New York State Court of Claims

New York State Court of Claims

POWERS v. THE STATE OF NEW YORK, #2008-040-029, Claim No. 109651


Synopsis


Partial appropriation of automobile service station. Award $43,265 plus interest.

Case Information

UID:
2008-040-029
Claimant(s):
EDWARD J. POWERS and BARONA E. POWERS
Claimant short name:
POWERS
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
109651
Motion number(s):

Cross-motion number(s):

Judge:
CHRISTOPHER J. McCARTHY
Claimant’s attorney:
Joshua J. Effron, Esq.
Defendant’s attorney:
ANDREW M. CUOMO
Attorney General of the State of New YorkBy: Audrey V. Bullen, Esq., AAG
Third-party defendant’s attorney:

Signature date:
May 13, 2008
City:
Albany
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

In this timely filed Claim for damages caused by the partial taking in fee of real property, the Court awards Claimants Edward J. Powers and Barona E. Powers the sum of $43,265, plus interest, as more particularly described below. The measure of damages in the case of a partial taking is the difference between the fair market value of the property before the appropriation and its fair market value after the taking. The primary dispute in this Claim resolves itself upon a determination of the fair market value of the property before the appropriation since the parties essentially agree about the fair market value after the taking.

A trial of the Claim was held on October 3 and 4, 2007 at the Court of Claims in Albany. Thereafter, the parties requested and were granted additional time to submit post-trial memoranda. The Court has made the required viewing of the subject property pursuant to Court of Claims Act (“CCA”)§ 12(4) and Eminent Domain Procedure Law (“EDPL”) § 510. Claimant Edward J. Powers testified that the Claim has not been assigned or submitted to any other court or tribunal for audit or determination (v. I, p. 43)[1].
The Subject Property and the Appropriation
The subject property is located at the northwest corner of Church and River Streets in the Village of Hoosick Falls, Town of Hoosick, Rensselaer County, New York, where Claimants own and operate an automobile service station. The appropriation was made pursuant to Highway Law §§ 10 and 30 and the EDPL. It is depicted in New York State Department of Transportation (“DOT”) acquisition map entitled “Hoosick Falls Village S.H. No. 5040, Map No. 14 R-1, Parcel No. 14" (Ex. H [the “Acquisition Map”]).

Claimants acquired title to the property by deed recorded in the Rensselaer County Clerk's Office on September 29, 1976 (Ex. 4). Ownership was not contested. Both appraisers valued the property on the basis of Claimants’ ownership of a fee interest in the subject property (Ex. 10, pp. 6, 8; Ex. A, pp. 3-4). Thus, the Court concludes that Claimants have established title (EDPL § 505[C]).

DOT’s Notice of Appropriation apprised Claimants that: the original Acquisition Map, or a microfilm or computer digitized copy thereof, was filed in DOT’s own office on February 13, 2003; the Rensselaer County Clerk's Office certified that a copy of the Acquisition Map was filed in that office on March 27, 2003; and that title to the property vested in the name of The People of the State of New York upon such filing in the Rensselaer County Clerk's Office. Copies of the Acquisition Map and Notice of Appropriation were transmitted to Claimant Barona E. Powers, by letter dated April 30, 2003 (see Exs. 2 and 3; EDPL §§ 402[A] and 502[A]). Thus, the Court finds March 27, 2003 was the date of the taking. The Acquisition Map and descriptions contained therein are adopted by the Court and incorporated by reference. The Claim was timely filed with the Clerk of the Court of Claims on July 26, 2004 (see Ex. 1; CCA § 10[1]; EDPL § 503[A]).

The parties generally agreed about the nature of the parcel before the taking, though their appraisers differed slightly as to dimensions. Claimants’ appraiser, William S. Hafner, described the original parcel as comprising approximately .114 acres (4,950 square feet), with approximately 55 feet of frontage on Church Street and 90 feet of frontage on River Street (Ex. 10, pp. 6, 8). Claimants’ deed also states those dimensions, as does a tax assessment map of the parcel cited by both parties and which was reproduced in Mr. Hafner’s appraisal (see Ex. 4; Ex. 10, pp. 8-9; Ex. A, pp. 4, 19). On the other hand, Defendant’s appraiser, W. Douglas Alvey, reported 92 feet of frontage on River Street, resulting in the parcel consisting of 5,060 square feet (Ex. A, p. 17), though the reason for the slight discrepancy was not explained. The Court concurs with and adopts the dimensions relied upon by Claimants.

The parties agreed that the site is generally level with both adjoining streets and that the unimproved portion of the site is paved (Ex. 10, p. 23; Ex. A, p. 17). They further agreed that the property is improved with a one-story automobile service station built in 1947. Claimants’ appraiser stated that the building consists of approximately 1,481 square feet of space, while Defendant’s appraiser described it as being 1,500 square feet. Defendant’s Post-Trial Memorandum of Law ([Bullen Memorandum] at p. 2) adopted Claimants’ measurements and the Court, likewise, does so. Both appraisers reported that the majority of the building is devoted to shop space/repair bays, with the remainder primarily devoted to office space and a rest room (Ex. 10, p. 24; Ex. A, p. 17). They agreed that the property constitutes a legal, pre-existing, permitted nonconforming use located in an area that subsequently was designated a residential development zone (Ex. 10, p. 31; Ex. A, p. 19).

The parties agreed that the taking consisted of approximately 492 square feet of the paved parking area at the extreme southeast corner of the property, at the intersection of Church and River Streets (Ex. 10, pp. 6-7; Ex. A, p. 5). Defendant’s appraiser also stated that the appropriated parcel was a triangular shaped strip with a maximum depth of approximately 20 feet, tapering to zero feet at each end (Ex. A, p. 39). The parties additionally agreed that no physical changes were made to the service station building as a result of the appropriation. Thus, after the taking, Claimants’ appraiser determined that the parcel comprised approximately .102 acres (4,458 square feet) (Ex. 10, p. 7), while Defendant’s appraiser stated that the remaining parcel consisted of 4,568 square feet (Ex. A, p. 40). The Court adopts the measurement relied upon by Claimants’ appraiser.

