MATTER OF CITY OF NEW YORK

Full title: IN THE MATTER OF THE APPLICATION OF THE CITY OF NEW YORK RELATIVE TO…

Court: Supreme Court of the State of New York, Kings County

Date published: Nov 18, 2010

2010 N.Y. Slip Op. 52004 (N.Y. Sup. Ct. 2010)

Opinion

37905/03.

November 18, 2010.

Mr. Franklyn Snitow, Esq., Mr. Stewart Epstein, Esq., Snitow, Kanfer, Holtzer Millus, New York, NY, Claimant.

Mr. Fred Kolifoff, ACC, Corporation Counsel, New York, NY, City.

ABRAHAM G. GERGES, J.

This condemnation proceeding was tried on September 22, 2009; January 14, 2010; March 12, 2010; May 18, 2010; June 14, 2010; and June 16, 2010. The court conducted an inspection of the property prior to rendering this decision.

The subject property, 48 Warsoff Place (Block 1718, Lot 15), is located on Warsoff Place and Nostrand Avenue, between Flushing and Park Avenues, on the border of the Bedford-Stuyvesant and Williamsburg neighborhoods in Brooklyn. Claimant Congregation Adas Yereim (the Congregation or claimant) purchased the property on January 5, 2000 for $2,550,000. On December 8, 2004, the City of New York (the City or the condemnor) acquired title to the property for the purpose of constructing a sanitation garage facility. As of the date of vesting, the property was vacant land that was zoned M1-2 for use for light manufacturing.

At issue herein is the just compensation to be awarded to claimant. The central issue to be resolved is whether there is a reasonable probability that the Congregation would have been awarded a special permit to construct a school and a variance to construct residential housing units at the site, so that the property could be valued for this use, or whether its value is limited to development for light manufacturing, as zoned.

Procedural History

As is also relevant herein, by decision dated November 10, 2008, this court denied the City's motion to preclude the Congregation from offering into evidence the appraisal report prepared by David E. Fields of Fieldstone Advisors, LLC, dated June 15, 2005 (the Fieldstone Report) ( Matter of City of New York, 21 Misc 3d 1127A, 2008 NY Slip Op 52260U) (the 2008 Decision). After noting that the City's motion was more properly characterized as one seeking summary judgment because the City argued that the Congregation should be precluded from introducing the Fieldstone Report on the ground that claimant failed to sustain its burden of proving that it used a proper methodology in valuing the property, the court went on to find that the City failed to make a prima facie showing that claimant's method of valuation was improper as a matter of law.

Claimant's Appraisal

In reliance upon the Fieldstone Report, the Congregation valued the subject property as of December 8, 2004 at $138 per square foot, or $6,600,000, in its highest and best use as developed with a special permit for the construction of a school and a zoning variance for the construction of a multi-family residential development. In so valuing the property, Mr. Fields used the sales comparison approach. At the trial, Mr. Fields testified that this value should be reduced to $132.50 per square foot to reflect the fact that a variance had not been granted, for a total value of $6,350,000.

The Fieldstone Report described the property as being a 47,917 square foot vacant parcel, located mid-block, having frontage on two streets. The Report noted that at the time of the taking, an application was pending before the Board of Standards and Appeals (BSA) for a special permit to construct a school and for a zoning variance to construct four multi-family apartment buildings containing a total of 90 units; the outcome of these applications was not concluded as a result of the condemnation of the property. The Report was admitted into evidence over the City's objection.¹ In valuing the property, Mr. Fields relied upon 12 comparable sales, ranging in value from $75 to $212.28 per square foot;² he asserts that the properties chosen reflected the transitional nature of the Williamsburg neighborhood, where all were located, and were zoned to allow for manufacturing or residential development. His comparable sales are described as follows:

1 The City noted that although the 2008 Decision denied its motion seeking to preclude the introduction of the Fieldstone Report into evidence, the City objected to the introduction at trial in order to preserve its objection for the record.

2 Hereinafter, all dollar amounts will refer to price per square foot, unless otherwise stated.

12

No. Date Location Zoning Square Feet Price Price/Sq. Foot 1 2/15/05 515 Spencer St. MX-4 19,046 $3,500,000 $183.77 2 10/18/04 429 Marcy Ave. M3-1/Var 18,500 2,400,000 129.73 3 9/23/04 73 Walworth St. M1-1 47,000 5,850,000 124.47 4 9/21/04 441 Marcy Ave. M3-1/Var 13,000 1,035,000 79.62 5 7/1/04 6/11/03 74-86 Spencer St. 90 Spencer St. 88 Spencer MX-4 MX-4 MX- 20,200 2,500 2,300 2,000,000 250,000 425,000 99.01 100.00 184.78 4/10/03 St. 4 25,000 2,675,000 107.00 6 3/25/04 147-59 Classon Ave. M1-1/Var 21,326 3,500,000 164.12 7 3/30/04 175 Harrison Ave. M1-2/Spec Per 29,200 3,114,835 106.67 8 1/23/04 756 Myrtle Ave. C1-3/R6 20,000 2,700,000 135.00 9 6/9/03 133 Classon Ave. M1-2 14,978 1,200,000 80.12 10 3/3/03 15-21 Broadway 375-89 Kent Ave. C4-3 R6 49,140 6,900,000 140.42 11 12/20/02 415 Flushing Ave. R7-1 21,198 4,500,000 212.28 12 6/19/02 386 Wallabout St. M1-2 15,000 1,125,000 75.00

Mr. Fields explained that when he adjusted the price of the comparable sales, a negative adjustment meant that the comparable sale was more desirable, while a positive adjustment meant that the subject property was more valuable. Accordingly, he adjusted the sales +12% per year, or +1% per month, for time, since prices were increasing during the relative time period. Mr. Fields adjusted for zoning because a residential designation was believed to be more valuable and the subject lot was zoned for light industrial use. In so doing, he did a paired analysis and compared the selling price of property having a variance to property that did not have a variance and determined that a 25% adjustment was appropriate; since the Congregation spent $100,000 to obtain a variance, he made appropriate adjustments in his final valuation, as he testified to at trial.

Mr. Fields also adjusted the comparable sales for size, predicated upon his belief that larger parcels would command a higher per unit price because they are not as readily available and because of the increased development options; these adjustments ranged from-10% for lots that were between 60,000 and 70,000 square feet in size to +20% for lots that were less than 15,000. The adjustments made for location were subjective, taking into consideration the location of the subject property relative to the comparable sale. Adjustments for access and configuration were made to compensate for the site's frontage, access, use of transportation and configuration. If structures on the lot needed to be demolished, Mr. Fields reduced the value by $9 per square foot, as determined by referencing one of the cost investors and in consultation with an architect.

Comparable sale number 1 was an assemblage of parcels located at 515 Spencer Street, a/k/a 771-791 Bedford Avenue, that sold on February 15, 2005 for $183.77; it was three and one-half blocks southwest of the site, it was zoned MX-4 and it had a total area of 19,046 square feet. MX-4 zoning allows for mixed use development, including residential housing. Mr. Fields adjusted this sale-2% for time, since it sold after the vesting date; -15% for location, since the comparable sale was on a corner and had a preferable address; +15% for size; -25% for zoning, since it allowed for residential development; and +6% for demolition costs, for an adjusted value of $145.88.

Comparable sale number 2, located at 429 Marcy Avenue, was sold on October 18, 2004 for $129.73. The property was two and one-half blocks east of the subject property; irregular in shape; zoned M3-1, a heavier manufacturing zone; and had a total area of 18,500 square feet. On August 15, 2002, more than two years before the sale transpired, an application was filed with the BSA to permit construction of three seven-story residential buildings, containing 42 units; the variance was granted on January 13, 2004. This comparable sale was adjusted +1% for time; -5% for location; +15% for size; -25% for zoning, because it received a variance prior to the sale; +10% for access and configuration; and +8% for demolition, for an adjusted price of $134.96.

Comparable sale number 3, located at 73 Walworth Street, was sold on September 23, 2004 for $124.47. The property was located one block south of the subject property; was zoned M1-1; had a total area of 47,000 square feet; and was improved with two warehouses, one having one story and the other having six. It was similar to the subject site in that it was a large parcel, it was located mid-block and it had frontage on two streets. The property is currently being used as a girls' school. This comparable sale was adjusted +2% for time; +5% for location, since it was closer to Flushing Avenue; +15% for zoning; +14% for demolition costs; and-25% because the property could generate income during the interim period, for an adjusted price of $138.39.

