In a victory for the principle of just compensation, the North Carolina Supreme Court upheld fair market value for a nonconforming billboard condemned by the State for construction.

The ruling (Department of Transportation v. Adams Outdoor Advertising of Charlotte) was dated September 29.  It focused on the State’s 2011 taking of a legal nonconforming billboard.

In a long-running legal battle over compensation, an appeals court in North Carolina said the billboard was non-compensable personal property.  But a majority of North Carolina’s Supreme Court concluded:

* The value added by Adams Outdoor’s billboard may be considered in determining the fair market value

*  Rental income derived from leasing advertising space on the billboard may be considered in determining the fair market value

*  Value added to the leasehold interest by the permits issued to Adams Outdoor may be considered in determining the fair market value

*  The automatic ten-year extension of the lease may be considered in determining the fair market value, but options to renew the lease after the automatic ten-year extension may not be

* The bonus value method evidence offered by North Carolina’s DOT may not be considered in determining the fair market value of the leasehold interest

Click here for the 38-page decision.

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