[Captain Kirk]

In this case, the city just demolishes the building and bills the owner. It does not even bother to take the land....though, by this action, it makes it worthless.

[BenLurkin]

In the case of sale of property, demolition cost is a deduction to the market value of the land -- if the improvement has no economic value -- and particularly if demolition is needed before the property can be put to its highest and best use.

If the improvements have an economic use -- even as an interim use -- then the condemnor should be paying for the value of the improvements it is taking.