New York State Court of Claims

New York State Court of Claims

NORTHVILLE v. THE STATE OF NEW YORK, #2001-028-021, Claim No. 97489


Appropriation of legal non-conforming use and additional property from single parcel rendering remainder a substandard lot. Court valued non-conforming use, additional property and remainder in order to calculate damages.

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:
SIEGEL, FENCHEL & PEDDY, P.C.BY: Saul R. Fenchel, Esq.
Defendant's attorney:
BY: Rose F. Lowe, Esq.
Assistant Attorney General

Third-party defendant's attorney:

Signature date:
January 31, 2002

Official citation:

Appellate results:

See also (multicaptioned case)

This is a timely served and filed claim for damages resulting from the partial appropriation of real property owned by claimant located in the Village of Laurel Hollow, Town of Oyster Bay, Nassau County (T-13). The Claim was filed on December 12, 1997. Such premises were appropriated in proceedings entitled "East Norwich Memorial Cemetery, S.H. 898" Map 68, Parcel 103 pursuant to section 30 of the Highway Law and the Eminent Domain Procedure Law. The Map describing the appropriated parcel was stipulated into evidence by the parties (Exhibit 5) and said map and the descriptions set forth thereon are adopted by the Court and incorporated herein by reference. The parties stipulated that the date of taking was November 21, 1994, and the Court so finds. The parties further stipulated and the Court finds that Claimant was the fee owner on the date of vesting and the Defendant has complied with all necessary procedures under the EDPL with regard to service (T-13). The Court has made the required viewing of the subject property.

