Opinion
No. C8-01-696
Filed December 26, 2001.
Appeal from the Ramsey County District Court, File No. C29711375.
Thomas L. Fabel, Jeffery J. McNaught (for appellant)
Robert J. Tansey, Jr., Mark D. Wisser (for respondent)
Considered and decided by Schumacher, Presiding Judge, Klaphake, Judge, and Peterson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
In this eminent-domain proceeding, the Port Authority of the City of St. Paul appeals from a jury award of $6.4 million and the denial of its motion for a new trial. The Port Authority argues that (a) the property owner, respondent DRF IV Limited Partnership, failed to provide an adequate foundation for its use of the development-cost approach to valuing property; (b) the district court improperly included in the value of property the property owner's lease of the property to a third party; (c) the jury instructions were defective because they did not address a valuation method or adequately direct the jury to avoid speculation; (d) it should not have been precluded from addressing, in its final argument, the property owner's claim against the lessee; and (e) the jury's condemnation award was excessive. We affirm.
FACTS
DRF owned about three-fourths of an acre of land in downtown St. Paul on which the Metropolitan Building was located. The Metropolitan Building was a six-story commercial building built in 1914. It had frontage on Robert, Minnesota, and Seventh Streets and was located on one of only four blocks in downtown St. Paul with access to the skyway in four directions. The total building size was 174,630 square feet, 110,000 square feet of which was rentable space. This case arose out of the March 16, 1998, condemnation and taking of that property by appellant Port Authority of the City of St. Paul to facilitate the development of a new downtown headquarters for Minnesota Mutual Life Insurance Company.
DRF is a real estate investment partnership formed in 1988 to purchase the Metropolitan Building. DRF's managing partner was David Frauenshuh, who has been a real estate executive since 1969. He has extensive experience with commercial real estate in Minneapolis and St. Paul, including a successful renovation of the IDS Center in downtown Minneapolis. Since 1988, Frauenshuh has been the sole owner of Frauenshuh Companies, which is involved in three areas of real estate: owning and managing building assets; providing consulting services to major corporations; and developing properties. Frauenshuh Companies owns several commercial buildings in Minneapolis and St. Paul.
The other three partners in DRF were Eldon Burrow, Randy McKay, and Gary Lindstrom. All three have extensive experience in commercial real estate in Minneapolis and St. Paul.
DRF paid about $3.1 million to purchase the Metropolitan Building. During the years it owned the building, DRF spent about $2.8 million on improvements, bringing its total investment in the building to about $5.9 million. The improvements included asbestos removal, a new roof, and renovation of the skyway and lobby.
When DRF bought the Metropolitan Building, it was occupied by many tenants operating small retail businesses. In 1990, Metropolitan Bank became a major tenant, leasing the third through the fifth floors of the Metropolitan Building. In 1990 or 1991, Metropolitan Bank leased more space, and the Metropolitan Building was about 90% occupied.
In 1994, US Bank, f/k/a First Bank Systems, acquired Metropolitan Bank and assumed its lease with the Metropolitan Building. The lease extended until April 2000, and the monthly rent was $94,000. By mid-1995, most of Metropolitan Bank's functions had been merged into existing US Bank operations, and US Bank no longer needed the office space in the Metropolitan Building. David Wright, a real estate manager for US Bank, testified that the Metropolitan Building was significantly below US Bank's standards and that renovation would have been very costly. The problems related to design and layout. Structurally, the building appeared to be up to code, and its heating, air conditioning, and other mechanical systems worked adequately.
US Bank sought a tenant to sublease its space in the Metropolitan Building. Rental payments due from April 1995 through the end of the lease term totaled about $5 million. The lease contained a provision for automatic termination in the event of a condemnation.
Lindstrom testified that the demand for office and business space in downtown St. Paul began increasing in 1995. The increased demand continued during the next two years, accelerating rapidly during the second half of 1997 and into 1998. Lindstrom testified that in 1998, rental rates began rising because downtown St. Paul was running out of vacant office space.