Comparable sale number 4, located at 441 Marcy Avenue, sold on September 21, 2004 for $79.62. It was adjacent to comparable sale number 2, was zoned M3-1, was irregular in shape, had 13,000 square feet and was improved with a one-story warehouse. On February 20, 2002, the owner filed an application with the BSA to construct a six-story residential building with a cellar, containing 23 units; that application was granted on September 16, 2003, prior to the sale. This comparable sale was adjusted +2% for time; -5% for location; +20% for its smaller size; -25% for zoning; +35% for access and configuration, because it was irregular in shape and had no right angles; and +8% for demolition, for a total adjusted price of $108.01.

Comparable sale number 5 was an assemblage of three sales, all zoned MX-4, located two blocks southwest of the subject property. The first parcel, consisting of eight lots, was located at 74-76 Spencer Street, was sold on July 1, 2004 for $99.01 and had a total area of 20,200 square feet. The second parcel, consisting of one lot, was located at 90 Spencer Street, was sold on June 11, 2003 for $100 and had 2,500 square feet. The third, which also consisted of one lot, was located at 88 Spencer Street and sold on April 10, 2003 for $184.78. Thus, the total assembled parcel sold for $107 and had 25,000 square feet. This comparable sale was adjusted +8.4% for time; +10% for location; +10% for size; -25% for zoning; and +15% for access and configuration because Spencer Street was a narrow, one way street and the parcel only had frontage on one street, for a total adjusted price of $127.53. At the time that the Report was prepared, five six-story residential buildings, each having 12 apartments, were being constructed.

Comparable sale number 6, 147-159 Classon Avenue, sold on March 25, 2004 for $164.12; it was located approximately eight and one-half blocks away from the subject property, was zoned M1-1 and had 21,326 square feet. The sale was made contingent upon obtaining a variance for residential development; the property had previously sold in October 2003 for a price of $72.68, so that the increase in value was approximately 100%. The site has subsequently been developed with a four and a five-story residential building. This comparable sale was adjusted +8% for time; +10% for location because Classon is a very busy street that runs into the Brooklyn Queens Expressway; +10% for size; and-25% for zoning, for a total adjusted price of $168.39.

Comparable sale number 7, located at 175 Harrison Avenue, sold on March 30, 2004 for $106.67. The property was about four blocks east of the subject property; was zoned M1-2; had an irregular shape and frontage on three sides; needed a special permit to be developed; and had 29,200 square feet. This comparable sale was adjusted +8% for time; +10% for location, since the subject property was thought to be in a better location; +10% for size; -2.5% for access and configuration, for a total adjusted price of $135.36.³ Mr. Fields testified that this sale was emphasized in valuing the subject property because it was very similar, having the same zoning, similar size and a similar plan for development, i.e., for use as a girls' school, although the parcel is still vacant.

3 Mr. Fields testified at trial that in his Report, the adjustment for access and configuration was erroneously listed for comparable sale number 8 instead of 7 and he corrected this error in his testimony. The remainder of this decision will refer to the corrected figures.

Comparable sale number 8, located at 756 Myrtle Avenue, sold on January 23, 2004 for $135; it was a few blocks to the south of the subject property, was zoned C1-3/R6 and had 20,000 square feet. At the time of the appraisal, the property was to be developed for retail use alone; it was subsequently developed with retail development at grade level and with a residential building above. This comparable sale was adjusted +10% for time, +10% for location, +10% for size and-25% for zoning, for a total adjusted price of $141.07.

Comparable sale number 9 was in close proximity to comparable sale number 6 and was located at 133 Classon Avenue. The property was sold on June 9, 2003 for $80.12; it was zoned M1-2 and had 14,978 square feet. The property was vacant when the sale was recorded and remains vacant. This comparable sale was adjusted +18% for time; +10% for location; +20% for size; and +15% for zoning, because it was zoned M1 and no efforts had been made to move it towards a higher and better use, for a total adjusted price of $137.09.

Comparable sale number 10 consisted of two lots on a block being assembled for future development that sold on March 3, 2003 for $140.42, had 49,140 square feet and was improved with a building. The first parcel, located at 15-21 Broadway, was zoned C4-3, and the second, located at 375-389 Kent Avenue, was zoned R6; the property could be developed for commercial and residential use. Mr. Fields testified that this comparable sale was a bit more distant from the subject site than the others, and was located near the waterfront and the Schaefer Landing Housing Development; it was included in his Report because it was comparable in size. This comparable sale was adjusted +21% for time,-15% for location,-25% for zoning, and +3% for demolition, for a total adjusted price of $107.04.

Comparable sale number 11, which consisted of multiple, non-adjacent lots, was located at 415 Flushing Avenue and was sold on December 20, 2002, for $212.28; it was two to three blocks away from the subject property, was zoned R7-1 and had 21,198 square feet. It was included to confirm the trend of building on larger lots; the development was for smaller buildings that were neighborhood friendly. This comparable sale was adjusted +23% for time; -25% for location, since it is located on a major corridor; +10% for size; -25% for zoning; and +5% for access and configuration, for a total adjusted price of $169.72.

Comparable sale number 12, which was located in close proximity to comparable sale number 7, at 386 Wallabout Street, was sold on June 19, 2002 for $75; it was zoned M1-2, had 15,000 square feet and was used for parking buses. This comparable sale was adjusted +29% for time, +10% for location, +15% for size, +15% for zoning, and +10% for access and configuration, for a total adjusted price of $145.13.

Accordingly, the adjusted sales are as follows:

No

Date Location Price/ Sq Ft Time Adj. Time Adj. Price/ Sq Ft Location Size Zoning Access Demolition Other Total Adj. Price/ Sq Ft 1 38397 515 Spencer St. $183.77-2% $180.09-15% +15%-25% 0 +6% 0-19% $145.88 2 38277 429 Marcy Ave. 129.73 +1% 131.03-5% +15%-25% +10% 8 0 +3% 134.96 3 38252 73 Walworth St. 124.47 +2% 126.96 +5% 0 +15% 0 14-25% +9% 138.39 4 38250 441 Marcy Ave. 79.62 +2% 81.21-5% +20%-25% +35% 8 0 +33% 108.01 5 38168 74-90 Spencer St. 107 +8.4% 115.93 +10% +10%-25% +15% 0 0 +10% 127.53 6 38070 147-59 Classon Ave. 164.12 +8% 177.25 +10% +10%-25% 0 0 0-5% 168.39 7 38075 175 Harrison Ave. 106.67 0.08 115.2 +10% +10% 0-2.5% 0 0 +17.5% 135.36 8 38008 756 Myrtle Ave. 135 +10% 148.5 +10% +10%-25% 0 0 0-5% 141.07 9 37780 133 Classon Ave. 80.12 +18% 94.54 +10% +20% +15% 0 0 0 +45% 137.09 10 37682 15-21 Broadway 375-89 Kent Ave. 140.42 +21% 169.91-15% 0-25% 0 3 0-37% 107.04 11 37609 415 Flushing Ave. 212.28 +23% 261.1-25% +10%-25% 5 0 0-35% 169.72 12 37425 386 Wallabout St. 75 0.29 96.75 0.1 +15% +15% +10% 0 0 +50% 145.13

In analyzing these comparable sales to arrive at a value for the subject property, Mr. Fields testified that the Congregation's site was zoned for industrial development in a location where there was a trend to develop property for residential use. He explained that comparable sale numbers 3 and 10 were selected because they were similar in size; these parcels had an unadjusted price range of $124 and $140 and an adjusted price range of $107 to $139. Comparable sale numbers 9 and 12 were selected because they were zoned M1-2, as was the subject property; they sold in 2002 and 2003 and formed the bottom line of the unadjusted range, valued at between $75 and $80, which values were then adjusted to between $137 and $145. Comparable sale number 7 was emphasized because it was intended to be developed with a school; it sold for $107 without adjustments and $135 as adjusted. Comparable sale numbers 1 through 5 were closest to the subject site and sold in the price range of $80 to $184; the adjusted sales prices were between $108 and $146. Comparable sale numbers 2, 4 and 6⁴ were chosen because they were purchased with a variance approved by the BSA for residential developments. The unadjusted range of sales prices for these properties was $80 to $164, with adjusted values of $108 to $168.

