## Facts

- The State of Rhode Island condemned about 2.3 acres of James and Eleanor O’Donnell’s 34.69-acre farm in North Smithfield for construction of a public road.
- The taking removed most road frontage, the property’s well, and roughly 75% of the experimental turf plots used by James O’Donnell, a chemist, for fertilizer research.
- O’Donnell had spent years preparing the soil for experimentation and operated a small “pilot plant” in an on-site structure to produce experimental fertilizer compounds applied to the plots.
- The condemnation substantially impaired the ongoing research use and the feasibility of O’Donnell’s contemplated commercial fertilizer venture.
- After a nonjury trial limited to just compensation, the Superior Court awarded the owners $101,100.
- The owners appealed as inadequate; the State cross-appealed, challenging admission and use of valuation evidence tied to the specialized research use and alleged speculative factors.

## Issues

1. Whether the property’s specialized use as experimental turf plots and a pilot fertilizer facility could be considered in determining fair market value and highest and best use.
2. Whether evidence connected to a prospective fertilizer business (including anticipated approvals and commercialization) was too speculative to affect compensation.
3. Whether the compensation award and related evidentiary rulings were legally erroneous because they incorporated nonmarket or speculative components.

## Decision

- The Supreme Court largely upheld the judgment and confirmed that specialized uses may be considered insofar as they bear on market value.
- The Court limited valuation to demonstrable fair market value and rejected reliance on conjectural elements tied to O’Donnell’s personal business expectations.
- The Court accepted that the taking could reduce the value of the remaining property and improvements (including the pilot plant) as severance damages, but required that such damages be supported by market-based valuation rather than sunk costs or projected profits.

## Legal Principles

- Just compensation in condemnation is measured primarily by fair market value: what a willing buyer and willing seller would agree upon absent compulsion.
- Highest and best use may include a specialized or noncurrent use if the property is reasonably adaptable to that use and the use has a market basis; purely owner-specific plans do not set value.
- Anticipated business profits, speculative future approvals, and other conjectural enterprise expectations are not separately compensable and cannot be used to inflate real-property value.
- Owner expenditures and preparatory efforts may affect value only to the extent they are reflected in the property’s condition and market appeal at the time of taking, not as reimbursement of costs.

## Conclusion

The court held that the owners could rely on the land’s specialized research adaptability to inform highest and best use and fair market value, but just compensation had to remain anchored in market evidence and could not include speculative value derived from the hoped-for success of the owners’ fertilizer enterprise.


O'Donnell v. State, 370 A.2d 233 (R.I. 1977)