Opinion
No. CV04-0093451 S
December 1, 2005
MEMORANDUM OF DECISION
On June 23, 2004, the Commissioner of Transportation, hereafter "Commissioner," acting under the authority of § 13a-73(b) of the General Statutes, filed a notice of condemnation acquiring a fee simple interest in and to a strip of land from the Candlewood Valley Country Club ("Candlewood") along the frontage of the subject property containing 38,880± square feet for the improvement of the highway known as Route 7 in New Milford and assessed damages at $106,000.
Subsequently, the figure of $106,000 was increased to $109,000.
The subject matter of the take maybe described as follows: "Said premises are situated in the Town of New Milford, County of Litchfield and State of Connecticut, on the easterly side of Present Danbury Road, U.S. Route 7, containing a total area of 38,880 square feet, more or less, bounded and described as follows and shown on the map entitled: TOWN OF NEW MILFORD MAP SHOWING LAND ACQUIRED FROM CANDLEWOOD VALLEY COUNTRY CLUB, INC. BY STATE OF CONNECTICUT DEPARTMENT OF TRANSPORTATION CONSTRUCTION OF ADDITIONAL LANES ON U.S. ROUTE 7 NOVEMBER 2002 ARTHUR W. GRUHN, P.E.-TRANSPORTATION CHIEF ENGINEER BUREAU OF ENGINEERING AND HIGHWAY OPERATIONS, and bounded:
Parcel No. 1 — containing 3,217 square feet, more or less, and bounded:
WESTERLY — by Present Danbury Road, U.S. Route 7, 303.7 feet;
NORTHERLY by land now or formerly of Berkshire Group, Inc., 11 feet, more or less;
EASTERLY — by remaining land of Candlewood Valley Country Club, Inc., a total distance of 303 feet more or less, by a line designated "Taking Line," as shown on Sheet 1 of 2 of said map;
SOUTHERLY — by land now or formerly of Present Danbury Road, U.S. Route 7, 9.7 feet.
Parcel No. 2 — containing 35,663 square feet, more or less, and bounded:
WESTERLY — by Present Danbury Road, U.S. Route 7, a total distance of 1,767.69 feet, more or less;
NORTHERLY running to a point;
EASTERLY — by remaining land of Candlewood Valley Country Club, Inc., a total distance of 1,768 feet, more or less, by a line designated "Taking Line," as shown on Sheets 1 and 2 of 2 of said map;
SOUTHERLY — by land now or formerly of Berkshire Group, Inc., 14 feet, more or less.
Said premises are taken together with the following full and perpetual easements, and a right under, over and across portions of remaining and other land of Candlewood Valley Country Club, Inc., as more particularly shown on said map:
1. A drainage right-of-way easement within an area containing 5,356 square feet, more or less, located between and opposite approximate Stations 6+430 and 6+485 right Baseline, Present Danbury Road, U.S. Route 7, as shown on Sheet 2 of 2 of said map.
2. An easement to slope for the support of the highway, within an area containing 3,050 square feet, more or less, located between and opposite approximate Stations 6±140 and 6+240 right Baseline, Present Danbury Road, U.S. Route 7, as shown on Sheet 2 of 2 of said map.
3. A defined traffic easement to install and maintain traffic appurtenances, within an area of 1,323 square feet, more or less, located between and opposite Station 6+033 and approximate Station 6+053 right Baseline, Present Danbury Road, U.S. Route 7, as shown on Sheet 1 of 2 of said map.
4. The right to enter portions of land of Candlewood Valley Country Club, Inc., for the purpose of grading, installing a sedimentation control system, grading and constructing driveways, and installing bituminous concrete lip curbing, all as shown on Sheets 1 and 2 of 2 of said map. Said right of entry shall terminate automatically upon completion of said work unless sooner released by the State.
The above-described premises are taken subject to such rights and easements as appear of record."