Frauenshuh testified that US Bank's early departure from the Metropolitan Building was advantageous because it gave DRF an opportunity to renovate the Metropolitan Building, upgrading it to profit from the growing demand for office space in downtown St. Paul, while still receiving rental income from US Bank. Frauenshuh testified that, initially, US Bank sought to sublease the entire space to a single party, but it later was willing to consider subleasing to multiple parties. Frauenshuh explained that it would have been unusual to find a single tenant with the exact same space requirements that Metropolitan Bank had. Frauenshuh testified that under the lease, US Bank was obligated to pay for building improvement costs, brokerage fees, and other moving costs resulting from a tenant or tenants taking over its space. Wright testified that US Bank was willing to cooperate with renovation plans and contribute to tenant improvement expenses to mitigate its total cost under the lease.
In 1996 or early 1997, DRF began planning a renovation of the Metropolitan Building. Because of a parking shortage in downtown St. Paul, DRF intended to convert the building's first floor into a 71-stall parking area for building tenants. DRF also intended to redo the building's lobby, skyway area, and exterior. To complete those renovations, DRF had received estimates of about $800,000 from two or three contractors.
Frauenshuh testified that DRF's efforts to find new tenants for the Metropolitan Building were hampered by rumors that Minnesota Mutual would be taking over the entire block where the Metropolitan Building was located. Although the possibility of condemnation was not formally announced until September 1997, DRF presented evidence that rumors of a possible condemnation began circulating in late 1996. Frauenshuh testified that Minnesota Mutual had first approached him about buying the Metropolitan Building about one to one and a half years before the taking and that real estate consultants were reluctant to place tenants into a building that might only be available for a year or so. Lindstrom testified that DRF hired an architectural firm to design plans for the renovation. Frauenshuh testified that DRF did not proceed further with the renovation plans because it would have been foolish to spend $800,000 on renovations before the Port Authority reached a final decision on whether to condemn the Metropolitan Building.
William Ruppert, a licensed real estate appraiser with about 40 years of experience in the field, appraised the Metropolitan Building for DRF. Ruppert testified that there are three methods of property appraisal: the market approach, which compares the subject property to recently sold similar properties and uses a rate per square foot formula to determine value; the cost approach, which estimates the value of the underlying land by itself using a market data analysis, estimates the cost of building the existing structure, and subtracts a depreciation allowance; and the income-producing approach, which analyzes the income stream that a property is producing or capable of producing and capitalizes that amount to determine the value that an investor would place on that income stream. Ruppert used the income-producing method to value the Metropolitan Building. He testified that that method is the one most commonly used by buyers and sellers of commercial properties. He testified that he has bought and sold several commercial properties and always relies on the income-producing method to determine price. Ruppert explained that the market approach was inadequate because the market for office buildings in the metropolitan area, including in St. Paul, had improved dramatically and, therefore, even sales that had taken place six months to a year before the taking provided inadequate comparisons. To illustrate, Ruppert used the example of an office building in Bloomington that sold for $10.46 million in November 1995 and was then resold for $15.9 million in September 1997, a 52% increase in sale price in less than two years.
Ruppert testified that the Metropolitan Building was a class B to B-minus building at the time of the taking and that it would have moved up to a class B to B-plus with the planned renovations. Ruppert valued the Metropolitan Building at $7 million at the time of the taking and $7.5 million if the renovations had been completed. Ruppert explained that he began the valuation by conducting a site analysis. He considered it significant that the Metropolitan Building had one of the highest pedestrian counts of skyway use in downtown St. Paul, with more than 25,000 pedestrians per day passing through the building. He also noted that the Metropolitan Building was located only one block away from the highest value block in St. Paul. Ruppert based his valuation on the property's highest and best use, which means the most profitable likely use for a property. Ruppert concluded that the highest and best use for the Metropolitan Building was as an office building.
To determine income stream, Ruppert used rent comparables, the lease rates for other office buildings in St. Paul, and real estate publications about leasing and appraising. Ruppert testified about several buildings he used for comparison purposes. They were older class-B buildings with fewer than 15 stories, some renovation, and skyway access in at least one direction. Most had some parking available. The net rent for those class-B buildings on the date of the taking ranged from about $9 to $11 per square foot. By comparison, at that time, the net rent for a 13-story class-C building in St. Paul located one block away from the courthouse with no skyway connections, no renovation, and no parking was $7 to $8 per square foot.
