Opinion
No. 563009
July 20, 2004
MEMORANDUM OF DECISION
The acting commissioner of transportation proceeding under the provisions of Connecticut General Statutes 13a-73(d) and 13a-73(e), as revised, found it necessary for the layout, alteration, extension, widening, change of grade, drainage and improvement of the highways commonly known as Route 82 and Route 85 to take certain premises in the Town of Salem containing a total of 10,357 square feet, more or less, as shown on a map entitled "TOWN OF SALEM MAP SHOWING LAND ACQUIRED FROM SALEM TOWN CENTER, LLC BY THE STATE OF CONNECTICUT SPOT SAFETY IMPROVEMENTS ON ROUTE 82 AND ROUTE 85 SCALE 1=500 OCTOBER 15, 1997 JAMES S. BYRNES, JR. — TRANSPORTATION CHIEF ENGINEER, BUREAU OF ENGINEERING AND HIGHWAY OPERATIONS." Last revised 4/04/02, Sheet 1 of 2 (120-79-14).
The premises were taken together with the following easements and rights under, over and across portions of owner's remaining lands. These easements and things are set forth on page 3 of the complaint.
1. A full and perpetual drainage right of way easement, containing 1,772 square feet, more or less, and located between and opposite approximate Stations 13+435 and 13+470 right, Base Line, Present Route 82, as more particularly shown on said map.
2. A full and perpetual drainage right of way easement, containing 475 square feet, more or less, and located between and opposite approximate Stations 38+636 right and 38+644 right, Base Line, Present Route 85, as more particularly shown on said map.
3. A full and perpetual drainage right of way easement, containing 441 square feet, more or less, and located between and opposite approximate Stations 38+661.5 and 38+669 right, Base Line, Present Route 85, as more particularly shown on said map. CT Page 11049
4. A full and perpetual drainage right of way easement, containing 490 square feet, more or less, and located between and opposite approximate Stations 38+885 and 38+893 right, Base Line, Present Route 85, as more particularly shown on said map.
5. A full and perpetual easement to install metal beam rail and construct end anchorages having a length of 49 feet, more or less, and located opposite approximate Station 38+633 right, Base Line of Present Route 85, as more particularly shown on said map.
Temporary easements to excavate and remove unsuitable material and replace with suitable backfill, within areas totaling 772 square feet, more or less, located between and opposite approximate Station's 13+360 and 13+435 right of Base Line, Present Route 82 and 38+636 and 38+720 right of Base Line, Present Route 85, as more particularly shown on said map. Said easement to automatically terminate upon completion of placement of backfill unless sooner released by the State. Temporary easement area taken under this paragraph will be restored by removal of all temporary installations and by grading and seeding the area.
Said premises are taken together with a right of entry under, over and across portions of Owner's remaining land to install sedimentation-control systems and construct driveways as more particularly shown on said map. Said right shall terminate automatically upon completion of said work by the State.
On July 25, 2002, the commissioner caused a notice of condemnation and assessment of damages to be filed in the office of the clerk of the Superior Court for the Judicial District of New London. The commissioner assessed damages for the taking as $3,700 and deposited said sum with the clerk. Claiming to be aggrieved by the assessment of damages made by the commissioner, defendant Salem Town Center, LLC filed an appeal from the action of the commissioner and applied for a reassessment of damages.
Connecticut General Statutes § 13a-76 limits appeals by persons claiming a reassessment of the damages assessed by the commissioner to those who are aggrieved by the action of the commissioner. The question of aggrievement is a jurisdictional issue and presents a question of fact for the determination of the trial court with the burden of proving aggrievement resting upon the defendants who have alleged it. Nader v. Altermatt, 166 Conn. 43, 59 (1994). Pleading and proof of aggrievement are prerequisites to the trial court's jurisdiction over the subject matter of the appeal. Beckish v. Manafort, 175 Conn. 415, 419 (1978). "The fundamental test for determining aggrievement encompasses a well settled twofold determination: First, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in the subject matter of the decision, as distinguished from a general interest such as is the concern of all members of the community as a whole. Second, the party . . . must establish that this specific personal and legal interest has been specially and injuriously affected by the decision." Mystic Marinelife Aquarium, Inc. v. Gill, 175 Conn. 483, 493, quoting Nader v. Altermatt, supra, 51.
