New York State Court of Claims

New York State Court of Claims

FRONT STREET v. THE STATE OF NEW YORK, #2008-045-503, Claim No. 108507


Synopsis


Appropriation decision concerning two contiguous parcels of land, unity of ownership issue.

Case Information

UID:
2008-045-503
Claimant(s):
90 FRONT STREET ASSOCIATES, LLC and 98 FRONT STREET ASSOCIATES, LLC
Claimant short name:
FRONT STREET
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
108507
Motion number(s):

Cross-motion number(s):

Judge:
GINA M. LOPEZ-SUMMA
Claimant’s attorney:
Siegel, Fenchel & Peddy, P.C.By: Saul R. Fenchel, Esq., Jason Penighetti, Esq. And Jennifer Hower, Esq.
Defendant’s attorney:
Hon. Andrew M. Cuomo, Attorney GeneralBy: J. Gardner Ryan, Assistant Attorney General
Third-party defendant’s attorney:

Signature date:
October 7, 2008
City:
Hauppauge
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Claim 108507 was a timely filed claim for the appropriation (taking) of property, 90 Front Street, owned by claimant, 90 Front Street Associates, LLC, brought against defendant, the State of New York, pursuant to the Eminent Domain Procedure Law and § 228 of the Transportation Law.

Prior to the taking 90 Front Street was a nearly rectangular shaped parcel located at the northwest corner of the intersection of Front Street and Roslyn Road in the Village of Mineola, Nassau County, New York. The total area of 90 Front Street, approximately 14,782 square feet, was appropriated by defendant on September 11, 2003. Notice of the appropriation was served by defendant upon claimant on September 15, 2003. Prior to the taking, 90 Front Street was improved with a 2,620 square foot residential dwelling and a garage. 90 Front Street also had approximately 93 linear feet of frontage on Front Street and approximately 144 linear feet of frontage on Roslyn Road.

Claim 109166 was a timely filed claim for damages arising from the taking of a temporary easement on property, 98 Front Street. At the time of the taking 98 Front Street was owned by an entity which is not a party to this action. However, at trial both parties stipulated that this claim was retained by claimant, 98 Front Street Associates, LLC. The claim was brought against defendant, the State of New York, pursuant to the Eminent Domain Procedure Law and

§ 228 of the Transportation Law.

Prior to the taking of a temporary easement, 98 Front Street was a 5,522 square foot nearly rectangular shaped interior parcel located on Front Street in the Village of Mineola, Nassau County, New York. It was improved with a 1,280 square foot residential structure and a garage. 98 Front Street is located approximately 93 feet west of Roslyn Road with 40 linear feet of street frontage on Front Street. On November 21, 2003 the temporary easement was placed on 98 Front Street. Notice of the appropriation was served by defendant upon claimant on December 9, 2003.

By motion, granted by Judge James J. Lack, claim 108507 and claim 109166 were consolidated for trial under claim 108507. A trial was held concerning these matters on October 31, 2007 and November 1, 2007.

The taking and temporary easement were associated with a construction project to eliminate the grade crossing of the existing railroad line that abuts the subject properties on the north. At a later date, 2,084 square feet of property was conveyed from 90 Front Street to 98 Front Street in order to assure access into 98 Front Street.

The Notice of Claim concerning 90 Front Street was served on the defendant on November 7, 2003 and the Notice of Claim concerning 98 Front Street was served on the defendant on April 8, 2004. The documents were filed with the Court on November 10, 2003 and April 9, 2004, respectively. The appropriation maps and descriptions contained therein are adopted by the Court and incorporated by reference. The aforesaid maps and descriptions, entitled Roslyn Road Grade Crossing Elimination Project, were filed in the Office of the County Clerk of Nassau County. The Court has made the required viewing of the properties which are the subject of these claims. The claims have not been assigned or submitted to any other tribunal for audit or determination.

The parcel of land known as 90 Front Street is identified on the Nassau County Tax Map as Section 9, Block 417, Lot 158. The parcel of land known as 98 Front Street is identified on the Nassau County Tax Map as Section 9, Block 417, Lot 156.

Pursuant to CPLR R 3025(c), the Court deems that the pleadings are conformed to the proof presented at trial.

William Lahti, a New York State licensed engineer, testified on behalf of claimant at trial. He stated that from an engineering standpoint the maximum utilization of the subject properties was as an office development type building, approximately 13,600 square feet in size[1]. Mr. Lahti evaluated the two separate parcels as a unified contiguous larger parcel since it allowed for a larger building to be built on the area.

Mr. Lahti explained that in order to attain a 13,600 square foot building it would be necessary to use an elevated building where the parking of vehicles would occur at grade level, below the structure. He stated in his report that several variances would be necessary for such

an edifice. The first necessary variance is for the front yard setback. The second variance is for the side yard setback and the third variance is for the number of parking spaces.

