A second dataset of seven appraisals of two brownfields by nine appraisers was used in Weber (2005) as part of Case Study 1.  It revealed why the scientific process is superior to traditional valuation methods.  A valuation model was developed therein (that includes Table 1) that integrates the scientific process into the appraisal process in order to solve Redeveloper Problem 1.

 

Weber et al (2005) summarized the method, which was meant to fulfill the requirements of both International and US guidance regarding the need for substantive economic support when forecasting specific micro-market demand that is required in order to justify the use of discounted cash flow analysis to test a proposed (re)development for economic feasibility as a potential highest and best use of a brownfield. This demand analysis is used to support the forecasted value of the reversions in year 2007 of Table 1.

 

 

The construction lender funded the remedial cost as part of the redevelopment of the land in Case Study 1. This lender commissioned repeated appraisals from different appraisers, voicing a concern about the feasibility of the project-especially after it was found that the initial remedial cost estimate was wrong due to inadequate methodology. None of the appraisals received by this lender has any requirements shown in Figure 2, nor did they discuss any of the variables so important to retail value listed in Table 3. The property subsequently became an asset of the lender, which was taken over shortly afterwards by the FDIC, a banking regulator.

 

The FDIC offered the property for sale after ordering two more appraisals. There were no offers to buy the property anywhere near its appraised value, as-is, post-remediation, after two years of very intensive marketing. Stigma resulted in the inability to sell the property for $45 million less than what it was previously appraised for. Both the property owner and the lender reportedly went bankrupt relying on a series of useless appraisals that relied upon heuristic conjecture rather than scientific methods.  This study demonstrates just how absurd using sales comparison can be as a method for valuing contaminated land.