New York State Court of Claims

New York State Court of Claims

HAGE v. STATE OF NEW YORK, #2009-018-013, Claim No. 105406


State appropriates contiguous parcel eliminating subject’s right of way access, making it completely landlocked. Court awards 98% of pre-taking value.

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:
BOND, SCHOENECK & KING, LLPBy: H. Dean Heberlig, Jr., Esquire
Defendant’s attorney:
Attorney General of the State of New York
By: Roger B. Williams, EsquireAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
March 5, 2009

Official citation:

Appellate results:

See also (multicaptioned case)


Claimant seeks remuneration from the State for a partial permanent appropriation of property pursuant to Highway Law § 30 and the EDPL. This claim has not been assigned or submitted to any other Court or tribunal for audit and determination and was timely filed on December 28, 2001. The Court adopts the descriptions of the appropriated property as shown on the maps and descriptions filed in the Oneida County Clerk’s Office, copies of which are attached to the claim and incorporated herein by reference. Claimant was personally served with a copy of Map No. 43, Parcel No. 51, on May 7, 1999, and on October 29, 1999, with a copy of Map No. 18, Parcel No. 25. Claimant was served with a copy of Map No. 44, Parcel No. 52. The Court has viewed the property.

The State appropriated a portion of a parcel of property owned by J.G.C. Hage Realty, Inc.,[1] known as 4744 Commercial Drive, Town of New Hartford, Oneida, County. This will be called the “front” parcel.[2] Contiguous to this parcel and behind it, in relation to Commercial Drive, is the subject parcel owned individually by Joseph M. Hage (Claim No. 105406), which lost its interest in 2 driveways by which it had access to Commercial Drive. This will be called the “rear” parcel. Although the subject parcel was not physically appropriated by the State, Claimant is entitled to be compensated for loss of the right to enter and exit this parcel (Pollak v State of New York, 41 NY2d 909, 910). As a result of the taking, both properties were left with no legal access. By stipulation, the appropriation occurred on April 1, 1999.[3]

The subject parcel both before and after the taking is 43,560 square feet or roughly 1 acre owned in fee by Joseph M. Hage. Before the taking, the rear parcel had access to the southeasterly side of Commercial Drive by 2 common 18 feet wide rights-of-way. Of the 18 feet width, 9 feet was provided by encumbering each side of the front parcel and 9 feet from each of the properties adjacent to the front parcel. The parcel also has 100 feet of direct visibility from Commercial Drive. The subject parcel is improved by a wood frame, metal clad structure on a concrete slab foundation with approximately 4,800 square feet. The building has 2 overhead doors with open warehouse space, a small office, restroom, and mechanical room. The building is heated by a gas forced hot air heating unit. According to the testimony, Claimant used the warehouse building for storage in conjunction with another business he owned and operated at a different location. The site has all public and municipal utilities and is bordered to the rear by Mudd Creek. Flooding is not an issue.

The subject parcel is located in a RB-1 retail business district which permits a wide variety of commercial uses such as banks, restaurants, and office facilities. In the area commercial development has been fairly steady and Commercial Drive is quite developed.

Claimant’s appraiser, Kenneth V. Gardner, II, a certified general real estate appraiser, submitted an appraisal report[4] which valued the property as of October 1, 1999, 6 months after the stipulated valuation date. Mr. Gardner testified about the effect of the earlier valuation date on his conclusions.

It was Mr. Gardner’s opinion that the highest and best use of the parcel before the taking was commercial development as if vacant. Mr. Gardner said the building was an under-improvement of the site as it was an inadequate size and quality for possible uses in this area. He felt that like other properties in the area, the building would be demolished as it added no value to the parcel and a new structure would be built. The building utilized roughly only 10% of the parcel and a warehouse is not a highly desirable use in the region.

To arrive at the value before the taking, Mr. Gardner used the sales comparison approach. First, he identified 8 sales of commercial development sites in the subject property area; 6 were on Commercial Drive, 1 was on Oriskany Boulevard and 1 was on Seneca Turnpike. Due to various physical characteristics and transaction circumstances, Mr. Gardner chose 4 sales he felt were the most similar to the subject property. These were Sales 3, 4, 6, and 8 in his appraisal report. All of these comparable sales had buildings that were demolished for the erection of new structures. Comparable Sale 8 has accessibility by right-of-way, as did the subject.

