Opinion
# 2015-010-045 Claim No. 116394
09-17-2015
SHIRIN KERMANSHAHCHI AND VIDA KERMANSHAHCHI v. THE STATE OF NEW YORK
E. STEWART JONES HACKER MURPHY, LLP By: Patrick L. Seely, Jr., Esq. Carl Rosenbloom, Esq. HON. ERIC T. SCHNEIDERMAN Attorney General for the State of New York By: J. Gardner Ryan, Assistant Attorney General
Synopsis
Appropriations
Case information
| UID: | 2015-010-045 |
| Claimant(s): | SHIRIN KERMANSHAHCHI AND VIDA KERMANSHAHCHI |
| Claimant short name: | KERMANSHAHCHI |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | The Court has, sua sponte, amended the caption to reflect the only proper party defendant. |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 116394 |
| Motion number(s): | |
| Cross-motion number(s): | |
| Judge: | Terry Jane Ruderman |
| Claimant's attorney: | E. STEWART JONES HACKER MURPHY, LLP By: Patrick L. Seely, Jr., Esq. Carl Rosenbloom, Esq. |
| Defendant's attorney: | HON. ERIC T. SCHNEIDERMAN Attorney General for the State of New York By: J. Gardner Ryan, Assistant Attorney General |
| Third-party defendant's attorney: | |
| Signature date: | September 17, 2015 |
| City: | White Plains |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
This is a timely filed claim for the appropriation of claimants' property pursuant to the Eminent Domain Procedure Law and the Highway Law Section 30. The claim arises from the permanent acquisition of two parcels by defendant for the purposes of New York State Highway No. 43 Cochecton Turnpike Part 2, also known as Route 17K, in the Town of Montgomery, Orange County (Exs. 4, 5). Parcel 266, Map 243, consists of .256 +/- acres. Notice of Appropriation for this property was served by filing the notice and related maps in the Orange County Clerk's Office, as certified by the Clerk on June 16, 2006 (Claim, Ex. C; Ex. 1, pp 99, 103). On or about January 24, 2006 Shirin Kermanshahchi, who was a claimant in a related matter, Claim No. 116153 filed in this Court on December 4, 2008, was served with a Notice of Appropriation for Parcel 254, Map 231, which consists of 8.273 +/- acres.
The Court adopts the maps and descriptions as set forth therein.
By stipulation so ordered by this Court and filed March 21, 2013, both claims were consolidated into Claim No. 116394. The claim has not been assigned to any other courts or tribunal for audit or determination. The Court has made the required viewing of the property pursuant to Court of Claims Act § 12(4). The Property
Parcel 266 is a strip of land that runs along the southern border of Parcel 254 and the two parcels form a 8.529 +/- acre square, which is a corner lot bordered on the west by Stone Castle Road and bordered on the south by Route 17K, also known as Cochecton Turnpike, Part 2. The parcels were collectively referred to as the property. On the south side, the property had approximately 625 feet along Route 17 K and on the west side the property had approximately 600 feet along Stone Castle Road. At the time of the taking, the property was zoned industrial, I-3, and was situated in the Town of Montgomery Gateway Overlay District (Gateway District). The requirements in the Gateway District imposed restrictions on property owners to enhance the attractiveness of the entranceway to the town (Ex. A, p 120). Additionally, there are some ruins on the southwest corner of the property, and the entire property was designated as a historic landmark under Town of Montgomery Local Law No. 1 of 1997 (Ex. 1, pp 69 et seq., Appendix No. 2). Overview
The parties stipulated at trial to value Parcel 266 at $5,000.
Claimants contend that the highest and best use of the property was commercial retail and that they are entitled to receive $1,450,000 as just compensation for the State's taking. Claimants argue that a purchaser would likely secure a zoning variance to develop the property commercially. In support of their position, claimants rely on a single variance granted to a neighboring Valero gas station in an I-2 industrial zone. Claimants further maintain that at the time of the taking the restrictions of the Gateway District were being reviewed by the town and would likely be repealed. Claimants further assert that they would have been granted a Certificate of Appropriateness for new construction by the Town Historic Preservation Commission because the actual ruins covered only approximately two acres of the property. In response to defendant's argument regarding wetlands on the property, claimants maintain that any restrictions in that regard are not applicable because there has never been a mapping or designation of wetlands on the property.
The restrictions were subsequently repealed approximately four years after the taking.