4 Although the valuation summary at page 38 of the Fieldstone Report states that comparable sale numbers 2, 4, 5 and 6 were sold with variances in place, the remainder of the report indicates that comparable sale number 5 was zoned MX-4, so that residential development was permissible as of right.

Accordingly, there is total range of between $107 and $170, as adjusted. Mr. Fields chose to ignore the two highest sales (comparable sale number 11 [$170] and comparable sale number 6 [$168]) and the two lowest sales (comparable sale number 10 [$107] and comparable sale number 4 [$108]), leaving a range of $128 to $146. He then emphasized the sales that he thought were the most comparable: number 3, which was purchased for its future potential as developed as a school, was in close proximity to the subject property, had an unadjusted value of $124 and an adjusted value of $138, and number 7, which was purchased to be developed as a school, had an unadjusted value of $107 and an adjusted value of $135. He thus valued the subject property at $138 per square foot, for a total of $6,600,000. As discussed above, Mr. Fields then adjusted that value down an additional 5% per square foot to $132.50, to reflect the fact that the site had not yet received a variance, for a total value of $6,350,000.

The City's Report

In its report dated May 2, 2005 and prepared by Doris Silber of Jacques O. Tuchler Associates, the City appraised the subject property as of December 8, 2004 at $60 per square foot, for a total of $2,871,240, at its highest and best use, developed as an 18 to 21 foot high structure with open land for truck/automobile parking/loading/storage, in conformity with local development and zoning (the Silber Report). In so valuing the property, Ms. Silber similarly used the sales comparison approach and described the property as being a vacant lot having 47,854 square feet. Ms. Silber also prepared a written analysis of the Fieldstone Report, dated January 28, 2009 (the Silber Rebuttal Report). Both Reports were admitted into evidence.

Her comparable sales were valued as follows: No. Date Location Zoning Square Feet Price Price / Sq. Foot 1 38075 42-62 Ferris St.

Red Hook M2-1 50000 $2,550,000 $51.00 2 38118 221-229 Richards St.

Red Hook M1-2 74000 2750000 37.16 3 38190 60 Central Ave.

Bushwick M3-1 45500 1800000 39.65 4 38075 175 Harrison Ave.

Williamsburgh M1-2 29200 3114835 106.67 5 38117 427 Greenpoint Ave.

Greenpoint M3-1 62239 3550000 57.04

In valuing the property, Ms. Silber relied upon 5 comparable sales, located in Greenpoint, Bushwick, Red Hook and Williamsburg, ranging in value from $37.16 to $106.67. All of these comparable sales were zoned for manufacturing. In discussing the adjustments that she made, Ms. Silber described Red Hook as being "quite far" from the subject property, or about two miles, and Bushwick as being "not that far," about one-half mile. She further testified that Bushwick did not have as many young urban professionals, or yuppies, as did Williamsburg; Greenpoint had more because it had a waterfront area. Further, she believed that smaller properties consisting of vacant land sold at higher prices; she acknowledged that this opinion was contrary to the opinion of the Appraisal Institute. Ms. Silber also testified that since claimant paid $2,550,000 for the subject property in 2000, she adjusted all of the values approximately 12.5% for the increase in value that occurred between February 2000 and December 2004, or approximately 5% per year. Further, in using a 5% per year generic adjustment for time, she testified that the adjustment would not capture all appreciation.

In addressing the specific adjustments that she made to her comparable sales, Ms. Sliber explained that comparable sale number 1, located at 44-62 Ferris Street in Red Hook, was zoned M2-1, had 50,000 square feet and sold for $51; the purchaser intended to build a 2,500 square foot storage facility for buses. Ms. Silber noted that this sale had no nearby public transportation; since she valued the property as industrial, she believed that it was more important to be close to either water or a highway. She adjusted this sale +3.54% for time and-5% for superior frontage, for an adjusted value of $50.17.

Comparable sale number 2, located at 221-229 Richards Street in Red Hook; was zoned M1-2; had 74,000 square feet, which is 26,083 square feet larger than the subject parcel; and sold for $37.16. Ms. Silber adjusted this parcel +2.92% for time,-5% for superior frontage and +10% for size, for an adjusted value of $40.15. Ms. Silber noted that the site was formerly used for bus parking.

Comparable sale number 3, located at 60 Central Avenue in Bushwick, was zoned M3-1, had 45,400 square feet and sold for $39.65. Ms. Silber adjusted this comparable sale +1.88% for time and +10% for location, since it was located further away from the Brooklyn Queens Expressway than the subject property, for an adjusted value of $44.43.

Comparable sale number 4, located at 175 Harrison Avenue, was zoned M1-2, had 29,200 square feet and sold for $106.67. Ms. Silber adjusted this site-20% for size, explaining that investors looking for a property with 50,000 square feet would not find a property of this size attractive; she did not, however, speak to any investors. She also adjusted the price +3.54% for time,-5% for location and-5% for frontage, for a total adjusted value of $77.32. Ms. Silber further testified that the unadjusted price per square foot of 175 Harrison Avenue was $106.67, as compared to between $37.16 and $57.04 for her other four comparable sales; she admitted that applying a large negative adjustment would have the effect of lowering the range of prices downward. She stated that the site was formerly used for trailer and school bus parking.

Comparable sale number 5, located at 427 Greenpoint Avenue in Greenpoint, was zoned M3-1, had 62,239 square feet and sold for $57.04. It was located adjacent to property having storage tanks; the property was purchased by the adjacent owner to expand his operation, so that Ms. Silber stated that she should have lowered the price. Ms. Silber further noted that access to this parcel was difficult, around the side of a bridge to a small driveway, but thought that this was offset by the fact that the property was right across the bridge from Long Island City, which is generally regarded as the most desirable industrial location in New York. Ms. Silber accordingly adjusted this site +2.92% for time,-5% for location, +5% for frontage and +5% for size, for a total adjusted value of $61.64.

Accordingly, Ms. Silber valued the comparable sales, as adjusted, as follows:

No. Date Location Price / Sq Ft Time Adj Time Adj Price/ Sq Ft Location Adj Frontage Adj Size Adj Net Adj Adjusted Price/ Sq Ft 1 38075 42-62 Ferris St.

Red Hook $51.00 8.5 mos

+3.54% $52.81 0-5% 0-5% $50.17 2 38118 221-229 Richards St.

Red Hook 37.16 7 mos

+2.92% 38.24 0-5% +10% +5% 40.15 3 38190 60 Central Ave.

Bushwick 39.65 4.5 mos

+1.88% 40.39 +10% 0 0 +10% 44.43 4 38075 175 Harrison Ave.

Williamsburgh 106.7 8.5 mos

+3.54% 110.45-5%-5%-20%-30% 77.32 5 38117 427 Greenpoint Ave.

Greenpoint 57.04 7 mos

+2.92% 58.7-5% +5% +5% +5% 61.64

Thus, the mean was $54.74 and the median was $50.17. After noting that the adjusted range of the comparable sales was $40.15 to $77.32, Ms. Silber determined that the value of the land was $60 per square foot, for a total value of $2,871,240 ($60 X 47,854).

The Trial Testimony ⁵

5 The testimony of Mr. Fields and Ms. Silber, as it pertains to the preparation of their reports, the value of the comparable sales and the adjustments made thereto has been discussed above and will not be repeated herein.

Israel A. Framovitz

Mr. Framovitz testified that he was born in 1951 in Williamsburg and has lived in the area all of his life. He has served on Community Board Number 1 for approximately 20 years and has been the secretary/treasurer of the Congregation since 1979. Mr. Framovitz testified that over the years he observed a change in the community, i.e., he noted that it was hard to find an apartment; there was little construction of new housing; and in the 1990s, factories, knitting mills and manufacturing businesses left.

Mr. Framovitz explained that in approximately 1999, the Congregation became interested in acquiring the subject property because its schools were filled to capacity and needed to expand. In November 1999, claimant began talking to an attorney, Sheldon Lobel, to determine if a school and housing units could be built on the subject property. Prior to closing on the sale, Mr. Framovitz, Mr. Lobel, Mr. Chin (the Chairman of the BSA), staff members from the BSA and Rabbi David Needleman met to discuss the proposed project. Mr. Framovitz testified that Mr. Chin told the Congregation that it should first apply for a special permit for the school, which would be on a faster track than the variance that would be needed to construct housing. As a result of the meeting, the Congregation closed on the sale of the property in January 2000 and retained Mr. Lobel's firm to submit applications to the BSA to obtain the requisite special permit and variance; Mr. Lobel was ultimately paid approximately $25,000 for his services. The Congregation also retained Karl Fischer, an architect, to draw up plans for the proposed project; Mr. Fischer was ultimately paid between $30,000 and $50,000. Mr. Framovitz further testified that an application and a site plan that showed a school and four buildings for housing were submitted to the BSA. The school was intended to have 27 classrooms with approximately 25 students per classroom; the four residential buildings were intended to have a total of 90 units.

