New York State Court of Claims

New York State Court of Claims

ROTHENBERG v. THE STATE OF NEW YORK, #2008-030-010, Claim No. 108418


Total appropriation of claimant’s property for highway purposes along State Route 25 and State Route 347 in Town of Smithtown, Suffolk County. The highest and best use of the subject property on the day of the taking was a commercial use conditionally allowed by special permit, not as residential, despite the indication that on the day of the taking the property had no legal access to the surrounding State highways by virtue of untested denial of curb cuts by the State. Law of the case did not apply because denial of curb cuts was untested, and no credible testimony established that continued denial would be likely. The residential use - almost exactly like the one proposed by defendant’s experts - was found to not yield the owner a reasonable return by the appellate division more than 10 years earlier. The property had been under a cloud of condemnation for over 20 years. Total damages in the amount of $1,414, 209.00 with interest from taking date of August 12, 2003, not interest from date of denial of curb cuts as argued by claimant

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:
Defendant’s attorney:
Third-party defendant’s attorney:

Signature date:
May 2, 2008
White Plains

Official citation:

Appellate results:

See also (multicaptioned case)


This timely filed claim seeks damages for the total appropriation of claimants’ property pursuant to Eminent Domain Procedure Law and §30 of the Highway Law, in a proceeding entitled P.I.N. 0054.15.201, Nesconset-Port Jefferson Station Road, S.H. 9376, the property being located in Suffolk County, as reflected in Map No. 1252 FEE, Parcel No. 1260. [Exhibit 8]. It is legally identified on the Tax Maps of Suffolk County as District 800, Section 114, Block 3, Lot 11.

The Appropriation Map was filed on August 12, 2003 and the Court adopts the description of the appropriated property as shown on the map filed. The claim herein was filed on October 17, 2003.
Claimants’ title to the subject property is not disputed. The property consists of 1.921 acres (or 83,681 square feet) located at the northwest corner of the intersection of State Route 25 and State Route 347 in St. James, Town of Smithtown, County of Suffolk. The Court has made the required viewing of the property which is the subject of this claim, and found such inspection to greatly inform this decision made after trial. [See Court of Claims Act §12(4)]. In the claim, claimants seek just compensation in the amount of Three Million ($3,000,000.00) Dollars.

To this Court’s knowledge, this claim has not been assigned or submitted to any other court, tribunal or officer for audit or determination.
The present claim did not arise in a vacuum, and has its genesis in proceedings of record, pertinent to issues submitted at trial. Significantly, in 1996 the Appellate Division, Second Department reversed the denial by the Town of Smithtown Zoning Board of Appeals of the owners’ application for a commercial use variance for the subject property stating:
“The Board incorrectly determined that the owners could realize a ‘reasonable return’ (Town Law §267-b[2][b][1]) on the property. The Board found that the property could be subdivided into three residential parcels allowing the owners to realize a reasonable return on their investment. However, the Board understated the . . . [owners’] cost basis in the property, failed to account for the present value of the . . . [owners’] investment, and computed the return on the property using construction costs and potential sale prices which lack any basis in the record. In contrast, the . . . [owners’] witness testified to the costs of subdividing the lot, including grading the land and installation of utility services, revealing that the net proceeds of the sale would fall drastically short of the initial investment. Considering the evidence, along with the other possible uses of the property, we find that the owners could not make any use of the property, as presently zoned, which would afford a ‘reasonable return’ on their investment. We note that the use variance would not change the essential character of the neighborhood which, although zoned 30% commercial, is in fact largely commercial within the vicinity of the subject parcel. Further, the hardship is unique, as this is the only parcel located on a major intersection within this commercialized area which is undeveloped and zoned residential. Finally, the hardship was not self-created, as the property was purchased as commercial property and was not developed because of a proposed condemnation by the State and a building moratorium imposed by the Town of Smithtown prior to the rezoning. Accordingly, the . . . [owners] are entitled to a use variance . . .” Matter of Rothenberg v Board of Zoning Appeals of Town of Smithtown, 232 AD2d 568, 569-570 (2d Dept 1996); [Exhibit 13].

As noted in the decision, the property had undergone different zoning classifications since its purchase. It had originally been zoned for business, then for warehouse service industry, and then finally the residential R-10 zone was imposed. Additionally, the Second Department said in 1996
“[t]he owners refrained from selling or developing the property because the State indicated that it intended to condemn the property. After more than a decade, the State rescinded its plans and the owners undertook to develop the property for commercial purposes.” [Ibid.].