To embellish and perhaps clarify, the taking consists of two parcels. Parcel No. 1 contained 3,217 sq. ft. in fee simple, 2,212 sq. ft. of grading rights and 282 lineal feet to install sedimentation fencing. Parcel No. 2 consisted of 35,663 sq. ft. in fee simple, along with 5,356 sq. ft. of drainage rights, 3,050 sq. ft. of slope easements, 12,098 sq. ft. of rights to grade and construct driveways, 981 lineal feet to install sedimentation fencing and 158 lineal feet to install bituminous curbing. The Commissioner also acquired a defined traffic easement of 1,323 sq. ft. to install traffic control devices. The total taking area is 38,880 sq. ft. in fee simple and 9,729 of encumbered land. The temporary rights consist of 14,310 sq. ft. and 1,421 lineal feet.
The defendant in this appeal claims to be aggrieved by the award as assessed by the state, and seeks an award in the amount of the difference between the Commissioner's value and the defendant's own value. "Aggrievement is established if `there is a possibility, as distinguished from a certainty, that some legally protected interest . . . has been adversely affected.' " State Medical Society v. Board of Examiners in Podiatry, 203 Conn. 295, 300 (1987). Being an owner of property establishes that said owner has "a specific personal and legal interest in the subject mailer of the decision." Huck v. Inland Wetlands and Watercourses Agency, 203 Conn. 525, 530 (1987); see Bossert Corporation v. City of Norwalk, 157 Conn. 279, 285 (1968). There can be no serious dispute over the fact that Candlewood as the owner thereof is indeed aggrieved by the actions of the Commissioner and has standing to pursue this appeal.
The Commissioner's appraiser initially valued the property at $106,000 and subsequently increased it to $109,000. He updated that amount at trial to address the inclusion in part of the cost of a new septic system of $6,354.70. The property owner's appraiser assessed damages at $390,200 ($356,000 permanent and $34,200 temporary) and the owner's appraiser again updated his amount at trial to include additional amounts for temporary damages based upon the loss of business. Justification for the take is found in the Fifth Amendment of the U.S. Constitution as made applicable to the states through the Fourteenth Amendment, and Article 1st § 11 of the Connecticut Constitution similarly provides that: "The property of no person shall be taken for public use, without just compensation therefor." The Constitutional principle was well reflected throughout the General Statutes in our case law which is why just compensation is an equitable question rather than a strictly legal or technical one. The paramount law intends that the condemnee shall be put in as good condition pecuniarily by just compensation as he would have been in had the property not been taken. Northeast Ct. Economic Alliance, Inc. v. ATC Partnership, 256 Conn. 813, 828-29 (2001). In order to arrive at the amount that constitutes just compensation, we determine the market value of the condemned property when put to its highest and best use at the time of the taking.
"In determining market value, it is proper to consider all those elements which an owner or a prospective purchaser could reasonably urge as affecting the fair price of the land . . . The fair market value is the price that a willing buyer would pay a willing seller based on the highest and best possible use of the land assuming, of course, that a market exists for such optimum use." Northeast Ct. Economic Alliance, Inc. v. ATC Partnership, supra 829-30. "The highest and best use concept chiefly employed as a starting point in estimating the value of real estate by appraisers, has to do with the use which will most likely produce the highest market value, greatest financial return, or the most profit from the use of a particular piece of real estate." State National Bank v. Planning Zoning Commission, 156 Conn. 99, 101 (1968). Highest and best use has been best defined as "that reasonably probable and legal use of vacant land or an improved property which is physically possible, appropriately supported, financially feasible, and that results in the highest value." Peter Rock Associates v. North Haven, 46 Conn.Sup. 458, 476 (2000); South Farms Assoc., Ltd. Partnership v. Burns, 35 Conn.App. 9 (1994); see 7 P. Nichols on Eminent Domain § 4.04[4][4](a), pp. 457-59. The Commissioner's appraiser offers a conclusion that if the property is vacant it would be best used as a commercial use. If it is improved, he offers the conclusion that the highest and best use is considered to be its present office use. It does not appear that the owner seriously disputes that conclusion. The court is satisfied that the highest and best use of the property is its present use and the presentation by the appraisers is not truly affected by that finding. Peter Rock Associates v. North Haven, 46 Conn.Sup. 458, 470 (2000).
