B-156126, MAY 13, 1965, 44 COMP. GEN. 717

B-156126, MAY 13, 1965, 44 COMP. GEN. 717

PROPERTY - PRIVATE - TAKING FOR GOVERNMENT USE - LESSEES RIGHTS. PROPERTY - PRIVATE - TAKING FOR GOVERNMENT USE - LESSEES RIGHTS COMMERCIAL AND INDUSTRIAL BUILDINGS AND IMPROVEMENTS OWNED BY LESSEES WITH REMOVAL RIGHTS ON LAND TO BE ACQUIRED BY THE UNITED STATES UNDER THE AMERICAN-MEXICAN CHAMIZAL CONVENTION ACT OF 1964, 22 U.S.C. 277D-17, WHICH NOT ONLY AUTHORIZES THE ACQUISITION OF LAND AND INTERESTS IN LAND BUT ALSO PROVIDES FOR COMPENSATION TO THE OWNERS ON THE BASIS OF THE "VALUE IN USE" OF THE PROPERTY MAY BE CONSIDERED "REAL ESTATE" RATHER THAN PERSONAL PROPERTY, AND THE LESSEES AS OWNERS OF THE LEASEHOLD INTEREST FOR COMPENSATION PAYMENTS UNDER THE ACT. LESSEES WHO OPERATE PARKING LOTS ON A MONTH TO MONTH BASIS ON LAND TO BE ACQUIRED BY THE UNITED STATES UNDER THE AMERICAN-MEXICAN CHAMIZAL CONVENTION ACT OF 1964, 22 U.S.C. 277D-17, ARE OWNERS OF LEASEHOLD INTERESTS AND ALTHOUGH THE COMPENSATION PROVISIONS IN SECTION 3B (1) (B) OF THE ACT AUTHORIZE PAYMENT TO THE "OWNER" OF REAL ESTATE, THE WORD "OWN" OR ITS DERIVATIVES HAS NO PRECISE OR DEFINITE MEANING AND MUST BE DETERMINED BY THE OBJECT SOUGHT TO BE ACCOMPLISHED BY THE ACT WHICH IS TO MAKE DISPLACED COMMERCIAL PROPERTIES WHOLE; THEREFORE, LESSEES OF THE PARKING LOTS ARE ENTITLED TO THE VALUE TO THEM OF THEIR LEASEHOLD INTERESTS REFLECTED BY THEIR NET INCOME ATTRIBUTABLE TO THEIR INTEREST IN THE REAL ESTATE CONVERTED TO ITS EQUIVALENT CAPITAL VALUE.

TO THE COMMISSIONER, UNITED STATES SECTION INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO, MAY 13, 1965:

FURTHER REFERENCE IS MADE TO YOUR REQUEST OF FEBRUARY 7, 1965, FOR ADVICE AS TO WHETHER, UNDER THE PROVISIONS OF THE AMERICAN-MEXICAN CHAMIZAL CONVENTION ACT OF 1964, PUBLIC LAW 88-300, APPROVED APRIL 29, 1964, 78 STAT. 184, 22 U.S.C. 277D-17, YOU MAY COMPENSATE LESSEES FOR THE ,VALUE IN USE" OF BUILDINGS AND STRUCTURES OWNED BY THEM ON RAILROAD PROPERTY BEING ACQUIRED BY THE UNITED STATES FOR SETTLEMENT OF THE CHAMIZAL BOUNDARY DISPUTE WITH MEXICO.

BY THE TERMS OF THE CONVENTION SIGNED AUGUST 29, 1963, AND PURSUANT TO THE ABOVE ACT, THE UNITED STATES WILL ACQUIRE FOR SETTLEMENT OF THE BOUNDARY DISPUTE A TOTAL OF 776 ACRES OF LAND NOW SITUATED IN THE SOUTHERLY PART OF THE CITY OF EL PASO. OF SUCH ACREAGE, 630.34 ACRES WILL BE TRANSFERRED TO MEXICO AND THE REMAINDER WILL BE REQUIRED FOR RIGHTS-OF- WAY FOR THE UNITED STATES PART OF A NEW RIVER CHANNEL AND FOR RELOCATION OF PUBLIC FACILITIES NOW LOCATED IN THE AREA TO BE TRANSFERRED TO MEXICO.