In terms of a time frame, when the State rescinded its plans to condemn the property, the Town imposed a building moratorium for an unspecified period of time. When the Town’s moratorium was lifted, the residential zone replaced the earlier designations. The owners’ pursuit of the commercial use variance, its denial by the Town Board, and the appellate treatment thereof in 1996, followed. [See ibid.].

The State’s actions leading up to the taking at issue here appear to have landed sometime after the site plan [Exhibit 9] reflecting the commercial use variance was conditionally granted by the Town on or about May 16, 2000. [Exhibit 5]. One of the conditions for granting the commercial use variance was that curb cuts to the State road be obtained from the New York State Department of Transportation [NYSDOT]. [See Exhibit 5].

In prior motion practice before this court, cross-motions for summary judgment resulted in a ruling granting partial summary judgment to the effect that as of the vesting date of August 12, 2003 claimants had no legal access from the property to Route 25 Middle Country Road or to Route 347 Nesconset-Port Jefferson Station Road, because curb cuts to these State roads had been denied by the NYSDOT. [1] The underlying papers to the cross-motions[2] indicate that a de facto appropriation claim was first pursued by these claimants in the Court of Claims premised upon NYSDOT’s denial of curb cut access to the subject property and the effective legal landlock allegedly resulting. [See Claim Number 103315, filed October 31, 2000]. During the pendency of the claim asserting the de facto appropriation cause of action, proceedings for the de jure taking that is the subject of this claim were commenced, and Claim Number 103315 was formally discontinued by stipulation on or about November 10, 2004.
As noted, the subject property is a 1.9+ acre parcel located adjacent to the ramp carrying traffic from Route 347 to Route 25. On August 12, 2003, the property had 380± feet fronting the access roadway connecting the State routes, and 80± feet fronting the undeveloped right-of-way of Wilson Avenue. Wilson Avenue - only a “paper street” - would lead into a residential area if developed. The R-10 zone in which the subject property is placed, is described as a residential development zone, allowing residential development of single family homes on a minimum lot area of 10,000± square feet. Commercial development in such a zone would be prohibited absent a special use permit issued by the Town of Smithtown. At the time of the taking, the property remained unimproved. The property was primarily wooded, and at or near road grade. Along the road frontage, utilities such as electric and telephone are available. There was vacant land to the east of the site, a commercial office building immediately adjacent to the property on the west, and a residential area to the north.
The parties’ primary dispute, evidenced in the conflicting testimony presented, was whether the subject property’s highest and best use for just compensation purposes was as a residential development, or as a specially permitted commercial development. As a result of this dispute, the expert testimony presented was based upon these conflicting viewpoints, with claimants’ witnesses opining that the highest and best use was as a commercial office building - of one or two storeys - and defendant’s witnesses opining that the highest and best use was for a three lot residential development. Neither side analyzed the value based upon the uses advocated by its adversary, except that for impeachment purposes, a telling appraisal performed by defendant’s real estate appraiser in April 2003 in anticipation of the State appropriation of the property found that the highest and best use would be commercial, and asserted a fair market value for the property of almost twice the amount the same witness testified to at trial. [See Exhibits B and 14]. Both Patrick Given, the defendant’s appraiser, and Ronald Haberman, the claimants’ expert, utilized only the sales comparison approach to arrive at an indicated value for the subject property at the time of the taking since vacant land was at issue. [See The Appraisal of Real Estate, 12th Edition, 2001].
As a preliminary matter, defendant argues that this court’s decision on the cross-motions for summary judgment, wherein this court indicated that on August 12, 2003 - the day of the taking - the subject property had no legal access to the State highways because of the denial of the curb cuts, necessarily concludes the issue of the highest and best use of the property as the “law of the case.” The lack of access, it is argued, renders the property suitable only for residential development, not the commercial use allowed only by special permit given the R-10 zoning. With a residential development as the highest and best use for the property, its value would be slightly more than half of its value as a commercial development.

Law of the case doctrine provides that “judicial determinations made during the course of a litigation before final judgment is entered may have preclusive effect provided that the parties had a full and fair opportunity to litigate the initial determination . . . (citations omitted).” Marcus Dairy, Inc. v Jacene Realty Corp., 27 AD3d 427 (2d Dept 2006); see also Sterngass v Town Bd. of Town of Clarkstown, 43 AD3d 1037 (2d Dept 2007). What this court’s ruling was, and its effect on the ultimate valuation to be given property seized by the State of New York, is overstated, however.

