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Alaska v. Teller Native Corporation (8/25/95), 904 P 2d 847
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0607, fax (907) 276-5808.
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, )
) Supreme Court No. S-6160
) Superior Court No.
v. ) 2NO-89-157 CI
TELLER NATIVE CORPORATION, ) O P I N I O N
Respondent. ) [No. 4243 - August 25, 1995]
Petition for Review from the Superior Court
of the State of Alaska, Second Judicial
District, Nome, Richard H. Erlich, Judge.
Appearances: E. John Athens, Jr., and Mason
Damrau, Assistant Attorneys General, Fair
banks, and Bruce M. Botelho, Attorney
General, Juneau, for Petitioner. Bryan P.
Timbers, Larson, Timbers & Van Winkle, Inc.,
Nome, and Robert John, Law Offices of William
R. Satterberg, Jr., Fairbanks, for
Before: Moore, Chief Justice, Rabinowitz,
Matthews, Compton and Eastaugh, Justices.
RABINOWITZ, Justice, dissenting.
The State condemned land owned by Teller Native
Corporation (TNC). At the time of the condemnation, the State
leased the land from TNC and operated an airport on it. The
airport was built by the State during the lease with the use of
federal funds. We granted review on the question of whether TNC
is entitled to compensation for the improvements erected by the
State during the term of the lease.
I. FACTS AND PROCEEDINGS
On March 15, 1972, the State applied to the Bureau of
Land Management (BLM) under 49 U.S.C. 211-14 for an airport
lease on 403 acres of land located outside the Native village of
Teller. This land had previously been withdrawn "from all forms
of appropriation"for selection by the village under the Alaska
Native Claims Settlement Act (ANCSA). 43 U.S.C. 1610(a)(1)
(1988). On March 15, 1973, BLM granted the State a twenty-year
airport lease on the land.
On August 7, 1974, TNC filed a village selection
application which included the lands encompassed by the airport
lease. The surface estate of this land was conveyed to TNC on
January 15, 1982.1 The conveyance to TNC was subject to the
airport lease. BLM waived administration of the lease on March
After receiving the airport lease, the State
constructed an airport, including an access road, parking apron,
taxiway, and runway, on the leased land. Construction was
completed in 1975 at a cost of $536,890. Approximately ninety-
four percent of this amount came from an FAA grant, and the
remainder came from state funds. Prior to the condemnation, the
airport was further improved with a $174,804 municipal grant for
airport lighting and an electrical equipment building and by a
state expenditure of $95,634 for a powerline to the airport.
On October 17, 1989, the State filed a declaration of
taking condemning two parcels of land totaling 94.105 acres and
including the Teller airport and the access road. The superior
court confirmed the taking on December 18, 1989. TNC and the
State then filed cross-motions for summary judgment concerning
whether TNC was entitled to compensation for improvements made to
the land during the period of the lease to the State. The
superior court granted TNC's motion and denied the State's
motion, ruling that the State breached the lease by condemning
the property, vesting title in all improvements in TNC. The
State petitioned for review, and we granted review.
II. STANDARD OF REVIEW
In reviewing a grant of summary judgment we
independently determine "whether there was a genuine issue of
material fact and whether the moving party was entitled to
judgment on the law applicable to the established facts." Zeman
v. Lufthansa German Airlines, 699 P.2d 1274, 1280 (Alaska 1985)
(citing Brock v. Alaska Int'l Indus., 645 P.2d 188, 190 n.6
(Alaska 1982)). Neither party claims that there are any material
issues of fact. The proper measure of compensation for the
taking presents a question of law, to which we apply our
independent judgment. On reviewing questions of law, we adopt
"the rule of law that is most persuasive in light of precedent,
reason, and policy." Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska
1979). The trial court's decision on a motion for summary
judgment may be upheld on any ground which, as a matter of law,
would support the result reached. Carlson v. State, 598 P.2d
969, 973 (Alaska 1979).
Article I, section 18 of the Alaska Constitution
provides, "Private property shall not be taken or damaged for
public use without just compensation." We liberally construe
this provision in favor of the property owner. Ehrlander v.
State, Dep't of Transp., 797 P.2d 629, 633 (Alaska 1990). "In
Alaska, the fundamental goal of 'just compensation' is to make
the property owner whole." City of Kenai v. Burnett, 860 P.2d
1233, 1242 (Alaska 1993). "[T]he property owner should be placed
as fully as possible in the same position as he was in prior to
the taking of his property." Ketchikan Cold Storage Co. v.