The subject property is irregular in shape and can be described as a wedge, the point being formed by the intersection of New York State Route 25A (Route 25A) and Syosset-Cold Spring Harbor Road. The subject has approximately 310 feet of frontage on its northerly property line along New York State Route 25A and is at street level. The subject has approximately
210 feet of frontage on its southerly property line along Syosset-Cold Spring Harbor Road. The parcel was 38,940 SF prior to the taking. There was no dispute that the taking consisted of truncating the point of the wedge. The taking included the improvement, a gas station - which consisted of a one pump island and a circa 1910 two story wood frame and brick structure, together with strips of land extending along the frontage of each street. The taking consisted of approximately 18,698 sf (Exhibit 5). The remainder of the parcel was vacant undeveloped land. All land within the Village of Laurel Hollow, including the subject, was zoned Residence District. At the time of the appropriation, the improvement was a legal non-conforming use pursuant to the Village of Laurel Hollow zoning ordinance.
The only witnesses to testify were the parties' appraisal experts.[1]
The experts agreed that the remainder parcel (20,000 sf approximately) following the appropriation was a substandard lot pursuant to the applicable zoning and could not be developed. The experts agreed that the remainder of the parcel was of value only to an adjoining landowner. There was further agreement that the property's highest and best use in the before situation was as a gasoline station as a consequence of both its legal non-conforming use status and application of the zoning ordinance to the parcel. There being no evidence in the record to the contrary, the Court concurs in the opinions of the experts and thus so finds.
Ronald Haberman (Haberman), testified for the Claimant. Haberman's appraisal report and a supplemental report were admitted as Exhibit 1 and Exhibit 2, respectively. Haberman testified that the highest and best use of the subject parcel in the before situation was its existing use as a gas station. Using the sales comparison approach with six comparable sales, Haberman, following adjustments, arrived at a before taking range of value from $30.37/sf to $46.46/sf and concluded the subject's gas station portion[2]
had a before value of $37.00/sf (T-43, Exhibit 1, p-45). Haberman testified that due to the age of the existing structure, he placed virtually all of the value in the land explaining that the property's value comes from its legal nonconforming status as a gasoline station.[3] Haberman, following an adjustment downward for time, arrived at a value of $30,000.00 for the remainder parcel based upon a sale of the subject remainder in 1998 to an abutting property owner. Claimant's expert allocated damages as follows: total damages of $690,000.00 (R) calculated before value gas station component [18,698 sf times $37.00/sf = $690,000.00 (R)] plus remainder property [$30,000.00] equals before taking value of $720,000.00 less the after value [remainder area $30,000.00] equals direct damages of $690,000.00.
Defendant's expert, Richard Marchitelli's (Marchitelli), appraisal reports were admitted as Exhibits A and B. Marchitelli valued the property using the sales comparison approach and the income capitalization approach. In arriving at his conclusion of value, Marchitelli relied upon his sales comparison approach.[4]
Using the "sales comparison approach" (Id.) with four comparable sales, Marchitelli, following adjustments, arrived at a before taking range of value from $475,000.00 to $537,000.00 and concluded the entire subject had a before value of $500,000.00 ( Exhibit A, p.39)[5]. The remainder was valued at $25,000.00 and damages determined to be $475,000.00. Marchitelli also prepared a supplemental report (Exhibit B), which he described as expressing the damages in greater detail, using the sales comparison approach. The supplemental report valued the subject as two economic units, representing the 10,000 sf gasoline station portion (Unit 1) (Exhibit B, p.6) and the 28,952 sf remainder (Unit 2) (Exhibit B, p.6). Unit 1 was then valued using five comparable sales ranging from $28.65/sf to
$ 32.17/sf and concluded the subject's gas station portion had a before value of $30.00/sf or $300,000.00 (Exhibit B, p. 8). Marchitelli valued Unit 2 using three additional comparable sales and established a range, following adjustments, from $52,683.00 to $62,500.00 per acre and concluded Unit 2 had a per acre value of $55,000.00 per acre. Marchitelli then converted the land area of Unit 2 to a percentage of an acre (.665) and arrived at a value of $37,000.00 (R) for Unit 2. Combining Unit values, Marchitelli concluded the land value of the subject was $337,000.00 (Exhibit B, p. 10). Marchitelli also valued the improvements at $164,000.00. Thus, Marchetelli arrived at his damage estimate of $475,000.00 as follows: $300,000.00 (representing Unit 1) plus $11,000 (representing that portion of Unit 2 taken [$55,000.00 per acre x .20 acres]) plus $164,000.00 (improvements) equals $475,000.00.
The Court is required to value the subject properties according to their highest and best use as of the date of vesting,
Matter of Town of Islip (Mascioli), 49 NY2d 354, 360; Matter of County of Clinton (Gagnon), 204 AD2d 898, 899. "Highest and best use" is generally defined as the "reasonable, probable and legal use . . . which is physically possible, appropriately supported, financially feasible, and that results in the highest value". American Institute of Real Estate Appraisers, The Appraisal of Real Estate, 305 (12th Ed. 2001). Both appraisers agreed on this standard.
