New York State Court of Claims

New York State Court of Claims

V. THE STATE OF NEW YORK, #2006-019-002, Claim No. 100512


Synopsis


After trial, court awarded claimant total damages of $577,700 for partial appropriation including direct damages of $55,000, indirect damages of $510,000, as well as $12,700 for cost to cure; court adopted claimant's appraisal including unity of use theory, proof of highest and best use, and valuation

Case Information

UID:
2006-019-002
Claimant(s):
TWO SULLIVAN STREET, A NEW YORK TRUST
Claimant short name:

Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
100512
Motion number(s):

Cross-motion number(s):

Judge:
FERRIS D. LEBOUS
Claimant's attorney:
JOSHUA J. EFFRON, ESQ.
Defendant's attorney:
HON. ELIOT SPITZER, ATTORNEY GENERALBY: Joseph F. Romani, Assistant Attorney General, of counsel
Third-party defendant's attorney:

Signature date:
February 10, 2006
City:
Binghamton
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)


Decision
This is a timely filed claim for damages caused by the partial appropriation pursuant to the Eminent Domain Procedure Law and Highway Law § 30 of properties owned by claimant in a proceeding entitled "Liberty-Woodbourne, Part 1, S.H. 1691, Sullivan County, Town of Liberty," as reflected on Map Nos. 73 and 66, Parcel Nos. 89 and 90. A trial in this matter was held on November 29 and 30, 2004 in the Binghamton District. Thereafter, the parties requested and were granted additional time to submit post-trial memorandums. The court has made the required viewing of the properties which are the subject of this claim. (CCA § 12 [4]).


Claimant acquired title to the properties by deeds recorded in the Sullivan County Clerk's Office on January 14, 1997 (in Liber 1921 of Deeds, page 77) and February 26, 1997 (in Liber 1928 of Deeds, page 540). The appraisers of both parties conclude that claimant was the owner in fee of the subject properties.


Appropriation Map Nos. 73 and 66, describing the appropriated Parcel Nos. 89 and 90, were filed in the Sullivan County Clerk's Office on December 11, 1997 which the court finds was the date of the takings. The appropriation maps and descriptions contained therein are adopted by the court and incorporated by reference. This claim was filed on June 9, 1999. This claim has not been assigned or submitted to any other court or tribunal for audit or determination.


Mobil Gas Station Parcel
Before the taking the gas station parcel was comprised of approximately .42 acres (18,295 square feet)[1]
with 130.65 feet of frontage located on Sullivan Avenue and 127.62 feet of frontage on Route 52, just north of the off-ramp for Route 17 (Exit 100) in the Village and Town of Liberty. The parcel is located in a commercial zoning district. The topography is a gradual up-slope from Sullivan Avenue and a gradual down-slope from Route 52.

The property is improved with a one-story masonry/brick gas station and an auto service facility. The building was constructed in 1997 containing 7,604 square feet to replace an older building. The building was setback 27 feet from Sullivan Avenue and 16 feet from Route 52. The exterior of the building contains a canopy with recessed lighting. The building is divided into two main functions, office space and an auto service area. The office space includes offices, bathrooms, waiting areas, and a Hertz rental car office. The auto service area contains seven overhead doors with five lifts for alignments, repairs, and body shop services. There is also a spray paint room, a mezzanine for compressors and tire storage and a 750-gallon waste oil storage tank.


The taking consisted of .05 acres or 2,185 square feet of asphalt paving.[2]
The building remained physically the same as before the appropriation. Thus, after the taking the gas station parcel was comprised of approximately .37 acres (16,110 square feet). (St's Ex A, p 81).

Prior to 1996 this parcel was owned by Sullivan County Oil Company and leased to Stanley and Linda Miller. In May 1996, the Millers entered into a contract for the purchase of said parcel with the closing occurring in January 1997. (Cl's Ex 8). The purchase price of the gas station was $750,000, subject to a variety of requirements including the following: the purchase of gasoline products at a set price; the sale of a minimum of 550,000 gallons of gasoline per year and, if the minimum was not met, the cost of gasoline would be six cents per gallon for each gallon less than 550,000 gallons; and that the purchasers construct a new service station and repair shop at a minimum cost of $200,000. (Cl's Ex 8, ¶ ¶ 20, 22, & 23). In accordance with these requirements, the Millers constructed the new service station and repair shop, but the Village of Liberty required as a condition to the issuance of a building permit that claimant own both parcels and consolidate them into one tax map which was accomplished on February 26, 1997. (Cl's Ex 3).