The defendant’s argument exalts what was a mere observation of fact in a prior ruling, largely premised upon both parties’ indications at the time that the property did not have legal access to the State roads on the taking date, in a matter clearly warranting plenary trial. The fact that on the day of taking there was no legal access to the property, premised on an untested denial of curb cuts by a State agency would - as noted by claimants’ appraiser - normally be viewed for valuation purposes as just another approval to be vetted toward the proposed commercial use. The court notes that no expert or other qualified witness stated at trial that further pursuit of curb cuts would inevitably be denied. Indeed, the court cannot help but observe from its own required inspection of the subject property that a curb cut to an adjoining property developed with a business use was apparently allowed along the actual right turn lane from Route 347, just prior to and leading on to the access road that fronts the subject property, despite Mr. Given’s indication during his trial testimony that it would be “a shock” to a driver following one who intended to turn right into the property, to observe the turn signal and adjust his own actions accordingly. Such a cut was apparently allowed despite the regulatory proviso that “in general” curb cuts are not allowed from turning lanes on State highways. [See 17 NYCRR §125.5]. Accordingly, the court finds that the law of the case doctrine defendant argues as having a preclusive effect herein does not apply in the manner advocated, given the very limited scope of this court’s prior ruling.

Given the cloud of condemnation[3] and limitation on development that hung over this property for more than 20 years, the positions taken by defendant’s witnesses at trial are not credited as they do not take into account such history except, at best, parenthetically. Indeed, Daniel Falasco, defendant’s engineer, claimed to be unfamiliar with the Appellate Division’s finding that the subject property would not achieve a “reasonable return” for the owner with a three (3) lot residential subdivision, and asserted it would not change his view of the proposed utility of the site had he known of it. [See Town Law §267-b and Exhibit 13]. He was familiar, however, with an affidavit sworn to by Frank Derubeis, Director of the Town of Smithtown Planning and Community Development Department since 1985, concerning the status of the subject property at the time of the appropriation, [see Exhibit 12], and recalled that a conceptual development plan presented to the Board by Frederick Wood in August 1994 - referenced in Mr. Derubeis’ affidavit - had concluded that the site’s development as residential property was not feasible, yet again Mr. Falasco indicated that it did not inform his view as to the utility of the site. [See id.].
His review was based on the assumption that access to the property would only be from Wilson Avenue - a residential street - and that the R-10 zoning for residential use controlled. With some irony given the 1996 Appellate Division decision, the court notes that Mr. Falasco envisioned three (3) residential lots at the end of a cul-de-sac off of a proposed extension of Wilson Avenue. Under Town regulations, he said, access roads are required to be 50 feet wide. As it was, Wilson Avenue was only 30 feet wide. Mr. Falasco acknowledged that the Town of Smithtown would have to approve the narrower Wilson Avenue as an access road, since the R-10 zone requires 50-foot-wide streets, but indicated that he had “investigated the likelihood of such approval with Town officials”, and had also had the experience of one of his own projects that contained a 30 foot right-of-way. [T-81][4]. He opined that were the property developed commercially the Town would not allow access through the residential area and Wilson Avenue to the commercial property. As noted, he did not explore the site’s development with a commercial use at all. There essentially would be no access to the property from either State Routes 25 or 347, or from Wilson Avenue, absent some type of negotiation with adjoining landowners or an additional adjacent purchase with access, he said. Additionally, were Wilson Avenue required to be widened for development of the property as either residential or commercial property, condemnation by the Town would be necessary to effectuate such widening. While there was no evidence of any relevant permit requirements presented by either side, Mr. Falasco’s pronouncement that no curb cut would be allowed was speculative, and not supported by reference to any NYSDOT regulations.[5]

Patrick Given’s trial testimony in support of the March 12, 2007 report he presented at trial is undermined by his previous appraisal of April 2003. [Exhibits B and 14]. The April 2003 appraisal was made at a time when the legal posture of the denial of curb cuts was essentially the same as at the time of the August 2003 taking; that is, curb cuts had been denied on May 11, 2000, and the denial was untested, yet the property is evaluated by Mr. Given based upon a highest and best use as commercial property, with almost double the value the defendant presented at trial for the residential use. [cf. Exhibit B and Exhibit 14]. He appraised the property in April 2003 with an assumption that there was access to the State routes, just as Ronald Haberman, claimants’ appraiser, did in the report he presented at trial. [See Exhibit 2]. When this earlier appraisal report was written, Mr. Given also referenced the Appellate Division decision, and the proceedings in the Town of Smithtown thereafter wherein the commercial use variance was granted on March 25, 1997, and extended to August 11, 2000, and allowed construction of a 12,000 square foot one storey office building on the residentially zoned site.