If the taking as here is a partial taking, the usual measure of damages is the difference between the market value of the whole tract with its improvements before the taking and the market value of what remained of it thereafter. Gontarz v. Berlin, 154 Conn. 695-97 (1967); Morgan v. Hill, 139 Conn. 159-61 (1952); Meriden v. Ives, 165 Conn. 768, 773 (1974); Connecticut Printers, Inc. v. Redevelopment Agency, 159 Conn. 407, 414 (1970). To reiterate, the fair market value is the price that a trier reasonably believes would result from fair negotiations between a willing seller and a willing buyer. That evaluation should ordinarily be based upon the highest and best possible use of the land. Lynch v. West Hartford, 167 Conn. 67, 73 (1974); Tolland Enterprises v. Commissioner of Transportation, 36 Conn.App. 49, 58 (1994).
Severance damages to the parcel remaining after the taking are included. The concept of severance damages is the compensation for the diminution of the fair market value of the remainder of the owner's property which is both unique to that land and arises as a direct and immediate result of the taking of the portions of that land by the condemning authority. Tolland Enterprises v. Commissioner of Transportation, 36 Conn.App. 49, 58 (1994). See also Meriden v. Ives, 165 Conn. 768, 773 (1974); Connecticut Printers, Inc. v. Redevelopment Agency, 159 Conn. 407, 414 (1970).
The Commissioner complains that O'Neil, the owner's appraisal, failed to complete a before and after evaluation of the subject property. See Gontarz v. Berlin, 154 Conn. 695-97 (1967). He separated or carved out 26.5 acres of the total property area of 149.69 acres and did a sales comparison approach to evaluate that 26.5 acres. While he was being cross-examined, he indicated that he arrived at the 26.5 acres to use for the subject property by looking at the amount of frontage the retail properties had and then figured out how much property was needed on the subject property to attain the same level of frontage. The Commissioner continues that this is the reverse of proper appraisal techniques. Generally, one looks for parcels that are similar to the subject property and then makes adjustments for dissimilarities. O'Neil carved out the 26.5 acres for the property in order to make it comparable to the other retail properties he used for comparison. As he stated in his report, smaller parcels tend to sell at higher unit prices.
There was an agreement between the appraisers that the danger to traffic from the highway being moved closer to the third hole needed to be cured. Both in fact utilized the same report from the Northeast Golf Company (the "McNeill" report) to ascertain what was needed to be done to "cure" the problem. Kerr, however, decided to obtain the estimated cost for trees half the size or less for the trees suggested by the golf course architect. Kerr admitted he had no expertise in this area and under cross-examination seemed to say that the reason he drastically reduced the tree buffer was that doing the job right would be prohibitively expensive. O'Neil more accurately estimated what actually needed to be done but he reduced that number by 50 percent to reflect the impact of the taking. When Kerr prepared his report, he allowed nothing for the replacement of the Coldwell-Banker septic system which had just been replaced at the time of trial at the cost of $6,354.70. This was less than O'Neil had estimated and he adjusted his "costs to cure" accordingly. While the total difference in the cost to cure aspect of these appraisals is less than 10 percent of the difference between the two appraisers' damage estimates, the above analysis has more significance than the dollars involved. The subject analysis reveals an appraiser, that is, Kerr, was going out of his way to minimize the damages caused by the take and another by O'Neil who is fairly allocating the damages incurred. Thus, O'Neil's 50 percent reduction in the cost to cure at the third hole. The same analysis would apply to the fencing, sign, lawn, trees, pavement, etc. in the taking area that Kerr valued without any substantiation at approximately $4,000. O'Neil provided a basis for his numbers and estimated the replacement costs of the taking improvements at approximately $54,000 and the contributory value of $34,280.
The Commissioner continues that as a result of appraising only a small portion of the subject parcel, O'Neil was able to establish a higher unit value for the land that is not representative of the entire parcel. In determining the value of the 26.5-acre parcel as the size of the subject parcel, he used land sales that were between 1.31 and 10.3 acres. These comparables are in a more developed commercial area than the subject. By using the smaller area (26.5 acres), O'Neil's adjustments to the size of the comparable properties were much lower and resulted in an inflated adjusted sales price for all five comparable properties. Therefore, his value of $5.05 per sq. ft. is not reasonable. It is the conclusion offered by the state.
