New York State Court of Claims

New York State Court of Claims

BROWN v. THE STATE OF NEW YORK, #2000-017-014, Claim No. 96372


In this appropriation claim in which the State purchased the uneconomic remainder that resulted after the taking, the sole issue for the Court was determining the before-value of the commercial property at issue. A key question for the Court was whether the property, which was part of an assemblage of parcels comprising the Dutchess County Mall, was able to obtain direct access to Route 9 in Fishkill, or whether the parcel had access to Route 9 only via the ring road that was constructed to service the mall.

Case Information

Claimant short name:
Footnote (claimant name) :

Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
Motion number(s):

Cross-motion number(s):

Claimant's attorney:
Wallace & WallaceBy: Herbert N. Wallace, Esq.
Defendant's attorney:
Hon. Eliot Spitzer
Attorney General of the State of New York
By: J. Gardner Ryan, Esq.Assistant Attorney General
Third-party defendant's attorney:

Signature date:
June 30, 2000
White Plains

Official citation:

Appellate results:

See also (multicaptioned case)

Claimants seek damages for the appropriation of their commercial property pursuant to Highway Law § 30 and the Eminent Domain Procedure Law. The Claim was filed with the Clerk of this Court on June 10, 1997, and it has not been assigned to any other court or tribunal for audit or determination. The Court has made the required viewing of the property pursuant to Court of Claims Act § 12(4).

Claimants are the owners of a vacant parcel of property comprising 12.795 acres in the southwesterly quadrant of the interchange of Route 9 and Interstate 84 in the Town of Fishkill, New York. Claimants' property was part of an assemblage of three separate properties joined in the early 1970s to meet the 75-acre zoning requirement in the Planned Shopping Center (PSC) zone in connection with the development of the Dutchess County Mall. The Mall was actually constructed on the lands hereinafter referred to as Parcels A and B. Parcel C, which is the land owned by claimants, was never developed, but a preliminary site plan reveals that the mall developers initially intended to improve Parcel C with a hotel/motel and an office building (
see, Exhs. C; O).
In the mid 1980's, the Mall failed financially, and in 1992 Parcels A and B were legally subdivided and sold at auction. Claimants purchased Parcel C from a company called Coscan on April 25, 1996 for $125,000. Coscan had purchased the property from Institutional Investors Trust (IIT), which had previously purchased the property in foreclosure.

On March 31, 1997, less than one year after the purchase, defendant appropriated approximately 11.459± acres of land in fee from claimants' parcel and a permanent easement over 0.310 acres in connection with the reconfiguration of the highway interchange, by filing appropriation map and description entitled "Interstate Route 503 (Route 9D - Route 9), S.H. No. 62-1, PIN 8040.85 Dutchess County, Map No. 153, Parcel Nos. 205, 206 and 209" in the Dutchess County Clerk's Office. The State also appropriated 0.22± acres of the parcel for a temporary easement by filing Map No. 154, Parcel Nos. 207 and 208 (
see, Exhs. 1A and 1B). The Court has adopted the descriptions of the property as contained in claimants' appraisal (see, Exh.3, p.5).
The parties agree, and the Court so finds, that the date of valuation is March 31, 1997, and the State does not dispute claimants' ownership of the property or raise any other jurisdictional impediment to recovery. It is also undisputed that, after the taking, claimants were left with an uneconomic remainder of 1.34± acres which defendant purchased for $24,000. The parties have agreed that that figure represents the after-value of the property. Thus, the measure of damages in this case will be calculated by subtracting the sum paid by the State for the remainder from the market value of the parcel before the taking. The Court also adopts claimants' position that it is unnecessary to calculate damages for the permanent and temporary easements because this appropriation was effectively a full fee taking once the State purchased the uneconomic remainder. Accordingly, the primary issue for this Court's determination in measuring the damages resulting from the taking is finding the before-value of Parcel C.

