Present: Carrico, C.J., Compton, Stephenson, Lacy, Hassell, and
Keenan, JJ., and Cochran, Retired Justice

WAMMCO, INC.

v.   Record No. 950752   OPINION BY JUSTICE BARBARA MILANO KEENAN
                                        January 12, 1996
COMMONWEALTH TRANSPORTATION
COMMISSIONER OF VIRGINIA


         FROM THE CIRCUIT COURT OF THE CITY OF CHESAPEAKE
                     William L. Forbes, Judge


      In this appeal from a judgment in a highway condemnation

proceeding, we decide whether the trial court properly excluded

evidence of adjustment costs as an element of damage to the

residue of the property.
                           I.   Proceedings

      The Commonwealth Transportation Commissioner (the

Commissioner) made a bona fide, but ineffectual, effort to

purchase a 17.65-acre tract of land in the City of Chesapeake for

construction of a portion of Interstate Highway 664 (I-664).

This tract was a part of a larger tract containing 314 acres.

      In 1989, the Commissioner recorded a certificate of take

pursuant to Code § 33.1-122 for the 17.65-acre tract, followed by

a petition in condemnation in 1990 asking the trial court to

appoint commissioners to determine just compensation due the

landowner as a result of the taking.    When the certificate of

take and the petition were filed, the property was owned by New

Boone Farm Associates.   In February 1993, WAMMCO, Inc. (Wammco)

acquired the property and was granted leave to intervene in the

proceedings.

      At the condemnation trial, Wammco sought $362,496 for the
17.65 acres taken and $2,414,042 for damage to the residue.

During trial, the court excluded Wammco's proffered evidence of

adjustment costs allegedly necessary to develop the property as a

result of the take.

     The condemnation commissioners returned a report valuing the

land taken at $356,165 and damage to the residue at $68,740.

Wammco filed exceptions to the commissioners' report and

requested a new trial based on the exclusion of its proffered

evidence.   The trial court denied Wammco's request and entered an

order confirming the commissioners' report.

                      II.   Admitted Evidence

     The following evidence was presented to the commissioners.

Prior to the construction of I-664, the 314 acre parcel (the

property) was bisected by Gum Road, a country road which was then

a segment of the only continuous north-south route through the

Western Branch area of Chesapeake.     When I-664 was constructed

through the property, Gum Road was cut in half.    Since Gum Road

was not provided access to I-664, a cul-de-sac was created on

each end of the road next to the highway.

     The portion of the property west of Gum Road was zoned for

industrial use at the time of the taking.    The portion of the

property east of Gum Road was zoned for agricultural use at the

time of the taking, but was re-zoned for residential development

four days later.   The parties agree that the highest and best use

of the eastern portion is for residential development.



                               - 2 -
     Walton Peter Burkhimer, Jr., a civil engineer, testified

that, prior to the taking, Gum Road provided sufficient access to

the property to support development in accordance with its

highest and best use.    However, when Gum Road was severed by the

taking, access to the property was so severely restricted that

the western portion is now unsuitable for industrial use.

     D.L. McKnight, a real estate appraiser, likewise testified

that, since Gum Road was severed by the taking, the western

portion of the property can no longer be developed without the

acquisition of additional land for road access.    In McKnight's

opinion, this inadequate road access to the property has caused

the highest and best use of the western portion to be reduced

from industrial to "assemblage." 1

         McKnight stated that this change from industrial to

"assemblage" use has diminished the value of the residue by

$1,029,722.    This figure was based on his opinion that the

western portion of the property has been devalued in the amount

of $6,166 per acre as a result of the take.
                       III.   Proffered Evidence

     The Commissioner made a motion in limine to exclude any

evidence of adjustment costs allegedly necessitated by the take.


     1
      McKnight explained that so-called "assemblage" use means

that additional land must be acquired in order to develop the

property.



                                 - 3 -
Wammco proffered the following testimony regarding these costs.

     Burkhimer stated that, as a result of the take, both on-site

and off-site improvements will have to be made in order to

develop the property in accordance with its highest and best use.

Burkhimer testified that additional land and right of ways will

have to be acquired, and that the off-site road network to the

residue will have to be improved, in order to provide sufficient

road access to develop the western portion of the property for

industrial use.   He also stated that, as a result of the taking,

an additional road will have to be built off the property site in

order for the eastern portion of the residue to be developed in

accordance with Wammco's post-take plan.
     Burkhimer further testified that, in order to connect with

these off-site improvements, Wammco will have to construct, on-

site, new roads and sanitary sewer service improvements that

would have been unnecessary prior to the taking.   According to

Burkhimer, the total cost of on-site improvements necessary for

development of the residue is approximately $1,236,000.   He

specifically excluded from these calculations the on-site

development costs that would have existed without the

construction of I-664.