Ruppert also considered the revenue generated by the Metropolitan Building during the four years before the taking, from 1994 to 1997. The Metropolitan Building's net operating income for those years ranged from $624,000 to $710,000. Ruppert also factored in the value of US Bank's lease. He testified that even though the lease rate of $7.25 per square foot was below market value, the lease was a positive factor because US Bank was a good tenant, the lease meant a very low vacancy rate for the building, and US Bank was obligated to pay for tenant improvements and leasing commissions if it wanted to avoid the lease. Ruppert testified that the lease rate was not that much below market rates because $7.25 per square foot with no tenant improvements was about equal to $9.75 per square foot with tenant improvements.
To determine the building's value, Ruppert applied a capitalization rate. He testified that one method of determining a capitalization rate is to use the Korpacz, a national real estate publication. For the second quarter of 1998, capitalization rates for properties of the same type as the Metropolitan Building ranged from 8% to 11.5%, with a 9.48% average for central business districts in the upper-midwest area. Ruppert testified that another way to determine a capitalization rate is the mortgage-equity basis, which takes into account existing mortgage rates and the rate of return required by an investor. Using the equity-yield method, Ruppert calculated a 9.65% capitalization rate for the Metropolitan Building. Ruppert explained that an inverse correlation exists between capitalization rate and building value.
Ruppert determined that the Metropolitan Building could generate a net operating income of $840,000 after renovation. That income was based on office-rental income of $10 per square foot, retail-rental income of $13 per square foot, $160 per month per parking stall, and $7 per year per square foot of storage space. In calculating income, Ruppert applied a seven-percent discount to allow for vacancies and credit losses. Applying a ten-percent capitalization rate, the building's value would be $8.4 million. Ruppert then subtracted $1 million for renovation costs, resulting in a value of $7.4 million.
Ruppert also testified about a third valuation method, the discounted-cash-flow analysis or equity-yield capitalization. That method considers the income generated by a property during the previous five to ten years and market data to project the property's future income-producing potential. Ruppert testified that a 12% discount factor is applied to future projected income to determine present value. Using the equity-yield capitalization method, Ruppert calculated a value of $7.7 million for the Metropolitan Building after deducting $1 million for renovation costs. Ruppert testified that of the income-producing methods of valuation, mortgage companies and buyers and sellers rely on the equity-yield capitalization method most heavily.
Frauenshuh valued the Metropolitan Building at $7.8 million after renovation on the date of the taking. He based that value on an annual income of $710,000 and applied a capitalization rate of ten percent, resulting in a $7.1 million value before renovation. Frauenshuh testified that he relies on the income-producing method of valuation in all of his real estate transactions.
Lindstrom, applying a discounted-cash-flow analysis, valued the Metropolitan Building at just under $8 million on the taking date. The projected amounts he used for rental income, $10 per square foot for office space and $13.50 per square foot for retail space, were about the same as those Ruppert used. Lindstrom noted that the only retail space would have been on the skyway level.
James Miller, an independent property manager and author of the most recent Building Owners and Managers Association (BOMA) annual survey for St. Paul, opined that, with renovations, the Metropolitan Building would have been a class-B building. He estimated that the renovated building would have produced a net rental income of $10 per square foot. In determining this amount, Miller considered significant the building's location in the center of the core downtown area and its access to the skyway system in four directions.