The threshold question in measuring damages caused by the State's exercise of its eminent domain powers is whether the highest and best use of the property was diminished by the taking. The term "highest and best use" is defined as "that reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible and that results in the highest value" (7 Nichols on Eminent Domain [hereinafter "Nichols"], § 4.04[4][a][ at 9-58 [3d ed]).

A landowner is entitled to receive compensation for the fair market value of appropriated property in its highest and best use, regardless of the actual use being made thereof at the time of the taking (
see, Matter of County of Suffolk [C.J. VanBourgondien, Inc.], 47 NY2d 507; Matter of Rochester Urban Renewal Agency [Patchen Post, Inc.], 45 NY2d 1). The determination of a property's highest and best use "must be based upon evidence of a use which reasonably could or would be made of the property in the near future" (Yaphank Devel. Co. v County of Suffolk, 203 AD2d 280, 281).
Here, the parties agree that the highest and best use of Parcel C is for commercial use consistent with the PSC zoning. Under the PSC zone, permitted principal uses include retail establishments, professional, banking, business or governmental offices, motels, hotels and restaurants and automobile sales and service stations (
see, Exh. 3, p. 29). The zone allows development of malls or commercial parks and proof elicited at trial establishes that the site may be developed in accordance with an approved site plan for the entire development or subdivided and sold for development in accordance with the original site plan. Parcels within the planned development that are subdivided and sold will obtain approval for development so long as the final site plan does not materially deviate from the approved site plan for the entire development (see, e.g., Exh. 3, pp. 28-29).
The appraisers for the respective parties vary widely on their conclusions of value for Parcel C before the taking. Claimants' appraiser concluded that the property was worth $200,000 per acre prior to the taking while defendant's appraiser concluded that the value was only $28,000 per acre.[1]
The discrepancy arises, in large part, from the appraisers' divergent views on whether Parcel C could be independently developed and on whether the Parcel could gain direct access to Route 9.
It is undisputed that in 1980 Parcels A, B and C were permitted access to route 9 at three points by the ring road which encircled the mall (
see, Exh. L). The approved site plan did not provide that Parcel C would have direct access to Route 9 from any point along its frontage. To facilitate its use of the ring road, Parcel C benefitted from easements to cross the other parcels to gain access thereto (see, Exh. D). Claimants contend that Parcels A, B and C were legally subdivided in 1992, and as a result of that subdivision, Parcel C was no longer relegated to ring-road access to Route 9. In other words, claimants argue that Parcel C became an independent entity at that time and was entitled to Route 9 access at a point designated by the State along its available 700 feet of frontage having access rights.
However, notes of the planning board written on the subdivision plat explicitly state that "[t]hat portion of the approved site plan constructed and in operation as Dutchess Mall is confined to parcels A & B, which parcels have been subdivided as shown on this plat. Parcel C, although not part of this subdivision, continues to be part of the acreage assembled to meet the PSC district minimum acreage referred to above and is subject to the restrictions of this district"(
see, Exh. F, Subdivision Plat, Addenda). This notation indicates to the Court that the three parcels were still bound legally and were intended to be used cooperatively to provide sufficient acreage in accordance with the unitary development scheme that had already been approved by the municipality. Additionally, claimants' predecessors in interest had previously inquired about obtaining separate and direct access to Route 9, and DOT denied the letter request on the ground that the original developers of the Dutchess Mall were aware that no additional access points would be granted north of the three driveways presently serving the mall and that the ring road design was designed to serve Parcel C (see, Exh. P; see, also, Exhs. M, N, O). Thus, claimants were clearly on notice at the time they purchased this property that direct access to Route 9 would not be permitted. Additionally, neither claimants nor any of the predecessor owners of Parcel C sought to obtain municipal subdivision approval to develop that land in a manner which deviated materially from the plan originally approved by the municipality. Accordingly, this Court finds that Parcel C did not enjoy direct access rights to Route 9 and was not available for independent development. Thus, the valuation of the property must reflect consideration of those facts.
Turning to an evaluation of damages, the Court finds that, before the taking, Parcel C was a 12.419±-acre parcel of land that was irregular in shape and bounded on the north by a highway right-of-way for Interstate 84 for approximately 1,100 feet, on the east by approximately 1,000 feet of frontage on Route 9 and to the south and west by the other parcels that comprise the Dutchess Mall. The property is largely level, but lies approximately 10 feet below the elevation of Route 9 in a 100 year flood plain. Approximately 5.5 acres of the parcel or 43% are federally designated wetlands. The Court credits the testimony of defendant's appraiser that property lying north of the Interstate 84 interchange with Route 9 was more valuable and commercially viable than land situated in the southwest quadrant of the interchange, where the subject is located.
In assessing the before-value of Parcel C, claimants' appraiser relied on seven sales which he concluded had an adjusted, per-acre range of value from $157,843 to $281,667. Three of those sales (Sales 1, 2 and 3) did not have zoning similar to the subject. The Court has disregarded those three sales, since they involved sales of independently developable sites that are not reflective of value for land in the Planned Shopping Center zone.

