A property located in downtown Chicago with frontage on two prime arterials and wrapping around a prominent corner was condemned by the City of Chicago. The multistory building had a long history of ground-floor retail use; however, the upper floors had been vacant or had been utilized for storage for many years. The fact that there were two owners in addition to leasehold positions involving these same parties complicated the allocation of value.
An extensive study was done in regard to retail rent levels for ground-floor space in the central business district; the highest and best use of the upper floors, which was concluded to consist of hotel, apartment, and/or condominium use, also was analyzed.
The change in highest and best use was acknowledged by the City of Chicago, and the case settled just before trial for an amount in excess of two times the initial offer made by the City of Chicago.