New York State Court of Claims

New York State Court of Claims

GOLUB v. THE STATE OF NEW YORK, #2003-015-581, Claim No. 103862


Claimant awarded $789,982 as Court determined value of 3.818 acre parcel appropriated for use as parking lot for Amtrak passenger station.

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:
Whiteman, Osterman & Hanna, EsquiresJoshua J. Effron, Esquire, of counsel
Defendant's attorney:
Honorable Eliot Spitzer, Attorney General
By: Donald E. Shehigian, EsquireAssociate Attorney
Third-party defendant's attorney:

Signature date:
September 23, 2003
Saratoga Springs

Official citation:

Appellate results:

See also (multicaptioned case)

This is a timely filed claim for the taking of real property with no remainder by the State of New York for highway purposes pursuant to section 30 of the Highway Law and section 1308 (8) of the Public Authorities Law and the Eminent Domain Procedure Law in relation to parking facilities at the Amtrak Station in the City and County of Rensselaer. The claim was filed on February 21, 2001.

The subject property consists of an L-shaped 3.818 acre parcel of unimproved property which includes a 62-foot wide strip bounded on the north by Partition Street. The remainder of the parcel is rectangular in shape and bounded on the east by East Street, on the west by lands owned by Amtrak and on the north by lands owned by the State. The property was appropriated in a proceeding entitled "Rensselaer Amtrak Railroad Station Parking Lot Improvements, Map No. 3, Parcel 3, Rensselaer County."

The parties mutually indicate April 8, 1999 as the date of the taking and the Court finds that claimant was the fee owner on the date of vesting and that the State complied with all necessary procedures under the relevant statutes with regard to service. The Court has made the required viewing of the subject property. The aforesaid map and description were filed in the Office of the County Clerk of Rensselaer County on April 8, 1999. The Court adopts the description of the appropriated property as shown on the map and description filed in the Rensselaer County Clerk's Office, a copy of which is attached to the claimant's appraisal and the same is incorporated herein by reference.

The parties stipulated to the introduction in evidence of Exhibit 2, a deed dated May 1, 1980 and recorded in the Rensselaer County Clerk's Office on October 2, 1980 in Liber 1328 at pages 22-25 by which claimant Golub Properties, Inc. received title to the subject property. The subject property is identified by tax map number 143.60-3-9.1 on the assessment map of the City of Rensselaer comprised of an area of approximately 3.818 acres. The claim was filed with the Clerk of the Court of Claims and served upon the Attorney General on February 21, 2001. The claim has not been assigned or submitted to any other tribunal for audit or determination. A trial of the matter was held in Albany on May 21, 2003.

Claimant's first and only witness was Kenneth Gardner. The witness described the process used to appraise the subject parcel which included a site visitation to determine potential uses and investigation of the marketing area including sales of comparable property to determine the subject property's value and highest and best use. The witness testified that the market factors considered with respect to his determination of the highest and best use of this vacant property included its location adjacent to the
Amtrak passenger train station and its past use as a supermarket, bank and gas station. Claimant's appraisal report was marked as Exhibit 1 and received in evidence without objection. Prior to its taking the subject property was zoned local business/commercial, industrial (LB/CI) which the witness described as very favorable with only one other such zone in the City of Rensselaer located approximately one mile from the subject property. He testified that the highest and best use of the property was as a commercial development site based upon the physical characteristics of the site, market data and purchase offers made on the property. The witness testified that the property's primary potential commercial use was as a neighborhood business given its proximity to the train station and the residential character of the surrounding area. The witness noted in this regard previous purchase offers received on the property for the development of a post office and an Eckerd Drug Store.
The witness testified that he utilized the sales comparison approach in valuing the subject property as vacant commercially developable land. The sales comparison approach to valuation involves the presentation and analysis of statistics regarding sales of similar properties with the same highest and best use. The witness stated that Exhibit 1 contains statistical information regarding eight comparable sale properties.