Claimant's Sales 4 and 7 involved the same property, which consisted of 7.91 acres of land in the Westage Business Center, a planned development on the west side of Route 9 that is north of the subject and above the I-84 interchange on Route 9. Sale 7 involves the original sale of this property in May of 1989 and Sale 4 concerns a contract for re-sale of the property in January of 1997. Referring to Sale 7, the property originally sold at $133,692 per acre. Claimants' appraiser made a positive 25% adjustment for economic trends to reflect the poorer state of the economy in the area in 1989, a positive 5% adjustment for location to reflect the fact that the sale property is one parcel removed -- or "slightly remote from" -- Route 9 (
see, Exh.3, p. 20), a minus 8% adjustment for size to reflect the fact that smaller parcels generally sell at a higher price per acre, a negative 15% adjustment to reflect the inferior land quality/terrain of the subject, a positive 15% adjustment to reflect the superior access and frontage of the subject, and a positive 5% adjustment to reflect the superior sight distance of the subject for a net positive adjustment of 27%.
The Court credits the negative 8% adjustment for land size, but has reduced the adjustment for economic trends to positive 20%. The Court finds that while claimants' appraiser considered the fact that the subject property contained some wetlands, the negative 15% adjustment for land quality/terrain did not adequately account for the fact that approximately 43% of the subject property is federally designated wetlands. Thus, the Court finds that a negative 25% adjustment is warranted to account for all of the terrain problems of the subject. The Court also finds that the individual adjustments made by claimants' appraiser for location, access/frontage and sight distance, which in the aggregate amount to a positive 25% adjustment, are somewhat duplicative, and lead to an exaggerated positive adjustment for the subject. As the Court has previously found, the subject property did not enjoy direct access from Route 9. Instead, the Court finds that a positive 10% adequately accounts for the subject's superior frontage, sight distance and proximity to Route 9. The Court also finds, however, that a negative 30% adjustment is warranted to reflect the fact that Parcel C is tied to a failed mall development in the southwestern quadrant of the highway interchange while the sale property is located in a successful corporate park north of the interchange and thus would be less attractive to prospective purchasers. Thus, the Court finds that a net negative adjustment of 33% is warranted on this sale, resulting in an adjusted per-acre indicated value of $89,574.

The Court finds that the same adjustments are applicable to Sale 4, which involved the contract for resale of this property in January 1997, with the exception of the positive 20% for market conditions, since the contract was entered into only two months prior to the taking. Thus, the Court finds that a net negative adjustment of 53% is warranted and that the adjusted price per acre indicated by this comparable is $101,011. However, the Court has given limited weight to this sale, given that it involved a contract for sale that never materialized as a completed sale.