Mr. Given was also aware when he prepared this other appraisal that the curb cuts had been denied for “safety concerns.” At trial, he opined that the safety concerns would likely be that the speeds on the State routes are “fairly high,” and that “people would be shocked if they saw somebody put their brakes on with a right-hand signal turn. So I think there’s very valid safety concerns regarding making ingress and egress of the subject property from this relatively high speed ramp.” [T-130]. He never saw any report from the State that might include any alternatives to deal with the safety issues, nor did he make any inquiry as to what alternatives there might be vis-a-vis safe access to the site from the State routes. He confirmed again that although he was aware of the NYSDOT curb cut denial to the subject, in April 2003 he “appraised it as if it had access trying to give the . . . property owner every benefit of the doubt,” arriving at a value of $880,000.00 when considering the property as possessing a highest and best use as being developed with a commercial office building. [T-127]. It is noted that all the general statements concerning the geographical area, and the location of the property and its utility are exactly the same in the report presented at trial which concluded that the highest and best use would be residential. [Exhibits B and 14].

Mr. Given testified that his trial appraisal was premised on the assumption that the subject did not have legal access to New York State Routes 25 and 347 on August 12, 2003, referencing this court’s decision on the parties’ cross-motions, and mentioning in passing the Appellate Division decision. [Exhibit B, Pages 17-18]. Driven by that premise, he appraised the property based on its R-10 zoning, that allows single family residences with lots having 10,000 +/- square feet. Without any legal access to the highway, in his opinion the highest and best use for the subject is as a residential development of three (3) lots. He analyzed comparable sales of residential developments all in the same general area as the subject to arrive at a per lot value after adjustments for the subject of $150,000.00, or a fair market value of $450,000.00.

Claimants’ expert engineer, William Lahti, testified that he had analyzed the subject property before the appropriation for development with a commercial office building, and opined that such would be its highest and best use. [See Exhibit 1]. He was aware that the Town of Smithtown had granted a special use permit for the commercial office development of the site on May 16, 2000, subject to a list of conditions involving various approvals, including approval from NYSDOT for curb cuts. [Exhibit 5]. He was also aware that conditional approval from the Town of Smithtown Board of Zoning Appeals had been granted much earlier with regard to reducing the parking set back required in the front yard on March 26, 1997. [Exhibit 7]. Site plan approval had been conditionally granted in 2000 for a one storey commercial office building of 12,200 square feet, with 86 parking stalls, with access provided via two curb cuts along the Route 347 and Route 25 frontage. [see Exhibits 9 and 11]. When he wrote in his report that access to the site would be provided by curb cuts along the State roads, he knew that almost simultaneously with the Town’s indication of conditional approval on May 16, 2000, NYSDOT advised the Town planning department in a letter dated May 11, 2000 that it would deny claimants’ curb cut application for “safety reasons” based upon site plans submitted in March 2000. [Exhibit 6].

Although at trial Mr. Lahti appeared to be saying that a developed Wilson Avenue could serve as access to the subject if developed commercially despite the fact that such access would entail driving through a residential area, in his written report he had opined that access from Wilson Avenue would not be provided for a variety of reasons, more in accord with defendant’s engineer’s view that Wilson Avenue would be unavailable as access to a commercial development.

Mr. Lahti further opined that if the Town approved a one (1) story, 12,200 square foot office building, with 86 parking spots, it was reasonably probable that the Town would approve a two (2) story building of 14,413 square feet with 117 parking spaces that did not require any additional use or setback variances other than those already obtained. Thus it was this larger structure that he put forward as the “maximum utilization” for the subject property. [T-29].

As to the list of conditions indicated on the conditional site plan approval [Exhibit 7] issued by the Town - including the proviso that curb cuts be granted by NYSDOT - Mr. Lahti testified that he did not view such a list as prohibitive, even if safety issues were involved, because having been brought to the applicant’s attention, such issues could then be addressed and resolved. He admitted that he could not opine, nor had he set forth in his report, that the Town of Smithtown would approve of a commercial development in the form of either the 12,000 +/-square foot or 14,000 +/- square foot building using only Wilson Avenue as access, or whether the “safety concerns” regarding curb cuts could be addressed.