Defense counsel objected to the inclusion of information regarding a purchase offer contained within Exhibit 1. The Court sustained the objection on the basis that an offer of purchase is inadmissable to show market value (
Brummer v State of New York, 25 AD2d 245; School Dist. #13 of Town of Huntington v Wicks, 227 NYS2d 768).
The witness referred to the sales comparison grid contained within Exhibit 1 explaining that each of the comparable sales was adjusted as required vis-a-vis the subject property and that the adjustments made are set forth on page 24 of Exhibit 1. The witness testified that sale # 1 is located within the City of Rensselaer approximately one mile from the subject property and within a local business commercial/industrial zone[1]
. He noted that comparable sale # 1 sold in July of 2000, approximately fourteen months subsequent to the instant taking. The witness related his conclusion that the fair market value of the subject property on April 8, 1999 was $790,000.00.
Despite the location of the witness's office in Ithaca he testified on cross-examination that he was familiar with the Capital Region in general and Rensselaer County in particular and had knowledge and expertise sufficient to conduct the appraisal of the subject property. He stated that he inspected the subject property four or five times and spent three to four days in the field prior to preparing his appraisal. The witness stated that he believed the population figure for the City of Rensselaer set forth on page 4 of the appraisal report (77,000[2]
) was correct.
The appraisal indicates that commercial properties benefit from the presence of a train station and the traffic it generates although the witness conceded that he did not possess traffic volume data for either of the streets bordering the subject property. He acknowledged that while the train station had been there for many years the neighborhood within which the subject parcel was located consisted of primarily residential properties with a scattering of commercial properties including a convenience store (Stewart's) and a Family Dollar store. In response to an inquiry by counsel the witness testified that the lack of commercial development surrounding the train station was primarily attributable to the fact that with the exception of the subject property and an adjacent parcel there was little or no developable land in the area. He further testified that the subject property ceased being used as a supermarket in 1995 and that a building located on the site was demolished in 1998 to clear the land for redevelopment. The property was available for sale following closure of the supermarket in 1995. He defined the term "commercial development site" as referring to any property that can be used or developed for business purposes.

With respect to the sales grid located on page 24 of Exhibit 1 the witness testified that sale #1 involving a property in the City of Rensselaer which was developed into an Eckerd Drug Store was adjusted for location since the property's Columbia Turnpike site was deemed superior to that of the subject. A further adjustment was made for shape. Both factors required a downward adjustment in the valuation of the subject property. The witness further testified that although sale #1 involved a corner property which generally commands a higher price no adjustment for this fact was warranted since one of the two streets making up the corner lot was a dead end street.

The second sale contained within the grid located on page 24 of Exhibit 1 is sale #3. Claimant's appraiser testified that the sale price of this property was adjusted for location since its location was deemed superior to that of the subject property. The witness noted the presence of a motel and a McDonald's restaurant nearby. He further related that the property is near an interchange of Interstate Highway I-90 and Route 4 and is visible from the highway.

The next property included on the sales comparison table located on page 24 of Exhibit 1 was sale #4 which is located within a retail plaza in the City of Troy, New York approximately 8 miles from the subject property. The witness testified that sale #4 is located in a more commercially developed area than is the subject. The witness made no adjustments for the fact that sale #4 is located in an area which includes two corners and no adjustment for location was made despite the fact that there appeared to be more traffic near sale #4 than the subject property.

Sale #6 included in the grid at page 24 involved the combination of several one-half to three-quarter acre parcels into a single commercial property. The witness admitted that generally a premium is paid for an assemblage of separate properties but no adjustment was made for the fact that this property was indeed composed of several component parcels.

Defense counsel presented the witness with a document marked for identification as Exhibit A which the witness recognized as a deed with respect to the Merzig property which is included within claimant's sale #6. The witness testified that the document reflects deed stamps in the amount of $3,600.00 representing a sale price of $900,000.00. He was unaware of any sales over $1,000,000.00 in Rensselaer County or any sales of vacant land in Rensselaer County involving a sale price in excess of $10.00 per square foot. He admitted that of the comparable sale properties only sale #1 was located within the City of Rensselaer. The indicated value per square foot for sale #1 is $5.10.