Ronald Haberman, a real estate appraiser whose office is located at 125 Front Street, four buildings away from the subject properties, also testified on behalf of claimants. Mr. Haberman, stated that the area surrounding the subject properties consists mostly of converted office buildings primarily occupied by professional offices. In assessing the highest and best use of the properties, Mr. Haberman initially looked at each property separately to determine if it made economic sense to value them individually in terms of a highest and best use scenario. He determined that in order to maximize the return on investment it was best to combine the properties. Mr. Haberman valued both parcels together as one economic unit after he determined that the two parcels were contiguous with one another, they had common ownership and had primarily the same use.

Mr. Haberman considered what was physically possible, legally permissible, economically feasible and maximally productive for the properties in determining the highest and best use of the properties prior to the taking. He found that the highest and best use of the properties was as a unified vacant parcel ready and available for office building development.

Bruce Savik, a New York State licensed engineer, testified on behalf of defendant in this matter. In his analysis, Mr. Savik took into account the relevant zoning code which addressed the admissible uses for the land, the setback requirements and the parking requirements. Mr. Savik prepared three distinct possible site layouts for the development of the properties prior to the takings. In the first scenario, Mr. Savik explained how the existing buildings on each parcel could be expanded and remodeled resulting in two separate buildings with a combined 6,600 square feet of office space. The buildings would require 33 parking spaces. In the second scenario, Mr. Savik removed the building located at 98 Front Street and re-developed the building at 90 Front Street. The resultant building would provide for approximately 6,400 square feet of office space and would require 32 parking spaces. In the third scenario, Mr. Savik removed the building located at 90 Front Street and re-developed the building at 98 Front Street. This building, after remodeling, would result in approximately 6,200 square feet of office space and would require 31 parking spaces.

Andrew Albro, a real estate appraiser, also testified on behalf of defendant. Mr. Albro determined that the highest and best use of the properties prior to the takings was to retain the existing buildings on the properties and convert them to office use. Mr. Albro stated that he inspected the properties and the neighborhood, determined land uses and trends as well as conducted a zoning analysis of the properties as part of his analysis.

In evaluating the highest and best use of the properties, Mr. Albro stated that he did consider treating the two parcels as a single, but divisible, larger parcel even though 90 and 98 Front Street were under different ownerships as of the vesting date. However, Mr. Albro determined that the value of the properties individually exceeded the value of the properties combined. In conducting this analysis Mr. Albro gave consideration to four factors; physically possible uses, legally permissible uses, economically feasible uses and the maximization of productivity.

Under his legally permissible analysis Mr. Albro considered four possibilities: The demolition of the existing buildings to permit redevelopment, conversion of both residences to office buildings, demolition of either 90 or 98 Front Street to allow for conversion and expansion of the remaining building to office use and continued residential use of one or both parcels.

Mr. Albro determined that the estimated land value of the properties is substantially less than the value of the parcels as improved at their highest and best use. He calculated that the demolition of both structures in order to redevelop the entire site was not economically justified. Mr. Albro opined that the existing buildings had value and that converting the residences to office buildings was economically feasible. He found that the demolition of one of the existing structures to allow for conversion and expansion of the other structure was not economically feasible.

In order to establish the propriety of valuing two parcels as a single economic unit, the owner must show that the subject parcels are contiguous, there is unity of ownership and there is unity of use (Johnson v State of New York, 10 AD3d 596 [2d Dept 2004]). There is no dispute that 90 and 98 Front Street are physically contiguous. However, claimants have failed to conclusively establish that there was unity of ownership and unity of use as of the vesting date, September 11, 2003. The recent title history of the subject properties is that both parcels of land were owned by Angelina Silvestrone who died on August 10, 2000. After her death, each property was separately transferred by deeds into the individual names of Clara Salvati and Benjamin N. Silvestrone, her children, as tenants in common. Thereafter, on August 1, 2001, Ms. Salvati and Mr. Silvestrone transferred the parcel known as 90 Front Street into 90 Front Street Associates, LLC, and on September 3, 2001 they transferred the parcel known as 98 Front Street into 98 Front Street Associates, LLC. Mr. Haberman stated in his report that each LLC was 100% owned by Clara Salvati and Benjamin N. Silvestrone, however, neither Ms. Salvati nor Mr. Silvestrone testified at trial. Mr. Albro described these conveyances in his report as “related -party” transfers since the properties were conveyed to the LLCs for no consideration. On June 10, 2002, 98 Front Street was sold to an entity known as Torsangie Properties, Inc. Torsangie Properties, Inc. is not a party in the present action. Apparently, as a condition of that sale, 98 Front Street Associates, LLC retained its right to recover damages arising out of defendant’s appropriation. The contract between 98 Front Street Associates, LLC and Torsangie Properties, Inc. was not presented at trial. Nevertheless, defendant conceded at the outset of the trial that 98 Front Street Associates, LLC retained its right of recovery in this matter notwithstanding 98 Front Street Associates, LLC’s lack of title on the vesting date.

There were no written documents presented at trial evincing the specifics of the real estate transaction between 98 Front Street Associates, LLC and Torsangie Properties, Inc., however, it is readily apparent that 98 Front Street Associates, LLC did not possess title to 98 Front Street on the vesting date. In fact claimants’ appraisal report compiled by Mr. Haberman’s firm relies on the sale of 98 Front Street in June 2002 in calculating the appropriate damages for this action. Mr. Albro has also attached to his report correspondence which pre-dates the vesting date between Torsangie Properties, Inc., and defendant as well as the Village of Mineola wherein Torsangie Properties, Inc. is recognized as being the owner of 98 Front Street.