IT IS STATED THAT THERE ARE APPROXIMATELY 63 LEASES OUTSTANDING, WHICH WERE GRANTED BY RAILROAD COMPANIES WHOSE LANDS ARE TO BE ACQUIRED BY THE UNITED STATES FOR SETTLEMENT PURPOSES. FOUR OF THE SEVERAL CATEGORIES, SUBJECT TO SOME VARIATIONS, ARE DESCRIBED GENERALLY, AS FOLLOWS:

"LEASES REGARDING WHICH IMPROVEMENTS HAVE BEEN CONSTRUCTED

ON LEASE PREMISES

"/1) COMMERCIAL LEASES FOR A TERM OF ONE YEAR, WITH A PROVISION FOR "EXTENSION OR RENEWAL THEREOF," HAVE BEEN GRANTED BY RAILROAD COMPANIES ON PROPERTIES LOCATED ADJACENT TO THEIR RAILROAD TRACKS. THESE LEASES CONTAIN A CLAUSE PROVIDING FOR 30-DAY CANCELLATION BY EITHER PARTY. THEY ALSO PROVIDE THAT UPON TERMINATION, LESSEE SHALL, IF NOT IN DEFAULT, BE ENTITLED TO REMOVE FROM THE LEASED PREMISES ANY "BUILDINGS OR STRUCTURES WHOLLY OWNED BY LESSEE.' IF LESSEE FAILS TO REMOVE THEM, THE IMPROVEMENTS,"AT THE OPTION OF THE RAILROAD," BECOME ITS SOLE PROPERTY OR THE RAILROAD MAY REMOVE THEM AT LESSEE'S EXPENSE.

"/2) INDUSTRIAL TRACK AGREEMENTS FOR NO STIPULATED TERM, BUT HAVING A PROVISION FOR A RIGHT BY THE RAILROAD TO DISCONNECT THE TRACK INVOLVED AND, AT THE OPTION OF THE RAILROAD, TERMINATION IF REQUIRED OR AUTHORIZED BY LAW OR ORDERS OF ANY LAWFULLY CONSTITUTED PUBLIC AUTHORITY TO DISCONTINUE OPERATION OF THE TRACK OR TO CHANGE IT IN SUCH MANNER AS TO RENDER IT IMPRACTICABLE IN THE JUDGMENT OF RAILROAD TO OPERATE IT. IN EVENT OF TERMINATION, THE LESSEE MAY RECOVER ALL MATERIAL OWNED BY HIM; PROVIDED, HOWEVER, THAT RAILROAD MAY PERFORM REMOVAL AT COST OF LESSEE AND PROVIDED ALSO THAT RAILROAD HAS RIGHT TO PURCHASE MATERIALS AT THEIR VALUE UPON TERMINATION.

"/3) INDUSTRIAL LEASES FOR TERMS OF FIVE YEARS AND MORE, WHICH DO NOT CONTAIN A 30-DAY CANCELLATION CLAUSE BUT HAVE AN ENTITLEMENT TO REMOVAL OF BUILDINGS AND STRUCTURES CLAUSE SIMILAR AS IN (1) ABOVE. THEY HAVE, HOWEVER, A PROVISION THAT: "IN THE EVENT ALL OR PORTION OF THE LEASED PREMISES SHALL BE CONDEMNED FOR PUBLIC USE, LESSEE SHALL RECEIVE COMPENSATION ONLY FOR THE TAKING AND DAMAGING OF LESSEE'S IMPROVEMENTS. ANY COMPENSATION OR DAMAGES FOR TAKING SAID PREMISES OR LESSEE'S LEASEHOLD INTEREST THEREIN AWARDED TO LESSEE SHALL BE ASSIGNED TO RAILROAD.'

"/4) SPECIAL LEASES FOR TERMS OF FIVE YEARS OR MORE, WHICH DO NOT CONTAIN A 30-DAY CANCELLATION CLAUSE; DO HAVE AN ENTITLEMENT TO REMOVAL OF BUILDINGS AND STRUCTURES CLAUSE; AND DO NOT HAVE THE "IN THE EVENT OF CONDEMNATION" CLAUSE. THESE LEASES APPEAR TO HAVE BEEN DESIGNED TO COVER A PARTICULAR NON-STANDARD TYPE OF SITUATION.'