     Wammco also proffered additional evidence from McKnight

that, based on the increased development costs of $1,236,000, he

made an additional downward adjustment in the value of property

in the amount of $1,384,320.   Combining this figure with the




                               - 4 -
$1,029,722 figure he gave earlier for the present loss of

industrial use of the western portion of the residue, McKnight

placed the total damage to the residue at $2,414,042.    The trial

court excluded the proffered evidence of adjustment costs,

including three exhibits offered by Wammco. 2   The court stated,

"It's too speculative . . . there is no plan, no proposed

improvement." 3

                        IV.   Issue on Appeal
     On appeal, Wammco argues that the trial court erred in

excluding the proffered testimony and exhibits.    Wammco contends

that it was entitled to have the commissioners consider the costs

necessary to adjust the property to its changed condition, as

well as the reasonable potential use of the property at the time

of the taking.    Citing Lynch v. Commonwealth Transp. Comm'r, 247

Va. 388, 391, 442 S.E.2d 388, 390 (1994), Wammco asserts that

every present or future circumstance affecting the value of the

residue at the time of the taking is admissible evidence.

     2
      Exhibit 1 depicted a street and lot configuration for

development of the property "without I-664."    Exhibit 2 showed

road improvements and a proposed lot layout for development "with

I-664."   Exhibit 3 listed the net cost increases for developing

the property after the construction of I-664.

     3
      In its ruling, the trial court did not state that Wammco

was required to present a recorded subdivision plat or plan.



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     In response, the Commissioner argues that Wammco's evidence

of increased development costs is speculative and inadmissible,

because Wammco's ability to develop the property is contingent on

future events beyond Wammco's control, namely, an upgrading of

the road network in the vicinity of Gum Road.   We agree with the

Commissioner. 4

     Initially, we review the principles governing the

determination of damages to the residue of property taken in a

condemnation case. In Lynch, we stated that
     [t]he test of damage to the land remaining after the
     taking is the difference in the residue's value
     immediately before and immediately after the taking.
     In determining such damages, consideration may be given
     to every circumstance, present or future, that affects
     the residue's value at the time of the take. Remote or
     speculative advantages and disadvantages, however, are
     not to be considered.


Id. at 391, 442 S.E.2d at 390; see also Appalachian Elec. Power

Co. v. Gorman, 191 Va. 344, 353, 61 S.E.2d 33, 37-38 (1950).

     Adjustment costs, also commonly referred to as increased

development costs, are those costs necessary to adjust the

property to the changed conditions caused by the taking.

     4
      At trial, the Commissioner argued, among other things, that

the proffered evidence was speculative because, in order to

develop the property, Wammco would "have to get approval from the

City to do all sorts of things."   This objection adequately

preserved the argument which the Commissioner advances here

regarding the speculative nature of the proffered evidence.




                              - 6 -
Dressler v. City of Covington, 208 Va. 520, 522, 158 S.E.2d 660,

662 (1968).       Adjustment costs are relevant to determining any

diminution in the market value of the residue as a result of the

taking.     Id.     "However, such cost[s] [are] not the measure of

damages and cannot be recovered specifically.       In other words,

evidence of the actual cost of necessary improvements is

admissible as a factor of evaluation, though not as a measure of

damages."     Id.     The measure of damages to the residue remains the

difference in value before and immediately after the taking, less

any enhancement resulting from the taking. State Highway &
Transp. Comm'r v. Parr, 217 Va. 522, 524, 230 S.E.2d 253, 255

(1976).

       Like any other evidence of damage to the residue, evidence

of adjustment costs is inadmissible if it is based on remote or

speculative factors.        See Lynch, 247 Va. at 393, 442 S.E.2d at

391.   As we stated in State Highway & Transp. Comm'r v. Lanier

Farm, 233 Va. 506, 357 S.E.2d 531, (1987), "[i]t is the present

actual value of the land with all its adaptations to general and

special uses, and not its prospective, or speculative, or

possible value based upon future expenditures and improvements

that is to be considered."        Id. at 510, 357 S.E.2d at 533,

(quoting Richmond & P.R. Co. v. Seaboard, &c., Co., 103 Va. 399,

407, 49 S.E. 512, 515 (1905)).       The facts of the present case

illustrate this principle.

       We will assume, without deciding, that Wammco's property




                                    - 7 -
could have been developed before the taking in accordance with

its highest and best use.   We also note, as stated above, that

the adjustment costs proffered by Wammco reflect only the cost of

on-site roads and sewer service improvements necessitated by the

take to develop the property to its highest and best use.