The witness testified that sale #8 is located on Route 7 near the boundary between the Town of Colonie and the Town of Niskayuna and that he adjusted the sale price for location, size and shape. The witness stated his understanding that Sale # 8 was purchased for development of a drug store although he was uncertain as to whether it had ever been developed for such a purpose.

On redirect examination the witness testified that sale #4 is located approximately eight miles from the subject property and that all comparable sales used by the witness were within the same marketing area as the subject property. With regard to sale #6 he testified that an assemblage adjustment was not required vis-a-vis the subject property because the overall price paid for the properties was consistent, although at the high end, of market parameters. He also admitted that he did not consider the value of buildings located on the assembled parcels since the properties were purchased for use as a commercial development site and the buildings located thereon were ultimately demolished. He testified that in preparing the appraisal he looked for sites suitable for construction of a major drug store because he was aware that the owners of the subject parcel had received an offer from a major drug store retailer. He reiterated that although his offices are located in Ithaca most of his work is done in the Capital District where he has worked continuously during the past 10 to 15 years.

On recross examination the witness admitted that the majority of his appraisal work within the Capital District has been performed in Albany County. The witness was excused at the conclusion of the recross examination.

The defendant's sole witness at trial was W. Douglas Alvey, a licensed appraiser since 1992. The witness testified that he has performed appraisals for thirty years and is a member of the Appraisal Institute. He asserted that he has performed approximately 1,000 appraisals in Rensselaer County, primarily of commercial/industrial property. The witness testified that he inspected the subject property, performed market research and researched comparable sales. The defendant's appraisal report was marked for identification as Exhibit F and received in evidence without objection.

The witness testified that he inspected the subject property on several occasions between 1998 and 2002. He described the area surrounding the subject property in April, 1999 as consisting primarily of older residences, an Amtrak train station, a Stewart's store, a drug store which later became a Family Dollar Store, a local tavern and a flower shop[3]
. The witness considered the area to be a secondary commercial development site with significantly less traffic volume than found on surrounding highways such as Columbia Turnpike or Routes 4 and 40. The subject property was described by the witness as "L" shaped with a long narrow leg approximately 62 feet wide. The property was generally level with the major portion thereof fronting along East Street.
The witness testified that he used the sales comparison approach to valuation in preparing the appraisal. He opined that the highest and best use of the property was for local neighborhood commercial uses based upon the property's size, shape, zoning and its proximity to the train station and attendant vehicular traffic. The witness estimated the subject property's value as of the date of vesting as $458,200.00. The witness stated that the comparable sales used in determining the subject property's value are listed on pages 24-28 of Exhibit F and that those sales were subject to the adjustments set forth in a grid found on page 29. The witness pointed out that explanations of the adjustments contained within the grid were set forth in the report at pages 30-32.

He offered the following descriptions of the comparable sales. Sale #1 was described as being located on Columbia Turnpike, an area of heavy traffic volume and having a superior shape to the subject property but inferior frontage.

The witness described sale # 2 as also located on Columbia Turnpike, a primary four lane, east/west traffic corridor in Rensselaer County, and described the property as having inferior frontage when compared to the subject property but having superior shape, topography and size.

Sale #3 was described by the witness as being located on Albany-Shaker Road near the Albany International Airport. The witness described Albany-Shaker Road as a two lane road in April 1999. According to the witness comparable sale #3 was inferior to the subject property in frontage, similar in shape, topography and size and somewhat superior in terms of location. The witness related that sale #4 was located along Routes 4 and 40 in the Town of East Greenbush, Rensselaer County, an area which was experiencing significant development in April of 1999. The witness adjusted the sale to reflect its superior location on a four lane highway. A further adjustment for size was required in recognition of economies of scale.

The witness testified that comparable sale #5 was located on Broadway in the City of Rensselaer but alleged that the property was not truly comparable to the subject property for a number of reasons including its small size (.195 acre), zoning, frontage inferior to that of the subject parcel and a superior location.