In determining value, he indicated in his report that he applied a theory which treated the upland frontage along Danbury Road, "whose highest and best use vacant is retail development as the property component which is principally and directly impacted by the take." He used this formula to determine the amount of such impact: A+X = Value Before and (A-Take) + (X-Y) = Value After. It is interesting to note that O'Neil was unable to cite whether the formula he used was part of a recognized appraisal method and he conceded that the formula was his alone. "X equals the remainder property including the balance of the land, site improvements and building. Y equals damage to the remainder." It is common to treat the site improvements and buildings such as an "X" in the before and after because their value is not being affected and the inclusion does not affect the value of the land. On the other hand, it is difficult to imagine how the exclusion of almost 123 acres of the subject property from O'Neil's report can be said not to affect the value of the land.
See O'Neil's report, Defendant's Exhibit 5, p. 34.
The Commissioner continues by reciting that O'Neil's estimated damages to the remainder property are also not reasonable. He says that "remainder property" includes the balance of the land, site improvements and buildings. Although his damages to the "remainder" clearly include property within the 26.5 acres that he used as "A" in his formula, he assessed damages to the remainder at $101,000 which is broken out as follows: $34,280 for damages associated with yard and site improvements; $32,500 for severance damage to the leasehold estate; and $34,250 for the cost to cure the hazard along hole number three.
Damages to the yard and site improvements include several items which he lists in his report on page 53. Damages to the lawn area are excessive since the area is a regular lawn with no special characteristics. Damages to the fence were based on the assumption that the fence would be lost to Candlewood. However, the manager of the property recited that Candlewood took down the fence itself in order to keep and re-use it. He also assigned damages to replace the Coldwell-Banker sign despite the fact that there is adequate space to relocate the sign. Furthermore, both parties agree that damages are necessary for the relocation of the septic system. His estimate is simply an estimate while the club manager testified that Candlewood has already relocated the septic system at a cost of $6,354.70.
He also assigns damages to the Coldwell-Banker leasehold estate using the income approach. He concludes that the rental rate will be reduced because one of the driveways is being eliminated and therefore "significantly" reduces the access to the building. He relies on a certain provision of the lease which recites that "if there is a lesser taking then Tenant's rental shall be proportionately reduced to the extent its use of the buildings, including parking, is impaired." He is unable to establish that the building and parking area are being reduced but he also finds damages based upon the loss of one driveway. There are two other driveways by which it is possible to enter and exit. He concedes that the elimination of the middle driveway will result in improved traffic management. "It is well known that damages resulting merely from circuity of access have been considered damnum absque injuria." W.R. Associates of Norwalk v. Commissioner of Transportation, 46 Conn.Sup. 355 (1999) (the key is suitable access and not inconvenience).
In O'Neil's determination of damages to the Coldwell-Banker building, he used an income approach that included only the rental value of the building and therefore applied a capitalization rate. The rate of capitalization should be a reflection of the market rate. W.R. Associates of Norwalk v. Commissioner of Transportation, supra. The plaintiff used an income approach to determine damages for a partial taking. Here the income approach is not supported by any market data. The assessed damages in the amount of $34,200 is to the cost to cure the hazard along hole number 3. The proximity of Route 7 to hole 3 is increased as a result of the taking. Although there is a buffer needed, his damages are excessive in that they seek to enhance a hole that is already an existing but not particularly significant hazard.
The club's appraisal is extremely critical to the state's expert. It begins with what they call a preposterous conclusion that the majority of the high, dry and level land taken along Route 7 was worth only about $25,000 per acre. It ignored the abundance of Route 7 commercial land sales and used only the Rogg sale to Bright Clouds Ministries. The Rogg sale was not comparable with respect to the highest and best use. This use was what was initially contemplated and ultimately became a church and a school rather than commercial development. Also in that situation the seller retained valuable rights in the property which she did not convey to the buyer. She reserved extensive easements and rights on the conveyed property. It is obvious that no buyer who intended to use the property for shopping center purposes (the actual and highest best use for the subject premises) would have purchased property so burdened with easements and rights. Candlewood continues that even so burdened, the Rogg sale was for twice the value Kerr found for the subject. If the Rogg parcel which is subject to all the easements is taken from the equation, the remaining land sold for six times Kerr's value for the subject commercial parcel. That six times determination is of interest because Kerr cut the land taken into two "arbitrary" parcels, one being six times more valuable per square foot than the other. Kerr arbitrarily made the more valuable arbitrary parcel as small as possible, i.e., the minimum lot size of two acres; and the less valuable arbitrary remaining parcel as large as possible (147.69 acres). He found an average value for the larger arbitrary parcel based upon the fact that some of the land at the rear was wetland in the flood plain. Then when the state took front land that was all high and dry, Kerr valued it based upon it being part of the larger parcel that was half flood plain and wetland.
