This is a timely served and filed claim for damages resulting from the
appropriation of real property (the property) owned by
and located in the Town of
Mamakating, Sullivan County. The premises were appropriated in proceedings
entitled Bloomingburg-Monticello, Part 1, S.H. No. 5510, Sullivan County, Map
No. 275, Parcel No. 445, pursuant to the pertinent provisions of the Highway Law
and the Eminent Domain Procedure Law. The parties agree that the date of the
taking was March 7, 2003. The claim was filed on May 5, 2004 and duly
The Court has viewed the property, as required by Court of Claims Act § 12
(4). This claim has not been assigned or submitted to any other court or
tribunal for audit or determination.
At the time of the taking, the property was comprised of approximately 1.84
acres, with improvements consisting of a full service gasoline station, repair
shop and towing station, with a small convenience store and impound lot annexed.
The Court adopts the appropriation maps and descriptions contained therein, and
incorporates them by reference. The parcel is located at the interchange of
State Route 17 (Route 17) and U.S. Highway 209 (Highway 209), abutting the
westbound access ramp to Route 17, and across the road from the westbound exit
ramp from Route 17. Highway 209 is a north-south artery which runs from
Kingston, New York to Stroudsburg, Pennsylvania. Route 17 is a four-lane
limited access highway in this area, but is incrementally being converted to an
interstate highway along portions of its route.
Claimant purchased the property in 1987. At that time, the property contained
an abandoned gasoline service station. After the purchase, he obtained a
special use permit and site plan approval from the Town of Mamakating, and
completely renovated the building, installing new doors, windows, septic system,
lighting, bathrooms, gas pumps and storage tanks. He eventually added canopies
and a 100-foot-high sign for the station. He also installed curbs and new
blacktop, and tiered the upper, back portion of the property in order to display
construction equipment he had for sale. In 2001, claimant again renovated the
station to comply with new Federal requirements for gasoline stations,
installing tanks with double-walled piping and underground monitoring equipment.
Claimant testified that, at the time of the taking, he was in compliance with
all relevant Town permitting requirements.
Kenneth Gardner II, a certified real estate appraiser, prepared an appraisal
and testified on behalf of claimant. At trial, Gardner stated that the
most significant characteristic of the property was its visibility from and
direct access to Route 17. He said that the highest and best use of the
property was for commercial use. In his appraisal, he analyzed the value of the
property by using both the sales comparison approach and the income
capitalization approach, and then used the cost approach as a general check on
the results from the first two methods.
In his sales comparison analysis, Gardner focused on sales of three similar
properties at or near interchanges on Route 17. All three of these properties
were located within 15 to 20 miles of the appropriated parcel, and were all in
Sullivan County. After comparing these properties with the parcel at issue, and
making appropriate adjustments for improvements, location and condition, Gardner
arrived at a valuation of the subject property of $445,000. He assigned the
building and site improvements a value of $215,000, and a land value of
His first comparable sale (Sale #5
) was a
property located at a Route 17 interchange in Sullivan County, which was
improved with a 3-bay auto service garage with fuel service that was expanded
after the sale. At trial, defendant's counsel questioned Gardner's Sale #5,
noting that the adjustment made to the value for location alone
, in order
to make it comparable to the subject property, was $250,000, or one-third of the
purchase price. In fact, after net adjustments, the indicated comparable value
of that sale was ± 41% lower than the sale price. As noted in Nichols on
The concept of using comparable sales to indicate a value for the subject
property presupposes similarities in the characteristics and components of the
comparables and the subject. It would appear axiomatic then that the greater
the number and percentage of adjustments, the less comparable the property and
the more vulnerable the appraisal opinion based thereon. If the net adjustments
to the comparable sale equals 30% or more of its unit price to make it equal to
the subject property, then it would seem . . . that such comparable sale has
been rendered no longer comparable and of no probative value in estimating the
market value of the subject (7A Nichols, Eminent Domain § G13.04 [3d
Accordingly, the Court finds that Sale #5 simply was not comparable.