It is equally well settled law that a party asserting a different highest and best use from the one existing at the time of the condemnation has the burden of proving a reasonable probability that the highest and best use it asserts would or could have been made of the subject property in the near future. (
Thompson v Erie Co., Indus. Develop. Agency, 251 AD2d 1026; Mtr. Of Rochester Urban Renewal Agency v Lee, 83 AD2d 770; See, Matter of New York City [Broadway Cary Corp.], 34 NY2d 535, rearg denied, 34 NY2d 916.), including re-zoning (cf., Masten v State of New York, 11 AD2d 370, affd 9 NY2d 796; Matter of Town of Islip (Hamlet of Sayville), 49 NY2d 354; Harwood v State of New York, 112 AD2d 741; Dittmer v State of New York, 187 AD2d 693). Notwithstanding Defendant's arguments to the contrary, in the instant proceeding neither expert asserts a different higher and best use due to the subject's status as a legal non-conforming use. Rather, Defendant takes exception to Claimant's conclusions regarding the extent of the use in terms of the use's footprint[6] and the intensity of the use.
Where, as here, the use does not and may not occupy the entire tract, the adjustment in value for the non-conforming use should be limited to that portion of land which the business may reasonably require and lawfully develop in the foreseeable future, absent appropriation, and the remainder must be valued before and after on the basis of the permitted use within the zone in which it is located (
Marra v State, 61 AD2d 38, 42-43; Wholesale Coop. Meat Dealers Assn. v. State of New York, 45 AD2d 14, 16). At the outset, the Court notes that neither party offered any testimonial evidence reflecting the percentage of the taking occupied by the non-conforming use. Each expert stated a size for the gasoline station, and, as might be expected, one maximized its size, while the other minimized the size, each supported by reference to the maps. The Court has carefully reviewed the exhibits and finds that a portion of the taking, specifically the two strips of land extending along the frontage of each street from a point behind the improvement, are properly excluded from the non-conforming use. The Court calculates the excludable portion on the Route 25A side of the property to be 2,444 sf (R) (120.64 feet x 20.26 feet [see, Exhibit A, p.A-2])[7] and calculates the excludable portion on the Route 25A side of the property to be 370 sf (R) (39.93 feet x 9.73 feet [Id.]) for a total of 2814 sf. As such, the Court finds the area of the non-conforming use to be 15,884 sf (18,698 sf taken less 2,814 sf excluded).
The Court now turns to finding a value for the nonconforming use. Beginning with claimant's appraisal, the Court disregards Comparable 3, a ground lease, as
Haberman acknowledged he did not factor in risk (T-69-70) and there was no evidence to support the capitalization rate (Arlen of Nanuet, Inc. v State, 26 NY2d 346). Similarly, the Court rejects Defendant's Sales "L", "N", "O", and "P" which were properties redeveloped from gasoline station uses to retail and office uses and as such, in the Court's view, are not comparable to the subject which is limited to its legal non-conforming use. The appraisers, however did have one sale in common (Sale 1 and Sales A and M ), and, after examining the remaining sales in each of the appraisals, the Court has placed heaviest reliance on those sales (see, Matter of Village of Johnson City [Waldo's, Inc.], 215 AD2d 917, 918; see also, William E. Dailey, Inc. v State of New York, 188 Misc 2d 303).[8] The parties' differences as to value flow from the differing adjustments made to these comparable sales by the experts which has resulted in a range of value from $34.89/sf to $28.65/sf. Claimant's appraiser, in the Court's view, overvalued the subject property because certain of his assumptions regarding use of the subject cannot be supported. As an example, Haberman testified that the subject had an exclusive location due to the lack of competitors for miles in each direction and warranted a twenty percent (20%) upward adjustment. Haberman also opined that the subject could increase sales, however the traffic count at the subject was only 19,100 cars per day compared to 40,000 cars per day for the common comparable sale. Notwithstanding the subject's status as a legal non-conforming use, Haberman also suggested, without support, that another pump island could be installed.[9] Moreover, Haberman's vision of a modern pumper gasoline station as set forth in his appraisal (Exhibit 1, p.39), was, he testified, in fact a modernization or refurbishing of the property.[10] The Court also notes the subject's tank capacity of 12,000 gallons is significantly less than that of the common comparable sale. Defendant's adjustment for location varied between negative twenty percent (-20%) (Exhibit A) and negative thirty percent (-30%) (Exhibit B). If, as Claimant's appraiser has testified the value of the subject is in its non-conforming use, then that value also must be constrained by the limitations on the use at the time of the taking.
The Court finds the subject's location is inferior to the common comparable sale. Based upon the Court's determination of the area of the use, the Court finds a size adjustment is not warranted. Similarly, the Court rejects any adjustment for utility or time. The Court therefore makes the following adjustments: 0% for time; -10% for location; 0% size adjustment and a 0% marketability adjustment. The Court adopts the sale price of $662,000 set forth in Claimant's appraisal (Exhibit 1, p.46, 53) and finds the adjusted price for the common comparable sale to be $34.20/sf.