The witness explained that in valuing the subject property he used a price per acre value as opposed to the price per square foot value used by the claimant's appraiser. He explained that either pricing method is appropriate, but because the subject property was 3.8 acres a per acre value was in his opinion more suitable. The witness opined that a total of $458,200 in damages were sustained as a result of the taking.

On cross-examination the witness testified regarding previous appraisals prepared for the State involving the appropriation of property in the Town of East Greenbush and on Route 7 in the City of Troy. Mr. Alvey acknowledged that the subject property is located in one of only two local business/commercial industrial (LB/CI) zones in the City of Rensselaer which he described as permitting a wide range of commercial development. He agreed that there are only two LB/CI zones in the City of Rensselaer. With regard to information contained on page 22 of the defendant's appraisal report, the witness testified that the Fay's Drug Store in place near the subject parcel in April, 1999 was thereafter closed and the retail operation moved from East Street to Columbia Turnpike. The resulting sale was included in the claimant's appraisal report as comparable sale property #1.

The witness testified that he was aware that the owner of the subject property had received a purchase offer for the parcel but denied that USPAP Rules require an appraiser to report offers on property being appraised, particularly when such offers are unsigned. The witness acknowledged that the defendant's appraisal does not make reference to the Rensselaer Amtrak Station as being the 9
th or 10th busiest passenger station in the United States nor does it note the number of trains in and out of the station as of April 1999 or the number of passengers who used the train station on a daily basis. The witness reiterated his earlier testimony that the highest and best use of the subject property was for commercial development compatible with both the train station and the needs of the surrounding neighborhood.
With respect to the presence of the nearby train station the witness indicated that it was, in fact, a positive factor considered in his appraisal and that the grid adjustments were made with awareness of that fact. The witness acknowledged that while in his earlier testimony he had indicated that approximately 5,000 cars traveled on East Street daily in the general vicinity of the train station, he had not obtained a traffic volume study for either East Street or Columbia Turnpike in preparing the appraisal report. The witness further acknowledged that none of the defendant's comparable sales abut a train station and while such sales involved commercial sites they did not strictly conform to the witness's conclusion that the highest and best use of the subject parcel was for development compatible with the train station and consistent with neighborhood needs. The witness pointed out that although the defendant's comparable sale #3 did not abut a train station it was located approximately three-eights of a mile from the entrance road to the Albany airport.

With regard to defendant's comparable sale #1, the witness admitted that he provided a -10% size adjustment to the 1.25 acre parcel despite the fact that it is one-third the size of the subject property. Similarly, sales #2 (1.727 acres) and #4 (1.78 acres) contained in the report are subject to a -10% size adjustment. With reference to comparable sale #5 the witness indicated that it had been included in the appraisal report solely because it was a sale of property in the City of Rensselaer. On counsel's inquiry the witness agreed that claimant's comparable sale #1 was also a sale within the City of Rensselaer of approximately the same size and zoning as the subject property. Likewise, the witness acknowledged that both he and claimant's appraiser adjusted property located on Columbia Turnpike by -15% for location relative to the subject property While acknowledging an awareness of claimant's sale #1 at the time he prepared his appraisal report the witness stated that he did not include claimant's sale #1 because he did not find it to be comparable to the subject property. On redirect examination the witness opined that claimant's sale #1 was not comparable to the subject property since in verifying the sale with the developer he determined that the only reason the sale was consummated was that the buyers had an Eckerd Drug Store lease "in their pocket". He further alleged that the location of claimant's sale #1 on Columbia Turnpike near the Dunn Memorial Bridge was far superior to that of the subject property. He testified that traffic along East Street in the City of Rensselaer is less than the traffic on any of the bordering streets for any of the comparable sales found in Exhibit F.

Claimant made an oral motion to strike this witness's testimony regarding that portion of the appraisal report which indicated that 5,000 cars passed by the subject property daily since that figure was not supported by any traffic volume data. The Court granted the motion. The defendant then rested and the claimant moved to strike the defendant's comparable sales #1 - #4 contained in the defendant's appraisal report since they were asserted to be incompatible with the defendant's expert's opinion that the highest and best use of the subject property was for commercial purposes serving both the train station and the surrounding neighborhood. The Court reserved decision on that motion and directed the filing of briefs addressed to the motion within 30 days of the conclusion of trial.