Defendant’s appraiser determined that the setback of the service station structure from the corner of Church and River Streets was reduced approximately 22 feet, from 38 feet to 16 feet, by the taking and, further, that the remaining parcel retained 44 feet of frontage along Church Street and 82 feet of frontage along River Street (id.; see Ex. H).
Fair Compensation
“An owner whose property has been taken in condemnation is entitled to just compensation” (Matter of Town of Islip [Mascioli], 49 NY2d 354, 360 [1980]; see US Const, 5th Amend; NY Const, art I, § 7[a]). However, “[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], affd 39 NY2d 958 [1976]; see Town of Cheektowaga v Starlite Bldrs., 247 AD2d 933, 934 [4th Dept 1998]).

Just compensation generally is determined according to the property’s fair market value in its highest and best use as of the time of the appropriation (Matter of Town of Islip [Mascioli], 49 NY2d, supra at 360; Keator v State of New York, 23 NY2d 337, 339 [1968]). Fair market value, in turn, is that price for which the property would sell if there was a willing buyer and a willing seller, neither of whom was under any compulsion to enter into the transaction (Matter of Allied Corp. v Town of Camillus, 80 NY2d 351, 356 [1992]; Matter of Town of Islip [Mascioli], 49 NY2d, supra at 360; Keator v State of New York, 23 NY2d 337, supra at 339).

Moreover, when the State takes a portion of real property and leaves a remainder, claimants are entitled, not only to direct damages for the value of the land actually taken, but also any indirect damages resulting from impairment to the remaining property as a result of the appropriation. Such indirect impairment can be in the form of consequential damages that arise from the manner in which the State uses the property it has condemned. There also can be severance damages that occur because the taking caused a diminution in value to a claimant’s remaining property (see Coldiron Fuel Ctr., Ltd. v State of New York, 8 AD3d 779, 780 [3d Dept 2004]; Williams v State of New York, 90 AD2d 882, 883 [3d Dept 1982]).

The measure of damages in the case of a partial taking is the difference between the fair market value of the property before the appropriation and its fair market value after the taking (McDonald v State of New York, 42 NY2d 900, 900 [1977]; Acme Theatres v State of New York, 26 NY2d 385, 388 [1970]; Matter of City of New York (Metro Inv. & Credit Corp.), 288 NY 75, 77 [1942]). Any award made should indicate, moreover, the amounts of damage attributable to the direct appropriation and those resulting from indirect damage to the remainder, as well as the basis for such award (Howard v State of New York, 35 AD2d 1032 [3d Dept 1970]; Wineburgh v State of New York, 20 AD2d 961, 962 [4th Dept 1964]).
Highest and Best Use
The parties agree, in substance, that the highest and best use of the subject parcel, both in a vacant and an improved condition, and both before and after the appropriation, would be to continue its commercial use as a vehicle service and repair facility. It is true that Claimants’ appraiser does state the highest and best use of the subject property as a vacant parcel (both before and after the appropriation) would be residential development (Ex. 10, pp. 6-7, 32-33; Ex. A, pp. 3, 20, 41). However, Mr. Hafner also determined that a comparison of the subject parcel “to vacant residential lots would not result in a credible opinion of the value of the land taken” since “[a]ny prospective purchaser of the property would most likely not be purchasing the property for residential purposes, but for continued use as a service station” (Ex. 10, p. 46). Thus, all of Claimants’ comparable sales in a vacant condition are “properties which offer the possibility of commercial development” (id.; see Ex. 10, pp. 47, 76). In fact, Mr. Hafner stated that it was “unavoidable” that all of his comparable sales were located “in the city of Troy, removed geographically from the subject, in more urban settings” so that they could be “small commercial parcels” (Ex. 10, p. 46). The Court concludes that the highest and best use of the property, in both a vacant, as well as an improved condition, and both before and after the appropriation, would be to continue its current use as a vehicle service and repair facility.
Valuation Using the Sales Comparison Approach
The best evidence of value is a recent sale of the subject property in an arms length transaction. Absent such evidence, however, courts typically have accepted three approaches to determine the value of real estate: (1) the cost approach; (2) the income capitalization approach; and (3) the sales comparison approach, with the third method being the generally preferred option (Matter of Allied Corp. v Town of Camillus, 80 NY2d 351, supra at 356). “The suitability of comparable sales [however,] is a matter resting in the sound discretion of the Trial Court” (Audino v State of New York, Claim No. 87749, Benza, J., filed February 27, 1998)]; see Levin v State of New York, 13 NY2d 87, 92 [1963]; Matter of County of Broome [Miller Facilities Corp.], 133 AD2d 984, 986 [3d Dept 1987]; Glenn Houle Co. v State of New York, 73 AD2d 794, 795 [4th Dept 1979]).

Both appraisers adopted the sales comparison approach as the correct one to apply to this Claim. They compared Claimants’ property to other sales of properties in the surrounding area that they deemed to be sufficiently similar as to provide insight on the proper valuation of Claimants’ parcel. Because sales of other properties usually are not directly comparable, however, they also made adjustments to the sale prices of those properties (Ex. 10, pp. 37-38, 47-49, 66-68; Ex. A, pp. 26-29, 35-38, 42-48) to account for any differences between them and the subject property regarding the property rights being transferred, financing terms, conditions of sale, market conditions, location, physical characteristics, utilities, zoning, highest and best use, economic trends since the sale date, and other factors (Ex. 10, pp. 34, 36, 65; Ex. A, pp. 21-22, 30-31). The Court accepts the appraisers’ analyses and determines that the sales comparison approach is the correct one to utilize in assessing this appropriation Claim.