The evidence here indicates that Salem Town Center, LLC acquired the property by virtue of a quitclaim deed dated July 27, 1995 and recorded in Volume 95 at page 201 of the Salem Land Records and had title to such property on the day of condemnation. Salem Town Center, LLC, being the owner of the property, is found to be aggrieved and has standing to prosecute this action. Bossert Corporation v. Norwalk, 157 Conn. 279, 285 (1968).
The real property owned by Salem involved in the taking consists of 21.5 acres, more or less, of commercial property lying at the intersection of Routes 82 and 85 in the Town of Salem. The property has 600 feet of frontage on Route 82 and approximately 1,490 feet of frontage on Route 85.
The property is generally flat with access, at grade, from a driveway on Route 82 and two driveways on Route 85.
About 17 acres of the land have been classified as wetlands, leaving about three acres as usable. The approximate three-acre area, which is dry, consists of a rectangular section bordering the highways.
There are two structures on the property. One structure is a strip center, or mall, consisting of separate businesses. This building is approximately 20,400 square feet in area. The second structure is a wooden building at the corner of the property near the highway intersection. This building is approximately 3,300 square feet in area and is known as the "Salem Country Store."
The property is in an excellent location for commercial activity being on a heavily traveled corridor which is the main route between Hartford and New London. Route 11 is approximately one mile west along Route 82 from the Route 85 intersection. There was testimony that 3,000 cars per day pass the property.
The court viewed the property on December 29, 2003, between the hours of 2:30 and 4:30 p.m.
"Under our constitution, no property shall be taken for a public use without just compensation. Connecticut Constitution, Article 1 § 11. This has been interpreted to mean that the condemnee is entitled to receive a fair equivalent in money for the property taken, as nearly as its nature will permit. Schnier v. Commissioner of Transportation, 172 Conn. 427, 4311, 374 A.2d 1087 (1977); Colaluca v. Ives, 150 Conn. 521, 530, 191 A.2d 340 (1963). The measure of damages is ordinarily the fair market value of the acquired land on the day of taking. Ibid. Where only a part of a tract of land is taken for the public use, the award will include the value of the part taken as well as any damages visited upon the remainder as a result of the taking." Tandet v. Urban Redevelopment Commission, 179 Conn. 293, 298 (1979).
"The fair market value is the price that the trier reasonably thinks would result from fair negotiations between a willing seller and a willing buyer. The valuation should ordinarily be based on the highest and best possible use of the land" (Citations omitted; internal quotation marks omitted.) Laurel, Inc. v. Commissioner of Transportation, 180 Conn. 11, 37 (1980).
"Application of the `before and after' rule to compute compensation for a partial taking was [approved by the Supreme Court and upheld] in Hanson v. Commissioner of Transportation, 176 Conn. 391, 400, 408 A.2d 8 (1979). [The Supreme Court] has also said that where only a portion of a tract is taken for the public use, the award will include the value of the part taken as well as any damages visited upon the remainder as a result of the taking . . . These principles of Connecticut law on the assessment of damages for a partial taking reflect the judicial philosophy that just compensation requires that the condemnee shall be put in as good a condition pecuniarily as he would have been in had the property not been taken." (Citations omitted; internal quotation marks omitted.) Laurel, Inc. v. Commissioner of Transp. of Conn., supra, 180 Conn. 37; see also D'Addario v. Commissioner of Transportation, 180 Conn. 355, 365 (1980); Tandet v. Urban Redevelopment Commission, supra, 179 Conn. 298-99.
