Appeal from County Court at Law No. 2 Harris County, Texas
Trial Court Cause No. 1042631
consists of Justices Boyce, Donovan and Wise.
State of Texas brings this appeal from a judgment entered
upon the jury's verdict in favor of Gleannloch Commercial
Development, LP, for $13, 190, 562. The State raises threes
issues: (1) sufficiency of the evidence, both legal and
factual, to support the amount of the jury's award; (2)
the admission of evidence; and (3) application of the project
influence rule. For the reasons stated below, we affirm.
owned a 25.33-acre tract on Boudreaux Road, near the city of
Tomball, in Harris County, Texas. In a condemnation
proceeding filed January 10, 2014, the State acquired
approximately 14.42 acres of Gleannloch's property for the
construction of a portion of Segment F-2 of State Highway 99
("the Grand Parkway"). The 14.42 acres acquired by
the State is the only portion of its property for which
Gleannloch sought compensation.
hearing was held August 5, 2014, by the appointed special
commissioners and they awarded Gleannloch $4, 867, 946.
Gleannloch objected. The commissioners' award was
deposited into the registry of the court on September 3,
2014, and Gleannloch withdrew those funds.
trial was then conducted in September 2015 on the question of
compensation to Gleannloch for the 14.42 acres (the
"subject property"). The jury's verdict valued
the subject property at $13, 190, 562, which equates to $21
per square foot. The trial court entered judgment in
accordance with the verdict. The State timely filed a motion
for new trial, which was overruled by operation of law. From
the trial court's judgment, the State timely filed this
appeal. The State complains:
• The evidence is legally and factually insufficient to
support the jury's verdict;
• The trial court erred in admitting evidence; and
• The trial court improperly applied the
project-influence rule. We address each issue in turn.
of the Evidence
first issue, the State contends the evidence was both legally
and factually insufficient to support the jury's award.
The State makes a single argument in support of its assertion
that there was no evidence, or not enough evidence, to
support the verdict - that the jury's award is greater
than the highest amount adopted by by an expert witness.
Accordingly, we address whether the record contains evidence
from which a jury could value the subject property higher
than did the expert witnesses.
Standard of Review
review the entire record to determine whether the evidence is
legally sufficient to support the judgment, crediting
favorable evidence if reasonable jurors could and
disregarding contrary evidence unless reasonable jurors could
not. City of Keller v. Wilson, 168 S.W.3d 802, 827
(Tex. 2005). If they reasonably could do so, we assume that
jurors decided questions of credibility or conflicting
evidence in favor of the verdict. Id. at 819, 820.
Evidence is legally sufficient to support the verdict if it
would enable reasonable and fair-minded people to differ in
their conclusions. Id. at 822. If the evidence falls
within this zone of reasonable disagreement, we do not
substitute our judgment for that of the trier of fact.
Id. To determine whether the evidence is factually
sufficient, we consider and weigh all of the evidence in a
neutral light and only if the finding is so contrary to the
overwhelming weight of the evidence as to be clearly wrong
and unjust do we conclude that the finding is not supported
by sufficient evidence. See Cain v. Bain, 709 S.W.2d
175, 176 (Tex. 1986) (per curiam).
is not bound to accept valuation expert testimony.
Preston Reserve, L.L.C. v. Compass Bank, 373 S.W.3d
652, 666 (Tex. App.-Houston [14th Dist.] 2012, no pet.)
(citing Callejo v. Brazos Elec. Power Co-op., Inc.,
755 S.W.2d 73, 75 (Tex. 1988)). However, this does not permit
the jury to "leap entirely outside of the evidence in
answering" a valuation question. Callejo, 755
S.W.2d at 75. The jury may not substitute its own knowledge
and experience for a party's evidence on value.
Id. But the jury may "set the value at any
amount between the lowest and highest values by the
evidence." Preston Reserve, 373 S.W.3d at 666
(citing State v. Huffstutler, 871 S.W.2d 955, 959
(Tex. App.-Austin 1994, no writ). Only if the jury's
verdict lies outside the range of testimony will we find
there is no evidence to support the verdict.
Callejo, 755 S.W.2d at 75.
record shows Gleannloch Farms is a twenty-one acre
master-planned development in northwest Harris County north
of Beltway 8 and west of Interstate 45 ("I-45").
The primary component of the development is more than 2, 300
single-family residences with amenities such as a 27-hole
golf course, lakes, parks, hike and bike trails, equestrian
center, recreation centers, playground, swimming pool and
tennis courts. Gleannloch Farms has two commercial reserves,
one on the south end and one on the north end. The southern
end of Gleannloch Farms is bordered by Spring Cypress Road.
subject property is part of the northern commercial reserve.