Claimants’ appraiser valued his properties on a per-square-foot basis. Defendant’s appraiser also valued his vacant comparable sales on that basis. For his improved properties, however, he evaluated them on a “whole to whole” basis, making adjustments in dollars and cents to the original sale price of a parcel. Mr. Alvey agreed, on cross-examination, however, that both are accepted appraisal techniques and that one method ought to be convertible to the other (v. II, pp. 264-266). Therefore, for ease of comparison, the Court adopts a convention of referring to adjustments on a per-square-foot basis.
Value of Claimants’ Property Before the Appropriation
Claimants’ appraiser concluded the subject property had a value, before the taking, of $111,000 (R), of which $71,400 was attributable to structural and land improvements to the parcel and $39,600 was attributable to the land itself (Ex. 10, p. 49). Defendant’s appraiser, by contrast, concluded that the subject property had a before value of $70,000, of which $48,000 was for structural and land improvements and $22,000 (R) was for the land itself (Ex. A, p. 38).

The Court has considered each of the comparable sales offered by the parties, the adjustments the appraisers made to the sale price in each case, their reasons for doing so, and the resulting adjusted sale prices that informed their opinions concerning the value of the subject property. The Court has made further adjustments, as necessary and as discussed below, to make the sales more comparable to the subject property. For ease of reference, charts summarizing the Court’s corrections to the comparable sales offered by the appraisers (as both an improved and a vacant parcel) follow the narrative discussions below.
Before Valuation as Improved Parcel
In determining the value of Claimants’ property before the taking, each appraiser compared it to three improved properties he deemed to be similar to the subject.

The appraisers share one comparable sale in common (Claimants’ Improved Before Sale No. 3 and Defendant’s Improved Before Sale No. 1 [the “Common Improved Before Sale”]). It is the shortest distance from the subject of all the comparable improved sales and, for Mr. Hafner, it also required the smallest adjustment (v. I, p. 137; v. II, p. 282). The appraisers agreed about most sale details and the physical dimensions of the property, an automobile service station in a rural part of the Town of Hoosick (Ex. 10, pp. 37-38, 43-44; Ex. A, pp. 32, 35- 37). They differed slightly, however, about the size of the building (by 56 square feet), and the sale price of the parcel as adjusted for trends in market conditions since the sale date (by $173). In the absence of definitive evidence to commend one view over the other, the Court splits the differences and determines that the structure consists of 1,260 square feet and the sale price (as adjusted for market trends) was $101,763.50, which equates to a price of $80.76 per square foot ($101,763.50 ÷ 1,260 [sq. ft.]).

The parties agreed that the Common Improved Before Sale is in an inferior location to the subject property. In Mr. Hafner’s opinion, that factor, if considered alone, would require a positive adjustment (v. I, p. 187). The appraisers also agreed, however, that the Common Improved Before Sale enjoys a superior lot size (about five times larger) and land to building ratio, and has better parking and provides easier maneuverability than does the subject[2]. Both determined that those superior features outweighed the inferior location (see v. I, p. 166) because Mr. Hafner made a -10% adjustment for them under the category of “location,” while Mr. Alvey made aggregate adjustments of -$29,000 (-28.5%[3]) under three headings (“location/land,” “land improvements,” and “land to building ratio/parking/maneuverability”). The Court determines that Claimants’ downward adjustment for those factors is inadequate, while Defendant’s is overstated.

The Common Improved Before Sale’s location along a high-speed portion of rural highway that connects Troy, New York and Bennington, Vermont is significantly inferior to the subject property (see v. I, p. 135). Mr. Powers testified, from his personal familiarity with the Common Improved Before Sale, that businesses have struggled at that location (v. I, pp. 37-42). Mr. Alvey further noted that sale prices for the Common Improved Before Sale have been erratic (Ex. A, pp. 32, 36). He testified that the property was vacant when it was sold last, had been for some period before then, and remained unoccupied for a period after that sale (v. II, pp. 266, 281-282). Mr. Powers also noted that the Common Improved Before Sale is not very visible to motorists, especially those heading east towards Vermont, and that the problem is exacerbated because the traffic moves quickly there. He also agreed that there is no commercial establishment nearby, like the convenience store across the street from Claimants’ property (v. I, pp. 39-40). Mr. Alvey also testified that the parcel is located near a cemetery and a residential property (v. II, p. 281).

Thus, the Court finds that the inferior location of the Common Improved Before Sale, when offset by the other superior aspects of the property owing chiefly to its greater size, requires an adjustment of -17.0 % to reflect those factors more accurately.

Next, Defendant’s appraiser made a +$5,000 (+4.9%) adjustment to account for the somewhat smaller structure on the Common Improved Before Sale, while Claimants’ appraiser determined that no adjustment was required. The Court finds that a more modest adjustment of +2.0% is sufficient to reflect that factor.

As for the condition of the building on the comparable sale site, Mr. Alvey thought that it was superior to the subject property’s building and made a -$10,000 (-9.8%) adjustment. In making that determination, he examined only the exterior of the building on the sale property, looking through the windows and doors to assess the interior. He also spoke with the person that bought the property and the real estate broker on the sale (v. II, pp. 267, 269). Mr. Hafner, by contrast, concluded that no adjustment was necessary and noted that the new owners made significant improvements to the building (v. I, p. 135). It is not clear from the record when Mr. Alvey made his site visit. However, it appears to the Court that it was before the extensive renovations noted by Mr. Hafner. At the same time, Mr. Alvey did not enter the building and relied, to some extent, on the second-hand observations of the new owner and the broker, all of which reduces the degree to which the Court credits his findings with respect to the condition of the building. The Court finds that a smaller adjustment for the condition of the building (-5.0%) is warranted.

