New York State Court of Claims

New York State Court of Claims


Case information

UID: 2010-037-506
a Florida Limited Liability Company, authorized to
do business in New York State with an office at
570 Delaware Avenue
Buffalo, NY 14202
Footnote (claimant name) :
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 113204
Motion number(s):
Cross-motion number(s):
Claimant's attorney: Harold M. Halpern, Esq.
Defendant's attorney: Hon. Andrew M. Cuomo
New York State Attorney General
By: William D. Lonergan
Assistant Attorney General
Third-party defendant's attorney:
Signature date: June 29, 2010
City: Buffalo
Official citation:
Appellate results:
See also (multicaptioned case)


This is a timely filed claim for the partial permanent appropriation of Claimant's property and a temporary easement pursuant to Section 30 of the Highway Law and the Eminent Domain Procedure Law in a proceeding entitled "Buffalo-Hamburg, S.H. 2, PIN 5308.03, Town and Village of Hamburg, Erie County." Five separate parcels were acquired by the State in this appropriation, either in fee, fee without access, or by temporary easement. The parcels are identified and described in the following appropriation maps: (1) Map No. 36, Parcel No. 38 (fee), containing 670± square feet or 0.0154± acre; (2) Map No. 36, Parcel No. 39 (fee), containing 21,781± square feet or 0.50± acre; (3) Map No. 36, Parcel No. 40 (fee without access), containing 1,022± square feet or 0.0235± acre; (4) Map No. 47, Parcel No. 52 (fee), containing 17,700± square feet or 0.4063± acre; and (5) Map No. 50, Parcel No. 54 (temporary easement), containing 7,340± square feet or 0.1685± acre. The maps were filed in the Erie County Clerk's Office on September 8, 2006, which the Court finds to be the date of taking. Said maps and the property descriptions set forth therein are adopted by the Court and incorporated herein by reference. The Claim was filed with the Clerk of the Court on January 16, 2007 and has not been assigned or submitted to any other court, tribunal or officer for audit or determination. The Court has viewed the property pursuant to Section 12(4) of the Court of Claims Act and Section 510 of the Eminent Domain Procedure Law (EDPL).

Before the taking, Claimant's property was an irregularly shaped corner parcel which enjoyed unlimited access to South Park Avenue (Route 62) along the westerly boundary and to Clark Street along the southeasterly boundary in the Town and Village of Hamburg, Erie County, New York. Claimant acquired the property in two parcels. The original parcel, formerly known as Hamburg Dodge, was acquired by deeds dated March 3, 1998 and recorded in the Erie County Clerk's Office on March 4, 1998 in Liber 10928 of Deeds at pages 4229 and 4236. The second parcel which adjoins the original on the north is known as 6208 South Park Avenue and was acquired by a deed dated March 5, 2003 and recorded April 16, 2003 in the Erie County Clerk's Office in Liber 11036 of Deeds at page 4452. Ownership was not contested and both appraisers valued the property on the basis of Claimant's ownership of a fee interest in the subject premises. Thus the Court concludes that Claimant has established title to and was the owner of the property at the time of the appropriation.

The appraisers differed as to the dimensions of the land before the appropriation. Claimant's appraiser, Howard P. Schultz (Schultz), described the property as comprising approximately 1.572 acres (68,498± square feet) based on a survey of the property dated April 9, 2003 (Claimant's Exhibit 5). By contrast, Defendant's appraiser, Roger P. Pigeon (Pigeon), concurred that the parcel contained 1.572 acres but computed the square footage to be 68,469±, which appears to be a miscalculation. As a result, the Court will adopt the land area dimensions relied upon by Claimant's appraiser.