Aside from the lack of documentary evidence, there was no testimony from either of the principals of 98 Front Street Associates, LLC to explain the conditions of the transaction between Torsangie Properties, Inc. and 98 Front Street Associates, LLC. Additionally, there was no testimony from either of the principals of 98 Front Street Associates, LLC to support the proposition that but for the pending appropriation, 98 Front Street would not have been sold and would have been put to common use with 90 Front Street. Consequently, based on the evidence presented at trial, the Court finds that claimants have failed to show that there was unity of ownership between the owners of the two parcels on the vesting date. Likewise, the Court finds that claimants have failed to show by sufficient evidence that there was unity of use of the two parcels on the vesting date. Thus, it would be inappropriate to value the properties as a single economic unit for the purposes of recovery in this action.

Both claimants’ and defendant’s appraisers determined that the appropriate method for evaluating damages in this matter was by the sales comparison approach however

claimants have not submitted a valuation of the properties as two separate parcels. Thus, the Court was guided by defendant’s appraisal.

As previously stated, defendant determined that the use which produces the highest value for 90 Front Street is the retention of the existing building for its conversion to office use. Using the sales comparison approach, defendant compared 90 Front Street with five similar properties which sold close in time to September 11, 2003 as well as close physical proximity to the subject property. These properties were also consistent with the highest and best use of the subject property. The sales utilized were adjusted for differences with the subject property, such as conditions of sale, financing terms, market conditions (time), location, land-to-building ratio, size, age/condition and utility factors.

Accordingly, defendant valued sale 1 at $223.60 per square foot of building area; sale 2 at $227.23 per square foot of building area; sale 3 at $227.91 per square foot of building area; sale 4 at $230.50 per square foot of building area and sale 5 at $229.56 per square foot of building area. Applying this data defendant valued the subject property at $230.00 per square foot of building area. Defendant then multiplied 2,620 square feet, the building area of 90 Front Street, by $230.00 a square foot to determine a market value of $602,600 for 90 Front Street as of the vesting date.

Since claimants’ expert testimony only concerned the value of 90 Front Street and 98 Front Street as a unified site, the Court has not been presented with a range of expert testimony addressing the value of 90 Front Street as a separate parcel of land completely taken by defendant. The court finds that defendant’s calculations have been adequately supported and accepts the values put forth in defendant’s appraisal regarding the market value of 90 Front Street as of the vesting date. As a result the Court finds the market value of 90 Front Street as of the vesting date to be $602,600.

On November 21, 2003, defendant exercised a temporary easement for a portion of 98 Front Street which lasted for a period of 36 months thereafter. Both claimant and defendant conclude that damages associated with the temporary easement are best addressed as a fair rent for defendant’s use of the land encumbered, calculated based upon a fair and reasonable rate of return on the market value of the land encumbered. However the parties differ as to the appropriate value of the land. For the reasons set forth above in the analysis of the taking of 90 Front Street, this Court similarly accepts defendant’s evaluation of damages for the taking of the temporary easement on 98 Front Street. Additionally, the Court finds that defendant’s calculations have been adequately supported and that the amount of $35.00 per square foot is the appropriate value of the land as well as 12% being the appropriate rate of return. Accordingly, the Court multiplied 1,402 square feet, the total easement area, by $35.00 a square foot, the land value, to calculate a total value of $49,070. That total is then multiplied by 12%, the estimated rate of return, to calculate a value of $5,888.40 for damages per year due to temporary easement. The yearly damages, of $5,888.40 are then multiplied by three years, the length of the easement. Accordingly, the court finds total damages due to the temporary easement of $17,665 rounded off.

Therefore, based on the foregoing, claimants are awarded a total of $620,265 in damages. This amount was calculated by adding damages of $602,600 to $17,665 in damages resulting from the temporary easement. Accordingly, claimants are entitled to an award of $602,600 with statutory interest from the vesting date of September 11, 2003 to the date of decision and thereafter to date of entry of judgment. Additionally, claimants are entitled to an award of $17,665 with statutory interest from the vesting date of November 21, 2003 to the date of decision and thereafter to date of entry of judgment.

The award to claimants herein is exclusive of the claims, if any, of persons other than the owners of the appropriated properties, their tenants, mortgagees or lienors having any right or interest in any stream, lake, drainage 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 properties 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 and maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines. To the extent the claimants have paid a filing fee, it may be recovered pursuant to Court of Claims Act section 11-a(2).

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

The Chief Clerk of the Court is hereby directed to enter said Judgment accordingly.


October 7, 2008
Hauppauge, New York

HON. GINA M. LOPEZ-SUMMA
Judge of the Court of Claims




[1].By motion granted by Judge James J. Lack, claimants were given permission to file an amended site plan which reduced the size of the building from 14,200 square feet to 13,600 square feet.