Therefore, the Court determines that an aggregate net adjustment of -20.0 % to the Common Improved Before Sale is appropriate. The Court’s $101,763.50 sale price (as adjusted for market trends) is reduced by $20,352.70, to $81,410.80, which equates to a price of $64.61 per square foot ($81,410.80 ÷ 1,260 [sq. ft.]).

With respect to Claimants’ Improved Before Sale No. 1, the Court disagrees with Mr. Hafner’s determination that the inferior location of the sale property completely offset the superior lot size and land to building ratio and resulted in no net adjustment for those factors.

Mr. Hafner made a -10.0% adjustment in the case of the Common Improved Before Sale discussed above (which the Court found inadequate and further adjusted to -17.0% for those factors). Mr. Hafner testified that his adjustments differed because, while both sale properties are inferior to the subject, the location of the Common Improved Before Sale on a main State highway, is superior to that of Claimants’ Improved Before Sale No.1, which is on a side street with little through traffic and visibility (v. I, p. 167; Ex. 10, p. 38).

At the same time, the Court notes that Claimants’ Improved Before Sale No. 1 is the only permissible location for an auto body shop in its town, and is located more than 20 miles from the subject, much closer to the more populous areas of Rensselaer County (see Ex. 10, pp. 40, 45). Moreover, the lot size of Claimants’ Improved Before Sale No. 1 is nearly three times the size of the Common Improved Before Sale (and over 17 times the size of the subject property). Thus, the Court concludes that the much larger size of Claimants’ Improved Before Sale No. 1 must be accorded greater weight and that the effect of the comparative inferiority of the location of Claimants’ Improved Before Sale No. 1 has been overstated in Mr. Hafner’s appraisal. Those superior features again outweigh the inferior location, just as they did in the case of the Common Improved Before Sale. Thus, the Court finds that the same -17.0% adjustment is required in the case of Claimants’ Improved Before Sale No. 1 in order to reflect more accurately those offsetting factors.

Claimants’ appraiser made a +10.0% adjustment to Claimants’ Improved Before Sale No. 1 to reflect the fact that larger properties generally sell for a lower price per square foot than do smaller ones. At the same time, the Court determines that a -10.0% adjustment is required to reflect the much larger size of the building located on that parcel (more than twice the size of the subject building), resulting in no net adjustment for factors relating to building size. No adjustment is made to Mr. Hafner’s +30.0% adjustment to account for the poor condition of the sale property. Thus, the Court makes an aggregate net adjustment of +13.0% to Claimants’ Improved Before Sale No. 1, which equates to a price of $62.39 per square foot.

Regarding Claimants’ Improved Before Sale No. 2, Defendant asserts that the structure is 3,822 square feet, rather than the 1,824 square feet listed in Claimants’ appraisal (v. I, pp. 168-169; Bullen Memorandum, p. 14). Mr. Hafner conceded that the structure could be larger than his figure (v. I, pp. 171-172) and the photographic record appears to confirm Defendant’s contention (see Ex. 10, p. 41; Exs. L, M, N). The Court concludes that an additional -10.0% adjustment for the superior building space on the sale property is required. No adjustment is made to Mr. Hafner’s -15.0% adjustment to account for the superior location and size of the sale property. Thus, the Court makes an aggregate net adjustment of -25.0% to Claimants’ Improved Before Sale No. 2, which equates to a price of $65.18 per square foot.

Turning to Defendant’s comparable sales, the Court makes no adjustment to Defendant’s Improved Before Sale No. 2 (indicated value of $73,007, which equates to $82.68 per square foot [$73,007 ÷ 883 [sq. ft. building on that parcel]]). The Court rejects Claimants’ contention that a larger adjustment should be made to account for the smaller building size of Defendant’s Improved Before Sale No. 2 (Claimants’ Post Trial Memorandum [Effron Memorandum], p. 6).

At trial, Claimants’ moved to strike Defendant’s Improved Before Sale No. 3 because it was a below market, distressed sale. The Court reserved and now grants that motion. At trial, Mr. Alvey agreed that an arms length transaction is one “between unrelated parties [that are] under no duress” (v. II, p. 261). Moreover, the definition of “market value” in Defendant’s appraisal assumes that the sale price “is not affected by undue stimulus” (Ex. A, p. 6; see v. II, p. 263). Defendant’s appraisal noted that Defendant’s Improved Before Sale No. 3 “was verified by the seller as being distressed. The seller verified that the company was desperately in need of cash and sold the property at a price well below market” (Ex. A, p. 36 [emphasis added]; see Ex. A, p. 34). Thus, the Court concludes that the seller in Defendant’s Improved Before Sale No. 3 was under duress and the price was affected by undue stimulus.

Mr. Alvey believed he could adjust for those factors. He stressed his further belief that there was no collusion in the transaction so that he considered the sale to have been made on an arm’s length basis (id.; see Bullen Memorandum, p. 16). Nevertheless, Mr. Alvey felt compelled to make a +$25,000 (+50%) adjustment solely to reflect the circumstances surrounding the sale. On direct examination, Mr. Alvey testified “I generally am of the opinion that when you ... have to make [aggregate net] adjustments in excess to 50 and 60 percent, what I would do is I try to find something better. You know, you’re getting I think beyond that particular property being comparable” (v. II, pp. 224-225). The large adjustment required to account for a single factor, in this case the sale conditions, undermines the Court’s confidence in the other adjustments proposed by Mr. Alvey with respect to Defendant’s Improved Before Sale No. 3. It indicates to the Court that Defendant’s Improved Before Sale No. 3 is so dissimilar to the subject that it is not truly comparable. Thus, the Court will not consider that sale in determining the subject’s fair market value.