Claimants' Sale 5 is a 46.18-acre parcel of PSC-zoned property that sold in October 1991 for $113,469 per acre. Claimants' appraiser made a positive 20% adjustment for economic conditions, which the Court has adjusted to positive 15%. As in Sales 4 and 7, the Court finds that a negative 30% adjustment for location is warranted, given the subject's attachment to the failed Dutchess Mall development. The Court credits the positive 20% adjustment for land size, but finds that a negative 20% adjustment for land quality/terrain is more appropriate than the negative 10% adjustment made by claimants' appraiser. Because the subject does not enjoy direct access to Route 9, and because the comparable enjoys approximately 750 feet of frontage along Route 9, the Court finds that no adjustments are warranted for frontage or sight distance. Accordingly, the Court finds that a net negative adjustment of 20% is warranted and that the adjusted price per acre of this sale is $90,775.

Sale 6 involved the sale of an 8.74-acre parcel in the Westage Business Center that sold in September 1989 for $229,291 per acre. Claimants' appraiser made a positive 25% adjustment for the time of the sale which the Court has reduced to positive 20%. The Court also made a negative 30% adjustment to account for the subject's connection with the failed Dutchess Mall. The Court credits the appraiser's negative 6% adjustment for land size, but has increased the adjustment for land quality/terrain from negative 10% to negative 20%. Claimant's appraiser also found that the access and frontage of the subject and the sale were comparable, but this conclusion is based on the appraiser's assumption that the subject enjoyed direct access to Route 9. Thus, the Court has made a negative 10% adjustment to reflect the fact that the subject lacked direct access to Route 9. Based on the foregoing, the Court finds that a net negative 46% adjustment is warranted, leading to an adjusted per-acre value of $123,817.

Defendant's appraiser utilized four comparable sales and determined that the adjusted price per acre was $10,065 to $42,242. The Court has disregarded defendant's Sale 3, which occurred outside of Fishkill and is governed by a less restrictive highway business zone that had a minimum lot size of only two acres.

Defendants' Sale 1 involved the purchase of the subject property by claimants which occurred in April 1996 for consideration of $125,000 or $10,065 per acre. Defendant's appraiser did not make any adjustments to this sale. Defendant acknowledges that the per-acre value of this sale falls far below the market value for other comparable sales in the area, but argues that the low value reflects the fact that the property was inextricably tied to the failed mall development. Defendant also points to a standard form filed contemporaneously with the closing in this sale which indicates that the deal was an arms-length transaction and that no discount was applied to the price (
see, Exh.F, Addenda, Real Property Transfer Report, Form EA-5217). Claimant William Dinneen testified at trial that the purchase price was reduced and the sale was not an arms-length transaction because he had prior business dealings with Coscan, the seller. The Court finds that although the purchase price of this property is largely out of step with even those comparables in the low end of the range presented by defendant, it should be considered by the Court as an indicator of the property's value since the purchase was made less than a year prior to the taking.
Defendant's Sale 2 involved the sale of a 7.62-acre parcel in the PSC-zoned Westage Business Center which sold for $38,058 per acre in May, 1996. Defendant made a positive 20% adjustment to this sale, which the Court credits, to reflect the fact that the property was purchased at foreclosure at a 20% discount from market prices. The Court finds that the appraiser's positive 16% adjustment for location due to the sale's lack of Route 9 frontage and positioning at the rear of the Westage Business Center should be increased to positive 30%, but also finds that that adjustment is offset by a negative 30% adjustment that is necessary to reflect the subject's location in the southwest quadrant of the interchange and connection with the failed mall. Claimants' appraiser made a negative 10% adjustment for utility to reflect the presence of wetlands on the subject, but failed to adjust for the uneven topography of the sale site. Accordingly, the Court has reduced this adjustment to negative 5%. Claimant's appraiser also made a negative 15% adjustment for approvals which the Court has disregarded since the subject also had preliminary site-plan approval if development conformed with the proposed mall development plans. As defendant's appraiser conceded at trial, no adjustment for utilities or services is warranted because claimants established at trial that they were entitled to receive municipal sewer and water (
see, Exh. K). Based on the foregoing, a net positive adjustment of 30% is warranted, resulting in an adjusted per-acre value of $49,475 per acre.
Defendant's Sale 4 involved a sale of 13.87 acres in the Westage Business Center in October 1997 of $37,851 per acre. The Court credits the positive 20% adjustment made by defendant's appraiser to reflect the fact that the property was sold at auction at a 20% discount from market value. For the same reasons stated above, the Court has declined to make any adjustment for location of this sale, which does not enjoy Route 9 frontage, has access to Route 9 only through the internal roads of the Westage development and does not have the same visibility from the highway that claimants' property enjoys. The Court has also changed the adjustment for utility negative 5% to reflect the uneven topography of the sale property, and rejects the adjustments for approvals and services/utilities for the reasons stated in the discussion of Defendant's Sale 2. Based on the foregoing, the Court finds that a net positive adjustment of 30% is warranted and that the adjusted price per acre indicated by this sale is $49,206.