State, 491 P.2d 143, 150 (Alaska 1971). "[J]ust compensation is
determined by what the owner has lost and not by what the
condemnor has gained." Gackstetter v. State, 618 P.2d 564, 566
(Alaska 1980). Therefore, this court must determine what TNC has
lost by virtue of the State's condemnation of the airport lands.
A. Compensation Should be Paid for Any Improvements
Which TNC Owned Under the Lease.
The State claims that just compensation does not
include the value of improvements made by the State as lessee
because TNC did not contribute to the improvements and because a
condemning authority should not pay for its own precondemnation
The State's argument that TNC is not entitled to
compensation for the improvements because it did not contribute
to them is incorrect. A condemnee is entitled to compensation
based on what it has lost, id. at 566, not based on its
contributions to what it lost. In addition, in the transfer of
the land to TNC, TNC succeeded to the interests of the United
States in the land. 43 U.S.C. 1613(g). As a result, TNC
should be considered to have paid whatever consideration for the
improvements the United States paid. The requirements in the
lease that the State construct an airport on the site, the
nominal rent paid under the lease ($10 a year), and the State's
use of free fill from other BLM land (also selected by TNC) for
improving the airport may be considered consideration for the non-
removable improvements paid by the United States as lessor.
The State's primary argument -- that a condemning
authority should not pay for improvements on the property it made
as lessee -- is supported by some precedent. In State v. Earl,
345 S.W.2d 20, 26 (Ark. 1961), the court rejected the landowner's
claim for compensation for improvements placed on the land by its
original lessee, who subsequently assigned his interest to the
condemning authority. The landowner originally leased the
premises to another private individual for use as an airport.
The lease required the lessee, as consideration for the lease, to
sod the runway, provide necessary artificial drainage, construct
fencing, and make other improvements. Id. at 21-22. The State
conceded that the improvements made by the original lessee
"amounted to several thousand dollars,"and one witness testified
that the improvements had a value of $25,000. Id. at 26. The
lease did not grant the lessee any right to remove the
improvements. Id. The landowners claimed that they were
entitled to compensation for the improvements because they had a
reasonable expectation that they would receive them at the
expiration of the lease. The court rejected this claim, holding
that "a condemnor need not pay for his own improvements when
they have been made prior to the act of condemnation." Id.
(quoting 1 Lewis Orgel, Valuation under the Law of Eminent Domain
409 (2d ed. 1953)).
In the sentence quoted by the court, Orgel is
discussing condemnors who are technically trespassers. In a
footnote to this sentence Orgel states:
A somewhat analogous situation is
presented where a lessee who has improved
property subsequently condemns it. If the
lessee has the right to remove the
improvements, the lessor is of course not
entitled to be compensated for their value
nor is cost of removal taken into
consideration since this does not increase
the value except to the condemnor. But where
the lessee has no right to remove the
improvements, their value is properly taken
into account, for in this case the lessor has
by contract a right to the improvements on
termination of the lease.
1 Orgel, supra, at 409 n.1 (citations omitted). Orgel thus draws
a distinction between pre-condemnation improvements made under a
contract giving the landowner the right to keep improvements --
in which case the condemnee gets compensation for the
improvements -- and pre-condemnation improvements which are made
under a contract not allowing the lessor to retain improvements
or which are made by a "trespassing"condemning authority. The
Arkansas Supreme Court purported to rely on Orgel but did not
follow this distinction; therefore, its decision in Earl is
The distinction drawn by Orgel is a reasonable one.
There is a difference between improving property under the
mistaken belief that one has good title to it and improving
property under a contract which specifically assigns the right to
improvements to another party. As noted above, we have defined
"just compensation" in terms of what the owner has lost.