Ronald Haberman, claimants’ expert real estate appraiser, testified that the highest and best use of the property before the taking was as a commercial office building, as further described in his report. [Exhibit 2]. A significant part of what informed Mr. Haberman’s opinion was the Appellate Division determination of 1996 that the subject property would not bring the highest return to its owners as a residential development, but rather as a commercial one. [See Exhibit 13; Matter of Rothenberg v Board of Zoning Appeals of Town of Smithtown, supra].

More significantly, he stated that the location was not good for residential development in any event, based upon the shape of the property; and its location immediately adjacent to a “very high speed route with the noise and vibration that came with it.” [T-58]. Indeed, it was the court’s observation during a viewing of the subject property that private homes along this not-quite corner property would be a very unappealing option. The properties to either side of the subject on the State routes are developed with commercial uses. The property immediately adjacent to the subject on Route 25 houses a professional’s office, and the property immediately adjacent to the subject on Route 347 - the property served by a curb cut along a portion of the right turn lane - is a small commercial building currently housing a travel agency.

Additionally, Mr. Haberman said that because there had been some indication that the property was “subject to a taking” some years earlier - which did not come to pass - its potential for development was additionally limited to a commercial use. [T-58]. He indicated that if there were no access to the property, his conclusion with regard to the subject’s value and the assessment of its highest and best use “as commercial” would not change. [T-60]. This was because the denial of an approval for curb cuts - while certainly part of the record he reviewed when performing his analysis - he considered “just another step” to take toward development, an “additional [part of the] approval process.” [T-61].

When describing in his report the various value adjustments made to the comparable sales in his report, he did not use the word access, but he credibly explained at trial that it was nonetheless part of his analysis. [See Exhibit 2, pages 35-36]. He said that when he described how he used the traditional analysis to arrive at what the highest and best use[6] for the subject would be, he included a brief mention of what was “physically possible,” [ibid. page 31] and that within that “physically possible” rubric he stated that the property “. . . is situated along the connecting road joining State Route 347 to State Route 25 with acceptable access projected.” [Id.]. He also noted that the approved site plan [Exhibit 9] - premised on the Town planning department’s design, not private designers - included two curb cuts onto the State highway, and did not include access onto Wilson Avenue.

Mr. Haberman said he looked at seven comparable vacant land sales near the subject and situated along similarly busy streets, whose square foot values ranged between $16.93 to $79.18 per square foot after adjustments. [see Exhibit 2]. For the subject site, he arrived at a value of $25.00 per square foot, and thus a market value for the subject property of $2,090,000.00.

Starting as early as 1986, the actions of the State of New York presented a perpetual conundrum for the owners of what to do with what would certainly seem to be a valuable piece of real estate near major access routes in a developing area. See Matter of Rothenberg v Board of Zoning Appeals of Town of Smithtown, supra at 568-569. The State’s actions never appear to have crystalized sufficiently to constitute a de facto taking[7] - the elements for which were not sufficiently made out based on the history - and even if made out by the time the level of intrusion at least arguably could constitute a de facto taking, the de jure taking - and the evidentiary clarity of taking maps that complement a de jure taking - followed forthwith, subsuming any more amorphous claims.

In consideration of all of the above, the engineering report by Mr. Falasco [Exhibit A], and Mr. Given’s March 12, 2007 appraisal [Exhibit B] premised upon that engineering report, are discarded, as they limit their analysis to development of the parcel as a three (3) lot residential development of a type disparaged by the Appellate Division in 1996. Additionally, such a development would have its own conditions attached, including a speculative presumption that either development of Wilson Avenue with a substandard width would have been approved, or that the Town would have engaged in the condemnation process to widen the road to the code standard of 50 feet attested to.

The court has the constitutional duty of determining just compensation for the property taken, requiring ascertaining the fair market value of the property at its highest and best use, regardless of whether it was being so used at the time of the taking. Matter of Town of Islip [Mascioli], 49 NY2d 354 (1980); Keator v State of New York, 23 NY2d 337, 339 (1968). Upon consideration of all the evidence, including the opportunity the court had at trial to listen to the witnesses presented and evaluate their demeanor as they testified, the court’s viewing of the property, consideration of the factual and legal findings made in the Appellate Division, and the analysis of what was credibly presented as physically possible, legally permissible, economically feasible and maximally productive for the purpose of analyzing what compensation for a taking would constitute “just compensation”, the court finds that the highest and best use of the subject property on the day of the taking was the commercial use conditionally allowed by special permit.
Just as it is the court’s responsibility to draw conclusions as to the highest and best use for a subject property, it also must arrive at a calculation of what constitutes “just compensation” when property is seized from a citizen. “A condemnation proceeding is not a private litigation. There is a constitutional mandate upon the court to give just and fair compensation for any property taken. This means ‘just’ to the claimant and ‘just’ to the people who are required to pay for it.” Matter of County of Nassau, 43 AD2d 45, 48 (2d Dept 1973). Courts attempt to place the owner in the same relative position he occupied prior to the taking. To that end, the history must clearly be considered, since it is axiomatic that the court may consider all factors indicative of the value of the property. Both appraisers utilized the sales comparison approach to arrive at an indicated value for the subject property at the time of the taking [see The Appraisal of Real Estate, 12th Edition, 2001], but only the claimants’ appraiser analyzed the property in accordance with the highest and best use found here. Mr. Given’s April 2003 appraisal is admitted for the limited purpose of impeachment, and arguably serves only that limited purpose.[8]

