4.3.3. Larger Parcel.In adopting “working rules in order to do substantial justice[,]” the Supreme Court established that “a parcel of land which has been used and treated as an entity shall be so considered in assessing compensation for the taking of part or all of it.”353 That “parcel of land,” reflecting the whole property to be considered for compensation purposes, is called the larger parcel. It is the economic unit to be valued.354 Under federal law, the larger parcel is the tract or tracts of land that possess a unity of ownership and have the same, or an integrated, highest and best use.355 

Definition of Larger Parcel The tract or tracts of land that possess a unity of ownership and have the same, or an integrated, highest and best use. 

The larger parcel may or may not have the same boundaries as the government’s acquisition.356 As a result, the appraiser must determine the larger parcel in every appraisal for federal acquisition purposes. This determination will distinguish whether a total or partial acquisition is involved, and therefore will dictate the valuation method to be used.357 In a total acquisition, the United States acquires an entire larger parcel, and compensation is measured by the market value of the property acquired. In a partial acquisition, the United States acquires only part of a larger parcel, and compensation is measured by the difference between the market value of the larger parcel before the government’s acquisition and the market value of the remainder after the government’s acquisition.358 A single acquisition for government purposes may involve more than one larger parcel (or parts of more than one larger parcel) for compensation and valuation purposes.359 

The larger parcel determination is integral to the analysis of highest and best use.360 It is fact-specific and rarely simple, but it is necessary for purposes of just compensation. As the Supreme Court explained: 

It is often difficult . . . to determine what is a distinct and independent tract; but the character of the holding, and the distinction between the residue of a tract whose integrity is destroyed by the taking, and what are merely other parcels or holdings of the same owner, must be kept in mind in the practical application of the requirement to render just compensation for property taken for public uses. How it is applied must largely depend upon the facts of the particular case . . . .361