"Under our law, a state referee sitting as a court on appeals in condemnation cases is more than just a trier of fact or an arbitrator of differing opinions of witnesses. He is charged by the General Statutes and the decisions of this court with the duty of making an independent determination of value and fair compensation in the light of all the circumstances, the evidence, his general knowledge and his viewing of the premises . . ." (Internal quotation marks omitted.) Minicucci v. Commissioner of Transportation, 211 Conn. 382, 388, 559 A.2d 216 (1989). "Valuation is a matter of fact to be determined by the trier's independent judgment . . . In determining fair market value, the trier may select the method of valuation most appropriate to the case before it . . ." (Citations omitted.) Cappiello v. Commissioner of Transportation, 203 Conn. 675, 679-80 (1987).
The parties are quite far apart in their assessment of damages. The commissioner originally assessed damages at $3,700. This was later revised to $4,300. Salem has claimed damages of $532,000 resulting from the taking.
Valuation of the property should ordinarily be based upon the highest and best possible use of the land Laurel, Inc. v. Commissioner of Transportation. supra, 180 Conn. 37. The parties are in general agreement as to what the highest and best use of this property would be. The commissioner's appraiser stated that the highest and best use would be commercial development. Salem's appraiser appears to have limited his conclusions of highest and best use to the Salem Country Store building. He stated that the highest and best use of this structure was as retail/office use. The property is located in a business zone. Considering the zone and all other factors in evidence, it must be found that the highest and best use of the property would be a commercial retail use as presently maintained.
The commissioner's appraiser used the sales comparison approach to arrive at the fair market value of the 21.5-acre parcel. He used four comparable sales, of what he considered similar properties, making adjustments for differences in such things as location, zone, topography, etc. He arrived at a per square foot figure for the land resulting in a conclusion that the before taking value of the land was $318,424. This was rounded out to $318,400. Salem's appraiser rejected the sales comparison approach, claiming that the property was unique and the use of comparable sales would result in "speculative conclusions that are based on subjective assumptions." The appraiser used the income approach. One factor which the appraiser considered was the anticipated income from a lease negotiated with an entity known as Carolina Direct, a furniture store which was to be located in the wooden building known as "Salem Country Store."
Considering all of the factors involved, it must be concluded that the commissioner's approach is a more accurate determination of the true market value of the property. The comparable sales upon which the value is based are reasonable and the adjustments are appropriate.
It is therefore found that the fair market value of the property before the taking was $318,400.
The commissioner's appraiser determined the value of the property after the taking to be $314,300, which resulted in damages of $4,100. To this figure, he added a calculation of the damages for the temporary easements at $151.81. This figure was rounded off to $200 resulting in a total assessment of damages of $4,300.
Using the income approach, Salem's appraiser concluded that the value after the taking was $120,000. To this figure was added rent to July 25, 2002 in the amount of $268,000 resulting in total damages from the taking of $532,000. This figure is not reasonable in view of all the evidence presented. The commissioner's appraisal of damages is basically reasonable. The taking resulted in a loss of a narrow strip of land along the highways at the corner. The appraiser testified that there was no impingement on any structure as a result of the taking. This is not totally accurate.
In its claim for damages, Salem concentrated on the effect of the taking on the building referred to as the Salem Country Store. From an observation of this building and the documents in evidence, it is obvious that the building was constructed at the corner of the highways with very little setback from either road. Salem contends that the taking resulted in dramatic restrictions in the use of this property.
Dominic Mecca, a member of Salem Town Center, LLC, and the person who managed the center testified that the country store building used electric heat. It was desired to replace this method of heating with less expensive propane gas and conditional approval had been obtained for the location of a 500-gallon tank. The zoning officials considered this tank a structure which would have to be located fifty feet from the road. Mr. Mecca testified that because of the taking, the required setback could not be made. After several months, an agreement with the town was reached whereby two 100-gallon tanks were installed.
The evidence does not permit a finding that the taking had any substantial effect on the conversion from electric to propane gas heat or that Salem suffered any ascertainable damages to heating expenses as a result of the taking. The building was nonconforming before the taking and there was no showing that the loss of the strip adjacent to the highway was the cause of the zoning problem. In any event, according to Mr. Mecca, within three or four months, the conversion was made.
