42. Leaseholds
 
    1. The owner of a leasehold is entitled to compensation for value lost - the difference between the cost of this lease and the cost of obtaining another, comparable one; plus the value of fixtures he is entitled to remove minus depreciation. (difference between fair rental value and the rent reserved in the lease)  St. Ex Rel. Dept. Highways v. Olsen, 76 Nev. 176, 187, 351 P.2d 186 (1960) (#31)

    2. Leaseholds: "(A) purchase made under the threat of condemnation is the same as a judicial condemnation" for the purpose of triggering a condemnation clause in a lease whereby the lease terminates upon condemnation, at least where the negotiations appear to have been "a good faith effort to agree on the amount of compensation." Fuddy Duddy's v. State, Dep't Transp., 113 Nev. 1452, 1454, 950 P.2d 773 (1997).

   3. "If there exists a prior agreement between a landlord and tenant as to allocation of condemnation proceeds, that agreement governs the disposition of those proceeds." Musser v. Bank of America, 114 Nev. 945, 949, 964 P.2d 51 (1998).

   4.  "A termination clause in a lease without accompanying language regarding how any compensation award is to be allocated, is sufficient to bar a lessee's claim to aprt of the award." Id.

    5. "These cases do, in fact, stand for the proposition that an automatic termination clause forecloses a lessee's right to a portion of a just compensation award. They are distinguishable from the instant case, however, in that while the present leases contain a clause to the effect that the leases will terminate upon total condemnation, they also include language dictating how any compensation award should be allocated between the Owners and Lessees in such an event." Id. at 948.

    6. "Some cases, however, have looked unfavorably on clauses causing the forfeiture of the lessee's entire interest on condemnation and, where possible, have construed such provisions to avoid this harsh result." Id., n. 2.

    7. "(C)ontracts should be construed so as to avoid rendering portions of them superfluous." Id. at 950.

    8. "Whether the Lessees are entitled to some remedy under NRS 342 [a comprehensive statutory scheme for compensating businesses displaced by a condemnation] is irrelevant since Chapter 342 is not an exclusive remedy. Here, the parties have provided for allocation of condemnation proceeds." Id.

    9. Springer dissenting: "The question in this appeal is why parties who first agree that the lease should be ended upon any taking of the whole of the premises would also include a later provision for apportionment of condemnation damages for either 'a taking of the whole of the premises or part of the premises.'" Id. at 951.

    10. When billboards "cannot be relocated to comparable, income-generating sites" within the market area, the bonus value approach to value does not sufficiently compensate the advertising companies for their leasehold interests, and the income capitalization methodology should be used. Nat'l Adv. Co. v. State, Dep't of Transp., 116 Nev. 107, 113, 993 P.2d 62 (2000).

    11. "As noted by the district court, the bonus value approach is based on the assumption that the Advertising Companies may keep the benefit of their bargain with the Damontes if they can relocate their billboards under a comparable lease at market value to another comparable site. The evidence in this case, however, clearly establishes that these billboards were in valuable, unique locations, and that the billboards could not be relocated to a comparable site within the market area." (Id. at 114)

    12. "If the billboards cannot be relocated to a comparable site, as is the case here, then the state must compensate the billboard owners for the valuable interests taken, that is, the value of their leasehold interests, taking into account the irreplaceable, lost rental income." (Id. at 114, n. 8)

    13. "In order to determine the value of the leasehold interests...the advertising rental income must be considered under the income capitalization approach, which adjusts the anticipated net income to present value through the capitalization process." (Id. at 114, n. 7)

[Query: What would the court do if a condemnor takes out a grandfathered porn shop? Or - god forbid - a neighborhood casino that cannot be relocated in the market area because of gaming enterprise district limitations?]

    14.  "We hold that the eminent domain statutes codified the undivided-fee rule, which requires the court to first determine the value of the property as a whole, and in a subsequent hearing, to apportion the award among the various interests." County of Clark v. Sun State Properties, 119 Nev. 329, 337, 72 P.2d 954 (2003)

    15.  "The undivided-fee rule provides that condemned property is first valued as though it was unencumbered, and in a subsequent hearing, the total award is apportioned among the various interests. ... Under the undivided-fee rule, the condemnor has no interest in the apportionment hearing because it has met its obligation when it pays the court the total award. Furthermore, the undivided-fee fule provides that 'the division of a fee into separate interests cannot increase the amount of compensation that the condemnor has to pay for the taking of the fee.'" (Id. at 336) "We decline to follow the Lynbar, Inc. decision and its reasoning." (Id. at 338)