The Court in its discretion now denies claimant's motion to strike finding that the defendant's determination of highest and best use should not be afforded an interpretation as restrictive as that urged on the motion. The position advanced by claimant's counsel is totally unrealistic in light of the representations of both parties that commercial property sales within the City of Rensselaer were static for a considerable period of time. The trial testimony reflects that within the Capital District there are only two Amtrak passenger stations, one adjacent to the subject property and the other in the City of Schenectady. To require the defendant to produce proof of commercial sales in close proximity to a train station as urged by the claimant would be to require the impossible. Claimant's motion is, therefore, denied.

In his appraisal filed with the Court on August 21, 2002 claimant's appraiser Kenneth V. Gardner II at page 19 opined that the highest and best use of the subject property is as a commercial development site. Similarly, the State's appraiser, W. Douglas Alvey, in his report at page 23 opined that the highest and best use of the property was a commercial use which would combine "compatibility with the train station as well as servicing the needs of the local neighborhood residents."

Applying the four well-established criteria for determining a property's highest and best use (i.e., legal permissibility, physical possibility, financial feasibility and maximum profitability) and cognizant of both the subject's location, physical characteristics and generous LB/CI zoning the Court concludes that the highest and best use of the subject property in the before situation was as a commercial development site in conformity with local zoning.

It is established that the standard for determining proper compensation in condemnation cases is "market value at the time of appropriation, that is, the price a willing buyer would have paid a willing seller for the property" (
Matter of Town of Islip [Mascioli], 49 NY2d 354, 360). "The valuation is to be based upon the highest and best use of the property, regardless of whether the condemnee is so using the property at the time (Matter of County of Suffolk [Firester], 37 NY2d 649, 652)" (Breitenstein, Matter of v State of New York, 245 AD2d 837, 839). The Court of Appeals stated the following in Village of Lawrence v Greenwood, 300 NY 231 at page 237:
Value, in a commercial sense, is the money estimate of marketable property. Where, as here, the inquiry goes to the market value of a parcel of vacant land taken by condemnation, we believe that evidence of sales of other comparable land in the vicinity, reasonably near in point of time to the appropriation date, may properly be received on direct examination as a criterion in evaluating the land in controversy. In short, proof of the price paid for one is relevant in arriving at the value of the other. 'A non-compulsory sale between a willing seller and buyer is ordinarily regarded as a good test or criterion * * * in determining the value of the land in controversy. The opinion of the buying public so expressed in a free market is what usually determines value.' (Epstein v Boston Housing Authority, 317 Mass. 297, 299).

Here, each party's appraiser relied on the sales comparison approach to valuation in the before situation, but analyzed the data in a slightly different fashion. As noted in the evidentiary presentation above, claimants' appraiser chose to value the property on a dollar per square foot basis while the State's appraiser used a dollar per acre approach. Neither party argues that the subject parcel may not properly be valued using either methodology and both experts agreed that the valuation process was somewhat skewed by the limited number of recent commercial sales in the City of Rensselaer. There was no comparable sale used by both parties and the Court rejected claimant's proof of two purchase offers on the subject property since such proof is inadmissible to show value (
Brummer v State of New York, supra 25 AD2d 245).
The parties offered widely divergent appraisals of the subject property's before taking value. Claimant asserts the value is $790,000 (rounded up from $789,984 based on $4.75/sq ft x 166,312 sq ft)[4]
while the State alleges the before taking value is $458,200. The non-adjusted sale price of the claimant's comparable sales ranged from a low of $4.36 per square foot (Sale #4) to a high of $10.77 per square foot (Sale #8). The adjusted indicated values per square foot ranged from $3.92 to $7.54 per square foot (see Claimants' Exhibit 1, p. 24). The Court disregarded claimants' comparable sales 2, 5 and 7 since they were not included in the adjustment grid (see Claimant's Exhibit 1, p. 24) and no testimony was offered to show that adjustments were unnecessary.
Defendant, on the other hand, offered comparable sales having non-adjusted sale prices between $105,333 per acre and $230,769 per acre and adjusted indicated values to the subject between $105,333 per acre and $138,461 per acre (
see Defendant's Exhibit F, p. 29).
Based upon the proof offered at trial the Court finds that claimant's sale #1 is the property most nearly comparable to the subject. Sale #1 is located within the City of Rensselaer approximately three-quarters of a mile from the subject parcel in an area governed by the same or substantially similar zoning requirements as the subject. Sale #1 is also similar to the subject property in terms of size. Although sale #1 is superior to the subject in terms of location, both experts applied a uniform -15% location adjustment in valuing the subject parcel vis-a-vis properties (such as sale #1) located on Columbia Turnpike.

