest will have compounded twenty-two times.


                                                -81-
         numerical interest rate that applies for future delay damages, if
         any, beyond February 19, 2019, which shall continue to be
         compounded quarterly (i.e., every three months thereafter).
         Agreeing upon an amount of judgment does not signify
         agreement with the court’s findings and conclusions, waive any
         arguments or rights the parties might otherwise have, or impact
         either party’s right to an appeal.

     •   If the parties disagree as to the amount of any component of the
         proposed judgment, each party shall, in the joint status report,
         indicate its proposed amounts and explain why its proposed
         amounts most accurately conform to the court’s findings and
         conclusions. Then, by no later than Monday, January 28,
         2019, each party shall file a response addressing why the other
         party’s proposed amount does not most accurately conform to
         the court’s findings and conclusions.

     •   The parties shall not use this process to reargue or seek
         reconsideration of any of the issues resolved by the court’s
         findings and conclusions.

IT IS SO ORDERED.


                                       s/ Margaret M. Sweeney
                                       MARGARET M. SWEENEY
                                       Chief Judge




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