ANOTHER CATEGORY CONCERNS "LEASES REGARDING WHICH IMPROVEMENTS HAVE BEEN CONSTRUCTED ON LEASED PREMISES" FOR WHICH IT IS STATED SPECIAL CONSIDERATION IS DEEMED WARRANTED. SPECIFICALLY, THIS LATTER CATEGORY IS DESCRIBED AS ONE WHERE THE LESSEE IS OPERATING A "PUBLIC PARKING LOT" UNDER WHAT IS NOW A MONTH-TO-MONTH LEASE CONTAINING A PROVISION THAT THE LESSEE WAIVES ANY LEASEHOLD INTEREST HE MAY POSSESS AND ASSIGNS SAME TO THE LESSOR IN THE EVENT OF CONDEMNATION. IT IS STATED THAT THESE PREMISES ARE VERY CLOSE TO THE UNITED STATES-MEXICAN BORDER; THAT THE PARKING LOT BUSINESS IS OF GREAT MAGNITUDE; AND THAT SINCE A LESSEE IN THIS CATEGORY IS NOT THE OWNER OF THE INVOLVED LAND OR ANY IMPROVEMENTS THEREON IT IS BELIEVED THAT PAYMENT IS NOT JUSTIFIED ON THE BASIS OF REPLACEMENT COST LESS DETERIORATION AND OBSOLESCENCE IN EXISTING REAL ESTATE AS PROVIDED UNDER THE "VALUE IN USE" SECTION OF THE CHAMIZAL ACT. IT IS STATED, HOWEVER, THAT SINCE THE AFORESAID SECTION PROVIDES THAT THERE MAY BE TAKEN INTO CONSIDERATION "FACTORS BEARING UPON INCOME ATTRIBUTABLE TO THE REAL ESTATE" AND THAT SINCE SUCH A LESSEE IS THE "OWNER" OF A LEASEHOLD INTEREST HE SHOULD BE ENTITLED TO THE VALUE TO HIM OF SUCH LEASEHOLD INTEREST REFLECTED BY THE INCOME ATTRIBUTABLE TO HIS INTEREST. IN THIS REGARD, IT IS EMPHASIZED THAT THE "VALUE IN USE" CONCEPT IS ONE OF ADMINISTRATIVE RATHER THAN JUDICIAL DETERMINATION; THEREFORE, IN YOUR OPINION, THE LESSOR CANNOT VALIDLY CLAIM THAT HE IS ENTITLED TO SUCH "VALUE IN USE" LEASEHOLD INTEREST. WHILE AS INDICATED ABOVE YOUR LETTER OF FEBRUARY 7, 1965, INDICATES THAT NO IMPROVEMENTS HAVE BEEN CONSTRUCTED BY THE TENANTS ON THE PARKING LOTS AND THAT THEY ARE NOT THE OWNERS OF ANY IMPROVEMENTS, SUBSEQUENT INFORMATION HAS BEEN FURNISHED INFORMALLY TO THE EFFECT THAT "PARKING SHEDS HAVE BEEN INSTALLED AND PAVING OF THE LEASED PREMISES HAS BEEN ACCOMPLISHED BY THE PARKING LOT LESSEES, SUCH BEING IN ADDITION TO THE MINIMUM TYPE OFFICE STRUCTURES.'

BASED ON THE LEGISLATIVE HISTORY OF THE CHAMIZAL CONVENTION AND THE PROVISIONS OF THE ACT IT IS YOUR VIEW THAT IT WAS INTENDED TO ASSURE THAT NEITHER THE CITY OF EL PASO NOR ITS PEOPLE SHOULD SUFFER BECAUSE OF THE INTERNATIONAL SETTLEMENT; THAT IT WAS INTENDED TO TREAT ALL OCCUPANTS TO BE DISPLACED FROM THE CHAMIZAL AREA WITH UTMOST SYMPATHETIC CONSIDERATION AND WITHOUT DISCRIMINATION; THAT THE ACT SHOULD BE CONSTRUED TO ATTAIN SUCH OBJECTIVES; THAT THE LESSEES, IN THE ABSENCE OF COMPARABLE PROPERTIES ON THE MARKET IN OR NEAR EL PASO, AS PROVIDED BY THE ACT, ARE ENTITLED TO THE SAME ADMINISTRATIVELY DETERMINED "VALUE IN USE" BENEFITS WITH RESPECT TO THEIR REALTY IMPROVEMENTS AS ARE THE FEE OWNERS TO THEIR PROPERTIES AND TO FACTORS BEARING UPON INCOME ATTRIBUTABLE TO THEIR LEASEHOLD INTEREST; AND THAT THE ACT SHOULD BE SO INTERPRETED.