The commercial reserve is restricted for commercial
development and architectural controls have been placed upon
it. The subject property fronts Boudreaux to the south. On
its western side is Champion Forest, which passes through
Gleannloch Farms. On its eastern side, Crescent Clover was
supposed to intersect Boudreaux and provide a second point of
access through Gleannloch Farms but it was stopped short. The
City of Houston has designated both Boudreaux and Champion
Forest, as well as Spring Cypress, as major thoroughfares. An
access way, about eighty-five feet wide, connects the western
part of the subject property to the eastern part so that both
commercial portions of the subject property are connected and
expert witnesses testified to their opinions of the subject
property's market value as of the date of taking,
September 3, 2014. One of Gleannloch's experts, Matthew
Deal, was the first to testify. Gleannloch then called the
State's expert, Michael Urban. He was followed by
Gleannloch's second expert, David Bolton. Ron Dagley,
president of Raymond R. Betz Interest, Inc. and Betz
Commercial Brokerage, Inc., then testified on behalf of
Gleannloch. Finally, Urban was called to the stand by the
estimated the subject property's value to be $9, 247,
704. For 14.42 acres, the price per square foot
("psf") thus averaged to $14.72.
subject property is a commercial reserve which Deal described
as the area set aside, typically on main roads, for
commercial development such as restaurants, gas stations,
grocery stores, retail stores, banks, etc. It is restricted
for commercial development to enhance the value of Gleannloch
Farms and architectural controls are in place to ensure it is
put to a proper use in conformance with the high standards of
Gleannloch Farms. Deal testified the commercial reserves are
the most valuable portions of the property, they are on the
major thoroughfares and supported by all of the residential
housing. The development on the southern commercial reserve
provides evidence of what was intended for the northern
portion. Because of the taking, Gleannloch Farms cannot
develop the northern end of its commercial reserve.
testified the subject property was really "improved
property" and not "vacant land." Gleannloch
Farms is not in the City of Houston so the water and sewer
utilities are provided by a municipal utility district. The
subject property has direct access to those utilities and the
pipes were already there for development. The property had
off-site detention so there was no land loss, typically ten
to twenty percent, for detention use. Deal took these factors
into account in appraising the subject property.
testified the demographics for the subject property were
"incredible" and "good in every regard."
According to Deal, residences drive the commercial
development and in a five mile radius of the subject property
there were 169, 000 residents. The average value of a home in
Gleannloch Farms was $500, 000 with some worth $2.4 million.
Within a three-mile radius of the subject property the
average household income was $123, 000 a year, which is
roughly five times the average household income in Houston of
about $25, 000 a year. For commercial development, that
average income is very important. In the area of the subject
property, the population and the average household income was
to Deal, the amount of traffic is very important to the value
of commercial property. C. J. Hensch and Associated conducted
a study of how much traffic there was on Boudreaux in front
of the subject property. The study reflected 15, 800 plus
vehicles per day ("vpd"). Deal testified that was
"a lot" of traffic.
were plans from the Texas Department of Transportation
("TxDot") showing Champion Forest extending north
of Boudreaux and the widening of Boudreaux from two to four
lanes. At the location of the subject property, Boudreaux is
a two-lane asphalt paved road and the Grand Parkway is on top
of it. Deal testified widening Boudreaux at that point would
have wasted millions of dollars because the Grand Parkway was
"going to wipe it out."
becomes Spring Stuebner, which is four lanes. Before Spring
Stuebner was widened to four lanes, a traffic study counted
16, 701 vpd. On Spring Stuebner between Mossy Oaks and
Kuykendahl, the traffic count was 6, 233 vpd and it was
widened to a four-lane standard roadway as part of the
construction project. To the west of the subject property,
Boudreaux had already been widened to four-lanes. Spring
Cypress, to the south of Gleannloch Farms, was four lanes.
Kuykendahl, to the east, had recently been widened to four
lanes; the traffic count was 12, 737 vpd. Gosling, a two-lane
asphalt-paved road like Boudreaux, was being widened to four
lanes and its traffic count ranged from 6, 700 to 12, 530
vpd. On the day of the taking, the traffic count on Boudreaux
was roughly 16, 000 vpd.