Three commissioners appointed by the district court to determine the value of the Metropolitan Building property following the taking valued it at $4.9 million. One of the commissioners, Stephen Chirhart, testified about how the commissioners determined their award. The commissioners assumed that the highest and best use was as a class B office building. The commissioners applied an income-producing approach to determine value because they concluded that the replacement-cost and market-value approaches were inadequate. Chirhart explained that because of rapidly changing market conditions, even sales that had occurred six months before the taking did not provide reliable comparisons. Chirhart testified that the income-producing method is typically relied on by real buyers in the investment market to analyze investment properties. The commissioners calculated net operating income to be $902,075 based on the following assumptions: $17 per square foot gross rent for office space; $19.50 per square foot gross rent for retail space; 90% occupancy rate for office space; 85% occupancy rate for skyway retail; $7.50 per square foot in operating costs; and rent for parking and basement storage. The commissioners applied an 11% capitalization rate resulting in a value of $8.2 million. The commissioners then deducted renovation costs of $20 per square foot for renovations other than tenant improvements, which totaled $1,774,000; $700,000 for parking construction costs; and $793,395 for tenant improvements and leasing commissions. Chirhart testified that the amounts of these deductions were consistent with those incurred in a renovation project that he had recently been involved in. In determining the amount to deduct for renovation costs, the commissioners accounted for the fact that US Bank would be willing to contribute financially because it still owed about $2 million under its lease.
Dwight Dahlen, the appraiser for the Port Authority, opined that the income-producing approach used by the other witnesses was too speculative due to uncertainties regarding how long it would take to obtain tenants, the amount of rent the property would generate, and the cost of conversion. Dahlen used the market-value or comparable-sales method to value the Metropolitan Building. Dahlen valued the building at $2.1 million based on market value but lowered the final value to $2 million based on income factors. When questioned on cross-examination, Dahlen admitted that there were significant differences between the Metropolitan Building and those he used for comparison purposes.
Dahlen's $2 million valuation was close to the $2.1 million assessment value for tax purposes as of January 1, 1998. Marri Renne, a supervisor in the Ramsey County Assessor's Office, testified that the assessor's office's goal is to keep assessed value within a range of 90 to 105% of actual market value and that it had been meeting that goal for downtown buildings during the two years preceding trial. But she admitted that valuing downtown office buildings is a complicated process and that changing market forces sometimes made it impossible for the assessor's office to meet the 90 to 105% goal range. For example, the 1999-2000 assessed value for one downtown building was $11.1 million, more than $2 million less than its April 1999 sale price of $13.5 million. Renne also conceded that the income-producing approach is the most appropriate valuation method for downtown rental properties when there are not a lot of valid comparables.
DECISION
1. The Port Authority argues that the district court erred in admitting valuation evidence based on the income-capitalization valuation method. A district court's ruling on whether to admit an expert opinion is within the district court's sound discretion and will not be reversed unless it is based on an erroneous view of the law or it is an abuse of discretion. Gross v. Victoria Station Farms, Inc., 578 N.W.2d 757, 760 (Minn. 1998). The value of land taken by eminent domain is always a matter of opinion and may be proved by opinion evidence. Housing Redevelopment Auth. v. Kieffer Bros. Inv. and Constr. Co., 284 Minn. 516, 521, 170 N.W.2d 862, 864-65 (1969). The court may consider any competent evidence if it legitimately bears upon the market value. Ramsey County v. Miller, 316 N.W.2d 917, 919 (Minn. 1982). The measure of compensation is the amount that a purchaser willing but not required to buy the property would pay to an owner willing but not required to sell it, taking into consideration the highest and best use to which the property can be put. Id. Minnesota courts have traditionally used three methods to arrive at the fair market value of property taken in a condemnation proceedings: (1) market data based on comparable sales, (2) income-capitalization, and (3) the reproduction cost, less depreciation. Id.
The Port Authority argues that the income-capitalization evidence was improper because it was based on the development-cost valuation method, which, in this case, was a hypothetical renovation of the Metropolitan Building into a class-B building. The development-cost method is recognized as an acceptable appraisal practice and is designed to reflect, through cash-flow analysis, the current price a developer-purchaser would be warranted in paying for the land, given the cost of developing it and the probable proceeds from the sale of developed sites. Id. at 920-21.
[E]lements affecting value that depend upon events or combinations of occurrences which, while within the realm of possibility, are not fairly shown to be reasonably probable, should be excluded from consideration * * *.
Id. at 921 (quoting Olson v. United States, 292 U.S. 246, 257, 54 S.Ct. 704, 709 (1934)) (emphasis omitted).
