[sdnlafkjh34rw]

The beach isn't owned by Khosla and is not private so I don't understand this argument. The value of the strip of land should be assessed at the market value of having a land route to an already public beach that previously didn't have land access (the beach has always been public, the argument is whether Khosla needs to provide access to it). Given its a tiny beach with moderate attendance, I'd argue the NPV is way less than $30m.

[harryh]

A person has something worth X. The government wants to take a piece of that thing that reduces its value to Y. Therefore the government has to give the person (X-Y) dollars.

That seems like a perfectly reasonable way to value what the government is taking away via eminent domain.

[cletus]

So if he paid $32M for the land and is arguing the government is destroying $30M of value by making a public beach (by law), well, public then he's arguing the property after the fact is worth $2M.

So he should take $2M for it right? Or he'd have no object to the State giving him $32M and simply taking the whole thing, right?

I'd be somewhat OK with these inflated property values estimates with eminent domain if the owner was forced to take $X-$Y for the remainder from any buyer.

[sdnlafkjh34rw]

That's not even how eminent domain works. You get the market value for the asset seized, not the delta in the market value for the asset remaining post seizure.

[harryh]

To the degree that this is true, that seems awfully unfair to people forced to give their property to the government without their consent. The government can just make you poorer overnight? That sounds bad.

[ballenf]

If it was reversed and the landowner was buying the road to join two large lots together, you could easily see the road costing a huge premium on the open market.

But I agree the state didn’t write the law that way because it would be too costly.

[harryh]

he's arguing the property after the fact is worth $2M.

No, he's not. What he paid 10 years ago is not a relevant data point in the calculation. What matters is the current market value.

[sdnlafkjh34rw]

Yea except your math is wrong. You include the value of the beach in X which represents what Khosla owns even though he doesn't own the beach. Even Khosla wasn't arguing he owned the beach. So you magically inflated the X by a huge amount which makes the valuation off (even though this isn't even a real valuation).

Eminent domain would compensate Khosla on the market value of the road land value. It has nothing to do with the beach. The beach is owned by the public. No legal team on either side is arguing that. The legal case is about easements (i.e. access).

Why don't you share your comparable analysis or discount cash flow model to see what that road easement actually is worth since you seem believe pretty strongly in the valuation. I'm really curious to how you think a narrow strip of land that is for the easement is worth $30 million given recent land sales in similar areas.