SECTION 1.B. OF THE AMERICAN-MEXICAN CHAMIZAL CONVENTION ACT OF 1964 AUTHORIZES THE SECRETARY OF STATE, ACTING THROUGH YOU "TO ACQUIRE BY DONATION, PURCHASE, OR CONDEMNATION, ALL LANDS REQUIRED.' THE TERM "LAND" AS USED IN THE ACT IS DEFINED IN SECTION 8 AS INCLUDING "INTERESTS IN LAND" AND THE TERM "FAIR VALUE" IS DEFINED AS MEANING "FAIR VALUE" OF THE INTEREST ACQUIRED. UNDER SECTION 3.A., PROVISION IS MADE FOR REIMBURSING OWNERS AND TENANTS FOR EXPENSES AND OTHER LOSSES AND DAMAGES INCIDENT TO MOVING THEMSELVES, THEIR FAMILIES AND THEIR POSSESSIONS SUBJECT TO THE LIMITATION AND CONDITIONS THEREIN STATED. SECTION 3.B. AUTHORIZES COMPENSATION TO THE "OWNERS AND TENANTS FOR IDENTIFIABLE, REASONABLE, AND SATISFACTORILY PROVED COSTS AND LOSSES TO OWNERS AND TENANTS OVER AND ABOVE THOSE REIMBURSED UNDER THE FOREGOING SUBSECTION (3.A.) IN THE CATEGORIES HEREINAFTER PROVIDED, AND FOR WHICH PURPOSE THERE SHALL BE ESTABLISHED BY THE COMMISSIONER A BOARD OF EXAMINERS.'

IN ADDITION TO THE COMPENSATION TO OWNERS AND TENANTS PROVIDED FOR IN SECTION 3.A., SECTION 3.B. (1) (B) AUTHORIZES COMPENSATION AS FOLLOWS:

"/B) FOR COMMERCIAL PROPERTIES FOR WHICH THERE ARE NO COMPARABLE PROPERTIES ON THE MARKET IN OR NEAR EL PASO, TEXAS, COMPENSATION TO THE OWNER UP TO AN AMOUNT WHICH, WHEN ADDED TO THE TOTAL FAIR MARKET VALUE, INCLUDING THE LAND VALUE, WOULD COMPENSATE THE OWNER FOR THE "VALUE IN USE" OF THE REAL ESTATE TO HIM. SUCH "VALUE IN USE" IS BE DETERMINED ON THE BASIS OF REPLACEMENT COST LESS DETERIORATION AND OBSOLESCENCE IN EXISTING REAL ESTATE AND TAKING INTO CONSIDERATION FACTORS BEARING UPON INCOME ATTRIBUTABLE TO THE REAL ESTATE.'

SECTION 6 PROVIDES:

"SEC. 6. PAYMENTS TO BE MADE AS HEREIN PROVIDED SHALL BE IN ADDITION TO, BUT NOT IN DUPLICATION OF, ANY PAYMENTS THAT MAY OTHERWISE BE AUTHORIZED BY LAW. THE MEANS EMPLOYED TO ACQUIRE THE PROPERTY, WHETHER BY CONDEMNATION OR OTHERWISE, SHALL NOT AFFECT ELIGIBILITY FOR REIMBURSEMENT OR COMPENSATION UNDER THIS ACT. NOTHING CONTAINED IN THIS ACT SHALL BE CONSTRUED AS CREATING ANY LEGAL RIGHT OR CAUSE OF ACTION AGAINST THE UNITED STATES OR AS PRECLUDING THE EXERCISE BY THE GOVERNMENT OF THE RIGHT OF EMINENT DOMAIN OR ANY OTHER RIGHT OR POWER THAT IT MAY HAVE UNDER THIS OR ANY OTHER LAW; NOR SHALL THIS ACT BE CONSTRUED AS PRECLUDING AN OWNER OR TENANT FROM ASSERTING ANY RIGHTS HE MAY HAVE UNDER OTHER LAWS OR THE CONSTITUTION OF THE UNITED STATES.'