     Nevertheless, the evidence shows that development of the

residue is contingent on the improvement of off-site roads in the

vicinity of the residue and the acquisition of property of others

to provide access to the site.    With regard to the western

portion of the property, Burkhimer stated that "you'd essentially

have to acquire a lot and then buy one more lot, and then you've

got to acquire land across [an] intervening parcel, over which

there is no right of way, so as to be able to get access or a

right of access."   McKnight also testified that development of

the western portion of the property would require acquisition of

the property of others and, thus, that the property presently is

unsuited for immediate industrial development.
     Concerning the eastern portion of the property, Burkhimer

testified that Wammco's post-take plan requires a collector or

minor arterial street following "the old railroad right of way

out to Taylor Road . . . to be built in order for the east side

to be developed."   The record shows that the construction of such

a collector road would entail off-site improvements.

     From the above testimony, Wammco's evidence shows that

development of the property is contingent on future acts beyond




                                 - 8 -
Wammco's control which are remote and speculative.   If these acts

or other acts necessary for an alternative plan of access are not

accomplished, the property cannot be developed in accordance with

Wammco's post-take plan and the on-site improvements will not be

required.   Thus, as a matter of law, the evidence of these

on-site adjustment costs is speculative and inadmissible.

     We disagree with Wammco's contention that our decisions in

Lynch and Gorman require a different result.    In these cases, the

landowner's ability to develop the residue was not contingent on

off-site improvements that were within the control of others.      In
Lynch, the evidence showed that the development potential of the

property had been reduced solely because of impact of the take on

the size and topography of the residue.   247 Va. at 394, 442

S.E.2d at 391.

     Likewise, in Gorman, the landowners' ability to develop the

residue was not dependent on contingencies beyond their control.

There, the evidence of diminished value to the residue consisted

of testimony that the lots which could be placed on the residue

were of lesser value than the lots planned for the property

immediately prior to the take.    191 Va. at 348, 61 S.E.2d at 35.

     We also find no merit in Wammco's contention that, if it is

not able to produce evidence of its increased development costs,

Wammco is left without any compensation for the impairment of its

ability to develop the property.    Wammco presented evidence of

its impaired ability to develop the western portion of the



                                 - 9 -
property.   As stated above, McKnight testified without objection

that the value of the residue had diminished by $1,029,722

because the western portion of the property was suited only for

"assemblage" use after the take.    Thus, the commissioners were

allowed to consider the direct effect on the value of the residue

resulting from Wammco's inability to develop this portion of the

property.

     Finally, we note that Wammco did not attempt to offer

similar evidence with regard to the eastern portion of the

property.   Although the evidence before the commissioners did not

show that off-site property would have to be acquired to develop

the eastern portion, it did show that Wammco's ability to develop

this portion of the property under its post-take plan was

contingent on the construction of off-site road improvements

beyond Wammco's control. 5   Thus, this limitation on development

was a factor relevant to the value of the residue immediately

after the take.

     For these reasons, we will affirm the trial court's judgment

confirming the commissioners' report.


     5
      We note, however, that Wammco can develop the eastern

portion without off-site improvements if it redesigns its post-

take plan to include fewer lots.    Burkhimer testified that the

additional access would be required only if the parcel is

developed into 100 or more lots.




                               - 10 -
                                                        Affirmed.
JUSTICE STEPHENSON, with whom CHIEF JUSTICE CARRICO and RETIRED
JUSTICE COCHRAN join, dissenting.


     I respectfully dissent.   I think, based upon our holdings in

Lynch v. Commonwealth Transportation Comm'r, 247 Va. 388, 442

S.E.2d 388 (1994), Appalachian Power Co. v. Anderson, 212 Va.

705, 187 S.E.2d 148 (1972), and Appalachian Elec., Etc., Co. v.

Gorman, 191 Va. 344, 61 S.E.2d 33 (1950), the trial court erred

in excluding the proffered evidence.    I do not think this

evidence, taken as a whole, was speculative.   Instead, the

proffered evidence, consisting of both oral testimony and

physical exhibits, presented "a real and present potential use in

the light of existing conditions and circumstances," demonstrated

"the adaptability and suitability of the property for its highest

and best use," and illustrated "the impact of the taking on the

remaining property."   Lynch, 247 Va. at 393, 442 S.E.2d at 391.

     I also think that the majority, in deciding the case, has

relied upon objections raised for the first time on appeal.     The

sole objection at trial, and the basis for the trial court's

ruling, was that the evidence was speculative because there was

no recorded subdivision plat or plan.   On appeal, however, the

Commissioner has abandoned that ground and raises numerous

objections to the proffered evidence, none of which were raised

at trial.   Clearly, this violates our rule that objections will

not be considered on appeal unless they are "stated with

reasonable certainty at the time of the ruling."   Rule 5:25.


                               - 11 -
     Accordingly, I would reverse the trial court's judgment and

remand the case for a new trial.




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