Rural British Columbia property's appeal compromised by dam construction, according to the court ruling.
Fresh Take:
A southeastern B.C. landowner scored a whopping $340,000 payday from the Regional District of East Kootenay, thanks to the unappealing monstrosity that is the new dam on Baptiste Lake. The plaintiff, 546761 B.C. Ltd., owned McKay Ranch, a picturesque property that boasts nearly all of Baptist Lake—the only substantial private lake in the area.
In 2019, the district decided to pump up the dam, enlarging its height and spillway in the process. The landowner, however, didn't see it that way. Instead, they saw a ruined retreat, with the rustic charm that once stood replaced by an industrial eyesore.
The district, on the other hand, argued that the lake-side real estate was actually enhanced by the dam, as it reduced the flood risk. However, the British Columbia Supreme Court Justice David A. Crerar wasn't buying it. He ruled in favor of the development company, affirming that the "gravel pit" look of the new dam had significantly marred the property's value.
McKay Ranch, which is part of the 3,000-acre Elk Creek Ranch development, had been the last of the 15 parcels to remain unsold. The property was nicknamed a "trophy property" due to its pristine alpine scenery and focus on outdoor recreation. In Crerar's decision, he agreed with the plaintiff's appraiser: the lakefront property was nothing short of a paradise, and the new dam works had tainted that paradise.
In the end, Crerar awarded 546761 B.C. Ltd. the $340,080 they sought, reflecting a roughly 30% decrease in the property's value as calculated by their appraiser. The regional district's arguments for reducing the compensation were dismissed, as the plaintiff's appraiser used accepted methods and arrived at a justifiable conclusion. In other words, the district simply didn't have a solid case for why the dam wasn't as damaging as the owner claimed.
Notes:- Baptiste Lake is a significant source of drinking water for Edgewater.- In 2013, the district commissioned a dam safety review to comply with provincial regulations. The review recommended increasing the dam's height and expanding its spillway.- The RDEK initially paid the landowner $13,720 for the expropriation of a statutory right-of-way for the enlarged dam.- The concept of "injurious affection" is part of B.C.'s Expropriation Act, allowing landowners to seek compensation for the reduction in value their property suffers from government expropriation, even if it wasn't a permanent taking.- The RDEK's "betterment" argument, which essentially claims the value of improvements made by the government must be deducted from any compensation, failed because the district was unable to prove that the increased dam protected the property from significant flooding before its construction, that potential buyers were concerned about dam failure, or that they quantified the potential impact of the hypothetical concern on the market price of the property.
The news of the court ruling has significant implications for real-estate investors, as it establishes a precedent that could potentially increase the financial risks associated with government-led infrastructure projects near prized properties. This ruling in the McKay Ranch case, where 546761 B.C. Ltd. was awarded $340,080 in compensation for the decrease in their property's value due to the new dam on Baptiste Lake, could influence future financing decisions for similar projects in the region.