Bearing in mind that the subject property should be valued at its highest and best use rather than its lowest and worst use, O'Neil adopted the 26.5-acre front parcel in the I/C zone, the most liberal of New Milford's business zones. This allows the development of a commercial shopping center along Route 7 and would allow for a reconfigured golf course remaining on the rear of the parcel. O'Neil identified sixteen sales of land on Route 7 and eight of these were business zoned. Those "B" zone sales sold for an average price of over $400,000 per acre. O'Neil recognized, however, that based upon a number of factors set forth in his report, the average size of "B" zone sales, the availability of sewer and water at some of the sales, the gas and electric easements at the northwest corner of the subject and concluded that the subject property should be adjusted downward from $400,000 per acre to approximately $220,000 per acre.
The Commissioner continues that O'Neil's assignment of damages to 15,731 square feet of temporary taking area is inaccurate. It recites that first, the actual temporary rights consisted of 14,310 square feet and 1,421 lineal feet, which strongly suggests the erroneously equated lineal feet was square feet. Secondly, O'Neil uses an after market value of $5 per square foot and multiplies it by a rental value of 8 percent which equals approximately $6,292 per year. As construction is expected to last about two years, he assessed total temporary damages at $12,000. This analysis is based upon what is said to be flawed data regarding the size of the property and a lack of any market data to support such prospective rental value. Therefore, his assessment of damages is unreasonable according to the state. That conclusion finds some support in the evidence offered.
O'Neil also assigned damages of $21,600 as a loss of rounds to the golf course because of noise, traffic etc. He increased this amount during his testimony. The increase was based solely on the golf course manager's testimony. These damages are said to be unreasonable for two reasons. First, he did not independently verify the information or research the market to justify such a conclusion. Second, this is essentially a loss of business which should be reviewed as part of the before and after analysis.
In the course of his appraisal, Kerr broke the property into two parcels. Of the 149.69 acres, he broke but two acres for the Coldwell-Banker building in order to assess severance damages to that building. He indicated he used two acres for that piece because two acres is the minimum zoning requirement in that area. His first appraisal is for the golf course land encompassing 147.69 acres and the second report is to damages to the Coldwell-Banker building. In total, he appraised the entirety. Kerr employed the same technique as O'Neil in carving out the property. At a difference of 149.69 to 147.69 will not affect the value of the land because of the small change. If anything, the reduction increases the value of the land to the benefit of the plaintiff. The same cannot be said for a change from 149.69 acres to 26.5 acres used by O'Neil. Reduction of 123 acres results in the far more substantial increase to the value of the land for the benefit of the plaintiff.
The Commissioner contends that Ken's testimony that the damages of $51,000 to the golf course land is a fair and reasonable assessment of damages incurred by the owner from a state taking on June 23, 2004. Kerr has used the direct sales comparison method to reach a per square foot value of the subject value for his overall acquisition value that is proper in accordance with the accepted appraisal methodology. In addition, Ken's testimony to damages to the Coldwell-Banker building of $64,354.70 ($58,000 + $6,354.70, the cost of the septic) is a fair and reasonable assessment. Kerr did use both the direct sales comparison method and the cost approach to form the basis for his opinion which was in accordance with the accepted appraisal methodology. The club pointed out that the silt fence observed on the viewing was not on the "taking line." This is true with respect to the land permanently taken in fee. The land between the silt fence and the "taking line" was temporarily taken for the duration of the construction project, at least for twenty-four months. Ken offered the inherently incredible testimony, according to the club, that a reasonably well informed buyer as of the date of the take would pay the same for the subject whether or not it was subject to the state's right to occupy it for its construction activities for the next two years. O'Neil recognized that even a temporary taking must be compensated. The commissioner cites Bowen v. Ives, 171 Conn. 231, 238 (1976). The general manager of the Candlewood Valley Country Club provided credible evidence on the affects of the project's road work and the plaintiff's ability to sell rounds of golf.