BECAUSE OF THE TENANTS' REMOVAL RIGHTS IN THE FOUR CATEGORIES DESCRIBED ON PAGE TWO OF YOUR LETTER A QUESTION HAS ARISEN AS TO WHETHER THE LESSEES' IMPROVEMENTS MUST BE REGARDED AS PERSONAL PROPERTY OR WHETHER SUCH IMPROVEMENTS MAY BE REGARDED AS "REAL ESTATE" SO AS TO AUTHORIZE COMPENSATION TO THE LESSEES AS OWNERS THEREOF FOR THE "VALUE IN USE" AS PROVIDED FOR UNDER SECTION 3.B. (1) (B) OF THE ACT.

AS YOU HAVE INDICATED, SHOULD A CONTROVERSY DEVELOP BETWEEN THE RAILROAD COMPANIES AND ANY OF THEIR LESSEES UNDER THE INVOLVED LEASES THE BUILDINGS AND IMPROVEMENTS CONSTRUCTED BY THE LESSEES WOULD GENERALLY BE REGARDED AS PERSONAL PROPERTY INSOFAR AS CONCERNS THEIR RIGHT OF REMOVAL. IN THIS REGARD YOU STATE THAT THERE IS NO EVIDENCE TO CONCLUDE THAT THE CONGRESS IN ENACTING SECTION 3.B. (1) (B) INTENDED TO MAKE A "RAZOR THIN" DISTINCTION BETWEEN ALLOWING "VALUE IN USE" WITH RESPECT TO BUILDINGS AND STRUCTURES HAVING ESSENTIAL CHARACTERISTICS OF REALTY OWNED BY A LESSEE, AS COMPARED TO THOSE OWNED BY A LESSOR, ON THE BASIS OF HOW THE PROPERTY MIGHT BE CLASSIFIED BY JUDICIAL DETERMINATION IN A CONTROVERSY BETWEEN A LESSOR AND LESSEE. YOU STATE THAT ARTICLE 5 OF THE CONVENTION WITH MEXICO, AS AMPLIFIED BY A SEPARATE UNDERSTANDING BETWEEN THE TWO COUNTRIES, OBLIGATES THE UNITED STATES TO TRANSFER STRUCTURES TO MEXICO INTACT WITH MINOR EXCEPTIONS NOT HERE PERTINENT; THAT THE AMOUNT TO BE PAID FOR SUCH STRUCTURES ($4,676,000) HAS ALREADY BEEN COMPUTED; AND THAT THE UNITED STATES IS THEREFORE IN A POSITION IN WHICH IT CANNOT PROPERLY PERMIT REMOVAL OF THE TENANTS' IMPROVEMENTS WITHOUT CONFLICT WITH MEXICO. FOR THE FOREGOING REASONS YOU HAVE CONCLUDED THAT FOR THE PURPOSES OF THE ACT, THE BUILDINGS AND STRUCTURES OWNED BY THE LESSEES SHOULD BE REGARDED AS REAL ESTATE AND THAT COMPENSATION THEREFOR SHOULD BE MADE TO THE LESSEES AS PROVIDED FOR UNDER THE SPECIAL COMPENSATION PROVISIONS OF SECTION 3.B. (1) (B) WITH SPECIAL REFERENCE TO LOCATION AS SUGGESTED ON PAGE 6 OF SENATE REPORT NO. 868, 88TH CONGRESS.

