New York Family Law Blog
In this family case, a condemnation proceeding is the just compensation to be awarded to claimant, for the taking of several parcels of property located in Queens County. The condemnee, took title to the subject parcels on February 29, 1996, for the creation of a Park. The court viewed the property on April 27, 2006 and this non-jury trial took place on July 12, 14, 17 and 18, 2006.
In its Appraisal Report dated June 30, 2005, claimant values the property at $10,000,000. In so finding, it determines that the total lot area of the subject property is 877,304 square feet; the majority of it is underwater, with additional property located within paper streets, i.e., streets that are mapped but are not physically improved. Claimant describes the property as being relatively level and located in Malba, “a prime area” that is “an upscale community that includes several waterfront mansions,” consisting of predominantly residential uses, including one- and two-family homes and several complexes of attached row houses. Albert further notes that approximately 88% of the land in the area is improved with residential structures, of which 75% are one- and two-family homes, 8% are walk-up apartment buildings and 5% are condominiums and elevator buildings.
In reaching its valuation, the evaluator adopts the findings of the claimant’s zoning expert, who relies upon the opinion of a licensed architect, who concludes that the paper streets could be demapped.
In addressing multi-family development, the sales price per FAR for these sales range from $21.33 to $103.08, before adjustment. After adjusting for site preparation (-5%), water access (5%, 10% or 90%), riparian rights (15%), excess parking (5%), and $10 per square foot for the estimated cost of demolition of the existing structures, the adjusted sales price per square foot of FAR ranges from $51.61 to $165.85, with a mean of $101.28 and a median of $91.25.
In its Appraisal Report dated May 13, 2005, the City values the property at $890,000. In reaching this conclusion, It relies upon the Development Potential Analysis. The City describes the property as being located in College Point, which is wholly contained within Queens Community District 7. In describing the District, It further notes that 67.2% of the land is improved with one- and two-family homes, 16.9% with condominiums, 6.6% with walkups and .7% with elevator buildings.
The analysis hence concludes that the total potential developable area is 36,018 square feet, with 9,292 square feet on Block 3989 and 26,726 square feet on Block 3994.2 The City acknowledges that 66,226 square feet could be built, but declines to so value the property, asserting that it would be difficult to sell houses with an average size of 8,278 square feet and that houses of this size were not consistent with the area.
Due to the dearth of recent sales of vacant land or wetlands and in the neighboring area, the City’s search for comparable sales looked to various other areas in Queens.
In its rebuttal report, claimant asserts that the cumulative effect of the errors and flaws in the City’s valuation is to understate the development potential of the property, both in terms of potential use and in the square feet of buildable area, which results in a substantial understatement of the property’s value. More specifically, claimant asserts that the City incorrectly excludes multi-family uses permitted in an R3-2 zoning area; neglects to calculate the correct size of the zoning lot by not basing the calculation upon that “portion of a waterfront lot located landward of the bulkhead line” as provided in Zoning Resolution § 62-11; fails to acknowledge that the permissible building height allowed for the construction of a third floor in each unit is miscalculated by measuring the permissible height from the street grade, rather than the higher base flood elevation, and limits the building height to 21 feet, instead of a maximum ridge height of 35 feet; fails to acknowledge that the front yard set back of 18 feet applies only to a garage entrance at ground level; miscalculates the point from which the 30 foot waterfront yard is measured by measuring it from the rip rap wall, instead of from the mean high water line; overestimates the cost and time required to demap the paper streets at $200,000 to $300,000 instead of $30,000 to $50,000; incorrectly assumes that visual corridors would be required and/or overstates the necessary width of the corridors; considers comparable sales from inferior areas; and improperly adjusts the sales prices.
In its rebuttal report, the City finds claimant’s Appraisal Report to be flawed in that the site plan fails to properly apply that provision of the Zoning Resolutions that requires a 30 foot waterfront yard, since he measured the yard from the mean high water line, and not from the rip rap wall referred to in the stipulation of settlement (the Stipulation) entered into the earlier related proceedings caption, wherein it was disputed the tidal wetlands adjacent area jurisdiction asserted by the New York State Department of Environmental Conservation (DEC) with regard to the subject property (the DEC Proceeding); that Ogur improperly determined that the required visual corridors were 50 feet, and not the 60 foot width of the upland streets of which they are a prolongation; that it is not necessary to value both single-family and multi-family units, with and without street demapping, as the inclusion of multiple development scenarios only confuses the issues and weakens the conclusion that demapping could be accomplished; and that claimant’s adjustments are not reasonable.
Hence, the trial focused on the issues raised in the party’s respective appraisal reports.
It is well settled that “[t]he constitutional requirement of just compensation requires that the property owner be indemnified so that he may be put in the same relative position, insofar as this is possible, as if the taking had not occurred'”. The measure of damages is fixed as of the date of the taking.
It is equally well established that the measure of just compensation is the fair market value of the property taken, which is essentially is a question of fact. Generally, the “market value of real property is the amount which one desiring but not compelled to purchase will pay under ordinary conditions to a seller who desires but is not compelled to sell'”. “In the determination of what is just compensation, there is no single element which is controlling, and it is proper to consider all factors indicative of the value of the property. The court must consider those things which will be present in the minds of a willing buyer and a willing seller”.