Mr. Framovitz described the surrounding area as being occupied by the Marcy Housing Complex, a city owned development having hundreds of apartments and covering a few blocks. He also noted that there was a Yeshiva across the street and a few businesses in the area. He stated that new housing was being constructed nearby, on Flushing Avenue.

Sheldon Lobel

Mr. Lobel testified that he has been an attorney since 1961 and that he specializes in land use and zoning. He appeared before the BSA approximately 700 or 800 times, he sought variances on approximately 500 or 600 occasions and he sought special permits on approximately 200 occasions. Mr. Lobel testified that after he met with Mr. Framovitz, his firm drafted a letter dated December 9, 1999 to Pasquale Pacifico, the Executive Director of the BSA, requesting a meeting to discuss obtaining a use variance to construct housing on the subject property. At the time that the letter was written, the firm had not been formally retained, since Mr. Lobel wanted to arrange an informal meeting with the BSA to determine whether the Board would deem the application to be meritorious; a retainer agreement was signed on February 3, 2000 and Mr. Lobel was ultimately paid approximately $25,000 for his service. At the meeting with the BSA, Mr. Lobel explained that the Congregation intended to propose two applications, one for a special permit to construct a school and the second for a variance to construct four residential buildings. Following the meeting, Mr. Lobel received a letter telling him that the applications looked meritorious and that he should prepare to file.

The application for a special permit was filed first, in mid to late December 2000, because the Congregation needed the school to be built as soon as possible; Mr. Lobel expected that an approval could be obtained in four or five months and he had never seen an application for a special permit denied. The application for a variance to build the housing units would follow. After the BSA reviewed the application and requested additional submissions, the matter was calendared for a hearing. After one hearing, the BSA declined to act on the application because the City decided that the property was going to be taken for City purposes.

Mr. Lobel further testified that his firm also represented Beth Chana and had obtained an approval to build a school for girls and four or five residential buildings in the area. In addition, Mr. Lobel testified that between 1994 and 2004, he was personally involved in obtaining eight or ten variances to build housing in the Williamsburg neighborhood for property that had been zoned M, like the subject property, which zoning did not permit the construction of residential units. Mr. Lobel testified regarding five applications that were granted, naming the owner, address and nature of the construction.

On cross examination, Mr. Lobel testified that although the December 9, 1999 letter and the February 3, 2000 retainer agreement indicated that the Congregation intended to file an application for a use variance to authorize housing, no such application was ever filed. Similarly, although the retainer agreement referenced a feasability analysis and an archaeological or environmental report, which would have been required to obtain a special permit and/or a variance, neither was ever prepared.

Mr. Lobel explained that in 2004, an applicant would need the vote of a majority of the members of the BSA, or three, to obtain a variance. The process would take approximately four to six months after an application was filed and would cost approximately $60,000. Mr. Lobel also explained that five requirements had to be met in order to obtain a variance under Zoning Resolution § 72-21: the property must have some unique physical characteristic; there must be an economic hardship, although this requirement does not apply to a religious organization; there must be a minimal variance; there cannot be any adverse effects on the character of the neighborhood; and the need for the variance must not be self-created. Mr. Lobel stated that the determination of whether a property was unique would be made in the discretion of the BSA.

David Fields

After testifying at length with regard to his education and experience, Mr. Fields stated that he was retained in February 2005 to appraise the subject property. He described the site as being a large, vacant lot situated in the middle of the block; it had frontage of 282 feet on Warsoff Place and 209 feet on Nostrand Avenue. It was located in a mixed use neighborhood that was being transformed from under-utilized, vacant and manufacturing lots to residential uses. Referencing the life cycle of a neighborhood as growth, maturity, decline and rejuvenation, Mr. Fields opined that this neighborhood had gone through its decline and was being rejuvenated.

Mr. Fields stated that the Marcy Housing Complex was across Nostrand Avenue from the site; he described that development as having 1,705 units and over 5,000 tenants. He further testified that other residential housing was scattered throughout the neighborhood and within four blocks there were mixed uses, i.e., residential, industrial and commercial; there was also an abundant amount of land. Mr. Fields also noted the decline in manufacturing jobs and the increase in service jobs between 2001 and 2004 to support his determination that manufacturing space was declining. In addition, an increase in employment would support an increased demand for housing.

Mr. Fields explained that to determine the highest and best use for property, one must consider whether a proposed development is physically possible, legally permissible, economically viable and maximally productive. Mr. Fields was of the opinion that the proposed development of the subject property for use as a school and for housing was likely to be legally permissible because prior to purchasing the property, the Congregation had explored the possibility and after taking title, was pursuing its efforts to have a special permit and a variance approved. Mr. Fields further stated that market value is the most probable price that a property would bring in an arm's length transaction, with the buyer and seller each acting prudently and knowledgeably, in a sale that is not affected by undue stimulus or duress.

In valuing the property, Mr. Fields determined that if it was developed in accordance with M1-2 zoning, it would have been underdeveloped and under improved in an area that was being developed with residential housing. Thus, in looking at the residential development taking place in the surrounding areas, he was of the opinion that constructing a commercial or industrial building would not be profitable. Mr. Fields also explained that his report stated that an application for a variance had been filed because that was the information that he had been given by Mr. Framovitz and Mr. Lobel; admittedly, however, no such application was ever filed.

On cross examination, Mr. Fields testified that on Flushing Avenue, a Yeshiva and other "warehouse-type structures" were located to the west of the subject property. To the east, between Walworth Street and Warsoff Place, property was primarily used for light industrial purposes or was vacant. The property directly to the south was being used as a bus terminal. Mr. Fields further noted that the proposed school would have an area of approximately 13,600 square feet, or 28.3% of the lot; he testified that he took this into account when he valued the site, particularly since he included 175 Harrison as a comparable sale.

Although Mr. Fields believed that a variance had been filed when he prepared his report, as discussed above, he was of the opinion that the property would have obtained a variance, based upon the residential and zoning trends in the surrounding area and the status of the application before the BSA. In this regard, Mr. Fields further referenced the fact that the Congregation had spent approximately $100,000 in pursuing its application to obtain the necessary approvals and that the process had been halted when the application for a special permit was withdrawn because of the condemnation. He also noted that three of his comparable sales, numbers 2, 4 and 6, had been zoned M and received a variance for residential development before they were sold. Mr. Fields emphasized, however, that comparable sale number 3, located at 73 Walworth Street, which sold for $124 per square foot in September of 2004; comparable sale number 7, located at 175 Harrison Street, which sold for $107 per square foot in March 2004; comparable sale number 9, located at 133 Classon Avenue, which sold for $80 per square foot in June 2003; and comparable sale number 12, located at 386 Wallabout Street, which sold for $75 per square foot in June 2002, were all were zoned M1-2 and did not receive a variance prior to closing.

On re-direct, Mr. Fields explained that he concluded that it was not economically viable to use the subject property according to the use for which it was zoned because his observations revealed that there was a tremendous amount of vacant land in the area, there were no new industrial uses being developed and the trend in the area was towards residential uses. He explained that as an appraiser, he is obligated to take zoning into account when appraising any parcel of property. Mr. Fields testified that he believed that the value of the property would not change because the buyer did not know if a variance would be granted, since the highest and best use was not for industrial purposes.

James Chin

Mr. Chin testified that he was formerly employed by the City as the chairperson and commissioner of the BSA from 1995 to 2006; he is currently the principal owner of James Chin Associates, where he works as a land use and zoning consultant. His firm prepares applications for city planning, zoning changes, variances and special permits, as well as appeals to the building and fire departments.