Gackstetter, 618 P.2d at 566. Where the condemning authority
improves property under the mistaken belief that it owns the
property or even with the intention to condemn the property
immediately, the owner of the property has not lost anything by
virtue of the premature construction. However, where the State
specifically agrees to build improvements on leased property and
leave them there at the termination of the lease, but
subsequently condemns the property before the expiration of the
lease, the owner of the property will lose his reasonable
expectation of receiving the improvements at the end of the
A number of cases have recognized the rule that the
lessor's right to compensation for improvements built by the
condemning authority/lessee is controlled by the terms of the
lease. In United States v. Certain Space in Rand McNally Bldg.,
295 F.2d 381 (7th Cir. 1961), the United States entered into a
lease which provided that the lessee would retain removable
improvements but could not remove structural improvements. After
making structural improvements, the United States condemned the
building. The court stated that the rights of the parties were
controlled by the terms of the lease. Id. at 383. The court
concluded that the non-removable improvements "became the
property of the landowner by the contract of the parties and the
property rights of the landowner therein were taken and
extinguished by the government's exercise of its power of eminent
domain." Id. at 384.
In United States v. Five Parcels of Land, 180 F.2d 75
(5th Cir.), cert. denied, 340 U.S. 812 (1950), the United States
leased land for the purpose of constructing a ship-building
facility. To this end, the United States dredged a channel,
filled and leveled portions of the land, and constructed
structural improvements and facilities on the land. Id. at 75-
76. The leases provided that the United States retained the
right to remove facilities and improvements which it placed upon
the land. Id. at 75. The landowners did not seek compensation
for any removable improvements or facilities. Id. They did,
however, seek compensation for the increased value of the land
which resulted from the dredging, filling, and leveling. The
court held that as the United States was not authorized to take
back the fill, undo the leveling, or fill what had been dredged,
the dredging, filling, and leveling were "normal, incidental, and
contemplated fruits of the leases which rightfully inured to the
landowners." Id. at 76-77. In making this determination, the
court relied on the terms of the leases. The owners were thus
entitled to compensation for the value of the land as improved.
Similar results were reached in United States v. 52.67
Acres of Land, 150 F. Supp. 347 (E.D. Ill. 1957), and United
States v. Certain Parcels of Land, 90 F. Supp. 27 (W.D. Va.
1949). In 52.67 Acres, the court denied the landowner
compensation for fixtures and structures affixed by the
government lessee because the lease provided such fixtures and
structures remained the property of the government and could be
removed by the government at the end of the lease term. 150 F.
Supp. at 349-50. The court also determined, however, that "the
grading, leveling, altering, and changing of the surface of the .
. . real estate could and should be considered as 'fruits of the
lease' and as becoming a part of the real estate and inuring to
the benefit of the lessors." Id. at 351. In Certain Parcels,
the lease provided that the government had the right to improve
the property and that "[a]ll such alterations, additions,
structures, fixtures, and improvements except walks, service
driveways, underground utilities (and appurtenances), and roads
shall be and remain the property of the Government and may be
removed from the premises by the Government." 90 F. Supp. at 29.
The court concluded that on the subsequent condemnation of the
property, the landowner was entitled under the lease to
compensation for the property as improved with walks, service
driveways, underground utilities, and roads. Id. at 33-34.
The State argues that giving Teller compensation for
the improvements would require the government to pay twice for
the same thing, resulting in a windfall to Teller. While this
"windfall" argument may have merit in the context of premature
construction by a trespassing condemnor, see Anderson-Tully Co.
v. United States, 189 F.2d 192, 197 (5th Cir.), cert. denied, 342
U.S. 826 (1951), it is not relevant where the pre-condemnation
construction was governed by a contract between the parties. No
windfall exists where the government has voluntarily entered into
a contractual relationship with the landowner rather than
condemning the property initially, and has either explicitly
agreed to build improvements as part of the consideration for the
lease or has, without contractually reserving its right to remove
improvements, made improvements that cannot be easily removed.4
As the court in Certain Parcels of Land stated in response to a
similar windfall/pay twice argument:
A brief answer to this argument is that it
ignores entirely the obligation which the
Government undertook with respect to the
improvements when it entered into the lease.
No doubt had the Government acquired the fee
in this tract in 1944, when it was
unimproved, the cost of it would have been
much less than it is now required to pay.
But instead it decided to lease the land
under a contract whereby, in consideration
for its use, it enhanced the value of the
property. Having now at this later time
decided to acquire the absolute title to the
property, it is not "ridiculous"nor is it
unjust that it should pay its present value.
90 F. Supp. at 34.
B. Who Owned the Improvements?
TNC's right to compensation for the improvements placed
on the land by the State prior to the condemnation therefore
depends on which party owned the improvements under the lease.