The Court arrives at a fair market value of the subject property before the appropriation based upon a preponderance of the evidence, which includes the corrections that the Court deemed necessary in order to account properly for the differences between Claimants’ property and the comparable sales proposed by the appraisers (as discussed above), and after having reviewed the exhibits and listening to the witnesses testify and observing their demeanor as they did so. The following chart summarizes those corrections.
Corrected Improved Before Sales Summary
Common Claimants’ Claimants’ Defendant’s
Improved Improved Before Improved Before Improved Before
Before Sale Sale No. 1 Sale No. 2 Sale No. 2

Adjusted Price per $101,763.50 $55.21 $86.90 $81,107
sq. ft. of building $80.76 [$91.85]
Location/Size -17.0% -17.0% -15.0% -$12,100
of Land
[4]
[-14.9%]
Building +2.0% 0.0% -10.0% +$10,000
Size [+12.3%]
Building -5.0% +30.0% 0.0% -$6,000
Condition [-7.4%]
Aggregate ----- ----- ----- -----
Net Adjustment -$20,352.70 +13.0% -25.0% -$8,100
-20.0% [-10.0%]
Indicated Value per $81,410.80 $62.39 $65.18 $73,007
sq. ft. of building $64.61 [$82.68]




The Court determines that the fair market value of the subject property, prior to the appropriation and as improved, was $65.00 per square foot, for a total fair market value of $96,265 ($65.00 x 1,481[sq. ft. [size of Claimants’ building]]). In making its finding, the Court relied, in particular, on the adjustments it made to the Common Improved Before Sale. That both appraisers relied upon that property as a comparable sale “attests to its probative worth as a comparable” (Buisch v State of New York, 98 AD2d 967, 967 [4th Dept 1983]; see Matter of County of Broome [Miller Facilities Corp.], 133 AD2d 984, supra at 985; Ensign v City of Hudson, 93 AD2d 963 [3d Dept 1983]).
Before Valuation as Vacant Parcel
In determining the value of Claimants’ property before the taking, the appraisers each made an allocation between the value of the improvements to the subject property and the value of the land itself. Thus, each appraiser further compared the subject to three vacant parcels that they deemed similar to the subject parcel.

The Court finds that Claimants’ Vacant Before Sale No.1 is not comparable, based upon the substantial adjustment (-70.0%) made by Mr. Hafner to reflect the superior location of Claimants’ Vacant Before Sale No. 1 in Troy’s central business district, and its designation in a commercial zone, which allows a greater range of development options than the subject property. This indicates to the Court that Claimants’ Vacant Before Sale No. 1 is not truly comparable to the subject. Thus, the Court will not consider that sale in determining the subject’s fair market value.

The Court makes no further adjustments to Claimants’ Vacant Before Sale No. 2 ($3.11 per square foot). The Court notes that, in general, sales that require fewer and smaller adjustments tend to be more comparable to the subject property. In this instance, however, the Court also notes that Claimants’ appraiser gave this sale “less weight” because it appeared to a have been sold together with an adjacent improved parcel (Ex. 10, p. 48). The Court, likewise, gives less weight to this sale in valuing the subject as a vacant parcel before the appropriation.

Regarding Claimants’ Vacant Before Sale No. 3, the Court finds that Mr. Hafner’s adjustment for the higher population density and superior location of the parcel in downtown Troy (-15.0%) is too low. The Court finds that a larger adjustment (-25.0%) more accurately values the superior location of Claimants’ Vacant Before Sale No. 3 in a mixed residential and commercial area. The Court adopts Mr. Hafner’s +5.0% adjustment for the sloping topography of Claimants’ Vacant Before Sale No. 3, and his -20.0% adjustment for the broader development options owing to the commercial zoning applicable to that parcel. Thus, the Court finds an aggregate net adjustment of -40.0% for Claimants’ Vacant Before Sale No. 3 to be more appropriate, which equates to a price of $8.73 per square foot.

Turning to Defendant’s comparable sales, at trial Claimants moved to strike Defendant’s Vacant Before Sale No. 1 as not comparable to the subject property. The Court reserved and now denies that motion. With respect to that parcel, however, the Court finds inadequate Mr. Alvey’s +$0.18 (+5.1%) adjustment for the lot’s inferior frontage, access and visibility. The subject property commands a corner lot with frontage on two-way streets on each side. Before the appropriation, the subject’s frontage equaled (on Church Street) or exceeded (on River Street) the frontage of Defendant’s Vacant Before Sale No. 1 on an interior lot located on a one-way street (see Ex. 10, p. 8; Ex.11; Ex. A, p. 23). The Court makes an adjustment of +$0.50 (+14.2%) for those factors. Mr. Alvey testified that most of his +$0.70 (+20.0%) adjustment under the caption “shape/topography” was for the topography of Defendant’s Vacant Before Sale No. 1, which, he conceded, is not at road grade, but rather, slopes down and away from the sidewalk (v. II, pp. 239, 259; see Exs. 11, 12). The Court determines that a larger adjustment of +$1.00 (+28.4%) is required in order to properly account for the superior topography of the subject property, which Mr. Alvey agreed is entirely at road grade (v. II, p. 259). The Court was not persuaded, however, by Claimants’ arguments that further adjustments are necessary to reflect a sewer easement on Defendant’s Vacant Before Sale No. 1 and the fact that the property was sold to an abutting landowner (see Effron Memorandum, p. 4; v. II, 238-239; see also Bullen Memorandum, p. 16). Thus, the Court makes an aggregate net adjustment of +$1.50 (+42.6%) to Defendant’s Vacant Before Sale No. 1, which equates to a price of $5.02 per square foot.

At trial, Claimants moved to strike Defendant’s Vacant Before Sale No. 2 as not comparable to the subject property because it has a different highest and best use as a residentially zoned parcel. The Court reserved and now denies that motion.

Regarding Defendant’s Vacant Before Sale No. 2, the Court finds that Mr. Alvey’s adjustment for its inferior location in a more secondary mixed use neighborhood in Hoosick Falls near recreational facilities (+$0.47 [+10.0%]) is inadequate. The Court makes a +$1.41 (+30.1%) adjustment to reflect more accurately the subject property’s better location (see Ex. A, pp. 15 [map], 24; see also, Ex. 10, p. 19 [map identifying recreational facilities]).

