State loses appeal in eminent domain suit: San Antonio TX Express-News, 7/18/08

By Adolfo Pesquera

The Fourth Court of Appeals on Wednesday shot down an attempt by the state of Texas to reverse a $1.26 million award given to the Dallas-based owner of a San Antonio Holiday Inn Select. (Click here for court opinion: http://www.4thcoa.courts.state.tx.us/opinions/htmlopinion.asp?OpinionId=20332)

Bristol Hotel Asset Co., owner of the Holiday Inn Select near San Antonio International Airport, had sued the Texas Department of Transportation over its eminent domain taking of just over 1 acre.

The taking — a 10-foot-deep strip that faced the frontage road to Loop 410 — was for expansion of the freeway.

The Bexar County Probate Court No. 1 judgment in favor of Bristol took into account the property's diminished market value.

David Bolton, a real estate appraiser and expert witness for Bristol, testified that the condemnation caused the owner to permanently lose its main entrance and several parking spaces.

Major modifications had to be made to the remaining west and east entrances in order to bring the property back into compliance with safety and disability access regulations.

Bolton recalculated the capitalization rate — the rate looked at by investors — and decreased the hotel's value by 5 percent.

The state's main argument was that Bolton should have been disqualified as an expert witness, and probate Judge Polly Jackson Spencer abused her discretion by not doing so.

Justice Karen Angelini, in answering for the Fourth Court, noted Bolton had been an appraiser for 41 years and was a member of the Appraisal Institute since 1972. Angelini said Bolton's methodology, basing damages on a commercial property's income stream, was appropriate since that is the method used by investors.

"Bolton considered the most important impact on the property, from an investor's standpoint, to be the hotel's loss of its main entrance drive," Angelini wrote. "The hotel would no longer operate as designed."

Bolton also noted the hotel sign was no longer in compliance with setback requirements.

San Antonio TX Express-News: http://www.mysanantonio.com