Mr. Gardner indicated that between 1997 through 1999, he found significant gains in property values in the area, so he included a positive 3% per year adjustment to the property values of the comparables for market trend. However, because of the incorrect valuation date, the Court finds an adjustment must be made to Sale 3, reducing the market trend in that case by ½ of 1 year’s percentage or 1.5%. The market trend for Sale 3 is therefore reduced from 6% to 4.5%. As Sale 3 and Sale 4 have superior frontage and access to Commercial Drive, the Court finds a minus 20% adjustment should be made to both making the resulting square foot values $7.94 and $7.45, respectively.

The Court also finds a reduction is necessary to the access/frontage adjustment for Sale 8 from 15% to 10%. The map of the parcel reflects similar frontage to the subject property. With this change, the adjusted value of Sale 8 is $7.72 per square foot.

The Court did not consider Sale 6 given the remoteness of the sale, the misjudgment of the size and the owner financing. These factors did not make this sale a useful comparable.

Using Mr. Gardner’s acceptable comparable properties with the appropriate adjustments, his range of values per square foot is $7.45 to $7.94. It was Mr. Gardner’s opinion that the pre-taking value of the property was $355,000.

Mr. Gardner gave this property an “after” value of $0.00 because after the taking it is totally land-locked. Only by assembling multiple parcels with various owners could this property be used. Mr. Gardner could not determine the feasibility and cost associated with such development. As a result, Mr. Gardner found Claimant’s damages from the appropriation were the total, $355,0000, value of the property.

The State’s expert, Richard J. Stropp, also a certified general appraiser, testified that, in his opinion, this parcel’s highest and best use before the taking is its existing commercial use as a warehouse. It was Mr. Stropp’s opinion that the warehouse was still in good condition and the land values were not high enough to warrant demolition. Improvements would not significantly increase the rents. He used the sales comparison approach, the cost approach and the income capitalization approach in arriving at values for the parcel both before and after the taking. He applied more weight to the sales comparison approach.

The highest and best use can be defined as “the reasonable probable and legal use...which is physically possible, appropriately supported, financially feasible, and that results in the highest value.” (Northville Industries Corp. v State of New York, Ct Cl, Sise, P.J., dated January 31, 2002, Claim No. 97489 [UID # 2001-028-021], quoting American Institute of Real Estate Appraisers, The Appraisal of Real Estate, 305 [12th Ed. 2001]).

The Court disagrees with Mr. Stropp to the extent that he found the highest and best use of this parcel to be a commercial warehouse building. Mr. Stropp acknowledged, on cross-examination, that the property in this area is not zoned for warehouse uses, the subject property is a legal, non-conforming use. Mr. Stropp also acknowledged that almost all of the development in the area over the past 10 years has been commercial-retail type usage. Claimant has met his burden of establishing the reasonable probability that this property would have been, in the near future, used as commercially developed land. The Court finds that the highest and best use of this property before the taking is commercial development land as determined by Mr. Gardner (see Thompson v Erie County Indus. Dev. Agency, 251 AD2d 1026, 1027). The Court will not consider Mr. Stropp’s cost or income capitalization approaches because they value the property utilizing the existing warehouse structure. The cost approach involves, among other things, estimating the cost of replacing the existing building and the income capitalization approach; also, among other things, involves assessing the value based on the income a property can produce using an estimate of operating expenses relying on the property’s past performance and the income of similar rentals. These valuation methods are not appropriate given the Court’s different determination of highest and best use.

Using the sales comparison approach, Mr. Stropp used vacant land and improved property as comparables. He valued the subject land as vacant and then as improved to arrive at his before taking valuation. However, the improved comparables are properties on which the existing structure was used in some manner post-sale. A primary component of the value of those improved properties was the value of the structure, unlike the situation as found by the Court with the subject property. Given the Court’s determination that the highest and best use is as commercial development land, the Court finds the improved property values are not useful in assessing the value of the subject.