[S]pecific numerical, analytical and illustrative evidence supporting the developmental cost approach appraisal will be allowed only if the party introducing such evidence can lay a proper foundation to show that (a) the land is ripe for development; (b) the owner can reasonably expect to secure the necessary zoning and other permits required for the development to take place; and (c) the development will not take place at too remote a time.
Id. at 922. The development-cost method can be applied to an already developed urban, commercial facility. Port Auth. of the City of St. Paul v. Englund, 464 N.W.2d 745, 748-49 (Minn.App. 1991).
Because the development-cost approach is complex and susceptible to manipulation, "it should be employed judiciously, when the other traditional methods for valuing property are not wholly reliable and only after a proper foundation has been laid." Hansen v. County of Hennepin, 527 N.W.2d 89, 94 (Minn. 1995). The record contains evidence that other methods of valuing the Metropolitan Building were not wholly reliable. The record contains evidence that the market-value approach was not reliable because of rapidly changing market conditions. Neither party's appraiser considered the replacement-cost method appropriate. Regarding income-capitalization, the evidence that renovation was feasible, with US Bank having vacated the Metropolitan Building but still obligated to pay under the lease for two years, and would significantly increase the property's income production supports the inference that income capitalization based on income previously earned under the US Bank lease was not wholly reliable.
The next question is whether DRF laid an adequate foundation for the development-cost evidence. The Metropolitan Building was centrally located in the core of the St. Paul business district and had access to the skyway system in four directions. The demand for office space in downtown St. Paul increased significantly from 1995 until 1998. US Bank had vacated the Metropolitan Building and was willing to cooperate in the renovation, hoping to save money on its lease. DRF had a specific renovation plan and had hired an architect to design the renovation. The proposed renovation was consistent with existing zoning regulations, and the Port Authority cites no evidence that the zoning authority would not have approved the renovation. See State by Humphrey v. Briggs, 488 N.W.2d 811, 815 (Minn.App. 1992) (even though existing zoning ordinance proscribed proposed commercial development, evidence of proposed development properly admitted when high demand for office space established a reasonable probability of obtaining rezoning that would allow the proposed development), review denied (Minn. Sept. 15, 1992).
The Port Authority's main objection to the development-cost evidence is that DRF had not secured a major tenant for the renovated building. However, Frauenshuh testified that DRF's efforts to find new tenants for the Metropolitan Building were hampered by rumors that Minnesota Mutual would be taking over the entire block where the Metropolitan Building was located and that rumors of a possible condemnation began circulating in late 1996. The condemning authority is not allowed to benefit from a reduction in property value caused by the taking. Regents of the Univ. Of Minn. v. Hibbing, 302 Minn. 481, 485 225 N.W.2d 810, 813 (1975).
Because DRF presented evidence that other valuation methods were not wholly reliable and laid an adequate foundation for the development-cost evidence, the district court did not abuse its discretion in admitting the evidence.
2. The Port Authority makes several claims of error relating to the purpose for which the value of the US Bank lease was admitted and the jury's consideration of that evidence. The Port Authority first argues that the jury improperly double counted the lease value. During a question-and-answer session with the court after returning the verdict, jurors disclosed their method of calculating damages, which appears to have included adding remaining lease payments to a valuation that already accounted for the value of the US Bank lease.
A jury verdict can be impeached based on juror misconduct. Minn.R.Evid. 606(b). But evidence about matters which inhere in the verdict is not admissible. Thus, evidence of a juror's bias, motives, or beliefs should not be considered. The verdict as finally agreed upon and pronounced in court by the jurors must be taken as the sole embodiment of the jury's act.
Olberg v. Minneapolis Gas Co., 291 Minn. 334, 340, 191 N.W.2d 418, 422 (1971).
In Hoffman v. City of St. Paul, 187 Minn. 320, 245 N.W. 373 (1932), the defendant moved for a new trial on the ground that although the evidence supported the verdict, the verdict was an improper quotient verdict. In affirming the district court's denial of defendant's motion and request to poll the jury to determine whether it had reached its verdict by the quotient process, the supreme court stated:
A quotient verdict, that is, one reached through an agreement that each juror put down the amount which he would award, and that the quotient resulting upon a division of the total by 12 shall be the verdict, is invalid. * * *
Affidavits or the testimony of jurors as to what transpired in the jury room are not admissible to impeach their verdict. * * * The injustice of the application of the doctrine in a particular case is recognized; but the thought is that on the whole greater wrong would be done by the application of a different rule and that good policy sustains the one adopted.
