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Owners' experts testify over land value in Reserve Avenue parcel dispute with city

The Roanoke Times
March 18, 2010
By Sarah Bruyn Jones

Testimony pointed to the marketability of the Burkholders' land in 2007 as Carilion expanded.

The 3-acre property on Reserve Avenue that is being taken by Roanoke's housing authority gained considerable value after Carilion Clinic first announced it was interested in building a biomedical park, the current landowners argued Wednesday in Roanoke Circuit Court.

"It was very common knowledge in the architecture and development community that Carilion had plans to build," said Richard Rife, a Roanoke architect. "So it seems like a natural place to develop a medical office business."

Rife was hired by Jay and Stephanie Burkholder, the owners of B&B Holdings LLC, to testify during the second day of a three-day trial to determine how much money the Roanoke Redevelopment and Housing Authority will have to pay for the land. Judge William Broadhurst previously ruled that the government could take the land by eminent domain, but the Burkholders have vowed to fight that decision.

Still, before the fight over the right to seize the land can continue, a jury must determine the fair market value of the land as of June 29, 2007, the date the housing authority filed the lawsuit to take the land.

"The property was prime, and in my opinion, a prime medical location," said Robert Crawford, a Roanoke commercial real estate agent who also testified Wednesday for the Burkholders.

While there were signs of redevelopment in 2007, Crawford said Carilion's announcement in late 1999 that it wanted to build a medical park at the corner of South Jefferson and Reserve Avenue was a driving force in determining the marketability of the Burkholders' land. Since then, that medical park has begun to emerge with Carilion office space having already opened and a new medical school and research institute set to open later this year.

By 2007 the housing authority had acquired other property in the flood-prone industrial area that was deemed blighted as part of the overall South Jefferson Redevelopment plan. Some of those other properties made way for the Carilion complex, located to the east of the B&B property.

Crawford said that the early signs of redevelopment in 2007 "to some extent" made the B&B property even more attractive.

The Burkholders have previously rejected the $1.53 million the housing authority says the property is worth.

After Crawford's testimony, an appraiser hired by the Burkholders explained how he reached a significantly higher value of $4.83 million for the same property. Frank Porter said the value was augmented not only by its location but also by its zoning designation that allows for a variety of uses including commercial, retail and residential.

Porter also said the existing buildings on the land were worth nearly $600,000. The flooring business Surfaces Inc. operates out of the buildings on the property.

The housing authority argued that anyone seeking to purchase the land would tear down the structures to redevelop the land. Mark Loftis, the housing authority's attorney, also suggested that the B&B property was not the only location a potential buyer could build a new medical office, noting other nearby properties that were for sale in the spring of 2007.

On Tuesday the housing authority presented experts and evidence supporting its $1.53 million offer, leaving most of Wednesday devoted to the Burkholders' experts.

A jury of five women, all of whom are property owners, will ultimately determine what the government has to pay the Burkholders for the property. That decision is expected today.