"Use Value" has been defined by the United States General Services Administration as the "Measure of the value to a known user of a specialized type property to provide usefulness, service, or profitableness above the value of the property if vacant."¹ This concept is generally referred to as value-in use. It tends to be focused on industrial type buildings that can be extremely expensive to build, and they are usually designed as part of a particular manufacturing process. It is rare if they can be adapted for other uses or if they can, features of the property which have been designed for a specific use will be under-utilized in the adapted use. Since properties of this sort are unique, it is difficult to measure the value of the property from the market approach. In instances where comparable sales information can be found, it is likely that the comparable sales have occurred outside of the local county, and even outside the State of Maryland. In order to make a valid comparison in this regard, the assessor must develop a national or even an international perspective of the market. It will also be necessary to develop a greater understanding of the economic influences that affect the process that is associated with the building. Personal property costs and manufacturing equipment items should be identified and adjusted for, especially where actual building costs are known.

In the absence of good sales information there are two remaining options for valuing the property - the cost approach and the income approach. The cost approach is recognized as the most relevant indicator of value where value-in-use is concerned. "Obviously many `special use' properties have a value to the owner of approximately their cost, less physical depreciation, and would have very little value to the typical buyer."² The conclusion that often follows is that if the building adequately performs the intended use, then value can best be measured by what it would cost to build, less depreciation.

The income approach should not be overlooked however, as it tends to be focused on economic value or the productivity of the property. The income approach can be developed from the worth of the goods produced and also from a more general market rent perspective. The value of the building is then quantified in a way that is directly associated with the use.

It has been observed that value can be defined both "for use" and "for exchange"³. Brack vs. Mayor and City Council of Baltimore, 125 Md. 378 (1915) and other cases that discuss highest and best use however, say that all capabilities of the property must be taken into account when valuing the property. Schley vs. Montgomery County, 106 Md. 407, 410, 67 A. 250 (1907) states that "when the property is of such a special nature that no market for it exists -- then its intrinsic value must be ascertained by consideration of its cost, nature, utility and other characteristics". This has also been recognized in two more recent cases Fairchild Hiller Corp. vs. Supervisor of Assessments for Washington County 267 Md. 519, 298 A.2d 148 (1973) and Supervisor of Assessments of Baltimore County vs. Edwin R. Fitzgerald 49 Md. App. 411, 431 A.29 1381 (1981).

When an intrinsic approach or value-in-use is applied in the assessment of a particular property, it should be identified as such throughout the appeal process.

¹ General Services Administration, Definition of Terms, Contract for Appraisal Report GSA Form 1241 D, August 1968.

² Encyclopedia of Real Estate Appraising, Third Edition Prentice Hall 1978. Appraisal for Tax Purposes pg.1143.

³ Property Appraisal and Assessment Administration, copyright 1990 by the International Association of Assessing Officers, Edited by Joseph K. Eckert, Ph.D pg 35.

​