Mr. Chin noted that under the New York City Administrative Code, the BSA is the appeal board for land use, zoning and other land codes. During his tenure, the BSA decided approximately 500 to 1,000 variance applications each year. He explained that a variance is a waiver of an objection from the Buildings Department of a zoning resolution. Mr. Chin also stated that if one wanted to construct a new school or to open a school in an old building, a special permit was needed if it was to be located in a C1 or M1 zone. The BSA was the agency responsible for hearing the cases and making the decisions for both special use permits and variances. Under the City charter, when someone applies for a variance, they need to meet five findings.⁶

6 Mr. Lobel identified these factors, as discussed above; the factors will not be repeated here.

Mr. Chin testified that the BSA granted many variances during his tenure. Most of the variances were for a change in use, i.e., most of the land in Williamsburg was zoned for manufacturing or industrial use and there were a lot of applications to convert to residential use. He described the process as follows: the applicant was asked to come in for a pre-application meeting because the BSA's calendar was full; because he wanted to avoid having landowners spend money unnecessarily, since a variance application could cost $30,000 to $200,000; and because the BSA wanted to review only meritorious cases. The purpose of the pre-application meeting was to tell the landowner whether the application should be filed and as a result, applications that were filed were usually approved.

Mr. Chin recalled that the Congregation came in for a pre-application meeting because it wanted to request a special permit and a variance to construct a five-story school and some housing units. The BSA told the Congregation to file for the special permit first, because the Congregation had a deadline for building the school, and because it would be easier to get a variance after the school was built. Mr. Chin identified the application that was filed with the BSA and the site plan, which depicted the school and the housing units; after seeing the site plan at the pre-application meeting, he told the Congregation to file its applications.

On cross examination, Mr. Chin explained that five people sat on the BSA. To obtain a variance, three votes were needed. During the time that he was Chairperson of the BSA, about 90% of the applications filed for a variance were granted.

On redirect examination, Mr. Chin stated that the BSA addressed approximately 300 to 1,000 applications a year. He recalled the application filed by the Congregation because after he asked them to come in and they filed, he asked them to withdraw the application because the Department of Sanitation was going to condemn the property. Mr. Chin also explained that in order to qualify for a special permit, the use had to be within 400 feet of a permitted zoning district; the subject property was located directly across the street from the Marcy Housing Complex, which was located in an R6 and R7 zoning district that permitted community facilities, such as a school, and residential units.

Doris Silber

After testifying with regard to her education and experience, Ms. Silber described the subject property as being a vacant lot, adjacent to a bus depot, and valued it as of December 8, 2004 at $60 per square foot, for a total of $2,871,240, at its highest and best use, for industrial development. Ms. Silber also testified that in valuing the subject property, she used the price per square foot of land as the common unit of comparison because the property taken was vacant land that was zoned for industrial use; she made no adjustments for zoning. In contrast, in reviewing the Fieldstone Report, Ms. Silber noted that Mr. Fields considered the property's M1-2 zoning, the state of its application before the BSA and its withdrawal, so that he adjusted his comparable sales for the reasonable probability of adoption by the BSA of the proposed zoning variance and special permit. Ms. Silber opined that since the other comparable sales relied upon by Mr. Fields had already received a variance, he should have used the floor area ratio of three, as is applicable in MX-4 districts, since the proper measure of value for residential development should be the price per buildable square foot because one would be considering how many apartments could be built within a building. Ms. Silber went on to criticize the comparable sales used by Mr. Fields. More specifically, she noted that comparable sale numbers 1 and 5 were zoned MX-4, so that residential development was permitted as of right; that a variance was granted for residential development of comparable sale numbers 2, 4 and 6 before the property was sold; and that comparable sale number 3 was improved with warehouse buildings that were reconstructed into a Yeshiva, so that the property was not comparable to vacant land.

On cross examination, Ms. Silber testified that she was very familiar with Williamsburg, having been there approximately 20 times in the past 10 years. She described Williamsburg as being a homogenous area where the Orthodox Jewish population predominated and where there were many synagogues and Yeshivas. Her report indicated that the Congregation filed building plans on November 28, 2000 to construct a five-story, 35,000 square foot building with a wedding hall in the basement, a synagogue at ground level and a school and offices on the first through fifth floors; the application was denied on the same day. She also noted that a loft building and a one-story factory building located one block away were converted into a Yeshiva and that housing for the Hassidic community had been constructed within four blocks of the subject property, along Bedford Avenue.

Ms. Silber testified that in preparing her report, she visited the site on December 8, 2004. She arrived by car; stayed at the site about 20 minutes; and walked along Nostrand, Bedford and Flushing Avenues, about one-half mile in total. She noted that two to four blocks west of the site there was residential construction; she did not notice the construction of any new light industry in the area. Her report also noted that an industrial building on the subject site had been demolished in 1997; she did not investigate or know the use that had been made of that building. Further, she noted that the subject property had been sold by Borden Incorporated to Bedford Avenue Properties (Bedford) in 1997 for $475,000; on January 2, 2005, approximately three years later, Bedford sold the property to the Congregation for $2,550,000, for an increase in price of 436%. Ms. Silber did not know what had driven the price that the Congregation paid so high.

Ms. Silber further testified that she considered whether there was a reasonable probability that the property could obtain a variance, but she did not consult a zoning expert. She elaborated, stating that there were no other parcels of land in the vicinity that were rezoned, so that she had no reason to assume that there was a reasonable probability that a zoning change could be obtained. Her report did note, however, that in 2001, former industrial sites on Franklin Avenue, Myrtle Avenue, Spencer Street and Wallabout Street were changed to a special mixed use district, MX-4, that went into effect on May 9, 2001, so that both residential and industrial uses were permitted. Ms. Silber further noted that the Fieldstone Report identified properties that received zoning variances between 2003 and 2004, i.e., comparable sale numbers 2, 4 and 6, which parcels were located about ten blocks, or one-half mile, away from the subject property. These properties were not referred to in her report because she did not use them as comparable sales.

Ms. Silber also testified that she was aware that there was an influx of young urban professionals into South Williamsburg and that there was an exponential growth in the Hassidic community's need for schools and housing. Knowing these facts, however, did not cause her to consider zoning changes in appraising the subject property, particularly since the Congregation did not file an application for a zoning change and because she is not an expert in zoning. Similarly, Ms. Silber did not determine whether an application had been filed for a special permit; she checked the website for the Department of Buildings, but did not make any inquiry of the BSA. Ms. Silber acknowledged that as an appraiser, she is obligated to identify and analyze the effect of any existing land use regulations and probable modifications pursuant to the Uniform Standards of Professional Appraisal Practice rules and the guidelines of the Appraisal Institute. She did not, however, get in touch with the owner of the parcel, claiming that it was up to claimant, in discovery, to tell her what she should know; accordingly, she did not know that an application for a special permit had been filed by the Congregation for the subject property. Ms. Silber also opined that the subject site would not be used to build residential housing because it was not very desirable as a result of being adjacent to a bus depot; she admitted that there was no physical reason why the site could not be so developed.

Ms. Silber further testified that if she had been aware that a zoning change had been requested for the subject property, she would have included that fact in her analysis. She did not know, however, if the value of the property would be changed if it had been granted a zoning variance to construct residential housing; she did not believe that the value of the comparable sales relied upon by Mr. Fields went up as a result of having received a variance that permitted residential development. Ms. Silber was aware that Domino Sugar and the Schaeffer Brewery closed in recent years and that the sites are now improved with residential housing.

Further, as is stated in her Rebuttal Report, since bulk and density are major considerations in residential development because they dictate size, height and financial feasibility of construction, the price per buildable square foot should be the unit of comparison for a residential site. Thus, using comparable sale number 1 as an example, while Mr. Fields utilized the industrial square footage of the land of 1, or 19,046, if he had utilized the value per buildable square foot with a floor area ratio of 3, or 57,138 square feet of buildable space, the unit price would be $61.26 instead of $145.88.

Finally, Ms. Silber testified that a bus depot was located to the south of the subject property; buses did not actually come up to the property line because there was vacant land and a building between the subject site and the bus parking. The north side of the property was adjacent to a four-story walk-up apartment building with a restaurant and a food market, as well as a three-story factory. Directly across Sanford Street, a multi-tenanted one-story factory building and a two-story industrial building had been partially converted into a Yeshiva in 1998. Park Avenue, west of Nostrand Avenue, was developed with a six-story industrial loft and a number of auto repair buildings.

Claimant's Contentions

The Congregation argues that it properly valued the subject property for residential use, based upon the value per square foot of land, as determined by Mr. Fields, in reliance upon the 12 comparable sales that he considered and adjusted. More specifically, claimant contends that the evidence establishes that the site was located in an area that was in transition, so that the Congregation would have been granted a special permit to construct a school, which is an allowable use in a M1-2 zone, and that there was a reasonable probability that it would obtain a variance to construct residential housing.