Before the taking, Claimant's property was improved with a one-story former automobile dealership and a two-family house which were vacant on the date of vesting. Claimant assembled the property with the stated intent of developing a pharmacy for a national chain and was in serious negotiations for a potential development at the time of taking. Both improvements were to be demolished for the proposed development. The taking was for purposes of a highway project which included the construction of a roundabout at the intersection of South Park Avenue, Clark Street and Legion Drive. The appropriation took 41,173± square feet of the property thereby reducing the land area by 60% to 27,325± square feet, which nullified Claimant's plans for a large retail development. As a result of the taking, the property was left with limited access to South Park Avenue which is a heavily traveled north-south thoroughfare in the Town and Village of Hamburg providing one of the main points of access to the Village center. The temporary easement, encompassing an area of 7,340± square feet, was acquired for the purpose of demolishing the automobile dealership improvements.

The property falls within two zoning districts. The portion of the property situated in the Village of Hamburg (385-395 Buffalo Street) is located in a "C-2" Commercial District under the Village of Hamburg zoning law and the portion situated in the Town of Hamburg (6280 South Park Avenue) is located in a "C-1" Local Retail Business District under the Town of Hamburg zoning law. Such zoning classifications permit the development of a national retail pharmacy as contemplated by Claimant and both appraisers found the highest and best use for the subject before the appropriation was for retail commercial development which requires a high profile location. The appraisers also concur that the remaining parcel has a significant reduction in utility due to its size, shape and limitations on access. Claimant seeks direct, severance and consequential damages, together with compensation for the temporary easement.

Applying the four well-established criteria for determining a property's highest and best use (i.e., legally permissible, physical possibility, financial feasibility and maximum profitability) and cognizant of the subject's location, physical characteristics and commercial zoning, the Court concludes that the highest and best use of the subject property in both the before and after situation was as a commercial development site in conformance with local zoning.

Claimant is entitled to "just compensation" when the State exercises its power of eminent domain and the amount is generally determined by reference to the fair market value of the property according to its highest and best use (Matter of Town of Islip [Mascioli], 49 NY2d 354 [1980]). In determining fair market value, "the condemnee is entitled to have the appraisal based on the highest and best available use of the property irrespective of whether he is so using it" (Keator v State of New York, 23 NY2d 337, 339 [1968]). Where the State takes part of a condemnee's property and leaves a remainder, just compensation includes not only direct damages for the portion 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 (damage resulting from the use to which the appropriated portion is put; see e.g. Matter of City of New York (Metro Inv. & Credit Corp.), 288 NY 75 [1942]; Dennison v State of New York, 48 Misc 2d 778 [1965], affd 28 AD2d 28 [1967]; affd 22 NY2d 409 [1968]) or severance damages (damage resulting from the effects of the loss of the taken portion; see e.g. Coldiron Fuel Ctr., Ltd. v State of New York, 8 AD3d 779 [2004]). The measure of indirect 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 [1977]; Acme Theatres v State of New York, 26 NY2d 385 [1970]; Diocese of Buffalo v State of New York, 24 NY2d 320 [1969]). Similarly, upon the taking of a temporary easement, Claimant is entitled to recover its loss in fair market rental value during the term of such easement plus further loss, if any, resulting from damage to the remaining property caused by the existence of the easement (Great Atl. & Pac. Tea Co. v State of New York, 22 NY2d 75 [1968]). Indirect damages for a temporary easement are only warranted when there is some actual interference with the owner's use of its property (Village of Highland Falls v State of New York, 44 NY2d 505, 508 [1978]).