Id. at 323-24, 245 N.W. at 374-75.
Although the holding in Hoffman has been modified by Minn.R.Evid. 606(b), which permits impeachment of a verdict based on juror misconduct, the Hoffman rule against impeaching a verdict otherwise remains good law. See Lundgren v. Fultz, 385 N.W.2d 378, 380 (Minn.App. 1986) (applying rule).
One cannot impeach a jury's verdict by showing the jury misapprehended the evidence, did not understand the jury instructions, or misconceived the legal effect of the fact findings * * *.
Lundgren v. Fultz, 385 N.W.2d 378, 380 (Minn.App. 1986).
Even if the jury's method of calculating damages reflects a misunderstanding of the valuation evidence, the jurors' comments to the court about how the jury reached its verdict cannot be used to impeach the verdict.
The Port Authority next contends that consideration of the lease value improperly allowed DRF recovery for loss of a going concern. Going concern value relates to goodwill. See Roth v. Roth, 406 N.W.2d 77, 80 (Minn.App. 1987) ("Goodwill value is a transferable property right which is generally defined as the amount a willing buyer would pay for a going concern above the book value of the assets."). DRF was not seeking compensation for loss of a going concern. Rather, the lease value was relevant to the Metropolitan Building's income-production capability, providing a stable source of income before renovation and a source of funding for renovation. A building's history and capability of generating rental income is a legitimate factor to consider in determining fair market value in a condemnation action. Regents of the Univ. of Minn. v. Irwin, 239 Minn. 42, 46-47, 57 N.W.2d 625, 627-28 (1953).
The Port Authority also argues that the lease-value evidence violated the unit rule. Under the unit rule, [w]here several persons have separate estates or interests in a single tract or parcel of land taken in condemnation proceedings, the proper mode of reaching a fair valuation of the property, and of ascertaining the damages of those interested, is to treat the property as though the entire estate and all interests therein were in a single person, and to find the value and damage in gross, leaving the apportionment of the award to be thereafter made according to the previous interests of the parties in the property.
Hennepin County v. Holt, 296 Minn. 164, 170 n. 3, 207 N.W.2d 723, 727 n. 3 (1973) (citations and quotations omitted).
The unit rule does not apply to this case. The lease value was relevant to the Metropolitan Building's income-production capability and was not presented as a separate item of damages. US Bank is not a party to this lawsuit, and nothing in the record indicates that it is seeking damages for the condemnation.
The Port Authority next contends that the evidence that US Bank was willing to contribute to renovation costs was too speculative. But US Bank's real estate manager testified that US Bank was willing to cooperate with renovation plans and contribute toward tenant improvements. The record also shows that US Bank had incentive to contribute towards renovation. It had been unable to find a tenant to occupy its space in the Metropolitan Building and still owed about $2 million under the lease at the time of the taking. The Port Authority's objection goes to weight, not admissibility. See Imperial Developers, Inc. v. Seaboard Sur. Co., 518 N.W.2d 623, 626 (Minn.App. 1994) (damages need only be proved to a reasonable certainty; absolute certainty is not required), review denied (Minn. Aug. 24, 1994).
The district court did not err in denying the Port Authority's motion for a new trial based on the admission of the evidence of lease value or on the jury's consideration of that evidence.
3. The Port Authority argues that the district court erred in declining to instruct the jury on the unit rule and instructing the jury on fair market value.
District courts are allowed considerable latitude in selecting the language of jury instructions, and we will not reverse a decision concerning instructions absent an abuse of discretion. Generally, a new trial is not warranted if the instructions fairly and correctly state the applicable law.
Shea v. Esensten, 622 N.W.2d 130, 137 (Minn.App. 2001) (citations omitted).