There was at the time of the taking on the Route 85 side of the property, what Mr. Mecca described as a marquee sign. This was a sign which listed the names of all of the businesses on the property, including those in the mall. Although it did not exist on the date of taking, Mr. Mecca testified as to the desirability of having such a sign on the Route 82 side of the property. This sign would be more visible to travelers coming from Middletown and Hartford. Because of the taking, a marquee sign could not be located adjacent to Route 82. Such a sign might be of value to the commercial activities on the property. Such value, however, cannot be considered great since Salem has owned the property since 1995 and never erected such a sign. There was no evidence as to what the value of the loss would be and it would be mere speculation for the court to conjure up a figure.
There was considerable evidence concerning the loss of income suffered by Salem from a proposed lease to an entity called Carolina Direct. The claim is that in 1996, before specific plans by the Commissioner to widen the intersection of Routes 85 and 82 had been promulgated, Salem negotiated a lease with Carolina Direct, a proposed furniture store for occupancy of the wooden corner building. The lease, which was placed in evidence, was for fifteen years at the rate of $48,000 per year with increases every two years at the rate of 2 percent. There was testimony that while Carolina Direct was preparing the building for occupancy and before the lease had been signed, a reporter from New London Day disclosed to James D. Redmond, Jr., the operator of Carolina Direct, that the state was about to take the property and demolish the building. On learning of this, Redmond declined to sign the lease. He remained in occupancy for a time on a month-to-month basis at $2,000 per month and then vacated the premises. Salem's appraiser calculated the present value of the loss of rent from Carolina Direct's lease to be $268,163. This loss is the principal factor in the appraiser's determination of damages using the income approach to valuation.
The evidence does not permit the acceptance of this loss upon which Salem's appraiser heavily relied. This factor severely restricts the court's ability to rely on this appraisal of damages.
The credibility of the proposed lease arrangement is a strong factor in the rejection of the claimed loss.
Carolina Direct was James D. Redmond, Jr., now of Woodstock, Georgia. Mr. Redmond testified by deposition that he was a resident of High Point, North Carolina in 1996. Prior to negotiating with Salem for the lease, Mr. Redmond had never operated a retail store. He did assist his father in what he described as tent sales. They would drive a truck load of furniture up from North Carolina, where it was manufactured, find a good corner spot, run an ad and sell the furniture to the public from a tent on a weekend.
Mr. Redmond was drawn to this area because of a friend to whom his father had delivered furniture. He was looking in this area for a place to start a furniture store. He selected Salem's building which appears to have been vacant at the time. He made a $1,000 deposit and was allowed to move in and commence renovations and use of the building. His testimony was that he negotiated the lease and was willing to sign at $4,000 a month with the first payment in July 1996.
According to Mr. Redmond, he declined to sign the lease when he was informed that the building was to be demolished. Salem, however, allowed him to remain in occupation of the building at $2,000 per month on a month-to-month basis. Mr. Redmond's testimony was that he did well in the furniture business at the location for about a year. Then business began, as he described it, to go down the drain. He attributed this to the pending demolition.
Mr. Redmond looked around for another location. Eventually he opened up in a much less desirable location in Groton. When this did not work out, he returned to North Carolina. Mr. Redmond does not appear to have opened another business and is presently in Georgia working in a computer-based business.
The claim that Salem suffered a loss of $268,168 as a result of Mr. Redmond's refusal to sign the lease cannot be accepted.
Except for the tent sales with his father, Mr. Redmond had no experience in operating a furniture store. There was no testimony concerning bank involvement or the financial basis of his operation. Even with the rent at one-half the lease figure, the business failed in about one year. Mr. Redmond left Salem looking for another location even though he knew that if he remained, the state would assist him with relocation and pay for it.
Mr. Redmond's use of the building while he occupied it and the condition in which it was left when he vacated reflects upon the type of business he was conducting. The workmanship of his alterations was shoddy, there were holes in the wall from moving furniture and other damage to the property.