The Court determines that Defendant’s -$0.47 (-10.0%) adjustment for frontage, access and visibility, on the other hand, is too large. It overstates the site’s frontage and access advantages over the subject property because it does not account properly for the poorer visibility of the site. The Court reduces that factor to -$0.23 (-4.9%).

Mr. Alvey testified that he believed the superior functional utility of Defendant’s Vacant Before Sale No. 2 far outweighed any negative adjustment necessary to reflect the parcel’s much larger (six times) size than the subject and accounts for the majority of his -$0.47 (-10.0%) adjustment for those factors (v. II, pp. 247-250). The Court disagrees. It concludes that the factors more accurately cancel each other out. Thus, no adjustment is made for those factors.

Mr. Alvey testified that he included an adjustment to reflect Defendant’s Vacant Before Sale No. 2 being in a residential zone while the subject property enjoys a permitted nonconforming use as an automobile service station, as part of his +$0.47 (+10.0%) adjustment for Defendant’s Vacant Before Sale No. 2’s highest and best use as a public or municipal property (v. II, p. 246). The Court finds that an additional and separate adjustment of +$0.47 (+10.0%) also should be made to reflect more accurately the zoning restrictions on the comparable sale.

Thus, the Court determines that an aggregate net adjustment of +$2.12 (+45.3%) is required to make Defendant’s Vacant Before Sale No. 2 comparable to the subject property. The adjustment equates to a price of $6.80 per square foot.

At trial, Claimants moved to strike Defendant’s Vacant Before Sale No. 3 as not comparable to the subject property. The Court reserved and now denies that motion. Claimants assert that Defendant’s Vacant Before Sale No. 3 is not in the same marketing area as Claimants’ property because the sale property is located in Washington County, while the subject is in Rensselaer County. Claimants’ contention is unpersuasive. First, Claimants’ own appraiser declared that Claimants’ property is located in New York State’s Capital Region, which he defined as a ten-county area that includes both counties (Ex. 10, p. 14). Both appraisers agreed that New York State Route 22 (upon which Claimants’ property fronts on both sides) is a primary north-south road in the area and Mr. Alvey noted that it connects Hoosick Falls with neighboring Washington County to the north (Ex. 10, p. 20; Ex. A, pp. 11, 15). Second, the cases cited by Claimants’ counsel are inapt. In them, the Third Department rejected purportedly comparable sales that were located in different (in some cases distant) parts of the State from the subject properties and for which no market analyses were provided (Matter of United Parcel Serv. v Assessor of Town of Colonie, 42 AD3d 835, 837 [3d Dept 2007]; Matter of Universal Packaging v Assessor of City of Saratoga Springs, 259 AD2d 875, 876 [3d Dept 1999]; see Effron Memorandum, p. 4). As noted, by contrast, Defendant’s Vacant Before Sale No. 3 and Claimants’ property are in adjoining counties within the Capital Region. Third, the Court credits Defendant’s contention that the nearby rural towns of Cambridge and Greenwich in Washington County are at least as comparable to the subject property as the more urban Troy properties relied upon by Claimants (see v. II, p. 252; Bullen Memorandum, pp. 14-15).

With respect to Defendant’s Vacant Before Sale No. 3, the Court rejects Defendant’s adjustment (-$0.17 [-4.9%]) for the parcel’s superior frontage, as offset by its limited access and inferior visibility. The Court concludes that, in fact, those defects outweigh the advantage conferred by the additional frontage and that, a +$0.17 (+4.9%) adjustment is required. Mr. Alvey made a +$1.00 (+28.7%) adjustment for the irregular shape and sloped topography of Defendant’s Vacant Before Sale No. 3. The Court finds those factors to be a more significant defect, however, and makes a +$1.50 (+43.1%) adjustment. Mr. Alvey testified (as he did regarding Defendant’s Vacant Before Sale No. 2) that the superior functional utility of Defendant’s Vacant Before Sale No. 3 far outweighed any negative adjustment necessary to reflect the parcel’s much larger (six times usable area) size and accounts for the majority of his -$0.35 (-10.0%) adjustment for those factors (v. II, pp. 253-255). The Court disagrees (as it did concerning Defendant’s Vacant Before Sale No. 2). It concludes that the factors more accurately cancel each other out. Thus, no adjustment is made for those factors. The Court agrees with Defendant’s +$0.17 (+4.9%) adjustment because the sale parcel does not have access to municipal utilities. Accordingly, the Court makes an aggregate net adjustment of +$1.84 (+52.9%) to Defendant’s Vacant Before Sale No. 3, which equates to a price of $5.32 per square foot.

The Court arrives at a fair market value of the subject property, as vacant land, before the appropriation based upon a preponderance of the evidence, which includes the corrections that the Court deemed necessary in order to account properly for the differences between Claimants’ property and the comparable sales proposed by the appraisers (as discussed above), and after having reviewed the exhibits and listening to the witnesses testify and observing their demeanor as they did so. The following chart summarizes those corrections.
Corrected Vacant Before Sales Summary

Claimant’s Claimants’ Defendant’s Defendant’s Defendant’s
Vacant Before Vacant Before Vacant Before Vacant Before Vacant Before
Sale No. 2 Sale No. 3 Sale No. 1 Sale No. 2 Sale No. 3