Defendant contends that, even without a formal mapping of wetlands, the limited use of the property would have been obvious to any potential purchaser because of the water issue and its impact upon the development of the property. Additionally, the property was designated historic and approval by the Town Historic Preservation Commission was required for any development of the property. Defendant also argues that, because the property was in the I-3 industrial zone, claimants' reliance upon a variance granted to a property in the I-2 industrial zone was not relevant, and, contrary to claimants' contentions, did not indicate any likelihood that a variance would be granted to their property. Thus, defendant maintains that the highest and best use of the property was industrial and not for commercial development, as argued by claimants' appraiser. Defendant values the property at $150,000. Claimant s' Case
Robert Lamar Stack, a licensed real estate appraiser, prepared an appraisal and testified on behalf of claimants (Exs. 1-3). Stack considered development along 17K, inspected the property, and obtained the tax maps and zoning map for the Town of Montgomery. He noted that the property was at a signalized corner location with approximately 600 feet of frontage on two state highways. While acknowledging that the property was zoned industrial I-3, he nonetheless maintained that the highest and best use of the property was commercial. Stack explained that a variety of commercial properties already existed along Route 17K for two and a half miles east and west of the property. Stack noted that a Valero gas station, located caddy corner to the subject property, had received a variance from I-2 to B-4 (commercial) zoning. Stack argued that, since it is usually more difficult for a gas station to be granted a variance, the subject property would have inevitably received a variance. Stack also testified that the Town of Montgomery was reviewing the impact of the Gateway District and was considering less restrictive zoning measures. Stack opined that because the historic ruins were situated on only approximately two acres, the Historic Commission would have approved building on the remaining six acres.
Stack also considered the topography of the property and conceded that there was an area on the southeast that might be wet seasonally. He maintained, however, that since there were no mapped wetlands, there would be ample land suitable for development. Utilizing the sales comparison approach to valuation, Stack selected five vacant land sales which were purchased for commercial development. After making adjustments for location and size, Stack concluded that a unit sale price of $4.00 per square foot was reasonable to apply to claimants' property. Multiplying $4.00 by the 361,548 +/- square feet of Parcel 254, Stack rounded the value of the property to $1,450,000. This resulted in a per acre value of $174,699. Stack did not adjust for acreage that could not be developed. Stack also did not make any adjustment in his comparables for the historical designation, although he conceded that the existence of the limitation could possibly have an impact on value. Stack acknowledged that seeking approval for a variance could delay development of the property and might involve excavation costs, yet Stack did not consider any of these potential costs in his final evaluation.
Stack was questioned on cross-examination as to any possible limitation to building on the property caused by the low lying lands. When faced with the statement that a developer would be somewhat constrained by a small brook on the side, Stack initially disagreed. Stack responded that this area, as well as the acreage with the stone ruins, could be considered in calculating bulk percentage requirements. Stack subsequently changed his position when confronted with a quote from his own appraisal which stated, "[d]evelopment of the subject is, however, somewhat constrained by a small brook along the eastern boundary and some low areas as well as the 2.34 ± acre historic Colden Mansion ruins site" (Ex. 2, p 29). Stack finally agreed that the presence of wet areas and the historical site impacted the market value of the property, however he stated that he had not calculated the extent of the impact in his final analysis. Contradicting himself on redirect, Stack testified that he did calculate the impact, but he did not include it in his report because there was a significant amount of property left for development.
Stack conceded on cross-examination that he originally thought the property was zoned B-4, but that he subsequently learned that it had never been in the B-4 zone. Stack noted the correct zoning as I-3 in a supplement to his appraisal (Ex. 2). Nonetheless, in his analysis, Stack ignored the industrial zoning of the property and maintained that the highest and best use was commercial. Stack relied upon the variance granted to the Valero gas station to establish the likelihood that claimants' property would receive a variance. He compounded this questionable logic by never considering that the Valero property was originally in an I-2 zone and the claimants' property was in a more restrictive I-3 zone. Stack also never researched the difference between the two zones. Stack simply maintained that it would have been unreasonable for the town to have denied a variance to claimants' property.
Stack was not aware that the traffic light at the intersection of 17K and Stone Castle Road did not exist at the time of the taking. He made no investigation as to the date of its installation. Stack also acknowledged that the Gateway District was not eliminated until 2010. Defendant 's Case
Stephen MacAvery, who is employed by the New York State Department of Transportation (DOT) as a landscape architect, testified on behalf of defendant. In 2009, MacAvery was asked to evaluate whether the subject property was considered a wetland. He explained that such determinations are made by using three indicators: a high degree of water in the soil; the presence of vegetation typical in wet areas; and a low level of oxygen in the soil. When all three criteria exist, property is categorized as a wetland. Based upon his personal findings, MacAvery prepared a DOT wetlands map, which depicted .876 acre of wetlands on the property (Ex. A, p 35). MacAvery acknowledged that his evaluation did not render the property subject to wetland restrictions because DOT can only map lands if the area is larger than 12 acres. He explained that the size of claimants' property required a mapping by the New York State Department of Environmental Conservation and the Army Corps of Engineers.
Jose A. Molinas, a licensed real estate appraiser, prepared an appraisal and testified on behalf of defendant (Ex. A). In 2005, Molinas was retained to evaluate the property. He noted a symbol for wetness on the taking maps and physically inspected the property to assess any possible water problems. At that time, he was also aware that the property was designated a historical site and restricted by the I-3 zoning and the Gateway District. When Molinas walked the property in 2005, there was no traffic signal at the corner of Stone Castle Road and 17K. The signal was installed in 2009.