IN DECISIONS OF AUGUST 4, 1950, B-95443 AND AUGUST 17, 1951, B 104527, BOTH TO THE SECRETARY OF THE ARMY, CONSIDERATION WAS GIVEN TO THE MATTER OF THE ENTITLEMENT OF RAILROAD TENANTS TO COMPENSATION FOR IMPROVEMENTS CONSTRUCTED BY THEM ALONG THE RAILROADS' RIGHTS-OF-WAY BEING ACQUIRED BY THE GOVERNMENT. FOLLOWING EXECUTION OF THE RELOCATION AGREEMENTS WITH THE RAILROADS THE TENANTS FAILED TO TIMELY REMOVE THEIR IMPROVEMENTS AS AUTHORIZED UNDER THEIR LEASES. SINCE THE IMPROVEMENTS WERE NOT REQUIRED FOR USE OF THE GOVERNMENT THERE WAS NO TAKING BY THE GOVERNMENT AND IT WAS HELD IN BOTH CASES THAT THE GOVERNMENT WAS NOT LEGALLY OBLIGATED TO COMPENSATE THE TENANTS FOR THEIR IMPROVEMENTS. IN THE DECISION OF AUGUST 4, 1950, WE STATED, HOWEVER, THAT "THOSE CASES INVOLVING CONDEMNATION PROCEEDINGS--- WHERE THERE IS A TAKING OR ENFORCED SALE OF PRIVATE PROPERTY THROUGH THE EXERCISE OF THE SOVEREIGN POWER--- CLEARLY ARE NOT APPLICABLE HERE.' WHILE YOU HAVE NOT INDICATED THE METHOD TO BE EMPLOYED IN ACQUIRING THE RAILROADS' LAND AND THE IMPROVEMENTS THEREON, THE SITUATION AS OUTLINED IN YOUR LETTER APPEARS TO BE ONE IN WHICH THE COMMISSION, TO SERVE THE PUBLIC PURPOSE AND TO CARRY OUT THE PURPOSES OF THE CONVENTION AND THE ACT, WILL BE REQUIRED TO "TAKE" THE TENANTS' BUILDINGS AND IMPROVEMENTS TOGETHER WITH THEIR REMOVAL RIGHTS WHERE APPLICABLE.

GENERALLY, WHERE THERE IS A TAKING BY THE GOVERNMENT IN EMINENT DOMAIN PROCEEDINGS, RIGHT OF REMOVAL AGREEMENTS BETWEEN THE LANDLORD AND TENANTS DO NOT SETTLE THE CHARACTER OF THE TENANTS' IMPROVEMENTS AS PERSONALTY OR REALTY SO FAR AS THE GOVERNMENT IS CONCERNED SINCE THE INHERENT CHARACTER OF SUCH IMPROVEMENTS IS REALTY AND THE GOVERNMENT BY ITS TAKING TAKES THE PROPERTY IN ITS ENTIRETY, THUS WIPING OUT ALL INTERESTS AND LEAVING THE COMPENSATION AWARDED BY THE COURT TO BE DIVIDED AMONG THE VARIOUS CLAIMANTS ACCORDING TO THEIR RESPECTIVE INTERESTS. BURKHART V. UNITED STATES, 227 F.2D 659; UNITED STATES V. 19.86 ACRES OF LAND IN EAST ST. LOUIS, 141 F.2D 344. IN THE CASE OF SOUTHERN CALIFORNIA FISHERMAN'S ASS- N. V. UNITED STATES, 174 F.2D 739, THE COURT, FOR COMPENSATION PURPOSES, TREATED THE PERMITTEE'S IMPROVEMENTS WITH REMOVAL RIGHTS AS PERSONAL PROPERTY. IN THAT CASE THE AMENDED COMPLAINT IN THE CONDEMNATION PROCEEDINGS INCLUDED BOTH IMPROVEMENTS WHICH WERE REMOVABLE BY THE PERMITTEE ON 30 DAYS NOTICE AND THE LAND. THE PERMITTEE, THE APPELLANT IN THE CASE, WAS SERVED WITH REMOVAL NOTICE BY THE GRANTOR BUT BEFORE THE APPELLANT HAD TAKEN ANY ACTION TO REMOVE THE IMPROVEMENTS THE UNITED STATES TOOK POSSESSION OF THE LAND AND IMPROVEMENTS. THE APPELLANT HAD CONTENDED THAT FOR COMPENSATION PURPOSES THE LAND AND IMPROVEMENTS SHOULD BE VALUED AS A WHOLE AS IF THEY WERE THE SOLE PROPERTY OF ONE OWNER. THE COURT, HOWEVER, HELD THE NET WORTH OF THE IMPROVEMENTS WAS SUBJECT TO THE CONDITION THAT THEY BE REMOVED WITHIN 30 DAYS AND THAT, THEREFORE, THE APPELLANT'S LOSS, INSOFAR AS CONCERNED JUST COMPENSATION, WAS NO GREATER THAN THE LEGAL RIGHTS UNDER THE PERMIT, WHICH AFTER SERVICE OF TERMINATION, WAS THE REMOVAL VALUE PLUS THE RIGHT TO RETAIN THE IMPROVEMENTS ON THE LAND FOR 30 DAYS. ALSO, IT HAS BEEN HELD THAT, ABSENT ANY PROVISION OF LAW TO THE CONTRARY, WHERE A LESSEE HAS CONTRACTED AWAY ANY RIGHTS IT MIGHT HAVE WITH RESPECT TO ITS IMPROVEMENTS IN THE EVENT OF CONDEMNATION OR THE TAKING FOR A PUBLIC USE, THE TENANT HAS NO RIGHT, IN THE EVENT OF SUCH CONTINGENCY, TO COMPENSATION FOR SUCH IMPROVEMENTS WHICH PERSISTED BEYOND SUCH A TAKING AND THAT HE IS ENTITLED TO NOTHING. UNITED STATES V. PETTY MOTOR CO. 327 U.S. 372; UNITED STATES V. 70.39 ACRES OF LAND, 164 F.SUPP. 451.