Auto Service Facility Parcel
Before the taking, the total land area was approximately .33 acres (14,375 square feet)[3]
with 123 feet of frontage located on Sullivan Avenue, just north of the off-ramp for Route 17 (Exit 100) in the Village and Town of Liberty. The land is improved with a building which is divided into multiple uses, namely a one-story auto service area, a three-story metal and masonry area used as office/storage, as well as an area described as shed storage. The building was constructed in 1982. The setback is approximately 15 feet from Sullivan Avenue. The parcel is located in a commercial zoning district.
The auto service facility contains three 14 foot high overhead doors. The one-story auto service area is divided into a body shop and general maintenance/mechanics area.


The three-story building is used primarily as office space on the first floor. The second and third floors contain some finished and unfinished wood plank flooring and sheetrock walls.


The steel shed addition contains 400 square feet.


The taking of the auto service facility parcel consisted of .02 acres or 872 square feet of asphalt paving. The building remained physically the same as before the appropriation. Thus, after the taking the auto service facility parcel was comprised of approximately .31 acres (13,503 square feet). (St's Ex A, p 118).


Before proceeding to a discussion of highest and best use and valuation of these parcels, the court believes a preliminary statement regarding the parties respective positions will be beneficial in placing the rest of the discussion into context. Claimant's position is based on the belief that the two parcels should be viewed as one unit based upon a unity of use theory, thereby entitling claimant not only to direct damages from each taking, but also consequential damages as well. The State holds a contrary view. The State views the two parcels as separate and distinct from one another and argues that the taking of one had no impact on the other. The parties' positions are reflected in their respective appraisals with claimant's expert valuing the two parcels as one parcel, while the State's expert appraises the parcels separately.

DISCUSSION
  1. Fair Compensation
Claimant is entitled to fair compensation for property appropriated by condemnation. (
Matter of Town of Islip [Mascioli], 49 NY2d 354, 360 [1980]). To that end the court is required to value the subject property according to its highest and best use as of the date of vesting with the measure of the damages being the fair market value in its highest and best use on that date. (Town of Islip [Mascioli], 49 NY2d at 360; Matter of County of Clinton [Gagnon], 204 AD2d 898, 899 [1994]; Gold-Mark 35 Assocs. v State of New York, 210 AD2d 377 [1994]). The fair market value is the price for which the property would sell if there was a willing buyer and a willing seller under no compulsion to either buy or sell. (Matter of Allied Corp. v Town of Camillus, 80 NY2d 351 [1992]; Gold-Mark 35 Assocs., 210 AD2d 377).
  1. Highest and Best Use
Claimant's appraiser valued the gas station and auto repair facility as an integrated economic unit. Claimant's appraiser determined that the highest and best use of the subject properties in both the before and after situations were as their current use, namely an integrated auto and truck service center with fuel service. (Cl's Ex 14, p 18).

The State's appraiser determined that the highest and best use of the gas station parcel in both the before and after situation is as commercial development as if vacant and for a gasoline service station as improved. (St's Ex A, pp 49-50 & 82). The State's appraiser determined the highest and best use of the auto repair facility parcel in both the before and after situation is as commercial development as if vacant and for a service garage and body/repair shop as improved. (St's Ex A, pp 49-50 & 119).


In examining the parties arguments relative to highest and best use, the court finds the issue of unity of use to be the distinguishing factor. As previously noted, claimant's expert found a unity of use between the gas station parcel and the auto repair facility parcel from which his methodologies and valuations flow, while the State's appraiser rejected any unity of use between the two parcels. It is well-settled that in order for separate parcels to be treated as one unit for purposes of determining consequential damages, if any, "[t]here must be (1) contiguity, (2) unity of use and (3) unity of title or ownership [citations omitted]." (
Erly Realty Development v State of New York, 43 AD2d 301, 303-304 [1974], lv denied 34 NY2d 515 [1974]).