Molinas observed stone ruins on the southwest corner. Although the entire site was classified as historical, Molinas estimated that only 2.34 acres contained actual ruins. He concluded that an owner might be granted permission to build on the unencumbered sections. Molinas also observed a wet area with a running stream and vegetation indicative of potential wetlands on the east side of the property. Although he learned that there were no federal or state wetlands mapped on the property, Molinas was familiar with the process of identifying wetlands. He testified that he knew DOT often goes into the field and prepares a survey that is later submitted to the Army Corps of Engineers. Molinas explained that when an individual wants to develop a site, the Town Board typically requests a survey to determine the presence of wetlands. Based upon his experience, Molinas inquired whether DOT had prepared a survey. He received the maps created by MacAvery and was confident in their representation. Using the DOT map, Molinas noted that there were potential wetlands that would limit the use of the property. He reasoned that this would constrain the utility of another three acres of the property in addition to the acreage already limited by the historic designation.
In order to establish the value of the subject property, Molinas subtracted the size of the potential wetlands (3 acres) and the historic ruins (2.34 acres) from the total acreage and determined that there were 2.8 acres of land that could be developed. In his analysis, unlike Stack, Molinas did not consider all of the property to be of equal value.
Following the existing zoning, Molinas concluded that the highest and best use of the property was industrial. He then looked for sales of vacant land with similar constraints. Finding none with historic designations, he chose parcels with some other limitations in the I-3 zoning. Molinas acknowledged that these limitations included designated wetlands rather than potential wetlands. Molinas explained, however, that in his analysis the salient fact was not the type of limitation but rather that portions of the land were not usable. In Molinas opinion, any purchaser, as part of due diligence, would investigate whether there were wetlands and consider the findings in determining the property's value. Molinas made adjustments for the size, topography and location of the property resulting in a per-acre value ranging from $14,201 to $19,219. After evaluating the factors in the market place, Molinas placed the subject property toward the upper range at approximately $18,000 per acre. Then multiplying 8.273 ± acres by $18,000, Molinas arrived at a total of $148,914 which he rounded to $150,000 for Map 231, Parcel 254. The value of Map 243, Parcel 266 was stipulated to be $5,000. Molinas concluded that the combined total for the taking was $155,000. Analysis
Claimant is entitled to just compensation for the taking of his property (New York State Constitution, Article I, ¶ 7). Generally, just compensation is determined by the fair market value at the time of the taking based upon the highest and best use of the property, even if the property is not being utilized to its fullest potential at the time of the taking (see Matter of Town of Islip (Mascioli), 49 NY2d 354 [1980]). "A party asserting a highest and best use different from the existing one must establish that it is reasonably probable that the asserted highest and best use could or would have been made of the subject property in the near future [citations omitted]" (Thompson v Erie County Indus. Dev. Agency, 251 AD2d 1026, 1027 [4th Dept 1998]). "It is well settled that a 'use which is no more than a speculative or hypothetical arrangement in the mind of the claimant may not be accepted as the basis for an award' [citation omitted]" (West Seneca Cent. School Dist. v State of New York, 60 AD2d 760 [4th Dept 1977]). "The determination of highest and best use must be based upon evidence of a use which could or would be made of the property in the near future" (Broadway Assoc. v State of New York, 18 AD3d 687, 688 [2d Dept 2005]).
Upon consideration of all the evidence, including evaluating the testimony of conflicting opinions presented by the parties, the Court finds the testimony presented by defendant was more persuasive and compelling as compared to the evidence and expert testimony presented by claimants (West Seneca Cent. School Dist. v State of New York, 60 AD2d 760; Auger v State of New York, 263 AD2d 929 [3d Dept 1999]). Thus, the Court rejects claimants' valuation of the property and the Court is constrained to accept the values placed into evidence by defendant (see Chester Indus. Park Assoc., L.P. v State of New York, 103 AD3d 827 [2d Dept 2013]; Gyrodyne Co. of Am., Inc. v State of New York, 89 AD3d 988 [2d Dept 2011]). The Court hereby adopts defendant's valuation as its findings. Accordingly, the Court finds that claimants are entitled to an award of $150,000 for Parcel 254. The Court also finds that claimants are entitled to an award of $5,000 for Parcel 266, as stipulated to by the parties. Pursuant to the stipulation of the parties so ordered on September 24, 2012, appropriate interest shall be awarded from October 19, 2012, date of filing of claimants' appraisals to the date of this Decision (see Court of Claims Act §19[1]) and thereafter to the date of entry of judgment herein (pursuant to CPLR 5001 and 5002). It is further ordered that, to the extent that claimants have paid filing fee(s), it may be recovered pursuant to Court of Claims Act §11-a(2).
The award to claimants herein is exclusive of the claims, 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, 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 or appurtenant facilities for the construction, operation, or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer, and railroad lines.
All motions not previously ruled upon are DENIED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
September 17, 2015
White Plains, New York
Terry Jane Ruderman
Judge of the Court of Claims