Almota Farmers Elevator & Warehouse Co. v. United States/Concurrence Powell
[p479] MR. JUSTICE POWELL, with whom MR. JUSTICE DOUGLAS joins, concurring.
I join the opinion of the Court, but add a few words to indicate what I find implicit in its rejection of the Government's claim to act as if it were Almota's landlord.
It is clear, first of all, that the market value of improvements placed on a leasehold interest will vary depending in major part upon the probable future conduct of the landlord. In this case, based on the experience of nearly half a century and the evident self-interest of the landlord railroad, this conduct could be predicted with considerable confidence. There was every expectation that the improvements would continue to have significant value beyond the term of the present lease. In a transaction between a willing buyer and a willing seller, there can be no doubt that this value would have been accorded appropriate weight.
On different facts, the market value of Almota's interest might have been significantly lower. If, for example, the railroad had relocated its tracks before the Government entered the picture, the leasehold improvements would have been nearly valueless in the market. A risk which Almota took in erecting those improvements, the risk that the railroad would relocate its tracks, would have proved a poor one. The risk would have been substantially the same if, independently of the present navigation project, the Government had purchased the railroad with the intention of operating it, and thereafter had decided to relocate it or to discontinue operation. Under those circumstances, the Government could properly have acted as an ordinary landlord, and its lessees could have been expected to bear the risk that it would put its land to a new use.
Here, however, the Government held no interest in the land until its navigation project required the acquisition of both the fee and the leasehold interests. If, at that [p480] point, the Government had condemned both interests in a single proceeding, or in separate proceedings, Almota would have been entitled to compensation for the value of the improvements beyond the present lease term. Almota bore the risk that the railroad would change its plans, but should not be forced to bear the risk that the Government would condemn the fee and change its use. Where multiple properties or property interests are condemned for a particular public project, the Government must pay pre-existing market value for each. Neither the Government nor the condemnee may take advantage of "an alteration in market value attributable to the project itself." United States v. Reynolds, 397 U.S. 14, 16 (1970); cf. United States v. Virginia Electric & Power Co., 365 U.S. 624, 635-636 (1961); United States v. Miller, 317 U.S. 369, 377 (1943).
The result should not be different merely because the Government arranged to acquire the fee interest by negotiation rather than by condemnation. Apart from cases where, as in United States v. Rands, 389 U.S. 121 (1967), the Government has a property interest antedating but within the bounds of its present project, it would be unjust to allow the Government to use "salami tactics" to reduce the amount of one property owner's compensation by first acquiring an adjoining piece of property or another interest in the same property from another property owner. While United States v. Petty Motor Co., 327 U.S. 372 (1946), arguably establishes an exception to this principle, I subscribe to the Court's narrow construction of that case.