"appraised the property as if it's on a two-lane
road, but based on this information, as well as the fact that
Boudreaux has been widen [sic] in other parts that aren't
where the Grand Parkway is not overlaying Boudreaux, it's
reasonably probable and clear in my mind that Boudreaux would
have been widen [sic], but for the Grand Parkway. If it
wasn't for the pending construction and ultimate taking
of Boudreaux for the Grand Parkway, Boudreaux would have been
widen [sic] to a four-lane roadway."
testified that he spoke to two property owners who had
attempted to develop their property which was east of the
subject property. The City of Houston would not let them
develop their property because it was in the path of the
Grand Parkway. According to Deal, those properties would
otherwise have been developed. Deal also testified the land
north of the subject property was owned by Mr. Pancasarp, who
already has an engineer's plans for development of that
property. Deal testified the market area in the immediate
vicinity of the subject property has been in limbo since 2010
and Boudreaux was not widened by Harris County because of the
Grand Parkway project.
testified the highest and best use of the subject property is
mixed-use commercial development - small pad sites that are
independent economic units for uses such as a bank, pharmacy,
retail shopping - that all have cross-access to each other
and access to a major road, such as Champion Forest. Deal
consulted with Peter Bosher of RVI Planning as to how the
market would develop the subject property. Bosher gave Deal
multiple plans with different options for
"pad-site" development wherein pads would be sold
to individual users. The pads would have access to each other
and to Champion Forest and Crescent Clover.
are ten residential subdivisions, including Gleannloch Farms,
on Boudreaux. Deal testified the people living in those
subdivisions create a demand for groceries, gas, fast food,
car washes, and pharmacies. That demand, where there is no
current commercial development, is what makes the subject
property so desirable. Deal testified that but for the taking
of the north end along Boudreaux there would have been
commercial development, as there was in the commercial
reserves that the southern end of Gleannloch Farms and the
southern entrance of Champion Forest.
Gleannloch Farms was created, the commercial reserve was
designed for a larger user such as an H-E-B grocery store.
Deal testified a grocery store creates a lot of traffic and
other types of users, such as gas stations, shopping centers
with nail salons and dry cleaners, fast food restaurants and
banks, quickly follow. In October 2013, H-E-B acquired the
tract immediately across Champion Forest from the subject
property. Part of H-E-B's property was also taken by the
Grand Parkway project. Deal opined that H-E-B chose that
location because of "the rooftops . . . the supply of
people and the dollars that are there, the income levels that
are there." Deal stated that H-E-B "would have
known, but for the taking, that Boudreaux would have been
widen [sic]" and H-E-B was there because of the
population and income. H-E-B was planning to start
construction in February 2016 and open in October 2016. Deal
testified the fact that H-E-B was coming into Gleannloch
Farms was evidence it is an excellent location.
was questioned about an H-E-B built at Rayford Road and Riley
Fuzzel where the Grand Parkway went through at the front of
the property. Shortly after H-E-B's entry, from July 2014
to January 2015, four tracts of land across Rayford quickly
sold for at values from $15.25 psf to $19 psf. The land was
being used for a Texas Children's Hospital site, Sonic,
car wash, and a retail shopping center. Those properties
share access, as the subject property could since it is has a
also considered an H-E-B built at League City Parkway and
South Shore Boulevard for highest and best use as well as
"absorption, " which is how quickly neighboring
properties are purchased. From May 2014 to June 2015, four
tracts of nearby commercial property, ranging in size from
1.3 acres to 2.7 acres, sold for between $16.40 psf to $19.00
psf. The properties all had cross-access, like the subject
property, which Deal stated was important. The one farthest
away actually sold for the most. The uses were a car wash,
fast food, and a shopping center. According to deal, those
properties sold once H-E-B announced it was opening a store.
testified he did not use the sales prices of the properties
near those two H-E-B's, even though it was a similar
market, because there were other transactions in closer
proximity to the subject property that were more appropriate.
Deal looked at eight transactions in the same market area,
with similar density of development, income level, and
highest and best use. Another factor he considered was when
the transaction occurred versus the date of value. Because
the western portion of the subject property was closer to the
major thoroughfare, it was worth more than the eastern
portion. Deal determined the value of the western portion to
be $16 psf and the value of the eastern portion to be $13
comparable sale No. 1 was at the corner of Spring Cypress, a
four-lane major thoroughfare, and Grant Road, a two-lane
major thoroughfare that was asphalt paved with open ditch
drainage, similar to Boudreaux. It sold in February of 2015
for $21 psf and the demographics of that property were very
similar to the subject property. The population was 180, 000
as compared to the subject property being 170, 000. The
income per household was $121, 000 as compared to the subject
property being $118, 000. There was an H-E-B right across the