THE FOREGOING RULES ARE GENERALLY APPLICABLE WITH RESPECT TO THE TENANT'S RIGHT TO COMPENSATION UNDER THE FOUR CATEGORIES OF LEASES DESCRIBED ON PAGE TWO OF YOUR LETTER. HOWEVER, BECAUSE OF THE UNUSUAL CIRCUMSTANCES INVOLVED AND THE RELOCATION DIFFICULTIES INCIDENT TO RELOCATING 4,500 PEOPLE AND COMMERCIAL FIRMS, SPECIAL AND UNUSUAL LEGISLATION WAS ENACTED BY THE CONGRESS "TO KEEP THE PROPERTY OWNERS WHOLE" AND TO AVOID ECONOMIC INJURY TO THE PROPERTY OWNERS AND TENANTS AFFECTED BY THE CHAMIZAL SETTLEMENT. TO ACCOMPLISH SUCH PURPOSES SECTION 3.B. (1) (B) OF THE ACT AUTHORIZED YOU TO COMPENSATE THE OWNERS OF COMMERCIAL PROPERTY FOR WHICH THERE ARE NO COMPARABLE PROPERTIES ON THE MARKET IN OR NEAR EL PASO IN "AN AMOUNT WHICH, WHEN ADDED TO THE TOTAL FAIR MARKET VALUE, INCLUDING THE LAND VALUE, WOULD COMPENSATE THE OWNER FOR THE "VALUE IN USE" OF THE REAL ESTATE TO HIM.' PURSUANT TO SECTION 6, PAYMENTS MADE AS PROVIDED FOR IN THE ACT WOULD BE IN ADDITION TO, BUT NOT IN DUPLICATION OF ANY PAYMENTS THAT MIGHT OTHERWISE BE AUTHORIZED BY LAW.

