Special appraisal techniques and legal rules applied in valuing special purpose properties, such as schools, churches, cemeteries, parks, utilities, etc., are discussed. The usual method of measuring just compensation is market value. Because special purpose properties are rarely sold, some courts refuse to apply the market value measured to such properties. Value is then expressed in terms of intrinsic value, value for special uses or purposes, value to the owner, or similar terms, all of which reflect value that the owner, as distinguished from others, may see in the property. Three usual appraisal approaches are the market data, reproduction cost, and income approaches. Because of the lack of other proof, the cost approach is often used in valuing special purpose properties. Substitution, or the substitute property doctrine, is a means of securing compensation to public owners where it is necessary to replace facilities taken. Compensation is measured by the cost of the necessary substitution of land and improvements, without depreciation, having the same utility as that taken. Unimproved cemetery lands are appraised by two approaches: (1) an income approach that uses net income from sales of tracts discounted to present value, (2) the market data approach, which usually disregards special value for cemetery purposes. Churches are usually valued in terms of market value by the cost approach. The market data approach is generally used in valuing parks if improvements are measured by the cost approach. Substitution had been applied to publicly owned parks. Schools are usually valued by substitution. No single method is applicable to all special properties or even all special properties of a particular type. To render just compensation, consideration should be given to the following: (1) extending the limits of admissible proof, including use of the replacement costs approach and the substitute property doctrine with a proper allowance for depreciation, (2) recognition of special value arising out of special uses or character of the property, (3) incidental to the more extensive allowance proof, expecting and receiving more extensive investigation and exercise of ingenuity by appraisers in considering factors that affect the value of special purpose properties.
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