See 51C C.J.S. Landlord & Tenant 394(1)(a) (1968) ("[T]he
ownership and right to remove improvements placed on the leased
premises by a tenant are determined by the intention of the
parties as evidenced by the terms of the lease and the
circumstances of the case."). Unfortunately, the lease does not
directly address this question, and the unusual circumstances
leading to the landlord-tenant relationship between TNC and the
State5 make divining the intention of the parties more difficult.
The airport lease, originally entered into between BLM
and the State, provides for a twenty-year term. The State was
granted a preference right if at the end of that time the lessor
determined that a new lease would be granted, but the lessor was
not required to offer a new lease. In section 3(d), the lease
That upon the termination of this lease, by
expiration or forfeiture, or whenever the
United States may claim the right of
possession as herein provided, the lessee
agrees to surrender to it possession of the
premises and to comply with such provisions
and conditions respecting the removal of
improvements and equipment on the property as
may be made by the lessor.
This provision appears to imply that the State, as
lessee, retained the right to remove all improvements, subject
only to whatever reasonable conditions might be placed on this
right by the United States as lessor. However, the right of
possession which the United States may claim under the lease
clearly anticipates the continued use of the premises by the
United States as an airport. Under the lease the State is
required to establish and maintain a public airport which meets
federal requirements and which federal agencies may use without
charge or restriction. The Secretary of Defense may assume
control of the airport at any time when doing so is deemed
necessary for military purposes. The United States paid ninety-
four percent of the cost of the airport and permitted gravel to
be extracted from federal land for its construction free of
charge. All of these factors indicate a federal interest in the
airport which is not limited to the twenty-year lease term.
TNC also argues that the improvements made by the State
were not removable because they were required by the terms of the
lease and thus were contemplated "fruits of the lease."
Improvements may be denied the status of a removable trade
fixture belonging to the lessee and treated as belonging to the
lessor if the lease specifies as part of the tenant's
consideration for the lease that he will construct certain
improvements on the property. 5 Richard R. Powell & Patrick J.
Rohan, Powell on Real Property 653, at 57-54 (1994). The lease
between BLM and the State does provide:
For and in consideration of the fore
going, the lessee hereby agrees: (a) To
establish a public airport on such tract and
to maintain such airport during the life of
(Emphasis added.) While it is clear that the State was required
to build and maintain an airport during the terms of the lease,
this term, by itself, does not necessarily require the State to
leave a developed airport at the expiration of the lease.
However, given the fact that the lease anticipates at least the
possibility that the United States would operate the property as
an airport at the termination of the lease with the State, and
given that no additional consideration is given to the State for
improvements seized at that time, it is reasonable to interpret
the lease as making improvements "fruits of the lease." In
addition, because removal of most of the improvements involved in
this case would probably be quite costly, it also seems probable
that, at the end of the lease term, complete removal of these
improvements would not have been a reasonable removal term.6
This interpretation of the lease is similar to the one
made in Five Parcels, 180 F.2d 75. That lease provided that the
United States would be entitled to remove facilities and
improvements which it placed on the land. Nevertheless, the
court concluded that dredging, filling, and leveling of the land
-- improvements which could not be removed and which were
essential to the use of the land anticipated under the lease --
were "normal, incidental, and contemplated fruits of the leases
which rightfully inured to the landowners"at the end of the
leases. Id. at 77.
That the United States would improve
landowner's property by dredging, filling,
and leveling was within the intent, purpose,
and contemplation of the parties to the
leases; that the United States would spend
large sums of the taxpayers' money to
disimprove, or unfill, or unlevel the lands
upon the termination of the lease is
fantastic and unthinkable, and not within the
intent of the parties to the leases. The
right to receive the lands back with the
improvements to the lands as distinguished
from the improvements on the lands was a
right implied in the leases that inhered in
Id. (emphasis added).7 Similarly, the lease between BLM and the
State is most reasonably interpreted as granting the State the
right only to remove removable improvements and as reserving for
the lessor the right to other improvements as "fruits of the
TNC's right to compensation is determined by what it
was entitled to as successor in interest to the United States
under the terms of the lease. Although the lease is ambiguous,
on the whole, it is best interpreted as allowing the lessor to
retain all unremovable improvements. Therefore, TNC should be
compensated based on its ownership interest in the land as an
airport with a runway, access road, parking apron, and taxiway.