Adjusted Price per
sq. ft. of land $3.45 $14.55 $3.52 $4.68 $3.48
Location/Size -10.0% -25.0% $0.00 +$1.41 $0.00
of Land [0.0%] [+30.1%] [0.0%]
Frontage/Access/ 0.0% 0.0% +$0.50 -$0.23 +$0.17
Visibility [+14.2%] [-4.9%] [+4.9%]
Shape/ 0.0% +5.0% +$1.00 $0.00 +$1.50
Topography [+28.4%] [0.0%] [+43.1%]
Size/Functional 0.0% 0.0% $0.00 $0.00 $0.00
Utility [0.0%] [0.0%] [0.0%]
Zoning 0.0% -20.0% $0.00 +$0.47 $0.00
[0.0%] [+10.0%] [0.0%]
Utilities 0.0% 0.0% $0.00 $0.00 +$0.17
[0.0%] [0.0%] [+4.9%]
Highest and 0.0% 0.0% $0.00 +$0.47 $0.00
Best Use [0.0%] [+10.0%] [0.0%]
Other 0.0% 0.0% $0.00 $0.00 $0.00
[0.0%] [0.0%] [0.0%]
Aggregate Net ------ ------ ------ ------ ------
Adjustments -10.0% -40.0% +$1.50 +$2.12 +$1.84
[+42.6%] [+45.3%] [+52.9%]

Indicated Value per
sq. ft. of building $3.11 $8.73 $5.02 $6.80 $5.32



The Court determines that the fair market value of the subject property, prior to the appropriation and as vacant land, was $6.20 per square foot, for a total fair market value of $30,690 ($6.20 x 4,950 square feet [size of Claimants’ parcel before the appropriation]).
Before Valuation of Land Improvements
The appraisers made an allocation between amounts attributable to improvements to the land itself, as opposed to the service station building and any other structures that also enhance the value of Claimants’ property.

In the former category, both appraisers allocated an amount to the paved surface of the property. Mr. Hafner assigned a depreciated value of $0.50 per square foot to the paving, while Mr. Alvey appears to have used a figure of $1.00 per square foot. Thus, Claimants valued the paved surface at $1,734 (R) (3,469 square feet [4,950 square feet of the total parcel, minus 1,481 square feet for the building] x $0.50 per square foot) (Ex. 10, p. 77). Defendant valued the paving at $3,600 (R) (3,560 square feet [the 5,060 total used by Mr. Alvey, minus the 1,500 square feet he assigned to the building] x $1.00) (Ex. A, p. 29).

Mr. Alvey also assigned a value of $1,400 to 31 linear feet of concrete wall located on the property (id.). The wall is clearly visible in several of the exhibits (see Exs. 8, C, E, F, J and K).

The Court assigns the paving a middle value of $0.75 per square foot, for a total value of $2,601.75 (3,469 square feet x $0.75). It further adopts Defendant’s uncontroverted value for the concrete wall. Thus, the Court determines that the value of the improvements to the land itself, before the taking, was $4,001.75 ($2,601.75 plus $1,400).
Allocation of Before Valuation
The Court finds that the fair market value of Claimants’ property before the appropriation was $96,265 ($65.00 x 1,481 square feet). Of that amount, $30,690 ($6.20 x 4,950 square feet) is attributable to the value of the land, $4,001.75 to improvements to the land itself, and the remaining $61,573.25 ($96,265 minus [$30,690 plus $4,001.75]) is attributable to improvements thereto.
Value of Claimants’ Property After the Appropriation
As a preliminary matter, the Court rejects Defendant’s argument that Claimants are not entitled to compensation for indirect damages resulting from reduced street access, lost parking, or loss of maneuverability on their property (see Bullen Memorandum, pp. 3-10).

It is Claimants’ burden to prove such indirect damages (Bero v State of New York, 33 AD2d 88, 89 [3d Dept 1969], affd 27 NY2d 977[1970]; Farber v State of New York, 29 AD2d 836, 837 [4th Dept 1968], affd 28 NY2d 676 [1971]). The Court determines that Claimants have met their burden by a preponderance of the evidence. The testimony and appraisal of their appraiser, Mr. Hafner, supports their claim for indirect severance damages. So does the testimony and appraisal of Defendant’s own appraiser, Mr. Alvey, who concluded that as a result of the taking, Claimants’ property suffered a reduction or diminution in: size of the parcel; land to building ratio; on-site parking; building setback; and on-site maneuverability, which has “negatively impacted” the marketability of Claimants’ property (Ex. A, p. 40). It was, likewise, Mr. Alvey’s testimony that Claimants were damaged by the appropriation to the extent of the difference between his valuations of their property before and after the taking, and that he allocated those damages between direct and indirect damages (v. II, pp. 226-227). Thus, Defendant’s contention that Claimants should not be awarded indirect damages is at odds even with its own appraisal. Moreover, an appraisal may be regarded by an adversary as an admission against interest by the party that proffered it (Metzner v State of New York, 59 Misc 2d 603, 610-611 [Ct Cl 1968], affd 43 AD2d 774 [3d Dept 1973]; City of Buffalo v Ives, 55 Misc 2d 730, 733 [Sup Ct, Erie County 1968]). As such, the Court finds that Claimants are entitled to indirect severance damages in addition to direct damages.

Indeed, there is virtually no dispute between the parties about the fair market value of Claimants’ property after the appropriation. Claimants’ appraiser concluded that the subject property had a value, after the taking, of $52,000, of which $16,336 was attributable to structural and land improvements to the parcel and $35,664 was attributable to the land itself (Ex. 10, p. 76). Defendant’s appraiser, by contrast, concluded that the subject property had a value after the taking of $53,000, of which $33,100 was attributable to structural ($28,600) and land improvements ($4,500), and $19,900 was attributable to the land itself (Ex. A, p. 49). Thus, while the two appraisers apportioned amounts attributable to land and improvements differently, their ultimate valuation of the subject property differed by only $1,000.

In making their determinations, both appraisers relied upon the same comparable sales of vacant parcels they used in making their before valuations. They each made further adjustments to those sales to reflect changed circumstances to the subject parcel after the taking. Defendant’s appraiser made similar adjustments to the same comparable sales of improved parcels he used in the before valuation. Claimants’ appraiser, however, chose three new improved parcels in determining the value of the subject property after the appropriation.