WHILE IN SOME SITUATIONS AND FOR CERTAIN PURPOSES IT HAS BEEN HELD THAT A LEASEHOLD ESTATE IS TO BE REGARDED AS A CHATTEL AND NOT AS REAL ESTATE, IT ALSO HAS BEEN HELD THAT A LEASE IS "REAL ESTATE" WITHIN THE MEANING OF A STATUTE WHICH AUTHORIZES A GOVERNMENT OFFICER TO PROCURE REAL ESTATE WHERE THE UNITED STATES HAD THE POWER TO CONDEMN. UNITED STATES V. MIDLAND NATIONAL BANK OF BILLINGS, 67 F.SUPP. 268. UNITED STATES V. FISK BUILDING, 99 F.SUPP. 592. SEE, ALSO, CARRIER V. MCDONALD, 218 S.W.2D 257, 258 (TEXAS). ACCORDINGLY, AND SINCE, BY THE DEFINITION IN SECTION 8 OF THE ACT YOUR AUTHORIZATION TO ACQUIRE LANDS INCLUDES INTERESTS IN LAND, WE AGREE THAT FOR THE PURPOSE OF COMPENSATING THE OWNERS FOR THE "VALUE IN USE" OF THE BUILDINGS AND STRUCTURES OWNED BY THE LESSEES IN THE FOUR CATEGORIES DESCRIBED ON PAGE TWO OF YOUR LETTER, SUCH BUILDINGS AND IMPROVEMENTS MAY BE CONSIDERED AS "REAL ESTATE" AND THE LESSEES AS OWNERS THEREOF FOR THE PURPOSES OF SECTION 3.B. (1) (B) AND THAT PAYMENTS TO COMPENSATE THE LESSEES THEREFOR ON THE BASIS OF THE ,VALUE IN USE" FORMULA PROVIDED FOR THEREIN MAY BE MADE "IN ADDITION TO, BUT NOT IN DUPLICATION OF, ANY PAYMENTS THAT MAY OTHERWISE BE AUTHORIZED BY LAW.' WITH RESPECT TO THE PROVISION IN CATEGORY NO. 3, PAGE TWO OF YOUR LETTER, WE DO NOT REGARD THE ASSIGNMENT THEREIN AS AFFECTING THE LESSEES' ENTITLEMENT TO COMPENSATION UNDER THE "VALUE IN USE" FORMULA IN THE ABSENCE OF CONDEMNATION OF THE LEASEHOLD ESTATE.

WITH RESPECT TO THE MONTH-TO-MONTH PARKING LOT TENANTS REFERRED TO ON PAGE THREE OF YOUR LETTER YOU HAVE CONCLUDED THAT PAYMENT DOES NOT APPEAR TO BE JUSTIFIED ON THE BASIS OF REPLACEMENT COST LESS DETERIORATION AND OBSOLESCENCE IN EXISTING REAL ESTATE AS PROVIDED UNDER THE "VALUE IN USE" PROVISIONS OF SECTION 3.B. (1) (B). SINCE AS YOU HAVE INDICATED THE "VALUE IN USE" CONCEPT IS ONE OF ADMINISTRATIVE RATHER THAN JUDICIAL DETERMINATION, WE WOULD NOT BE DISPOSED TO DISAGREE WITH YOUR CONCLUSION. AS YOU HAVE POINTED OUT, HOWEVER, THE PARKING LOT LESSEES ARE OWNERS OF LEASEHOLD INTERESTS. UNITED STATES V. GENERAL MOTORS CORPORATION, 323 U.S. 373, 380. WHILE UNDER THE PROVISIONS OF SECTION 3.B. (1) (B) THE "VALUE IN USE" CONCEPT FOR COMPENSATION RELATES TO THE ,OWNER" OF REAL ESTATE OUR OFFICE HAS RECOGNIZED THAT THE WORD "OWN" OR ITS DERIVATIVES HAS NO PRECISE OR DEFINITE MEANING AND THAT IT MUST BE EXAMINED IN ITS CONTEXT AND SETTING TO DETERMINE THE MEANING INTENDED AND THAT WHEN USED IN A STATUTE THE OBJECT SOUGHT BY THE STATUTE IS, OF COURSE, DETERMINATIVE. 43 COMP. GEN. 705, 706. HERE, AS YOU HAVE INDICATED, THE LEGISLATIVE HISTORY LEAVES LITTLE ROOM FOR DOUBT THAT THE CONGRESS INTENDED TO MAKE ALL DISPLACED COMMERCIAL PROPERTIES WHOLE WHETHER THEY BE HELD IN FEE OR BY A LESSEE. ACCORDINGLY, AND SINCE THE TERM ,LAND" AS DEFINED IN SECTION 8 INCLUDES INTERESTS IN LAND, OUROFFICE IS NOT REQUIRED TO OBJECT TO YOUR CONCLUSION THAT THE LESSEES OF THE PARKING LOTS ARE ENTITLED TO THE VALUE TO THEM OF THEIR LEASEHOLD INTERESTS REFLECTED BY THE NET INCOME ATTRIBUTABLE TO THEIR LEASEHOLD INTERESTS IN THE REAL ESTATE CONVERTED TO ITS EQUIVALENT CAPITAL VALUE TO THEM. SEE IN THIS REGARD PAGE SEVEN OF HOUSE REPORT NO. 1233, 88TH CONGRESS.