RABINOWITZ, J., dissenting.
The federal-state lease which gave rise to this appeal
is a unique circumstance which does not fit neatly within our
eminent domain jurisprudence. I dissent because I believe that
prior case law does not compel us to conclude that TNC must be
compensated for the value of the improvements on the airport
property, and that policy dictates otherwise.
The majority opinion cites numerous cases in which a
government lessee was required to compensate a private landowner-
lessor for improvements made during the course of the lease. In
these cases, the government entity builds nonremovable
improvements and then condemns the leased property. In awarding
compensation, the court, either from express lease terms or based
upon the circumstances, determines that the parties intended that
the improvements were part of the lease price.9 In such
circumstances, compensation is appropriate for two reasons.
First, the government entity could have condemned the property
and then made the improvements. However, having chosen not to do
so, the government should be required to fulfill its end of the
bargain.10 Second, in setting the lease price for the unimproved
property, the landowner has set the price with the expectation
that it will receive the benefit of the improvements at the
termination of the lease term. Thus, by denying compensation for
such improvements the court would be denying part of the "rent"
which the landowner is due.
Neither of these factors are present in this case.
First, the State was unable to condemn the property because it
was federal land and was subject to selection under Alaska Native
Claims Settlement Act.11 Thus, if the State wished to go ahead
with the construction of an airport, a lease was the only
property arrangement which was available. Second, I conclude
that in view of the totality of the circumstances, the
construction of improvements on the property as required by the
lease was not part of the "rental price"for use of the property.
The terms of the lease, including its twenty-year duration and
the renewal provision, were prescribed by federal regulations.12
Additionally, the nominal $10 yearly rental fee, rather than
being in exchange for the improvements at the end of the lease
period, was more likely the result of federal policies favoring
the development of airfields in outlying locations. The federal
government financed most of the initial cost of building the
airport through an FAA grant. It would have been a self-
defeating proposition to with one hand give an FAA grant to build
the airport, while with the other to take back a portion of this
money as rental payments for the land on which the airport was
Nor do I believe that the federal government perceived
these improvements as "fruits of the lease." The lease is silent
as to the ownership of the improvements at the termination of the
lease. The majority reasons, however, that the transfer of the
improvements at the end of the twenty-year term is an implicit
provision of the lease. The majority also argues that several of
the lease terms demonstrate that the federal government had an
"interest in the airport which is not limited to the twenty-year
lease term."13 I disagree. These terms permitted the federal
government to use the airport, and to take it over in the case of
a military emergency. I concede that the federal government had
an interest in the existence of an airport at Teller, but not
necessarily a federal airport. These interests are consistent
with continued operation of the airport by the State, and the
renewal provision giving the State a preference suggests that
this was the arrangement which the federal and state governments
foresaw. Thus, I conclude that the construction of the
improvements was not a part of a bargained-for exchange, and that
the federal government had no expectation of taking over the
airport at the termination of the lease.14 Because the federal
government had no such expectation under the lease, neither could
In short, the federal and state governments build
airports in remote locations to benefit nearby populations. The
public has financed this effort at Teller once in the form of
federal taxes which went toward the FAA grant. Now, the majority
would have the public pay for these improvements a second time as
a result of the State's condemnation. TNC is being compensated
as a result of federal and state laws and policies which led to
the development of an airfield near Teller and has given up
virtually nothing.15 I therefore conclude that TNC need not be
compensated for the value of the improvements.
1 TNC subsequently received the subsurface deed from
Bering Straits Native Corporation.
2 The court held that the State had "every right in this
litigation"that the original lessee would have had. 345 S.W.2d
3 The State relies on some cases which stand only for the
proposition that the condemning authority need not pay
compensation for improvements built by it prior to condemnation.
See Searl v. School Dist., 133 U.S. 553 (1890); Etalook v. Exxon
Pipeline Co., 831 F.2d 1440 (9th Cir. 1987). These cases are
distinguishable because they do not specifically address
improvements built during the term of a lease which explicitly or
implicitly gives the landowner the right to keep the improvements
at the end of the term of the lease.
4 Where the lease is silent, the tenant may remove
improvements at the termination of the lease only if the leased
property can be restored to its former condition within a
reasonable time of the termination of the lease. See Restatement
(Second) of Property (Landlord and Tenant) 12.2-.3 (1976); see
also Interior Energy Corp. v. Alaska Statebank, 771 P.2d 1352,
1356 (Alaska 1989). No reason is apparent why the government,
when acting as a lessee, should be subject to a different default
rule than a private tenant, where either may arrange for
increased protection in the lease.