When O'Neil originally calculated his opinion of indirect temporary damages upon a loss of income which he estimated as of the date of the take when he testified at trial, he based his opinion on the actual loss of income as testified to by the manager. When the EBITDA analysis set forth at page 60 of O'Neil's report was applied to the actual loss of income testified to by the manager, he increased his estimate of damages by $70,000.
The club sites to Tandet v. Urban Redevelopment Commission of the City of Stamford, 179 Conn. 293, 304-05 (1979). "While it is true that the fair market value of land that is taken, or the remainder of land partially taken, is ordinarily measured on the date of taking, we know of no reason, and counsel have presented us with none, for an appraiser who seeks to establish market value to rely upon hypothetical projections of events subsequent to the taking when facts indicating what actually occurred are readily available. The United States Supreme Court was faced with an analogous situation in Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U.S. 689, 53 S.Ct. 736; 77 L.Ed. 1449 (1933), where the value of a patent was to be determined on a certain date and a substantial period of time had transpired between that date and the date on which evidence of its value was to be offered in a judicial proceeding. The District Court had decided that evidence of the use to which the patent was put was inadmissible. Mr. Justice Cardozo, writing for the court, disagreed and stated: `Experience is [now] available to correct uncertain prophecy. Here is a book of wisdom that courts may not neglect. We find no rule of law that sets a clasp upon its pages, and forbids us to look within.'" Sinclair Refining Co. v. Jenkins Petroleum Process Co., supra, 698; see also United States v. Westinghouse Electric Mtg. Co., 339 U.S. 261, 70 S.Ct. 644, 94 L.Ed. 816 (1950).
New York's highest court adopted this more realistic approach to appraisals in eminent domain cases in 1909, when it ruled on the propriety of excluding from consideration any actual damage caused by the partial taking of certain property to construct an underground train roadway. The Court of Appeals stated: In estimating the market value on this basis, the experts were confined to supposition and speculation and they were allowed to consider the realities as shown by time and experience. The test presented to them was what the market value would probably be if an intending purchaser knew that the road was to be built. This left everything open to the mere estimate of experts not founded on fact but on conjecture. Certainty is better than conjecture and the injuries actually inflicted a better guide than the opinions of experts as to the market values just before and just after the [taking] or during the same five minutes. In re Board of Rapid Transit Railroad Commissioners, 197 N.Y. 81, 108 (1909). The court continued: "We think it was the duty of the commissioners to receive evidence relating to the condition of the properties down to the time of the trial and to note the effect thereon of the work in fact done at that time. Evidence as to the physical injuries which had actually been inflicted and could be seen, touched and measured, was competent and should have been received . . ." In re Board of Rapid Transit Railroad Commissioners, 197 N.Y. 81, 108, 90 N.E. 456 (1909); Kennedy v. Commonwealth, 336 MA. 181, 183; Boyne City, GAR Co. v. Anderson, 146 MI. 328, 330-31, 109 N.W. 429 (1906); and Stratton v. Town of Jaffrey, 102 N.H. 514, 516-17 (1960). Any suggestions that the market represented by a reasonably well informed buyer would not recognize what the state is actually doing to the subject property is simply not to be believed.
The defendant also claims reimbursement for its appraiser's fees for both the preparation of the appraisal report and the testimony delivered in court. The authority for a landowner's recovery of appraiser's fees in a highway condemnation case is found in § 13a-76 of the General Statutes which provides that whenever the court determines that the Commissioner's assessment of damages was inadequate, the court "shall award to such property owner such appraisal fees as [the court] determines to be reasonable." The question of what constitutes a reasonable amount of appraisal fees is an issue of fact for the trial court to determine. Alemany v. Commissioner of Transportation, 215 Conn. 437, 449 (1990); citing therein French v. Clinton, 215 Conn. 197, 205 (1990), which recites that the question of what constitutes a reasonable amount of appraisal fees is an issue of fact for the trial court. The appraiser's fee as itemized and offered at trial, and which was accepted as Defendant's Exhibit 6, is as follows:
Real estate appraisal $3,000 Review state appraisal 250 Meetings and court preparation 750 Court testimony of August 10 1,050 ______ Total $5,050 ______
The exhibit further recites that payment has been received in the amount of $3,250 and a balance of $1,800 was left due and owing.