Mr. Redmond's venture at the Groton location failed. He returned to North Carolina and never went back into the retail furniture business again.
Salem contends that it is entitled to be compensated for the loss of rental income under the proposed lease to Carolina Direct. This claim is based upon the rule of law, usually found in cases of inverse condemnation, whereby the state is guilty of a "substantial interference with private property which destroys or nullifies its value or by which the owner's right to use or enjoyment is in a substantial degree abridged or destroyed." Textron v. Wood, 167 Conn. 334, 346 (1974).
After Carolina Direct vacated the building, Salem was unable to rent the building, except for temporary occupancy. There was also testimony that maintenance was deferred and the building deteriorated.
The condemnation of this property was rather involved. The Department held a public hearing on the proposed improvement of the intersection in June 1996. The map exhibited at this hearing showed the taking line going through the wooden building at the intersection. At the hearing, the demolition of the building was discussed. Subsequently, in August, Salem was notified that the state was proceeding with the proposed plan.
Representatives of the Department assured Mr. Mecca that they were proceeding under the proposed plan.
Representatives of the Town, however, independent of Mr. Mecca, commenced an effort to save the building. Mr. Mecca was aware of these efforts. In his contacts with the Department's representative, he was assured that it was their intention that the original plan be followed. Despite this, all parties were aware that the plan could be modified.
The attempts to save the building were able to impress a higher authority, the Governor, of the importance of saving the building and, in July 1998, parties were notified that the plans were being modified and that the building was not to be razed.
Salem was officially notified of the change in plan and the certificate of condemnation was finally filed on July 25, 2002.
Although Mr. Mecca was of the opinion that the state fully intended to demolish the wooden building, he must have realized that the plan was preliminary and subject to change. He was fully aware that an effort was underway to save the building. This effort clearly indicates that the promulgated plan was governmental planning and temporary in nature. Reasonable parties would, or should have, concluded that the state's intent to demolish the building had not become fixed or irreversible.
The situation here differs substantially from that found in Textron, Inc. v. Wood, 167 Conn. 331, 337-39 (1974). In this case, Textron was informed that a taking would occur and that the route would not be changed, although a slight revision was in fact made. Formal notification that the project was to go forward, a date when the property was to be taken was given, the project was advertised and bids were sought, a layout of the property was filed in the town clerk's office, and Textron was informed of a date for the start of construction. However, nothing was done. Textron's successor brought a declaratory judgment action, which resulted in a determination of inverse condemnation. This is substantially different from the case at bar.
In Santini et al. v. Connecticut Hazardous Waste Management Service, 251 Conn. 121, 142 (1999), the court stated, "It is true, in some cases, the public planning process might result in a landowner's property value being significantly harmed, either before the ultimate taking occurs or, if for some reason the taking never does occur, on a temporary basis. The line that we drew in Textron, Inc., however, strikes an appropriate balance between that risk to landowners and the concomitant need to preserve the governmental planning process as a matter of sound public policy."
Salem has failed to prove that the Department's conduct was more than governmental planning, or that it is entitled to lost rent or damages resulting to the building. As previously determined, Salem is entitled to damages in the amount of $4,000 as a direct result of the taking. Salem may also be entitled to compensation for the reduction in value of the wooden building resulting from the impact of the taking on the septic and water system.
There was evidence that the taking had a direct effect on the septic and water systems which serviced the wooden building preventing any expansion of that system and has resulted in restrictions in public restrooms in the building affecting the first and second floors. The first floor is presently restricted to a takeout restaurant with minimum seating. Restrictions on the ability to wash dishes and cooking utensils has also resulted from the limited septic system.
As noted by the parties in their briefs, the court has reserved for future litigation, in the event it becomes necessary, the issue of the taking and its impact, if any, upon the septic and water system located on the subject property. The court will retain jurisdiction for these purposes.
Accordingly, judgment is entered assessing damages at $4,300.
Joseph J. Purtill Judge Trial Referee