The Court's adjustments to claimants' comparable sales lead to an adjusted range of value of $89,574 to $123,817 per acre while adjustments made to defendant's comparable sales lead to an adjusted range of value of $10,065 to $49,475 per unit. The Court has been given pause by the fact that despite its adjustments, the ranges resulting from the opposing appraisals remain difficult to reconcile. This is especially true since claimants' comparable Sales 6 and 7 and defendant's sales 2 and 4 all involved sales of parcels in the same development, the Westage Business Center. The Court finds that claimants' Sales 6 and 7 are most similar to the subject in their proximity to Route 9, but involved purchases remote in time from the subject. By contrast, the purchases involved in defendant's Sales 2 and 4 involved parcels that did not enjoy Route 9 frontage or sight distance, but were proximate in time to the taking of the subject.

The Court finds that the differences in the physical characteristics of the parcels are most easily accounted for by the adjustments to the sale prices and that the sales that are closest in time to the subject better reflect the market value of the subject. Accordingly, the Court finds that the disparity in the foregoing ranges is best reconciled at the low end of the range and that the fair market value of the subject is approximately $39,000 per acre. That value results in a before value of the property of $499,005. When the after-value of $24,000 is subtracted from that figure, the resulting damages are $475,005.

In accordance with the aforementioned analysis the Court finds that claimant is entitled to a total award of $475,005[2]
with appropriate interest from March 31, 1997 to the date of the decision herein, and thereafter to the date of entry of judgment pursuant to CPLR 5001 and 5002and Court of Claims Act §19(1). All trial motions not heretofore decided are deemed denied.[3]
The award to claimant is exclusive of the claims, if any, of persons other than owners of the appropriated property, their tenants, mortgagees and lienors, having any right or interest in any stream, lake, drainage, irrigation ditch or channel, street, road, highway or public or private right-of-way, or the bed thereof, within the limits of the appropriated property or contiguous thereto; and is exclusive also of claims, if any, for the value of damage to easements and appurtenant facilities for the construction, operation and maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer and railroad lines.


June 30, 2000
White Plains, New York

Judge of the Court of Claims

[1]Although defendant's appraiser valued Parcel C at $25,000 per acre in his appraisal, he adjusted this number to $28,000 per acre at trial based on proof that claimants' property had access to municipal water and sewer services.
[2] The Court has considered, but rejects as inappropriate, the fact that claimants purchased the subject property in May 1996 for only $125,000 and seek over $2 million in damages for the State's taking of the same property. It is the Constitutional mandate of this Court to pay the fair market value regardless of the inordinate profit that has accrued to claimants.
[3] Claimants' motion to supplement their appraisal (M-60730) was withdrawn at trial upon the consent of the parties.