Claimant further argues that the comparable sales relied upon by the City are deficient in that all are zoned for industrial development and only one, 175 Harrison Avenue, which was also used by the Congregation, is located is Williamsburg. Significantly, that property sold at $106 per square foot, which is more than twice the price of the other comparable sales included in the Silber Report. Claimant also avers that the adjustments that Ms. Silber made for this sale are excessive and unjustified.

The City's Contentions

The City argues that the subject property should be valued as vacant industrial land, as it was zoned on the date of the taking, so that the Fieldstone Report improperly values it as developed for residential housing. In this regard, the City contends that the Fieldstone Report is erroneously predicated upon the belief that claimant had submitted an application for a variance, which was admittedly not true. The City further avers that claimant did not sustain its burden of establishing that there was a reasonable probability that the property would obtain a variance to build the residential units proposed in the site plan, since the Fieldstone Report does not contain an analysis of the subject property with regard to the five requirements that must be satisfied in order to obtain a variance as set forth in Section 72-21 of the New York City Zoning Resolution. In this regard, the City further contends that the testimony concerning variances that had been granted in the area reveals that one was granted 12 years before the date that title vested in the City and that three others were granted between 1999 and 1997. Moreover, Mr. Lobel's and Mr. Chin's recollection of the specific facts relating to those variances was vague. In addition, since Mr. Chin testified that only 90% of the applications for a variance were granted, 10% were denied, and when a variance was granted, it could provide less density than was sought by the applicant.

The City goes on to argue that Mr. Fields did not properly value the subject property, i.e., he did not value it as zoned and augment that amount by an increment representing the amount of money that a knowledgeable buyer would be willing to pay for a potential change to a more valuable use, as is required pursuant to Berwick v State ( 107 AD2d 79) and Chase Manhattan Bank v State of New York ( 103 AD2d 211). The City also contends that Mr. Fields did not properly adjust the values of his comparable sales for time and size and that he improperly relied upon comparable sale number 3, which was improved with a warehouse that was renovated into a school, while the subject property was vacant land. Finally, the City argues, as testified to by Ms. Silber, that if the court finds that claimant established that the subject property should be valued for use as a residential development, Mr. Fields should have valued the site based upon the number of square feet of buildable area, and not the number of square feet of vacant land, since using the latter method improperly inflated the value.

Highest and Best Use

The Law

It is well settled that the measure of just compensation is the fair market value of the property taken on the date that title vests in the condemnor ( see e.g. Matter of Town of Islip [Mascioli], 49 NY2d 354, 360; Breitenstein v State, 245 AD2d 837, 839), which essentially is a question of fact ( see e.g. W. T. Grant Co. v Srogi, 52 NY2d 496, 510). Further, as was discussed in detail in the 2008 Decision, it is also well established that when land is taken by eminent domain, its owner is to be compensated for the market value of the property in its highest and best use (2008 Decision, 2008 NY Slip Op 52260U, *7). Briefly stated, the determination of highest and best use must be based upon evidence of a use which reasonably could or would be made of the property in the near future, regardless of whether the condemnee was so using the property at the time of the taking; 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 ( Id. at 7-8).⁷ It is also well settled that the burden of proving that there is a reasonable probability of rezoning is on the condemnee (2008 Decision, 2008 NY Slip Op 52260U, *7) and that the existence of such a reasonable probability is similarly a question of fact ( Rodman v State, 109 AD2d 737, citing Rebrug v State of New York, 42 AD2d 801; Maloney v State of New York, 48 AD2d 755).

7 The governing law was discussed in detail in the 2008 Decision and not will not be repeated herein.

As is also of particular relevance herein, in determining whether a reasonable probability of rezoning exists, the various factors present in each case should be weighed in order to ascertain whether a request for a change in zoning would have been favorably received or whether there were good prospects of rezoning ( Spriggs v State, 54 AD2d 1080, citing Norris v State of New York; 42 AD2d 839; Babcock v State of New York, 41 AD2d 860; Knight v State of New York, 36 AD2d 574). Further, it has been recognized that:

"While it is not essential to demonstrate either that the property had been used as its projected highest and best use or that there had been an ante litem plan for such use ( Keator v State of New York, 23 NY2d 337, 339 [1968]), it is, of course, necessary to show that there is a reasonable probability that its asserted use could or would have been made within the reasonably near future ( Matter of City of New York [Wilson], 21 AD2d 652, 653 [1964], affd 16 NY2d 814 [1965]).

(2008 Decision, 2008 NY Slip Op 52260U, *7-8, quoting Matter of City of New York [Jones Woods Park Addition], 20 Misc 3d 1143A, 2008 NY Slip Op 51839U, *6-7 [2008], quoting Matter of City of New York [Matter of Newtown Creek Water Pollution Control Plant Upgrade], 18 Misc 3d 1118(A), 2008 NY Slip Op 50124U, *23 [2008]).

Discussion

Herein, the court finds that claimant has satisfied its burden of proving that there was a reasonable probability that the subject property would have obtained a special permit to build a school and a variance to construct residential housing. As a threshold issue, it must be recognized that case law clearly establishes that it is not essential to demonstrate either that the property had been used at its projected highest and best use or that there had been an ante litem plan for such use ( see generally Keator, 23 NY2d at 339), so that the fact that the Congregation's applications for a special permit and for a variance had not been filed and/or granted at the time of the taking does not compel a contrary conclusion. Accordingly, the court must look to the evidence presented by the parties.

In so doing, it is noted that the testimony of Mr. Framovitz establishes that prior to purchasing the property, the Congregation consulted with Mr. Lobel to determine if it could be used to build a school and residential housing. The testimony of Mr. Framovitz, Mr. Lobel and Mr. Chin establishes that a pre-application meeting was held, that Mr. Chin viewed the proposed applications to be meritorious and that he encouraged the Congregation to submit the appropriate applications. Towards this end, Mr. Fischer was retained to prepare a site plan, which depicted a school and five residential buildings, which was filed along with an application for a special permit in December 1999.

Further, the testimony of Mr. Chin establishes that it was probable that a special permit would be granted to build the school, since the site was adjacent to a zoning district that permitted such development, so that it satisfied the requisite criteria. Similarly, Mr. Lobel testified that he never saw an application for a special permit denied. In addition, Mr. Chin's testimony that approximately 90% of all applications that were filed for a variance were granted also serves to support the conclusion that it was probable that a variance would be granted, as does the fact that the approval process was ongoing until the City notified Mr. Chin that the property was to be taken by eminent domain and Mr. Chin requested that the Congregation withdraw the application ( see generally Zappavigna v New York, 186 AD2d 557, 561 [since condemnation awards are based upon the highest and best use of the property and the record indicated that claimant obtained preliminary approval for his subdivision plan, it was reasonably probable that the property would or could be used as a residential subdivision in the near future, since claimant was all but assured of obtaining final approval]; Masten v State, 11 AD2d 370, 371-372, affd 9 NY2d 796 [proof that, inter alia, a number of business and commercial establishments existed in the neighborhood before the appropriation; that the highway traffic became increasingly heavy; that a large number of variances from the existing residential restrictions were granted before and after the appropriation; and that, apparently, no applications therefore were denied, supported a finding that there was a reasonable probability that the zoning might be changed]).

In addition, the testimony of Mr. Framovitz, Mr. Fields and Ms. Silber, as discussed above, establishes that the neighborhood in which the subject property was located had been changing from industrial to residential use over recent years and that no new industrial uses were being developed. Also significant is the uncontroverted testimony that established that there were several residential developments in the immediate area, including the 1,705 units in the Marcy Housing Complex, directly across Nostrand Avenue, and other developments in the immediate area. Similarly, the testimony of Mr. Lobel and Mr. Chin, along with the testimony of Mr. Fields, as supported by the comparable sales that he relied upon in his Report, establish that numerous variances had been granted for the construction of residential housing in close proximity to the subject property during the relevant time period.