Based upon the foregoing, the Court determines that the value of the non-conforming use immediately before the taking was $34.20 per square foot. The total value of the non-conforming use before the taking was $543,233.00 (R) (15,884 sf x $34.20/sf). Therefore, the Court finds Claimants direct damages for the area of the non-conforming use taken to be $543,233.00 (R), as the entire area of the use was taken.

Before ascertaining the damages for the additional 2,814 sf taken, located outside of the area of the legal nonconforming use, the Court must determine the value of the entire 23,056 sf remaining after the appropriation of the legal non-conforming use. Claimant valued what it determined to be the remainder (20,242 sf) at $30,000.00 or $64,200 (R) per acre utilizing only the subsequent sale of the remainder, adjusted for time. The sale of the subject property at a time close to the date of appropriation is, of course, highly probative evidence of the value of the land at the date of appropriation (
Plaza Hotel Associates v Wellington Assoc., 37 NY2d 273, 277; W. T. Grant Co. v Srogi, 71 AD2d 457, 464). Here, where the lot was substandard at the time of the appropriation and remained so at the time of its sale, the Court believes that the passage of time does not adversely impact the use of that sale as highly probative evidence of its value (see, Albert v State, 71 Misc 2d 459). Defendant valued what it determined to be the remainder (28,940 sf) at $37,000.00 or $55,000.00 (R) per acre. Upon review of the range of value between the experts[11], the Court, finds the value of the remainder at $59,600 per acre. Thus, the Court finds the area taken but excluded from the nonconforming use to have a value of $3,850.00 (R) ($31,546.00 [23,056 sf @ 59,600.00 per acre] minus $ 27, 696 [20,242 sf @ 59,600.00 per acre] equals $3,850.00).
The Court summarizes its findings as follows: of the 18,698 sf taken, the legal non-conforming use occupied 15,884 sf and 2814 sf constituted the balance of the taking. The legal non-conforming as of the date of vesting had a value of $543,233.00 and the balance of the taking had a value of $3,850.00 based upon a value of $59,600.00 per acre for the substandard lot.

In accordance with the aforementioned analysis the Court finds that claimant is entitled to a total award of $547,083.00
with appropriate interest from the date of vesting, November 21, 1994 to the date of the decision herein, and thereafter to the date of entry of judgment pursuant to CPLR 5001 and 5002 and Court of Claims Act §19(1).[12] All trial motions not heretofore decided are deemed denied.
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.


January 31, 2002
Albany, New York

Judge of the Court of Claims

[1] Prior to the commencement of the trial, the parties agreed to withdraw from the Court's consideration the issue of whether the Court of Claims could address the cost of an environmental clean-up at the site. The parties agreed between themselves that the Court of Claims did not have jurisdiction and presented no evidence regarding remediation.
[2] The sharpest dispute in this Claim involves the square footage occupied by the gas station and valued as such. Claimant argued the gas station occupied the entire taking (18, 698 sf) while the Defendant argued it occupied only 10,000 sf.
[3] As will be discussed, infra, Claimant's "modernization" concept, although possible, was neither plausible nor legally permissible.
[4] As noted by Marchitelli, the income capitalization approach is not well-suited to valuing gasoline stations as a number of variables "skew contract rental agreements"(Exhibit A, p .45). For that reason, and Marchitelli's use of the sales comparison approach to explain the damages calculations, the Court focuses only upon the experts' sales comparison valuations.
[5] Defendant identified this calculation as "comparable building sales"(Exhibit A, p.38) which, inter alia, led Claimant to argue that Defendant had failed to value the entire subject in the before situation. The record establishes both appraisers valued that which they believed was the gas station portion and then valued the remainder, combining the two values to arrive at a before value for the entire subject.
[6] There is no argument advanced that the use preempted the entirety of the subject (see, i.e., Syracuse Aggregate Corp. v. Weise, 51 NY2d 278; Marra v. State of New York, 61 AD2d 38, supra; see also, Town of Southampton v. Sendlewski, 156 AD2d 669).
[7] The pages in the Addendum to Defendant's Appraisal are not numbered and the Court has designated same for ease of reference.
[8] Claimant's Sale 1 data was verified and noted as such in Claimant's Appraisal Report. Whether Claimant's failure to state its verification of other sales in its Appraisal Report alone warrants striking those comparable is a question the Court need not address (but see, Heinemeyer v State Power Authority, 229 AD2d 841 failure to verify and other factors warranted conclusion appraisal was of no probative value to Court]).
[9]Although there was a suggestion that the subject's hours of operation were limited by the municipality, the Court found no record evidence of same.
[10] Haberman suggests that part of his utility adjustment includes construction costs associated with site improvements (Exhibit 1, p.42, footnote 4), He also states that he has taken a negative ten percent (-10%) under utility for the subject's undeveloped area (Exhibit 1, p.43).
[11]The Court has found no authority, nor did Defendant provide any in its post-trial submission, for Defendant's proposition that Claimant's valuation of the remainder based exclusively on its sale was improper.
[12]While a three year difference in time between the date of vesting and the date the Claim was filed suggests that interest should be suspended pursuant to CCA §19(1), The Defendant neither argued for suspension of interest nor established that suspension of interest was warranted. (see, Sokol v State of New York, 272 AD2d 604)