Gardner's second comparable sale (Sale #6) was a former gasoline station later
used as a convenience store. This property was located at an interchange with a
secondary road which was accessible to eastbound traffic only. This sale was
the same as defendant's Sale #4.
problem occurs with this sale as with Gardner's previous sale, however. The
sale price of this property was $230,000, and after adjustments to render it
comparable, Gardner values it at $444,125, or nearly double the original
purchase price. Again, the adjustments made by Gardner are so substantial by
comparison to the purchase price (as are the per-square-foot adjustments made by
defendant’s expert in his analysis of this
) so as to render this sale not
comparable as well, in the Court's view.
Gardner's third and final comparable sale was an equipment sales and service
facility with exposure to Route 17, but without direct access thereto and with
no fuel sales. The Court finds that the substantial cost of equipping a parcel
for fuel sales (as testified to by claimant), in light of the requisite
standards imposed in both Federal and State regulations, is such that the lack
of fuel sales at this location also renders it not comparable.
Gardner's income capitalization valuation of the property was in part based on
the number of gallons of gasoline sold at various convenience store locations.
Gardner testified that, in his opinion, this method (known as gallonage) is the
most appropriate way to value a fuel service facility, because that is the first
factor that anyone seeking to purchase this particular property would examine.
However, as defendant's counsel accurately noted, New York courts have not
readily accepted gallonage as the basis for determining valuation in
appropriation proceedings (see Kozecke v State of New York, 34 AD2d 599
; Coldiron Fuel Ctr., Ltd. v State of New York, Ct Cl, Mar. 27,
2003, Lebous, J., Claim No. 102518 [UID # 2003-019-004], affd 8 AD3d 779
). In Kozecke, the Third Department noted that "[t]here can be no
doubt that to some extent the number of gallons sold is dependent upon the
management of the premises...and is beyond the control of the fee owner"
(Kozecke v State of New York, supra). Accordingly, the Court has
disregarded this income capitalization portion of Gardner's analysis and any
conclusions based thereon.
Likewise, the Court declines to consider Gardner's cost
As defendant accurately notes, the
cost approach is appropriately used when a property may be categorized as a
“specialty” (see Great Atl. & Pac. Tea Co. v Kiernan
NY2d 236, 239-240 ; Matter of Saratoga Harness Racing v Williams
91 NY2d 639, 645-646 ). Both appraisers agreed that the highest and best
use for the improved land would be a gas station, convenience store and auto
repair business. There is nothing unusual about those uses, or about the
location of the property. Accordingly, this property does not qualify as a
specialty, as it has “features which, while rendering the property
suitable to the owner's use, are not truly unique to his business but, in fact,
make the property adaptable for general industrial use” (Great Atl.
& Pac. Tea Co. v Kiernan, supra
Defendant also objects to claimant's appraisal because Gardner used whole
dollar adjustments to the comparable sales values, rather than making
adjustments per square foot, and does not arrive at a “per square
foot” valuation of the subject property in his sales comparison approach.
The Court notes that a “per square foot” valuation might have
assisted in the Court's analysis, but there is no particular requirement that
the appraisal be performed in this fashion. However, in light of the Court's
findings above, this issue is not relevant.
Defendant's certified appraiser, Robert Congdon, Jr., MAI, RM, prepared an
appraisal and testified on defendant's behalf. He arrived at a valuation of the
taking in the amount of $375,000. He based this figure on the cost and direct
sales comparison approaches. He did not use an income approach due, he said, to
the lack of rentals in the area and the absence of purchase or
construction of like facilities for rental income. He apportioned his valuation
in the following manner:
Land $ 83,000
Land Improvements $159,100
As previously noted, defendant objected to claimant's appraiser's use of the
cost approach in valuing the property, because the property does not qualify as
a specialty. The Court declined to consider claimant's appraiser's cost
analysis for this reason, and likewise declines to consider defendant's use of a
cost analysis as well.
Congdon's report and testimony both referenced his belief that the use of the
property as a gas station, auto repair and convenience store was a pre-existing
and further that the uses
of equipment sales and storage were not legally permissible. His determination
regarding the legality of these uses was based upon a schedule contained in his
appraisal which set forth permitted uses in the Town Center (TC) zoning district
of the Town of Mamakating, and which noted that auto repair and gas stations
required a special use permit, and made no provision for equipment sales (thus
presumably rendering those a non-permitted
This assertion was substantially undermined, however, by claimant's production
of another schedule pertaining to the General Business (C) zoning district.
