This case involved a gas storage field conversion/condemnation, where a formerly active 300-acre natural gas field would be repurposed as a gas storage field. The condemning authority, Washington 10 Gas Company, was a collaborative enterprise between major regional utilities and private investors. The company formally became a common carrier/public utility for the purposes of acquiring the gas field. After the condemning authority gained the rights to acquire and reuse the site, an initial compensation offer of approximately $1,000/acre—a total of $386,000—was made to the owner.
Ackerman Ackerman Complete & Dynkowski approached this case with the understanding that there are a number of very nuanced and complicated issues in calculating just compensation of natural gas storage fields. While those industry-specific issues can be both legally and technically complex, there are effective ways to resolve evaluation discrepancies and determine/demonstrate reasonable compensatory value to the owner. Washington 10 Gas Company’s intention—to acquire the property and use it as a storage facility for natural gas reserves during periods of low demand—was at odds with the relatively low per-acre offer that was initially presented.
Essentially, that low offer reflects an evaluation based on the price of the land itself, without taking into consideration other factors that impact value and compensation—most importantly, the property’s significant value as a potential storage facility. The condemning authority either did not know or did not acknowledge the value of the land as a storage facility, with its unique logistical advantages and appealing proximity to major pipelines and markets. Experienced counsel, expert testimony and knowledgeable appraisals were key in presenting and ultimately resolving this case, and Ackerman Ackerman Complete & Dynkowski was subsequently able to secure a final resolution that was orders of magnitude higher than the initial offer: in excess of $5 million for the property owner.