Based upon a finding that the highest and best use of the property was as a vacant commercial development site, both appraisers utilized the sales comparison approach in valuing the subject property which is generally the preferred method (Matter of Allied Corp. v Town of Camillus, 80 NY2d 351, 356 [1992]). The sales comparison or market data approach to valuation involves the presentation and analysis of statistics regarding sales of similar properties with the same highest and best use. Claimant's appraiser initially submitted information in Exhibit 1 regarding five comparable sales and subsequently submitted for consideration two sales which occurred after the appropriation and after the appraisal was filed (Exhibits 2 & 3). The later two sales involved Claimant's acquisition of parcels situated across South Park Avenue from the subject for development of the pharmacy it originally intended to build. Defense counsel objected to the inclusion of information regarding the later sales on the basis that they were not made within a reasonable time of the taking and do not accurately reflect land values for the subject property as of the date of vesting. Court of Claims Act § 16 provides that evidence of comparable sales is relevant and material to the issue of value if the Court finds, inter alia, that the sale was made within a reasonable time of the vesting of title in the State, "it being in the court's discretion as to the outer limits of time within which sales, either before or after the appropriation, will be deemed comparable (citation omitted)." (Waldenmaier v State of New York, 33 AD2d 75, 77 [1969]). The sale contracts for Claimant's purchase of the two parcels were executed on March 15, 2007 and May 21, 2007, a few months after the appropriation, and the transactions were concluded on December 12, 2008 and May 4, 2009. The sales cited by Claimant in its appraisal occurred between 2001 and 2006, while Defendant cited comparable sales occurring between 2003 and 2006. In light of the broad spectrum of time encompassed by both experts in their appraisals the Court finds that the later sales occurred within a reasonable time of the vesting of title in the State and may be considered in determining the value of the subject.

Counsel for Defendant also contends that Claimant's appraisal report and Section 16 submissions are defective for a variety of reasons and should be stricken. Although inadequate in

some respects, the appraisal and submissions, taken as a whole, substantially satisfy the requirements of 22 NYCRR § 206.21 (b) (see Welch Foods v Town of Westfield, 222 AD2d 1053 [1995]; Matter of Broadway-Saranac Lake Corp. v Board of Assessors of Saranac Lake, 43 AD2d 649 [1973]). Whatever insufficiencies there may be in Claimant's appraisal do not hamper the Court's ability to determine value.

In determining the value of Claimant's property as vacant before the taking, both appraisers used seven comparable sales, three of which were common to both appraisals. The methodology used by each appraiser, as well as the adjustments they each made in determining the "before" land value, appear to be reasonable and logical. Schultz initially used five comparable sales to determine the before taking value, including the three used by Defendant's appraiser, resulting in a range of values, following adjustments, of $24.92 per square foot to $35.55 per square foot. Placing the most emphasis on Sales No. 1, No. 2 and No. 3, Schultz adopted a value of $34.00 per square foot of land area and then noted that after the taking Claimant purchased two comparable parcels located across South Park Avenue from the subject which, when adjusted for market conditions and the cost of demolishing the improvements thereon, increased the unit value to $43.72 per square foot resulting in a total before value of $2,900,000.00.

Likewise Pigeon used the sales comparison approach and seven comparable sales to arrive at a range of values, following adjustments, of $13.00 per square foot to $22.53 per square foot and, according weight to all sales, assigned a value of $18.00 per square foot to the subject as vacant, resulting in a before market value of $1,232,500.00.

The Court has reviewed and considered both appraisals, including the comparable sales offered by the appraisers, the adjustments made by each appraiser, the rationale behind each adjustment and the testimony and evidence presented at trial. Based upon a preponderance of the evidence, the Court finds and adopts a value of $2,054,940.00 (68,498 square feet x $30.00 per square foot) for the subject property, as vacant, in the "before" situation. Therefore, with respect to direct damages, the total square footage appropriated equals 41,173 square feet of land area and the Court has assigned a value of $30.00 per square foot to the land resulting in direct damage of $1,235,190.00.