The defendant’s witnesses’ attempt to deflate the value by limiting their analysis at trial to a residential use and a type of development that would be very unlikely given the location of the property on major highways - as observed by the court - and the juxtaposition of commercial properties is not credited. By the same token the claimants’ engineering witness’ design of a larger commercial building than that accepted by the Town, and some vague assertion that a commercial use would be serviced by an undersized, undeveloped road annexing a residential area, is also not credited. As is frequently the case when a court is asked to evaluate presentations made by opponents in a claim seeking just compensation for appropriated property, there are flaws in the evidence presented by both sides.

On the whole, Mr. Haberman’s use of the seven comparable commercial sales to arrive at a value is credited, however, with some reservations. [Exhibit 2]. He chose primarily undeveloped properties to compare, and while he conceded that none of the properties were ultimately developed with an office building of the type proposed on the subject site, he credibly explained that the properties compared were developed with the type of structures that would be allowed in a commercial use. With regard to the various adjustments to value Mr. Haberman made to the properties compared to the subject, he explained that when speaking of the “yield of the subject property” in connection with zoning density adjustments made, he confirmed that he was talking about the size building that could be constructed on the subject and on the comparable properties. When asked, he said that he “bore in mind” both the 14,000 +/- square foot structure counsel for defendant described as the “prepared for litigation building” [T-66] as well as the 12,000 +/- square foot building conditionally approved [see Exhibit 9] when making the “zoning/density” adjustment in his report.

Finally, in his report he opined that Suffolk County was considered economically stable for the period from 2001 to 2005, with “normal rates of growth in all segments of the real estate community.” [Exhibit 2, page 18]. Asked to clarify what he meant by “normal rates of growth”, he explained that the time adjustment he utilized over the time period from 2001 to 2005 was premised on an increase in value for vacant land of 9% per year. He also confirmed that his “marketability” adjustment to the comparable sales reflected his consideration that the subject is appraised as if all approvals were in place given the conditional site plan approval.

Of those seven sales, the court finds that sale L-1 referencing property sold in 2001, and sale L-7 referencing property sold in 2005 are simply too remote in time in a volatile real estate climate, to make them comparable. See generally Court of Claims Act §16(1). In this connection, Mr. Haberman noted in his report that the time adjustment for the properties reflected “. . . the ever decreasing supply of buildable sites available in the market.” [Exhibit 2, page 35]. Additionally, sale L-7, while located in the Town of Smithtown, is a property less than half the size of the subject; and sale L-1 was in the Town of Huntington.

Sales L-5 and L-6 are also discarded as having too many adjustments to make them truly comparable. Additionally, while sale L-6 is in the Town of Smithtown, it is a property of only 23,365 square feet; and sale L-5 is also markedly undersized compared to the subject and in a different town. Sale L-3 is also discarded because it is located in a different town that might have different constraints on development.

The remaining sales are both located in the Town of Smithtown, and are of roughly comparable size to the subject. No adjustments for size were made to either comparable sale.
Sale L-2, involved a 96,329 square foot piece of property that sold for $1,600,000.00 as improved with a vacant auto dealership at the time of sale in February 2003 [Exhibit 2, page 47]. Mr. Haberman initially adjusted the sale price in his report to $20.71 per square foot (or a total of $1,995,000) based upon the grantee’s later demolishment of the dealership in 2004, and the cost of remediating the site. After additional adjustments selected by the appraiser for time, location, marketability and utility, an adjusted value per square foot of $23.92 was found. While Mr. Haberman made an initial time adjustment increasing the value by 5%, and a marketability adjustment increasing the value by 15%, the court does not agree that such adjustments are warranted given what little foundation for same was mentioned in the appraisal report or at trial. The explanation offered for using a marketability adjustment as a correlation for the value of the subject property is that the subject property is viewed as having all necessary approvals in place, unlike sale L-2. As the evidence at trial established, while some approvals were in place for the subject, there would be difficulty completing the project given the conditionality of such approvals, including access to the property.