The court thus finds that this evidence is adequate to conclude that the Congregation satisfied its burden of establishing that it was reasonably probable that it would obtain the special permit and variance necessary to construct a school and residential housing on the site ( see generally Spriggs, 54 AD2d 1080 [a reasonable probability of rezoning was indicated where land contiguous to or near the subject property had been zoned for and used in accord with the proposed use and when a large number of variances, not remote in time or distance, had been granted for comparable properties before and after the appropriation, so that there was a likelihood that similar action would have been accorded claimant's land]; cf. Weingarten v State, 60 AD2d 671, 672 [there was ample support for the court's refusal to add an increment to the value of part of the residentially zoned land to reflect the probability of obtaining a zoning change where the zoning boundary in question had been redrawn eight months before the taking, the planning consultant testified that increasing the proportion of the tract zoned commercial would allow undesirable development by expanding the depth of the commercial zone and there was no evidence of successful requests for zoning changes in the area]; Lem v State, 45 AD2d 805, 806, lv denied 35 NY2d 642 [the record did not establish a reasonable probability that a zoning change would have been granted where property to the south was zoned neighborhood business, property to the north and west was residentially zoned, claimants' dwelling was screened from the highway by a growth of trees, contiguous property on the north and east was residential property for which an application for a zoning change had been denied on the ground that it would not be in accord with the Development Plan and 8 out of 11 applications for rezoning in the same general area submitted over a six-year period up to the year after title to the subject property vested had been denied]). In so holding, the court also notes that while the City contends that the use of several comparable sales is inappropriate because variances had been granted years before the taking, the evidence herein establishes that while the trend towards granting a variance to construct residential housing started years earlier, it continued up to the date of the taking ( cf. Ridgefield Realty v State, 42 AD2d 807).

It is also noted that Ms. Silber's testimony and Report also serve to support this conclusion. More specifically, Ms. Silber testified that she was not aware that an application for a special permit had been filed by the Congregation with regard to the subject property, that the Congregation intended to file an application for a variance as soon as a special permit was obtained and that a pre-application meeting with Mr. Chin indicated that the BSA looked favorably upon these applications. Ms. Silber's attempt to justify this lack of fundamental data by asserting that such information was not available on the website or should have been provided to her by claimant is lacking in probative value, particularly since she testified that she was aware that as an appraiser, she was obligated to consider the highest and best use of property and whether it was probable that a zoning change could be granted. Moreover, Ms. Silber admitted that she did not consider a possible zoning change because she was not a zoning expert, although she did not consult with a zoning expert prior to valuing the property. Similarly, this finding is supported by Ms. Silber's testimony concerning her brief, 20 minute inspection of the area surrounding the subject property, when she walked about one-half mile and saw no new industrial development, along with her admission that the area had been changing, with an influx of young urban professionals who needed housing. Further, her Report states that in the past five years, privately built residential housing, mainly condominiums, were constructed in Williamsburg. Finally, she testified that she was not sure if a zoning change would change the value of the subject property. Thus, Ms. Silber's own testimony supports the conclusion that she should have made further inquiry into the probability that the Congregation could have obtained a zoning change to permit residential development.

In view of this testimony and evidence, the court further finds that the City's conclusory assertion that claimant failed to establish that the five elements necessary to obtain a variance to be equally unavailing. Most significant in this regard is the testimony of Mr. Chin, who was cognizant of the requirements that must be met to obtain a variance and who testified that he viewed the application favorably, particularly since the testimony makes it clear that the BSA was vested with broad discretion in approving such applications. This conclusion is also supported by Mr. Lobel's testimony that his firm was prepared to file the application necessary to obtain a special permit and variance after the pre-application meeting with the BSA because he believed, based upon his expertise and experience, that such relief would be obtained. In this regard, the court also notes that the City's reliance upon cases challenging the denial of a variance, where the standard of review is whether the denial was arbitrary and capricious because a different result was reached on the same facts with regard to another parcel of property, are inapplicable herein, where the issue to be determined is whether it is reasonably probable that a variance would be granted for the purpose of valuing property in an eminent domain proceeding ( see e.g. Matter of Monroe Beach v Zoning Bd. of Appeals of City of Long Beach , 71 AD3d 1150 ; Matter of 194 Main v Board of Zoning Appeals for Town of N. Hempstead , 71 AD3d 1028; Matter of Hurley v Zoning Bd. of Appeals of Vil. of Amityville, 69 AD3d 940), particularly since the evidence of other variances that were granted in the area was intended to establish that the use of land in Williamsburg had been changing from industrial to residential over recent years, so that this trend would also serve to support the contention that a variance would be granted for the subject property.

Valuation of the Property

The Law

It has been held that "[t]he best evidence of value . . . is a recent sale of the subject property between a seller under no compulsion to sell and a buyer under no compulsion to buy'" ( FMC Corp. v Unmack, 92 NY2d 179, 189, quoting Matter of Allied Corp. v Town of Camillus, 80 NY2d 351, 356). It must also be recognized that:

"[W]here values are ascertained with reference to truly comparable sites, i.e., those with similar highest and best uses but not yet so developed, there is no need for the use of an increment' ( Breitenstein v State, 245 AD2d 837, 839 [1997], citing Marks v State of New York, 152 AD2d 930 [1989]; United Artists Theatre Circuit v State of New York, 53 AD2d 784 [1976]). Similarly, where the narrative explanation provided by a petitioner's appraiser adequately sets forth the particular facts which led him to conclude that two properties were extremely similar, so that only a nominal adjustment was necessary, the valuation set forth in the report will be found to be adequate ( see generally Balboaa Land Develop. v Shell, 257 AD2d 790, 792 [1999])."

(2008 Decision, *9).

If evidence of a recent sale or a sale of similar property is not available, the use of comparable sales is an approved evaluation method for real property ( see e.g. Matter of City of New York [Broadway Cary Corp.], 34 NY2d 535, reh denied 34 NY2d 916; Freiberger v State, 33 AD2d 619, citing Village of Lawrence v Greenwood, 300 NY 231, 237 [1949]). As is also relevant herein, the court in FMC Corp. went on to explain that:

"With respect to the comparable sales method, market value may be determined with evidence of recent sales of comparable properties' ( Matter of General Elec. Co. v Town of Salina, 69 NY2d 730, 731). . . . By its very definition, a comparable sale need not be identical to the subject property. A comparable sale need only be sufficiently similar to serve as a guide to the market value of the [subject] complex, notwithstanding differences between these comparables and the [subject] property' ( Matter of General Elec. Co. v Town of Salina, 69 NY2d, at 732, supra; Great Atlantic Pacific Tea Co. v Kiernan, 42 NY2d 236, 242, supra). In fact, and in accordance with the substantial evidence standard, sound theory and objective data' may be used to adjust evidence of sales of comparable properties in order to more accurately reflect the market value of the subject property. Even evidence of past sales may need adjustment in light of any changes which may have taken place in the market for the property."

( FMC Corp., 92 NY2d at 189).

In Matter of City of New York ( 18 Misc 3d 1118A, 2008 NY Slip Op 50124U, this court further explained that:

"Differences between the subject property and alleged comparables are the proper subject of adjustment by expert witnesses, and the degree of comparability becomes a question of fact' ( Martin v State, 33 AD2d 599, 600 [1969], citing Kastelic v State of New York, 29 AD2d 803 [1968]). The failure of an expert to give a dollar and cents adjustment in any instance between the comparable and the subject land or the failure to give a breakdown or to state the factors which entered into the valuation affords no basis for review, and it is insufficient to justify an award ( Geffen Motors v State, 33 AD2d 980 [1970]).

"In addition, it is within the court's discretion to accept or reject expert testimony in determining the value of condemned property ( see e.g. In re CNG Transmission, 273 AD2d 726, 728 [2000], citing Matter of Albany County Airport Auth. [Buhrmaster], 265 AD2d 720, 722 [1999], lv denied 94 NY2d 758 [2000]; Matter of Adirondack Hydro Develop. [Warrensburg Bd. Paper], 205 AD2d 925, 926 [1994]). The suitability of comparable sales, absent legal error, is a matter for resolution by the trial court' ( Matter of City of New York, 98 AD2d 166, 190 [1983], citing Yonkers Rlty. Assoc. v State of New York, 52 AD2d 1014, 1015 [1976]; Sapia v State of New York, 33 AD2d 821 [1969]; Argersinger v State of New York, 32 AD2d 708, 709 [1969]). It has been repeatedly held, however, that [i]n determining an award to an owner of condemned property, the findings must be either within the range of the expert testimony or be supported by other evidence and adequately explained by the court' ( Town of Islip v Mustamed Assocs., 222 AD2d 682, 682 [1995] [citations omitted]; accord Madowitz v State, 288 AD2d 442 [2001]; Estate of Dresner v State, 262 AD2d 274, 275 [1999])."