In addition to direct damages, the Court must determine if there was any consequential or severance damage to the remainder of Claimant's property as a result of the partial taking and, if so, at what valuation. Here, both Claimant and Defendant agree that some degree of severance damage did result from the taking of a portion of Claimant's property. Claimant's appraiser proffers that the property no longer has the potential for the unique high-end commercial development it had prior to the taking. He opined that while it is still suited for a commercial use, it would be for a far less intense commercial use such as offices or a small destination retail use, not as a large retail development such as a national pharmacy chain. Defendant's expert acknowledged that the development potential for the property has been diminished, stating:

"There is also justification for indirect damage to the subject's remainder. The fee appropriations are irregular in shape and contain a total of 41,173±sf. The appropriations acquire 60±% of the "Before" site. The shape and size of the site "After" the appropriations render the overall utility of the subject site to be diminished, limiting potential development and desirability of the site in the open market. Furthermore, Map No. 361/Parcel No. 40 is a fee without access, which will prohibit vehicle access. In the "Before" situation, the subject property had ingress and egress driveways along Buffalo Street/South Park Avenue and Clark Street. Due to the placement of a roundabout, the remaining property will have only one (1) means of ingress and egress on the newly relocated Clark Street at the northeast corner of the property. The placement of the driveway hampers placement of a building on the site.

In summary, there is direct damage due to the acquisitions of the land. Also, in consideration of the placement of the right-of-way the subject site is considered to suffer from indirect damage, resulting from the diminished utility of the subject caused by the loss of 60±% of land area." (Exhibit A, p. 84).

Consequently, the Court finds that after the taking the highest and best use is commercial, but a different commercial enterprise than it was prior to the taking, being more suited to less intense use as either an office or other like commercial use as opposed to a high-end retail establishment which it enjoyed prior to the taking.

In determining the diminution in value of the remaining property resulting from indirect or severance damage, the appraisers each provided market data assessments using three different comparable sales of commercial properties located in the Town and/or Village of Hamburg, with adjustments reflecting their opinions of the lesser value of the remaining parcel. Without engaging in a detailed discussion of Claimant's appraisal, Schultz concludes that the remainder has a range of values, following adjustments, of $1.15 per square foot to $4.90 per square foot and he adopted a unit value of $2.50 per square foot resulting in an after market value of $68,500.00. By contrast, Pigeon arrived at a range of values extending from $6.54 to $8.79 per square foot and adopted a unit value of $8.00 per square foot resulting in an after market value of $218,400.00. Given the relatively minor difference between the square foot valuations arrived at by the appraisers using the market data valuation process, the Court finds it unnecessary to engage in an exhaustive discussion of the opinions offered by the appraisers. Overall, based upon a preponderance of the evidence before the Court and the Court's consideration of the exhibits and testimony of each expert, the Court elects to adopt a unit value of $5.50 per square foot for the vacant land after the taking resulting in an after value of $150,290.00 for 27,325± square feet of land area. Accordingly, the Court finds that Claimant sustained indirect or severance damage in the amount of $669,460.00.

With regard to the temporary easement, both appraisers estimated the rental value at 10% of land value and also assumed that the temporary easement was in effect for a period of two years. Therefore, the Court has used 10% of its post-appropriation square foot valuation of the vacant land to obtain a value for the temporary easement for two years of $44,040.00 (7,340±square feet @ $30.00 per square foot x 10% per year x 2 years).

In conclusion, the Court finds that Claimant is entitled to direct damages in the amount of $1,235,190.00 and indirect damages in the amount of $669,460.00 for the fee taking, together with $44,040.00 for the temporary easement for a total award of $1,948,690.00 with statutory interest thereon from the vesting date of September 8, 2006 to the date of this decision and thereafter to the date of the entry of judgment.(1)

The award to Claimant herein is exclusive of the claims, if any, of persons other than the owners of the appropriated property, its tenants, mortgagees and 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 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 or appurtenant facilities for the construction, operation or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines.

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

All motions not previously ruled upon or upon which decision was reserved are hereby denied.


June 29, 2010

Buffalo, New York


Judge of the Court of Claims

1. Since there is no evidence on the record establishing the date of personal service of the notice of appropriation, prejudgment interest shall not be suspended pursuant to EDPL 514(B) (see Sokol v State of New York, 272 AD2d 604 [2000]).