The court also finds that no adjustment is required for time given the separation by only a few months in the same calendar year of the L-2 sale and the taking, and the attested lack of change in market factors over that period. Mr. Haberman stated that Suffolk County had been relatively economically stable, yet he selected an increase in value for land for the period from 2001 to 2005 of 9% per year - essentially the statutory interest rate - and then pro-rated the percentage. Not providing a reference or other evidentiary foundation for that figure belies its utility for adjustment purposes. Finally, Mr. Haberman made no zoning adjustment for the business zoning designation that sale L-2 bears. There should be a negative adjustment for the superior zoning relative to the subject in the amount of 5%. Thus, in comparison to the subject, the adjusted value for sale L-2 is more accurately in the range of $18.64 (rd) per square foot.

Sale L-4, involving the sale of a 76,790 square foot property on June 17, 2003 for $1,300,000.00 ($16.93 per square foot), is also located in the Town of Smithtown on the same street as sale L-2. Adjusted for time, superior location to the subject, its inferior density of development pursuant to its zoning, its inferior marketability - again, because of the conditional approvals for the subject - and its inferior topography, results in a per square foot value of $21.58 according to Mr. Haberman. As noted above, however, no time adjustment is warranted, and the location along the same street as L-2 is more accurately seen as a superior location to the subject warranting the same negative adjustment of 10% applied relative to sale L-2. The 15% positive marketability adjustment based upon the conditional approvals for the subject versus the lack of approvals for the comparable is unwarranted for the reasons stated above, and the court finds that the less prohibitive zoning of the comparable sale warrants its negative adjustment of 5%. Based upon these more appropriate adjustments, the court finds that the indicated value per square foot for the comparable sale is $15.24 (rd).

Based on the foregoing, the court finds that the subject property before the taking has an indicated per square foot value within the range of values presented after adjustment of the comparable sales in the amount of $16.90 (rd) per square foot. The court finds that the fair market value of the subject parcel at the time of the taking, at its highest and best use as commercial property suitable for an office building, is $1,414,209.00 (rd) ($16.90 x 83,681).

Accordingly, claimants are entitled to a total damages award of $1,414,209.00, together with statutory interest[9] thereon from the vesting date of August 12, 2003 to the date of this decision and thereafter to the date of entry of judgment pursuant to Civil Practice Law and Rules §§ 5001 and 5002 and Court of Claims Act §10(1), plus the return of any filing fee actually paid. Court of Claims Act § 11-a (2).

The award to claimants herein is exclusive of the claim, if any, of persons other than the owners of the appropriated property, their tenants, mortgagees and 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 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.

All other motions on which the court may have previously reserved or which were not previously determined, are hereby denied.

Let Judgment be entered accordingly.

May 2, 2008
White Plains, New York

Judge of the Court of Claims

[1]. See Rothenberg v State of New York, Claim No. 108418, Motion No. M-69889; CM-70198 unreported (Scuccimarra J., October 20, 2005).
[2]. It is noted that in cross-motion papers submitted by the defendant it is averred that the claimants first heard of the denial of curb cuts by NYSDOT on June 29, 2000, and that an Article 78 proceeding seeking an order directing NYSDOT to grant such curb cuts was dismissed on May 3, 2001 because claimants failed to obtain personal jurisdiction over the named defendants. [See Claim Number 108418; M-69889, Affirmation by Martin Rowley, Assistant Attorney General, Exhibit G]. A subsequent attempt to pursue administrative review was also dismissed on September 25, 2001. [Ibid, Exhibit H]. This is mentioned because it appears that claimants did not merely let the denial of curb cuts by the State agency stand on its own, but rather pursued - however ineffectually - judicial review.

