Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civil Action No. 99-cv-02128) District Judge: Honorable Sylvia H. Rambo
The opinion of the court was delivered by: Ambro, Circuit Judge
Before: AMBRO, ALDISERT and STAPLETON, Circuit Judges
The United States appeals from the District Court's judgment awarding compensation to Overview Limited Partnership ("Overview") and Hans and Christina Enggren (the "Enggrens") pursuant to the Government's taking of 6.45 acres of land in the Gettysburg National Military Park. The Government asserts that the District Court impermissibly failed to apply the "unit rule" of valuation in determining the fair market value of the condemned land (instead valuing separate interests rather than the aggregate interests as a single unit). Moreover, the Government contends that in so doing the District Court awarded compensation to Overview and the Enggrens that exceeded, in aggregate, the amount the United States could fairly be obliged to pay. In essence, the Government argues that the District Court strayed from the clear path of the unit rule and, mired in a jungle of valuations of partial interests, "double counted" a key component of its estimate of the land's value, in effect charging the Government twice. Because we agree, we reverse the judgment of the District Court and remand for further proceedings.
I. Facts and Procedural History
A. The Condemned Properties
On December 12, 1999, the United States filed a complaint in condemnation to acquire approximately 6.45 acres of land within the boundaries of the Gettysburg National Military Park. The condemned land consisted of (1) two fee simple interests, designated Tract 4-203 and Tract 4-204, and (2) multiple right-of-way easements in three tracts of land, designated Tract 4-108, Tract 4-109, and Tract 4-220 (collectively, the "Condemned Properties").
Tract 4-203 was owned in fee simple by the Enggrens.*fn1 In 1972, the Enggrens leased this parcel, which was unimproved at the time, to Overview for a term of 99 years.*fn2 Overview intended to build on Tract 4-203 an observation tower overlooking the Gettysburg Battlefield and to operate the tower as a tourist attraction. Accordingly, the lease provided that Overview would own, insure, and pay all applicable taxes with respect to the proposed tower. At the end of the lease term, the Enggrens would retake possession of the land and would also take ownership of the tower. Construction of the 307-foot observation tower was completed in 1974.
Tract 4-204 was owned in fee simple by Overview. *fn3 On this land, which lay adjacent to Tract 4-203, Overview owned and operated a gift shop, restaurant, and parking lot. These improvements were operated in conjunction with the tower as a tourist attraction. Overview generated revenue from the gift shop and restaurant, and through fees for admission to the tower. Overview also received rent from two cellular phone companies for space on the tower subleased for cellular antennae.
The Declaration of Taking, which transferred title in the Condemned Properties to the United States, was filed by the Government on May 17, 2000. *fn4 The Government thereafter deposited with the registry of the District Court an estimate of just compensation for the Condemned Properties–$3 million. Because the Enggrens and Overview contested the fairness of the Government's estimated payment, a bench trial was set for the sole purpose of determining and awarding just compensation.
Prior to trial, the parties submitted briefing on the appropriate methodology *fn5 for valuing the Condemned Properties. As a result of that briefing, the District Court issued a pretrial order ...