Candlewood also claims that it has a right to interest from the date of the taking to the date of the payment of any amount in excess of the taking amount. If awarded, that computation would be the difference between $109,000 on June 23, 2004 and any additional funds that may be awarded by the court. The right to award interest in eminent domain actions does not depend upon statutory authority. See 3 Nichols, Eminent Domain (3d Ed.) § 8.63. In condemnation cases, even in the absence of a provision or interest in the statute, the Constitution requires just compensation, in its ascertainment as a judicial function. Seaboard Air Line Ry. v. United States, 261 U.S. 299, 304, 43 S.Ct. 354, 67 L.Ed. 664 (1923). A statutory rate of interest can, however, be applied to a claim for just compensation if that rate is deemed reasonable by the court. Miller v. United States, 620 F.2d. 812, 837 (Ct.Cl. 1980), The ascertainment of just compensation is a judicial question. "[T]he amount of interest to be paid as an additional component . . . is also a matter for judicial determination." Matter of the City of New York, 58 N.Y.2d 532, 535, 449 N.E.2d. 399; Leverty Hurley Co. v. Commissioner of Transportation, 192 Conn. 377, 380-81 (1984).
Having considered the evidence including the exhibits, the rather thorough briefs of counsel including the artful attack upon the respective appraisers by their adversaries, much of which has been set forth herein previously, the court is prepared to make and does, in fact, find the following values as a result of this condemnation.
The state utilized the services of John P. Kerr, who conducted two separate appraisals, one of the land and one of the building. Utilizing the cost approach, he began with the total amount of land in the entire parcel which sold as 149.69 acres, more or less. He also used the direct sales and the income approach but utilized as indicated the cost approach as set forth previously. Utilizing that approach, he reached an estimated value of $25,000 per acre. His before-value of 147.69 acres multiplied by $25,000/acre presents a figure of $3,692,000 (R) + "X." Adjusting that figure with the contributory value of landscaping lost — $1,000, and the sign base and lost lighting — $500, and the contributory value of the fencing lost — $2,500, permitting him to arrive at a final before-value of $3,696,000 + "X." His after value is computed this way: Unencumbered land 146.71 acres at $25,000/acre equals $3,667,750; encumbered land (D.R.O.W.) .1230 acres at $25,000/acre × 25% equals $769. The next entry is the encumbered land (slope easement) .07 acre × $25,000/acre × 65% equals $1,138 and finally the encumbered land (traffic easement) .0304 acres at $25,000/acre × 75% equals $570. Those figures aggregate $3,670,227 + "X." His final after value figure is $3,670,000 (R) + "X." He finds damages at $26,000 and the cost to cure by the installation of white pine tree buffers along the highway and also along hole no. 3 at $25,000 for total damages of $51,000.
With the second parcel so designated, the appraiser again used the cost approach although contemplating the income approach and comparable sales which were said to support the building's current use which is that of leased office spaces for the corporation or company known as Coldwell-Banker. The appraiser chose the sales comparison approach as opposed to the cost approach. After considering his comparable sales, he arrived at an adjusted value range of $164,184 to $228,449 per acre for the two acre lot. He established a value of $165,000 per acre for the lot. Therefore, the $165,000 per acre × two acres is an estimated market value of the land of $330,000. The sales comparison approach utilized produced an estimated market value of $673,300.
The after-land evaluation in which he recites that the site will be reduced by $5,993± square feet, of which was presently 1.8624± acres. The breakdown of the land value is the total land area which was 87,120 square feet or 2.0 acres at $165,000 per acre equals $333,000. The land area after the take, 87,120 square feet minus 5,993 square feet (that is the taking) equals $81,127 or $1.8624 per acre. Therefore, the 1.8624 acres × $165,000 per acre equals $307,000 (R). The estimated market value of the land after the take was $307,000. The damages due to the taking area were $330,000 minus the $307,000 or $23,000. This testimony ultimately utilizing the various and sundry means and adjustments for his total value of the damages comes to $109,000, which is $3,000 more than was offered on the date of the take, June 23, 2004.