This schedule also listed auto service stations and used car sales lots as
requiring special use permits, but listed motor vehicle, trailer, boat or farm
equipment sales and convenience retail stores as being permitted uses as of
right. A copy of the survey obtained by claimant during the course of his
applications to the Town for various zoning approvals, and entered into
evidence, indicates that the property was zoned “C” - General
Business District. Claimant also supplied a certified copy of his license for
operation of the auto parts business and junkyard, and testified without
contradiction that he had obtained the requisite special use permit for the
automotive service station (which was born out by documentation annexed to
Documentation annexed to defendant's appraisal indicated that claimant and the
Town of Mamakating had had a dispute in 2000 regarding claimant's storage of
unlicensed, unregistered vehicles on the property. However, that documentation
also indicates that the matter was resolved in 2001. That dispute clearly had
no bearing on the numerous other uses to which claimant put the property, all of
which the Court finds to have been in compliance with the various zoning
regulations and requirements as presented to the Court.
Congdon also placed a considerable amount of weight on his determination that
the rear portion of the property had no legal access. He contended that
claimant was accessing that part of the property by trespassing across State
land. The Court finds Congdon's determination in this regard to be completely
without merit. While one of claimant's two means of access to the rear of the
parcel may - or may not - have been across State land, it is readily apparent
from both pictures taken at the time of the appropriation and from
claimant’s testimony that the back portion was directly accessible from
the bottom part of the property, and the rear area was not landlocked.
Congdon's erroneous assumption regarding
appears to have had a direct and
substantial impact upon his valuation of the land value he assigned the
property. He developed a site value using an analysis of sales of comparable
land (that is, sales of real property which he perceived to be similar to the
subject property, although undeveloped or developed with improvements
substantially differing from the subject property).
Based on this analysis, he valued the front portion of the land - 34,529 square
feet - at $2.40 per square foot, based on comparable sales. He then assigned a
contributive value for the rear portion in the amount of $22,800, based on a
“comparable” sale of landlocked land. While the value thus assigned
to the rear portion was clearly not based on a comparable situation, Congdon
exacerbated the matter by failing to add the amount allocated to the rear
portion ($22,800) to that allocated to the front portion ($2.40 x 34,529 =
$82,869, rounded up to $83,000). Instead, he inexplicably adjusted his square
foot value of each of the comparables by $22,800. He acknowledged that if he
had valued the entire parcel at $2.40 per square foot, the resulting land value
would have been ± $192,571.
Congdon also performed whole-to-whole sales comparisons (in other words, sales
of properties with similar development characteristics). At trial, he testified
that he gave all the sales approximately equal weight. Sale #2 was located in
Steuben County, approximately 275 miles away. Sale #3 was located in Broome
County, approximately 150 miles away.1
showing was made with regards to Sales #2 and #3 that the marketing areas or
demographics were similar to those of the subject property. Such a showing
would not only have been appropriate, but necessary in order to use the
properties as comparables, given the relatively proximate location of the
subject property to the downstate area and the vastly differing natures of the
economy between the two locations. Omitting these sales, Congdon's range of
values per square foot was $216.01 (Sale #4) to $248.10 (Sale #1). The value he
assigned to the subject property was $238 per square foot (defendant's exhibit A
The parties' appraisers differed in their conclusions of the number of square
feet contained in the building on the subject property. Claimant's appraiser,
Gardner, testified that he actually measured the building, and arrived at a
total of 1,363 square feet. However, he did not provide a sketch, layout or
individual dimensions in his appraisal, nor could he testify to the dimensions.
In contrast, defendant's appraiser Congdon lists a square footage for the
building of 1,590, which did not include a tool shed of approximately 175 square
feet. However, Congdon's appraisal contains a sketch indicating the exact
measurements of each wall of the building. These measurements and the building
layout and shape appear to directly correspond with the survey prepared by
defendant for its appropriation. The Court accordingly accepts 1,590 square
feet as the size of the building.