Given the minor discrepancy between the valuations arrived at by the two appraisers, the Court finds it unnecessary to engage in an exhaustive discussion of the comparable sales offered by the appraisers. Overall, based upon a preponderance of the evidence and the Court’s careful consideration of the comparable sales offered by each party, the Court finds Defendant’s analysis more persuasive because it relied on the same comparable sales both before and after the taking. As the Court determined above, the highest and best use of Claimants’ property did not change as a result of the taking. Thus, the Court finds that the subject property had a value, after the appropriation, of $53,000, which equates to $35.79 per square foot ($53,000 ÷ 1,481 [sq. ft. of building]).
Allocation of After Valuation
Allocation of the market value of Claimants’ property after the appropriation is a straightforward exercise.

With respect to the amount attributable to the land, both appraisers simply multiplied the reduced parcel (in square feet) by the value per square foot used in the before valuations. Thus, Claimants’ valued the land at $35,664, while Defendant’s valued it at $19,900 (Ex. 10, p.76; Ex. A, p. 44).

Similarly, the value of the paved portion of Claimants’ property was calculated by reference to the reduced paved area multiplied by the same price per square foot used earlier, with Claimants’ valuation at $1,488 and Defendant’s at $3,100 (Ex. 10, p. 77; Ex. A, p. 45). Defendant found no reduction to the concrete wall (Ex. A, p. 45).

Thus, the Court finds that the fair market value of Claimants’ property after the appropriation was $53,000 ($35.79 x 1,481 sq. ft.). Of that amount, $27,639.60 ($6.20 x 4,458 [4,950 sq. ft. original parcel, minus 492 sq. ft. taken]) is attributable to the value of the land. $3,632.75 is attributed to improvements to the land itself ($2,232.75 [2,977 sq. ft. paved area [4,458 sq. ft. total parcel after the taking, minus 1,481 sq. ft. building] x $0.75 per sq. ft.] plus $1,400 [for the concrete wall]). The remaining $21,727.65 ($53,000 minus $31,272.35 [$27,639.60 plus $3,632.75]) is attributable to improvements thereto.
Direct and Indirect Damages
A further allocation must be made between direct damages and indirect damages. Claimants’ appraiser determined that there were $4,182 in direct damages ($3,936 diminution in the value of the raw land and $246 diminution to improvements thereto) (Ex. 10, p. 77). Defendant’s appraiser determined that there were $2,600 in direct damages ($2,100 diminution in the value of the raw land and $500 diminution to improvements thereto) (Ex. A, p. 49).

Claimants’ appraiser valued the indirect, severance damages to the land improvements at $54,818 (Ex. 10, p. 77), while Defendant’s appraiser concludes such damages amount to $14,400 (Ex. A, p. 49).

Thus, Claimants’ appraiser determines total damages to be $59,000 (Ex. 10, p. 77), while Defendant’s appraiser concludes that they are $17,000 (Ex. A, p. 49).

The Court finds that there were $3,419.40 in direct damages ($3,050.40 diminution in the value of the raw land [$30,690 [value of the land before the taking] minus $27,639.60 [value of the land after the taking]], plus $369 diminution in the value of the paving [$2,601.75 [value of the paving before the taking] minus $2,232.75 [value of the paving after the taking]]). The Court values the indirect severance damages to the land improvements at $39,845.60 ($61,573.25 [value of improvements before the taking], minus $21,727.65 [value of improvements after the taking]). Thus, the Court determines total damages to Claimants to be $43,265 ($3,419.40 [direct damages], plus $39,845.60 [indirect severance damages]).
Allocation of Damages
The allocation of damages made by the Court in this Claim are summarized in the table that follows:
Before Taking After Taking Damages
Market Value $96,265.00 $53,000.00 $43,265.00
Land Value $30,690.00 $27,639.60 $ 3,050.40
Paving $ 2,601.75 $ 2,232.75 $ 369.00
Concrete Wall $ 1,400.00 $ 1,400.00 $ 0.00
Improvements $61,573.25 $21,727.65 $39,845.60
Direct Damages — — $ 3,419.40
Indirect Damages — — $39,845.60
Conclusion
Accordingly, it is the finding of the Court that Claimants are entitled to an award of $43,265, with statutory interest thereon from the vesting date of March 27, 2003 (date of appropriation) EDPL§§ 514(B), 705; CPLR 5001, 5002; see Sokol v State of New York, 272 AD2d 604 (2d Dept 2000); Mordecai v State of New York, 118 AD2d 763 (2d Dept 1986); De Laus v State of New York, 19 Misc 3d 1133(A) (Ct Cl 2008).

It is directed that, to the extent that Claimant has paid a filing fee, it may be recovered pursuant to Court of Claims Act § 11-a(2).

The award to Claimants herein is exclusive of the claims, if any, of persons other than the owners of the appropriated property, their 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 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.

Except as addressed above, all other motions and cross-motions upon which the Court previously reserved decision are hereby denied. All objections upon which the Court reserved determination during trial are now overruled.

The Chief Clerk is directed to enter judgment accordingly.


May 13, 2008
Albany, New York

HON. CHRISTOPHER J. MCCARTHY
Judge of the Court of Claims




[1].All references and quotations taken from the trial transcript are indicated by reference to volume and page number.
[2]. Defendant asserted that Mr. Hafner did not include an adjustment for parking and maneuverability (Bullen Memorandum, p. 12). That contention was refuted, however, by Mr. Hafner’s testimony (v. I, pp. 172-174).
[3].For each of Defendant’s adjustments in dollars and cents, the Court has included the percentage equivalent.
[4].Includes adjustments under Claimants’ categories “location” and “site improvements” (see Ex. 10, p. 37) and Defendant’s categories “location/land,” “land improvements,” “functional utility,” and “land to building ratio/parking/maneuverability” (see Ex. A, p. 35).