Candlewood's appraiser, Roy O'Neil, also utilized the sales comparison approach but he also paid deference to the cost approach and the income capitalization approach, which contributed to and complimented his findings on the sales comparison approach.
Perhaps an appropriate starting point on this subject is the cost to cure which would be necessary because of the problem of Route 7 to the third hole. The difficulty would be overcome by the planting of eastern white pine trees, twenty-five in number, for a price of $26,250. The state's expert believed that that figure was exorbitant and somewhat arbitrarily reduced it in half. To arbitrarily take what appears to be a legitimate evaluation and because the appraiser believed that cost to be exorbitant, reduced it by 50 percent which this court finds arbitrary and unreasonable, and the court wonders if this is an example of a provider attempting to please its client with artificial figures.
A second consideration with respect to the cost to cure was the Coldwell-Banker septic system which the state believed to be taken for the highway. As a result, nothing was allocated for its replacement. Ironically, the system had just been replaced at the time of trial at a cost of $6,354.70. That figure was less than what the owner's estimate had been but it was adjusted on a cost to cure. The last entries under this heading would apply to the fencing, sign, lawn, trees and pavement in the taking area that the state's appraiser valued at $4,000. The actual cost to correct these casualties consists of ornamental trees, a split rail fence, the replacement of the C-B sign with lighting, a C-B well, a C-B septic test and system and a Candlewood Valley Country Club sign with lighting replacing the former one. These cost $54,017. The contributory value applied to those diminishes the damage cost with respect to this to what is generally conceded by the owner's appraiser to be $34,280.
The only comparable which the state's appraiser used was this Rogg sale to Bright Clouds Ministries. That sale ignored the highest and best use concept as this land was being used to build a church and school rather than commercial development. In addition thereto, Rogg reserved extensive easements and rights on the conveyed property. These reservations and those rights or easements could well sound the death knell of any conveyance of that property for any commercial development unless or until removed. The Rogg sale was for twice the value the state's appraiser found for the subject.
The Rogg parcel is an example of no help to the trier. Its inadequacy is apparent when one recognizes that the appraiser cut out the land taken into two "arbitrary" parcels, one being six times more valuable per square foot than the other. The word "arbitrary" is the appraiser's testimony taken from the record. O'Neil, honoring the "highest and best use," or rather in the words of the owner "lowest and worst use" adopted a 26.5 acre front parcel in the I/C Zone, the most liberal of New Milford's business zones. This would allow for the development of a commercial shopping center along Route 7 and allow for a reconfigured golf course to remain on the rear parcel. O'Neil identified sixteen land sales on Route 7. Eight of these were business zoned. These "B" zone sales sold for an average price of over $4,000 per acre. He did understand, however, that based upon a number of factors set forth in his report that the average size of the "B" zone sales, the availability of sewer and water at some of the sales, the gas and electric easements at the northwest corner of the subject concluded that the subject property should be adjusted downward from $400,000 per acre to approximately $220,000 per acre. The court believes that that adjustment should be from $400,000 per acre to approximately $220,000 per acre to ultimately $180,000 per acre.
The state recited that the silt fence observed on the viewing was not on the "taking line." This is true with respect to the permanent take in fee. The land between the silt fence and the "taking line" was temporarily taken for the duration of the construction project which will last at least twenty-four more months. It cannot be seriously believed that a reasonably well informed buyer as of the date of the take would pay the same for the subject whether or not it was subject to the state's right to occupy it for its construction activities for the next two years. Therefore, there is no question that even temporary takings should be compensated.
There was evidence from the club manager of a 10 percent reduction in rounds of golf played and the conclusion that there be a reduction of gross revenues by about $120,000 per year and Earnings Before Income Tax Depreciation and Amortization by about $24,000. At a 9 percent multiplier, reduction would be a temporary drop in value by about $216,000. Reduction is anticipated to endure two years. A safe yield rate of 5 percent is applied to that reduction for a construction period and damages are estimated at $10,800 a year for a period of two years.
The total that was shown by the owner's expert is that the sum of the permanent damages of $356,000 and temporary damages of $34,200 is $390,200.
In accordance with the foregoing, the Commissioner is ordered to pay over to the Club the additional sum of $154,594.70, together with interest at the rate of 7 percent from June 23, 2004 until the date of final payment, together with an appraisal fee of $5,050.