Claimant is entitled to fair compensation for property appropriated through the
process of eminent domain (Matter of Town of Islip [Mascioli], 49 NY2d
354, 360 ). To determine that fair compensation, the Court must value the
subject property according to its highest and best use as of the date of
vesting, with the measure of damages being the fair market value of the property
in its highest and best use on that date (id. at 360; Matter of County
of Clinton [Gagnon], 204 AD2d 898, 899 ; Gold-Mark 35 Assoc. v
State of New York, 210 AD2d 377 ). The fair market value is the price
for which the property would sell if there was both a willing buyer and a
willing seller, with neither under any compulsion to buy or sell (Matter of
Allied Corp. v Town of Camillus, 80 NY2d 351 ; Gold-Mark 35 Assoc.
v State of New York, supra).
There is no dispute between the parties that the highest and best use as of the
date of vesting was as a gas station, convenience store and auto repair
business. Further, based upon the foregoing discussion, the Court finds
defendant's Sale #1 to be the most appropriate comparable sale presented. This
property, containing a gas station and convenience store, sold for $357,000 in
2 It was located on a State
Highway in Fallsburg, which is also in Sullivan County. It had 97,574 square
feet of usable land (relatively similar in size to the subject property’s
80,238 square feet). The building size (not including the metal building) was
1,680 square feet, as compared to the 1,590 square foot building on
claimant’s property. Sale #1 also had two dual-sided MPDs, each with
three product capabilities, compared to claimant’s three dual-sided MPDs
with two hoses. Sale #1 had two underground tanks, with 6,000 gallon and 1,500
gallon capacities, and a 20 x 30 canopy. The subject property had two 6,000
gallon tanks, one 4,000 gallon tank and one 2,000 gallon tank, as well as two
26' x 24' canopies. Sale #1 did not contain service repair bays. Conversely,
however, the entire building on the premises of Sale #1 was devoted to
convenience store sales, whereas less than one-third of the building at the
subject property was used for retail sales, and the rest for the repair shop.
Congdon adjusted for this, calculating the finished portion of the subject
property as being 30%, and that of Sale #1 at 100%, resulting in an adjustment
of -$17.50/sq.ft. to the adjusted square foot value of Sale #1.
Congdon estimated the condition of the subject property as average to good, and
that of Sale #1 as average, and made an appropriate adjustment (+$28.04/sq.ft.)
therefore. He also made an appropriate adjustment (+$35.18) for the difference
between the properties’ site improvements (estimated for the subject
property at $159,100 and for Sale #1 at $100,000).
The final adjustment made by Congdon with regard to Sale #1 pertained to the
estimated land value of the two properties. As previously discussed, Congdon
improperly estimated the land value of the subject property at $83,000, due to
his erroneous opinion that the rear portion of the parcel was landlocked. As
shown in Appendix A herein, the Court has revised his estimated land valuation
of $83,000, to arrive at an estimated land value of $127,000. This results in
an adjustment of +$16.07 per square foot to Sale #1, rather than Congdon’s
adjustment of -$10.12, for a total adjusted value per square foot of
(as opposed to Congdon’s
adjusted value per square foot for Sale #1 of $248.10). This results in a value
for the subject property of $436,000 ($274.29 x 1590 sq.ft., rounded).
Accordingly, it is the finding of the Court that claimant is entitled to an
award of $436,000 with statutory interest thereon pursuant to Court of Claims
Act § 19 (1) from the vesting date of March 7, 2003 to the date of decision
and thereafter to the date of
judgment for the permanent appropriation.
The award to the Claimant herein is exclusive of the claims, if any, of any
persons other than owners of the appropriated properties, their tenants,
mortgagees or lienors having any right or interest in any stream, lake,
drainage, irrigation ditch or channel, street, road, highway or public or
private right of way or the bed thereof within the limits of the appropriated
properties or contiguous thereto; and is exclusive also of claims, if any, for
the value of or damage to easements or appurtenant facilities for the
construction, operation or maintenance of publicly owned or public service
electric, telephone, telegraph, pipe, water, sewer or railroad lines.
The Chief Clerk is directed to enter judgment in favor of Claimant as set forth
above and to the extent that Claimant paid a filing fee, it may be recovered
pursuant to Court of Claims Act § 11-a (2).
Let judgment be entered accordingly.