5 As the original parties to the lease, the United States
and the State of Alaska, were both governmental entities
concerned primarily (it would appear) with providing for public
need and not with dividing economic advantages between them, it
is especially difficult to discern their economic intentions.
The State argues that because TNC did not claim the
lands until after the lease, because the parties did not consider
TNC's potential interest in the lease, and because, had the
United States remained lessor, the lease probably would have been
renewed, TNC had no reasonable expectation of ever owning the
improvements. However, TNC's reasonable expectations should not
be based either on any third party beneficiary theory or on the
assumption that the United States continues to administer the
lease. TNC is an assignee of the United States' interest in the
lease, and therefore has all rights in the lease that the United
States would have. However, it is a private party, and it was
not obligated to make decisions on renewal in the same manner the
United States would have. Therefore, once it received an
interest in the land, it could reasonably expect to receive the
benefits of any improvements on the land that the State would
have been required to leave behind at the expiration of the
lease, even if it could also expect that the State would, in
fact, condemn the property before that time.
The State also argues that TNC had no expectation of
ever receiving the land because it was required to convey the
land to "any Municipal Corporation in the Native village." 43
U.S.C. 1613(c)(3). This section does not necessarily require
that airport lands be conveyed to the municipal corporation
where, as here, it is not land "on which the Native village is
located." The option to select land needed for community
expansion, rights of way, and other needs is granted to the City
of Teller, but unless this option is exercised, the village
remains the owner.
6 In other words, if the same lease was between two
private individuals and, at the end of the term, the lessor sued
the lessee for the cost of removing the runway, access road,
parking apron, and taxiway, and returning the land to tundra, it
seems likely that the lessee could successfully defend on the
ground that removal of these substantial changes to the land
would not be a reasonable removal term.
7 The reasoning of Five Parcels was criticized in United
States v. Delaware, Lackawanna & W. R.R. Co., 264 F.2d 112, 117
(3d Cir.), cert. denied, 361 U.S. 819 (1959), where the court
That the lessee for practical considerations
of cost would not have removed the new roof
and windows, torn up new floors and paving,
nor taken out new plumbing all in order to
effect a restoration to the original state is
irrelevant to this proceeding. What the
reversioner would in all probability have
gotten at the end of the term is not entirely
pertinent in evaluating the property; rather,
it is what the reversioner was entitled to as
of right at the end of the term. With most
respect we think that the Fifth Circuit panel
which decided [Five Parcels] . . . reached an
erroneous result by failing to take this
consideration into account, and so we decline
to follow that decision.
Had the Five Parcels court based its decision solely on the
practical difficulties of removing the improvements to the land,
we would join in the criticism. Where a lease clearly reserves
the right to remove all improvements to the lessee, the lessee
should retain title to those improvements in spite of any
practical difficulties in removing them. However, in Five
Parcels, the court looked to the practical difficulties of
removing the improvements -- improvements which were required as
part of the lease -- as an indicator of the parties' intentions
in entering the lease. Where a lease anticipates improvements
to the land by the lessee which could not feasibly be removed and
does not clearly address each party's rights in those
improvements, it is a reasonable interpretation of the lease that
the improvements will be left behind as fruits of the lease. See
also 52.67 Acres, 150 F. Supp. at 351.
8 This result is also supported by the Restatement's rule
that additions to property may not be removed at the termination
of the lease by the lessee unless the property can be restored to
its former condition within a reasonable time of the termination
of the lease. See supra note 4. In this case such restoration
is not a practical option.
9 See United States v. Certain Space in Rand McNally
Bldg., 295 F.2d 381, 383 (7th Cir. 1961).
10 See United States v. Certain Parcels of Land, 90 F.
Supp. 27, 34 (W.D. Va. 1949).
11 43 U.S.C. 1610(a)(1) (1988).
12 43 C.F.R. 2911 (1973).
13 Majority Opinion at 13.
14 In other words, I would distinguish the prior lease
cases cited by the majority because they were commercial
exchanges rather than inter-governmental land transfers.
15 The State's valuation of the unimproved property is
approximately $40,000, while the value of the improvements is