The Court has reviewed all of Mr. Stropp’s comparables and considered some of the vacant land sales Mr. Stropp used finding these values are more probative. Sales L-3 and L-4 both had structures on the property immediately before or at the time of sale, which were demolished for the purchaser’s subsequent commercial needs. However, both L-3 and L-4 have superior access and frontage to the subject property; the Court finds the adjustment Mr. Stropp made too high and reduces it to -20% each, making the adjusted values of these 2 parcels $5.06 for L-3 and $3.72 for L-4.

Although Sale L-8, like the subject has access only by right-of-way, the Court questions its probative comparability based upon its much smaller size which is particularly relevant given its very irregular shape. It was also sold 6 years before this appropriation. For these reasons, the Court has given Sale L-8 little weight. The State’s range of comparable land sale values as adjusted are between $3.72 and $5.06 per square foot.

After considering the testimony and appraisals, and using the appropriate comparable sales as adjusted, the Court finds the value of the subject property before the taking to be $6.40 per square foot or $278,784.

It is the Court’s finding that due to the State’s appropriation of the front parcel, all access to Commercial Drive for the subject parcel has been eliminated. The parcel is completely landlocked and several of the immediately adjoining parcels are also landlocked further complicating any effort to obtain access. With no access, development is significantly impaired, as any development would require the assemblage of several parcels and the cooperation of several owners. Based upon these circumstances, Claimant’s appraiser found no comparable properties and assessed the post-appropriation value of this parcel at $0. Although the Court struggles to accept the position that any piece of land in a commercial setting is entirely valueless, even Defendant valued the property at a nominal amount with an 89% reduction from Defendant’s pre-taking value.

The State assessed the post-appropriation land value of this property at $16,000 or $.35 per square foot utilizing the same 4 comparable land sales that it used in the before analysis. Mr. Stropp made a negative 100% access adjustment to both Sales L-3 and L-4 and for Sale L-8 and L-15 a 90% adjustment, since both these parcels have access by rights-of-way. The magnitude of these adjustments reflects the lack of comparability to the subject parcel. Even after all other adjustments, the lowest adjustment for the 4 parcels is negative 70% on L-15 which is a sale too remote in time to be probative, even before the access adjustment. Given the range of Mr. Stropp’s net adjustments, the Court finds these properties provide minimal guidance to the value of this completely landlocked parcel with severely restricted options for gaining access. No evidence was presented to show the feasibility that any access could be obtained or an assemblage purchase was a reasonable probability. Even at the time of trial, 7 years after the appropriation, Claimant could not access his property and no options for productive use of the property had been presented. “There is no place in the judicial determination of the issue of a ‘reasonable probability’ when it is based upon mere speculation, conjecture or hope.” (John Arborio, Inc. v State of New York, 27 AD2d 388, 390).

Accordingly, the Court finds that the subject parcel is preclusively landlocked and lacks any viable marketability resulting in a 98% reduction in its pre-taking value or $5,600 (r) (compare Chester Industrial Park v State of New York, Ct Cl, Mignano, J., dated September 7, 2007, Claim No. 108833 [UID # 2007-029-029]). Therefore, the consequential damages are $273,184. There are no direct damages.

Claimant is entitled to an award of $273,184 with statutory interest thereon from the vesting date, April 1, 1999 until October 1, 1999. Statutory interest shall thereafter accrue from December 28, 2001 until the date of the Decision herein and thereafter until entry of judgment.

The award to Claimant herein is exclusive of the claim, 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 or 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 and maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines.

All motions not heretofore ruled upon are hereby DENIED.

To the extent that Claimant paid a filing fee in accordance with Court of Claims Act § 11-a(2), he is entitled to reimbursement.


March 5, 2009
Syracuse, New York

Judge of the Court of Claims

[1]. This property is the subject of another claim, No. 105407.
[2].This claim was joined for trial with the claim for the appropriation of the front parcel (Claim No. 105407); however, this Decision addresses only Claim No. 105406.
[3].There were 3 different dates of vesting for portions of the property; the parties stipulated to April 1, 1999 for valuation purposes.
[4].Exhibit 2.