The Port Authority was not entitled to an instruction on the unit rule because the rule is inapplicable to this case. See H Window Co. v. Cascade Wood Prods., Inc., 596 N.W.2d 271, 277 (Minn.App. 1999) (a party is only entitled to a requested instruction on its theory of the case when the evidence supports the requested instruction), review denied (Minn. Aug. 17, 1999).
The Port Authority argues that in instructing the jury on fair market value, the district court should have cautioned the jury against basing its verdict on speculative evidence. The district court instructed the jury:
The owner must prove just compensation. Just compensation is the fair market value of the property that was taken as of March 16, 1998. Fair market value is the price that would be paid for the entire property by a willing buyer to a willing seller. Consider all facts and circumstances that a buyer and seller in the open market would reasonably consider. The owner is entitled to the value based upon the highest and best use of the property. The owner's investment in the property is not necessarily the same as its fair market value. For example, the owner may have acquired the property for more or less than it was worth. There might have been changes in the property's value while the owner was holding it.
The district court's instruction fairly and correctly stated the law. See Miller, 316 N.W.2d at 919 (explaining fair market value). The district court did not err in instructing the jury.
4. The Port Authority argues that the district court erred by prohibiting it from addressing in its closing argument a property-damage claim by DRF against US Bank. Although counsel is given wide latitude in closing argument, argument must be based on the evidence and proper inferences to be drawn therefrom. Connolly v. Nicollet Hotel, 258 Minn. 405, 419-20, 104 N.W.2d 721, 732 (1960).
The Port Authority wanted to refer to a $2.9 million claim by DRF against US Bank for damages resulting from US Bank vacating the Metropolitan Building before the lease expired. The only evidence regarding damages caused by the vacation was Lindstrom's testimony that DRF incurred about $100,000 in damages in renegotiating retail business leases. Absent specific evidence showing diminution in value as a result of the vacation, the district court did not err in prohibiting the Port Authority from referring to the $2.9 claim during closing argument.
5. The Port Authority argues that the verdict is unsupported by the evidence. It is within the province of the jury to determine damages in an appeal from the commissioners' award. State by Lord v. Pearson, 260 Minn. 477, 493, 110 N.W.2d 206, 217 (1961). While expert opinions are not to be blindly followed by juries, the opinions are to be weighed by the jury and judged in view of all the testimony in the case and the jury's own knowledge. Kieffer Bros., 284 Minn. at 521, 170 N.W.2d at 865. An appellate court must accept a jury verdict in an eminent domain case if the verdict is reasonably supported by evidence. Briggs, 488 N.W.2d at 814.
The law does not permit a court, appellate or otherwise, to substitute its own judgment for that of the jury although the verdict may be considerably more (or less) than in the judgment of the court it ought to have been.
Northern States Power Co. v. Barnard, 187 Minn. 353, 355, 245 N.W. 609, 609 (1932).
The jury's $6.4 million verdict was within the range of values testified to by the parties' experts. The Port Authority argues that Dahlen's testimony was credible and the testimony of Ruppert and other witnesses for DRF was incredible. DRF laid an adequate foundation for the testimony of Ruppert and the other witnesses who testified regarding valuation. Ruppert gave detailed testimony explaining why the income-producing method was the best valuation method for the Metropolitan Building and how he determined the property's value based on that method.
The record contains evidence undercutting the credibility of Dahlen's testimony. First, Dahlen conceded that significant differences existed between the Metropolitan Building and those he used for comparison purposes. Second, Dahlen valued the Metropolitan Building at $2.6 million in 1997 and reduced it to $2 million at the time of trial, despite a rapidly improving market for commercial property in downtown St. Paul during the same time period.
It was the jury's role to determine the credibility and weight of the experts' valuation testimony. Behlke v. Conwed Corp., 474 N.W.2d 351, 357 (Minn.App. 1991), review denied (Minn. Oct. 11, 1991); see also Independent Sch. Dist. No. 13 v. Minneapolis Elec. Steel Castings Co., 298 Minn. 534, 536, 214 N.W.2d 469, 470 (1974) (When opinion evidence is conflicting, its weight is for the jury's determination). The evidence as a whole reasonably supports the jury's verdict, so this court cannot disturb it.