Here, the court finds that the first and third elements are undisputed thus leaving the second key element of unity of use. Claimant's position is that as long as the two parcels are used for complementary purposes they need not have been put to the same use. The court agrees and finds many cases in which unity of use has been found on two separate parcels used for complementary purposes such as an automobile dealership and a service station; a gravel pit and a concrete plant; and a mobile home park and recreational use. (
Geary v State of New York, 95 AD2d 965 [1983], lv denied 61 NY2d 605 [1984]; Strong v State of New York, 38 AD2d 241; Glazer v State of New York, 54 AD2d 1077 [1976]).

Consequently, based upon the foregoing, this court accepts claimant's conclusion of a unity of use between the gas station parcel and auto repair facility parcel. Thus, the court finds that the highest and best use of these parcels is as an integrated economic unit in both the before and after situations. (
Mays, Inc. v State of New York, 300 AD2d 545, 547 [2002], lv denied 99 NY2d 511 [2003]; Broadway v State of New York, Ct Cl, November 6, 2003, Ruderman, J., Claim No. 103220 [UID No. 2003-010-032]).[4] In sum, this court finds that claimant's expert's conclusion relative to highest and best use to be supported by the credible evidence and, as such, rejects the State's appraisal which was based on two separate unintegrated parcels. (Split Rock Partnership v State of New York, 275 AD2d 450 [2000], lv denied 95 NY2d 770 [2000]).

As such, the court finds that claimant is entitled to direct damages as well as consequential damages. Having accepted the claimant's analysis of highest and best use as supported by the credible evidence, the court now turns to the issue of valuation. (
Chemical Corp. v Town of E. Hampton, 298 AD2d 419 [2002]; Vassar College v State of New York, 294 AD2d 427 [2002]).
  1. Valuation
Based upon the foregoing determination relative to unity of use, the court need not review the State's appraisal which rejected the unity of use principle and will address claimant's appraisal. (
Split Rock Partnership, 275 AD2d 450). Additionally, since the court now views these parcels as one integrated parcel, the court notes that the combined square footage of these two parcels before the takings was 32,234 square feet as set forth in the claimant's appraisal, while the combined takings equaled 3,057 (2,185 + 872), thus leaving a combined square footage after the takings of 29,177. (Cl's Ex 14, Summary).
  1. Before Value
There are three generally accepted approaches to determine the value of real estate: (1) the cost approach; (2) the income capitalization approach; and (3) the sales comparison approach.


Claimant's appraiser concluded the subject property had a $1,260,000 value in the before situation. Claimant's appraiser found a value of $1,260,000 using the sales comparison approach; a value of $1,333,000 using the cost approach; and a value of $1,255,000 using the income approach. (Cl's Ex 14, p 50). The court accepts claimant's valuation of $16.00 per square foot in the before situation. Further, the court accepts claimant's appraiser's valuation of these combined parcels in the before situation of $1,260,000 without adjustments.

  1. After Value
Claimant's appraiser reaches a $695,000 value of the combined parcels in the after situation. Claimant found an after value of $695,000 using the sales comparison approach; a value of $686,000 using the cost approach; and a value of $674,000 using the income approach. (Cl's Ex 14, p 79).


With respect to direct damages, the total square footage appropriated equals 3,057 square feet (872 square feet from Parcel 89 and 2,185 square feet from Parcel 90). The court accepts the claimant's valuation of $16.00 per square foot and thus finds the direct damages as a result of the taking equals $48,912 (3,057 x $16.00 per square foot). (Cl's Ex 14, p 80). Additionally, however, the evidence at trial established that a portion of the paved parking area was also appropriated. As such, the court finds that the damage to the paved parking area resulted in a loss of $6,100 as set forth in the claimant's appraisal. (Cl's Ex 14, p 80). Consequently, the total direct damages suffered by the claimant as a result of this appropriation total $55,000 (rounded).


Next, the court must determine if there was any consequential damage to the remainder of claimant's property as a result of the taking. It is well-settled that when the State takes a portion of claimant's property, claimant is entitled not only to direct damages for the taking but also consequential or indirect damages for the diminution in value of the remaining property as a result of the taking. As a general rule, the measure of damages in a partial taking case is the difference between the fair market value of the whole property before the taking and the fair market value of the remainder after the taking. (
Acme Theatres v State of New York, 26 NY2d 385, 388 [1970]).

