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
The State appropriated a portion of a parcel of property owned by J.G.C. Hage
known as 4744 Commercial Drive,
Town of New Hartford, Oneida, County. This will be called the
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,
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
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,
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
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.
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.
LET JUDGMENT BE ENTERED ACCORDINGLY.