It is also significant to note that in making an award of just compensation, an “appraisal should be based on the highest and best use of the property even though the owner may not have been utilizing the property to its fullest potential when it was taken by the public authority”. Hence, it has been held that property taken in condemnation must be valued as legally restricted in use by all zoning and environmental regulations in effect on the date of taking, with the reasonable probability of rezoning being a relevant factor in determining the market value. “A use which is no more than a speculative or hypothetical arrangement in the mind of the claimant may not be accepted as the basis for an award”, unless it is so imminent that it would have a bearing upon the appropriate market.The use of comparable sales is an approved evaluation method for real property.
“With respect to the comparable sales method, market value may be determined with evidence of recent sales of comparable properties’. By its very definition, a comparable sale need not be identical to the subject property. A comparable sale need only be sufficiently similar to serve as a guide to the market value of the [subject] complex, notwithstanding differences between these comparables and the [subject] property’. In fact, and in accordance with the substantial evidence standard, sound theory and objective data’ may be used to adjust evidence of sales of comparable properties in order to more accurately reflect the market value of the subject property. Even evidence of past sales may need adjustment in light of any changes which may have taken place in the market for the property.”
Further, the cost of construction plans or site preparation may be considered in determining the market value of a condemned parcel.
“It seems obvious that where, as here, the landowners have rejected the offer and allege a greater sum than that deemed fair by the condemnor, the landowners have created the issue. Having created the issue as to value and damages in excess of that offered, they must then, in effect, assume the burden of proof.”
In its Appraisal Report, claimant contends that three-story structures could be built on the property. Ogur calculates the area of the third floor at approximately 60% from the grade plain. Although the City contends that only two stories could be built in its Appraisal Report, it concedes in its Rebuttal Report that three-story units could be constructed, with Fleming asserting that the area of the attic would be 40% to 50% of the area of the lower floors, based upon his observation of other homes in the area.
Since three-story units would provide more buildable area, the property shall be valued as if it were so developed. The court further determines that the area of the third floor shall be calculated at 60% of the floors beneath, finding that claimant’s mathematical calculation, which was not refuted by the City, is more persuasive than Fleming’s estimate, as based upon his observation of other homes.
The court finds claimant’s contention that the paper streets could be demapped to be persuasive. In this regard, claimant’s assertion that the demapped streets would not be necessary for the proposed development is rationally based, since there is no evidence offered to support the conclusion that the demapping of the streets, which lead only into the water, would not be permitted, particularly since the development plans offered by claimant appear to provide sufficient access to the proposed units for ingress, egress and emergency access. Significantly, the City offers no evidence to support its claim to the contrary.
In so holding, the court rules that the negative declaration issued with regard to demapping the street for the creation of the Park is admissible. In the first instance, a certified copy was annexed to claimant’s post-trial memorandum of law, rendering moot the City’s objection on the ground that the document was not certified. In the alternative, the negative declaration is admissible pursuant to CPLR 4522 as a record affecting real property, since it was presumably on file with a department of the City for more than ten years.
Accordingly, since both parties agree that demapping is possible and that the buildable area would be increased if the streets were demapped, which would consequently increase the value of the property, the remainder of this decision shall address only the development scenarios that assume demapping.
“Rear yard regulations shall be inapplicable on waterfront zoning lots. In lieu thereof, a waterfront yard shall be provided along the entire length of the shoreline, bulkhead or stabilized natural shore, whichever is furthest landward, with a depth [of 30 feet]. The minimum depth shall be measured from the landward edge of the bulkhead, landward edge of stabilized natural shore or, in the case of natural shorelines, the mean high water line.”
Zoning Resolution § 62-11 defines a visual corridor as “a public street or tract of land within a block that provides a direct and unobstructed view to the water from a vantage point within a public street, public park or other public place.” Zoning Resolution § 62-422 states that “the width of a visual corridor shall be determined by the width of the street of which it is a prolongation but in no event less than 50 feet”.
More specifically, the court finds that the Acquisition Map, having been filed in the instant proceeding, is admissible to support the absence of a rip rap wall on the property. Further, the City’s objection to the introduction of the Montrose Survey is found to be particularly disingenuous, since the City’s contention that a rip rap wall existed on the subject property is premised exclusively upon the Stipulation, which includes reduced portions of the Montrose Survey, albeit with the inclusion of a line representing a rip rap wall that did not appear on the original survey. Having introduced a copy of the survey into evidence, the City will not be heard to argue that the original is not admissible.
Accordingly, in the absence of any persuasive evidence that a rip rap wall was present on the property on the date that title vested in the City, the court holds that claimant has made a prima facie showing that the waterfront yard for the proposed property is properly measured from the mean high water line. Hence, in addressing multi-family development on Block 3989, the area reduction urged by the City is rejected, since claimant’s proposed building is located more than 30 feet from the mean high water line and is not within the area of DEC’s jurisdiction, since it is landward of the rip rap wall. Similarly, the court rejects the City’s contention that on Block 3994 the building footprint should be reduced by 3,430 square feet, or a total of 10,290 square feet because the building is placed within 30 feet of the top of the rip rap wall. In the first instance, the site plan clearly places the building 30 feet from the tidal wetlands boundary as per the DEC.
For the above discussed reasons, the court is constrained to value the property as developed with single-family units. In reliance upon the comparable sales offered by claimant, since the City chose to value the property only as developed with multi-family units, the court finds that the property should be valued at $120 per square foot of buildable area, which has been determined to be 75,979 square feet, for a value of $9,117,480. After subtracting the cost of demapping of $50,000 the total sum to awarded to claimant is $9,067,480.