February 2011

The mythical Vermont town of Bayer is conducting a reappraisal.  Farmer Brown owns a 100 acre tract of land that she is using to grow corn.  Two years ago Ms Brown was granted approval for a twenty lot subdivision of the 100 acres.  The land is in the Ag-Res zoning district that has a two acre minimum lot size.  No infrastructure such as roads have been built, and all 100 acres were planted with corn. The property is not enrolled in the Vermont State Current Use program and there are no conservation easements on the land.  Ms Brown is not listing any of the lots for sale and she still owns all 100 acres.
It is generally agreed that the market value of each individual lot varies between $30,000 and $40,000.  If Ms Brown were to put in the roads and could sell each lot individually the total would be $700,000.  Ms Brown has been approached by a developer to buy the entire 100 acre twenty lot subdivision.  The developer has offered $300,000 for the entire property.  Ms Brown’s appraiser has valued her 100 acre, twenty lot subdivision with no infrastructure if sold in one transaction to a developer at $350,000.
Ms Brown’s daughter has expressed interest in taking over the farm and wants to continue using the 100 acres as a corn field.  Mrs Brown’s appraiser has also valued her 100 acres if limited to agricultural use to be $150,000.  
The Bayer Listers are required to set the assessment of Ms Brown’s land at 100% of market value as it exist on April 1st (April Fools).  What value should the Bayer Listers use?