[3]. See generally City of Buffalo v Clement Co., 28 NY2d 241, 253-255 (1971), a case involving the City of Buffalo’s announcement of an intent to condemn properties and the alleged diminution in their value thereafter. The Court of Appeals distinguished a de facto taking from “condemnation blight”, which - just as when a de facto taking is compared to a mere trespass - is a matter of the degree of the invasion, and said in part “. . . ‘condemnation blight’ relates to the impact of certain acts upon the value of the subject property. It in no way imports a taking in the constitutional sense, but merely permits a more realistic valuation of the condemned property in the subsequent de jure proceeding. In such a case, compensation shall be based on the value of the property at the time of the taking, as if it had not been subjected to the debilitating effect of a threatened condemnation.” Further, “. . . the mere announcement of impending condemnations, coupled as it may well be with substantial delay and damage, does not, in the absence of other acts which may be translated into an exercise of dominion and control by the condemning authority, constitute a taking so as to warrant awarding compensation.” City of Buffalo v Clement Co., supra at 257. “. . . [W]here true condemnation blight is present, the claimant may introduce evidence of value prior to the onslaught of the ‘affirmative value-depressing acts’. . . (citation omitted) . . . [W]hen damages are assessed on the claim for the de jure appropriation, the claimant’s property should be evaluated not on its diminished worth caused by the condemnor’s action, but on its value except for such ‘affirmative value-depressing acts’ of the appropriating sovereign.” Ibid. at 257-258.
[4].References to “T” are to the transcript of the trial held on November 7, 2007.
[5]. The court is aware of the regulatory scheme surrounding the NYSDOT’s judgments, but notes that the witnesses did not make specific reference to these. [See 17 NYCRR §125.5, providing in part, and with a discretionary component, that “[i]n general, permits will not be issued for entrances to State highways along acceleration or deceleration lanes, and lane tapers.” See also Highway Law §52].
[6]. Namely, what is “physically possible, legally permissible, financially/economically feasible and maximally productive.”

[7]. See City of Buffalo v Clement Co., supra. The court said “. . . the concept of de facto taking has traditionally been limited to situations involving a direct invasion of the condemnee’s property or a direct legal restraint on its use . . . (citations omitted).” The elements of the cause of action were stated therein, with the court announcing “. . . a de facto taking requires [either] [1] a physical entry by the condemnor, [2] a physical ouster of the owner,[3] a legal interference with the physical use, possession or enjoyment of the property, or [4] a legal interference with the owner’s power of disposition of the property.” City of Buffalo, supra, at 255. In O’Brien v City of Syracuse, 54 NY2d 353, 357 (1981), the court stated: “De facto appropriation does not involve a proof of title in the governmental defendant. Rather, de facto appropriation, in the context of physical invasion, is based on showing that the government has intruded onto the citizen’s property and interfered with the owner’s property rights to such a degree that the conduct amounts to a constitutional taking requiring the government to purchase the property from the owner . . . (citations omitted).” Where there has been no physical invasion, the question is the degree of interference with an owner’s property rights and whether the consequences of that interference establish a compensable de facto taking, or the mere inconvenience of regulation. Compensation may be available if the regulation goes “too far.”
[8]. Such unfiled appraisals enjoy a qualified immunity from discovery as material prepared in anticipation of litigation [see 815 Assoc. v State of New York, 251 AD2d 538, 539 (2d Dept 1998); Schad v State of New York, 240 AD2d 483, 484 (2d Dept 1997); Civil Practice Law and Rules §3101(d)(2)]. As initially introduced by defendant here however, and for such limited purposes as an admission against interest, there are suggestions that the appraisal while not admissible in the case in chief or in pre-trial disclosure [see Matter of Town of Oyster Bay [Bruce], 54 AD2d 762, 763 (2d Dept 1976); Swartout v State of New York, 44 AD2d 766 (4th Dept 1974)] may be introduced for impeachment purposes when it is inconsistent with the expert’s trial testimony. See CMRC Corp. v State of New York, 270 AD2d 27, 28 (1st Dept 2000) (in dissent); Swartout v State of New York, supra. Indeed, an appraisal filed under 22 NYCRR §206.21(b) by an expert not called to testify may nonetheless be admitted as an “admission against interest relative to factual descriptive data, the before and after market values and the damage figures,” provided a proper foundation is laid. Sullivan v State of New York, 57 Misc 2d 308, 309 (Ct Cl 1968).
[9].Claimants’ arguments concerning imposition of interest from the date the NYSDOT denied curb cuts are unpersuasive. See Eminent Domain Procedure Law §514 (A), which provides in pertinent part that “Subject to the provisions of this chapter, a condemnee shall be entitled to lawful interest from the date of acquisition to the date of payment. If it is determined that the condemnor has in fact acquired the property prior to or without the filing of an acquisition map as provided in section four hundred two of this law, a condemnee shall be entitled to lawful interest from the date of such acquisition . . .” The property was not “acquired” within the meaning of the statutory language.