Legal Definitions - specialty

Specialty property refers to a unique type of real estate that is not typically bought and sold on the open market. Because of its distinctive nature, specialized design, or specific use, it's difficult to determine its value by comparing it to other sales. This concept is particularly relevant in cases of eminent domain, where a government entity acquires private property for public use.

When specialty property is acquired through eminent domain, its value is often calculated based on the estimated cost to rebuild or replace it with a modern equivalent, minus any wear and tear, age, or obsolescence (known as depreciation), rather than by market comparisons to similar properties.

• Example 1: A historic, privately-owned opera house.

  Imagine a city planning a major urban renewal project that requires the acquisition of a privately-owned opera house, built in the late 19th century, which is still operational and a cultural landmark. This opera house is a specialty property because it's not a standard commercial building that can be easily compared to other sales. Its unique architectural features, specialized performance spaces, and historical significance mean there isn't a regular market for such properties. If the city acquires it through eminent domain, its value would likely be determined by estimating the cost to construct a new, equivalent opera house today, then subtracting an amount for the existing building's age and condition.

• Example 2: A highly specialized manufacturing plant.

  Consider a state needing to build a new highway that cuts through a privately-owned factory designed specifically for producing microchips, featuring clean rooms, custom machinery foundations, and unique environmental controls. This factory is a specialty property because its design and infrastructure are highly customized for a very specific industrial process, making it unlike typical industrial warehouses or manufacturing facilities that frequently change hands. In an eminent domain proceeding, its value would be assessed based on the cost to build a new, comparable microchip manufacturing plant, adjusted downwards for the existing plant's age and wear, rather than by general industrial property values.

• Example 3: A private animal sanctuary with custom enclosures.

  Suppose a county needs to expand a public park and must acquire a privately-owned animal sanctuary that houses rescued exotic animals. The sanctuary features custom-built, climate-controlled enclosures, veterinary facilities, and specialized habitats tailored to specific species. This sanctuary would be considered specialty property. Its value cannot be determined by comparing it to residential homes or standard commercial land. Instead, if acquired through eminent domain, the compensation would be based on the estimated cost to construct a new sanctuary with similar specialized facilities and habitats, factoring in depreciation for the existing structures.