Here, both the State and claimant agree that some degree of severance damage did result as a result of the taking of a portion of the claimant's properties and some of the improvements thereon. The court has previously indicated that it has accepted claimant's theory of a unified use of these parcels. Furthermore, the court has determined that it accepted the claimant's combined before value of $1,260,000. Based upon the evidence presented at trial, the court is satisfied that the appropriation significantly raised the grade of Route 52 and Sullivan Avenue leaving the northerly portion of the claimant's property substantially below grade. The court is also satisfied that this increased grade seriously hinders accessibility to the subject property for commercial purposes particularly in bad weather winter conditions. Additionally, the appropriation infringes on the fuel service island and canopy so that the fuel service island and canopy now encroach on the State's right-of-way. Furthermore, the court is satisfied that the auto service facility and truck service facility have also been impaired due to a less than adequate area on the property for maneuvering of service vehicles. For instance, the setback from the body shop has been reduced to approximately 12 feet and the setback of the truck service center has been reduced to approximately 21 feet. The setback of the auto parts store has now been reduced to approximately 1 foot and prevents direct access to the retail portion of this building complex without opening the front door onto the State's right-of-way.


Additionally, claimant has suffered declining fuel sales as well as declining auto part sales in two of the businesses. Moreover, the truck retail service center has now changed its operation from a retail use to a wholesale service center due to lack of parking and access, due to difficult if not dangerous conditions for retail customers when using the subject property.


In reviewing the claimant's appraisal report, the court finds the sales comparison approach most helpful in determining an after appropriation value. Based upon the comparables and a review of the same, the court is in agreement that the value of the subject property after the taking is, in fact, $695,000. Consequently, indirect damage to the remaining 29,177 square feet at $5.00 per square foot totals $145,885, with damage and loss of improvements of $364,000 resulting in total indirect damages of $510,000 (rounded).


With respect to the cost to cure, increased drainage problems have resulted in and around the property in front of the parts store and truck repair shop. Standing water now accumulates in front of these portions of the subject property and at times actually enters into the auto parts store. The catch basin installed by the State in this area was installed at a level that does not accept run off from this portion of the property. The correction of this problem has been addressed in a report prepared by claimant's engineering firm and damages related to this problem are addressed as a cost to cure. The court accepts claimant's report and finds claimant is entitled to $12,700 as a cost to cure the drainage problems created by this appropriation as a result of the increased elevation of Sullivan Avenue. (Cl's Ex 14, Addenda, pp 118-122).



SUMMARY OF FINDINGS
Recapping, the court finds the following damages:
  1. Direct Damages: $55,000 (rounded).
!
$48,912 ($16.00 square foot x 3,057 square feet taken)


!
$6,100 for pavement

  1. Indirect Damages: $510,000 (rounded)
!
Land $145,885 ($5.00 square foot x 29,177)


!
Improvements taken: $364,000.

  1. Cost to Cure: $12,700
Total:
Thus, the total damages to be awarded to claimant are direct damages ($55,000), indirect damages ($510,000), and a cost to cure ($12,700), for total damages of $577,700.


Accordingly, it is the finding of the court that claimant is entitled to an award of $577,700 with statutory interest thereon from the vesting date of December 11, 1997 (date of appropriation) to June 11, 1998 (six months thereafter), and from June 9, 1999 (date of filing of claim) to the date of decision herein and thereafter to the date of entry of judgment for the permanent appropriation.


The award herein is exclusive of the claims, if any, of persons other than the owners of the appropriated property, its tenants, mortgagees or lienors having any right or interest in any stream, lake, drainage and 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 the claims, if any, for the value of or damage to easements and appurtenant facilities for the construction, operation, or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer, or railroad lines.


Any motions on which the court previously reserved or were previously undecided are hereby denied.


ENTER JUDGMENT ACCORDINGLY.



February 10, 2006
Binghamton, New York

HON. FERRIS D. LEBOUS
Judge of the Court of Claims




[1]For ease of reference, the individual square footage of each parcel is taken from the State's appraisal. However, the parties' appraisals actually reflect a difference of .01 acres in total combined square footage of the two parcels. Claimant's appraisal reflects a before situation total of combined square footage of the two parcels of 32,234, while the State's appraisal reflects a before situation total of combined square footage of the two parcels of 32,670 (18,295 + 14,375). Ultimately, as will be discussed below, the court will rely on the claimant's appraisal and the square footage referenced therein.
[2]The parties' appraisers agree on the amount of square footage actually appropriated.
[3]See footnote 1.

[4]Selected unreported decisions from the Court of Claims are available via the Internet at