Only one of the defendant's comparable sale properties is located within the City of Rensselaer and the proof does not reflect that any of the defendant's sales were subject to the same zoning requirements as the subject property. Defendant's sale #5 is located on Broadway in the City of Rensselaer but comprises a total area of only .195 acre and required a -45% size adjustment. Defendant's sales #1, 2 and 4 are all less than two acres in size. The only comparably large parcel is defendant's sale #3, a 3.8 acre property located on Albany-Shaker Road in the Town of Colonie, Albany County.

Court of Claims Act § 16 provides that evidence of comparable sales is relevant and material to the issue of value if the Court finds,
inter alia, that the sale was made within a reasonable time of the vesting of title in the State on April 8, 1999. The sale date indicated for claimant's sale #1 is July 11, 2000, approximately 15 months subsequent to the taking of the subject parcel. The sales cited by claimant occurred between September 1996 and July 2000 while the defendant cited comparable sales occurring between August 1996 and September 1999. In light of the broad spectrum of time encompassed by both experts in their appraisals as well as the proof indicating a generally stable real estate market in the City of Rensselaer, the Court finds that claimant's sale #1 occurred within a reasonable time of the vesting of title in the State and may be considered in determining the value of the subject (Waldenmaier v State of New York, 33 AD2d 75).
Claimant's expert determined that the indicated value for sale #1 after adjustments for both shape and location was $5.10/square foot. Based upon the similarities between the subject parcel and claimant's sale #1 in terms of size, proximity and zoning, the Court finds that the opinion of claimant's expert valuing the subject property as of April, 1999 at $4.75/sq. ft. or $789,982 (166,312 sq. ft. x $4.75/sq. ft.) is supported by the proof and the claimant is therefore entitled to recover that amount as just compensation for the taking of 3.818 acres in fee simple with no remainder (
CNG Transmission Corp, Matter of (Green), 273 AD2d 726).
Thus, claimant is awarded the sum of $789,982 with appropriate interest thereon from the date of taking (April 8, 1999) until October 8, 1999 (six months subsequent to the taking date) and from February 21, 2001 (the claim's filing date) to the date of this decision and thereafter to the date of entry of judgment herein pursuant to CPLR 5001 and CPLR 5002, EDPL § 514, Court of Claims Act § 19 (1), and subject to Court of Claims Act § 19 (4).

The award to the claimant herein is exclusive of the claims, if any, of persons other than the owners of the appropriated properties, their tenants, mortgagees or 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 properties or contiguous thereto; and is exclusive also of claims, if any, for the value of or damage to easements or appurtenant facilities for the construction, operation or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines.

The Clerk of the Court is directed to enter judgment in favor of claimant as provided for herein and the claimant's filing fee shall be recovered pursuant to Court of Claims Act § 11-a (2).

Let judgment be entered accordingly.

September 23, 2003
Saratoga Springs, New York

Judge of the Court of Claims

[1]Claimant's appraisal report p. 71, however, indicates sale #1 is located in Zone C-1 (presumably meaning CI).
[2]In contrast the defendant provided data from the Capital District Regional Planning Commission which estimated the City of Rensselaer's population at 7,828 in the year 2000.
[3]The latter two businesses were not mentioned in the claimant's appraisal.
[4]The actual calculation yields a result of $789,982.