( Matter of City of New York, 2008 NY Slip Op 50124U, *24).

It is also significant to note that in discussing the use of comparable sales to value property in its highest and best use with a zoning change, it is now well settled that:

"When . . . there is a reasonable probability of rezoning, some adjustment must be made to the value of the property as zoned. An increment should be added to this amount if there is a reasonable probability of rezoning to a less restrictive category ( Masten v State of New York, 11 AD2d 370, 371, affd 9 NY2d 796; Genesee Val. Union Trust Co. v State of New York, 9 NY2d 795; cf. Matter of County of Nassau [Cohen], 39 NY2d 574). . . . The theory is that a knowledgeable buyer, recognizing the potential changes in the available uses would make similar adjustments in valuing the property ( Masten v State of New York, supra; 4 Nichols, op. cit., § 12.322[1])."

( In re Islip, 49 NY2d at 360-361).

Thus, it is a "well-recognized rule that an increment or discount ascribed to a reasonable probability of a zoning change must have a basis in the evidence" ( County of Nassau v Cohen, 39 NY2d 574, 577-578). Accordingly, a claimant's comparable sales may properly be adjusted to reflect the value of land enhanced by the possibility of a zoning change, provided that there is sufficient proof to support the trial court's award, i.e., such comparables are proper so long as they are adjusted to "reflect a diminished figure for the fact that rezoning has not actually been accomplished" ( Glennon v State, 40 AD2d 1072, quoting Yochmowitz v State of New York, 25 AD2d 930, lv denied 18 NY2d 579). Stated differently, the value of the subject property must be properly discounted to reflect the fact that removal of a restriction was not an accomplished fact ( Schwartz v State, 72 AD2d 490, 492). "No matter how probable an amendment may seem, an element of uncertainty remains and has its impact upon the selling price. At most a buyer would pay a premium for that probability in addition to what the property is worth under the restrictions of the existing ordinance" ( Masten, 11 AD2d at 372-373 [internal citation omitted]; accord In re County of Nassau, 49 AD2d 748 [the trial court should have considered the uncertainty of procuring a variance as a discount factor]).

Discussion

The court first notes that the Congregation purchased the subject property on January 5, 2000, approximately four years before the taking, for $2,550,000, which was an increase in price of 436% over the $475,000 that the property was purchased for in 1997. While this sale serves as some evidence of value, neither claimant nor the City explains why the value of the property increased at this rate between 1997 and 2000, so that the sale and the increase in price will be not determinative in valuing the site.

Further, having held above that claimant properly determined the value of the property based upon its highest and best use as developed with a school and residential housing, the court finds that the comparable sales relied upon in the Silber Report, which valued the property as developed for industrial use, without addressing the possibility of rezoning, are unpersuasive in determining the fair market value. Moreover, in looking at the individual comparable sales in the Silber Report, the court finds that the evidence establishes that the sales located in Red Hook, Bushwick and Greenpoint were not in the same area as was the subject property and that none of those neighborhoods were experiencing increased residential development, as was Williamsburg, so that reliance upon those sales in determining the value of the subject property is unavailing for this reason as well. These fundamental flaws in the Silber Report thus serve to undermine Ms. Silber's overall credibility, so that the court shall value the property in reliance upon the Fieldstone Report. In so doing, however, it will be noted that the City's comparable sale number 4, 175 Harrison Avenue, was also included in the Fieldstone Report, so that this sale will be afforded more significant weight in valuing the site.

Turning to the Fieldstone Report, the court first finds that a 12% per year, or 1% per month, adjustment for time, as was made by Mr. Fields, is reasonable in view of the 436% increase in the price of the subject property between 1997 and 2000. The fact that comparable sale number 6 sold for $72.68 in October 2003 and for $164.12 in March 2004, for an increase of approximately 100%, also supports the conclusion that the value of property in this area was increasing significantly during the relevant period of time. In so holding, it is also noted that neither party presented any evidence that would allow the court to find that any other adjustment for time would be appropriate. Further, after reviewing the testimony and the descriptions of the comparable sales in the Fieldstone Report, the court similarly finds that the adjustments made for location, access and configuration, demolition and other factors are reasonable and will be adopted herein.

Nevertheless, the court rejects Mr. Fields' assertion that there should be an adjustment for size, based upon his opinion that larger parcels of property command a higher price. In reaching this conclusion, it is first noted that a review of the unadjusted values of the comparable sales fails to support his conclusion (see Schedule, p 4). In this regard, the two largest lots, comparable sale number 10, which had 49,140 square feet, and comparable sale number 3, which had 47,000, sold for $140.42 and $124.47, respectively. In contrast, the smallest parcel, one of the lots assembled into comparable sale number 5, had 2,300 square feet and sold for $184.78, the second most valuable piece of property considered. In addressing comparable sale number 5, the court notes that in averaging the size and price per square foot, the $107 value is not indicative of the price of each of the three distinct sales, perhaps in part because so doing would contradict Mr. Fields' conclusion that larger parcels of land sold for a higher price. Further, the most valuable sale considered, comparable sale number 11, had only 21,198 square feet and sold for $212.28. Similarly, the unadjusted values of the remaining comparable sales relied upon by Mr. Fields do not support the conclusion that large parcels command a higher per unit price.

It is also noted that the values of the properties as adjusted by Mr. Fields, excluding an adjustment for size, also fail to support the conclusion that larger parcels of property command higher prices:

No. Location Size Time Adj Price/ Sq Ft Location Adj Zoning Access Demolition Other Adjustment Adj Price/ Sq Ft 10 15-21 Broadway Kent Ave. 49140 $169.91-15%-25% 0

+3% 0-37% $107.05 3 73 Walworth St. 47000 126.96 0.05 15 0 +14%-25% +9% 138.38 7 175 Harrison Ave. 29200 115.2 0.1 0-2.5% 0 0 +7.5% 123.84 5 74-86 Spencer St.

90 Spencer St.

88 Spencer St.

Assembled 2e+17 107.32108.40

200.30

115.93 0.1-25% +15% 0 0 0

107.32

108.40

200.30

115.93 6 147-59 Classon Ave. 21326 177.25 0.1-25% 0 0 0-15% 150.67 11 415 Flushing Ave. 21198 261.1-25%-25% +5% 0 0-45% 143.61 8 756 Myrtle Ave. 20000 148.5 0.1-25% 0 0 0-15% 126.23 1 515 Spencer St. 19046 180.09-15%-25% 0 +6% 0-34% 118.86 2 429 Marcy Ave. 18500 131.03 — 5%-25% 0.1 +8% 0-12% 115.31 12 368 Wallabout St. 15000 96.75 0.1 0.15 0.1 0 0 +35% 130.61 9 133 Classon Ave. 14978 94.54 0.1 0.15 0 0 0 +25% 118.17 4 441 Marcy Ave. 13000 81.21 — 5%-25% +35% +8% 0 +13% 91.76

As is revealed above, the largest parcel, number 10, was valued at $107.05, the second lowest value. Although the second largest parcel, comparable sale number 3, was valued at $138.38, which was the second highest value (excluding the properties that comprised comparable sale number 5), and the smallest property, comparable sale number 4, had the lowest value, or $91.76, the values of the remaining sales failed to establish that larger lots were more valuable, since the values did not steadily increase with size. Thus, inasmuch as Mr. Fields offers no other rationale to support his adjustments for size, the court finds that no such adjustment should be made.

The court also rejects Ms. Silber's opinion that there should be a downward adjustment for size because the market for smaller parcels is larger, so that smaller parcels were more valuable. In this regard, in reviewing Ms. Silber's unadjusted values (see Schedule, p 15), it is noted that although the smallest parcel, comparable sale number 4, which had 29,200 square feet, sold for the highest per unit price, $106.67, this value can be explained, at least in part, by the fact that the property was located in Williamsburg, where claimant argues properties were more valuable. Further, while the largest, comparable sale number 2, which had 74,000 square feet, sold for the lowest per unit price, $37.16, the remaining sales failed to establish that smaller parcels were more valuable, i.e., comparable sale number 5, which had 62,239 square feet and is the second largest parcel, sold for $57.04; comparable sale numbers 1, which had 50,000 square feet, sold for $51; and comparable sale number 3, which had 45,400 square feet, sold for $39.65, so that all three sold for more.

Further, a review of the values of the comparable sales, as adjusted by Ms. Silber, but for size, fails to support this conclusion:

No. Location Size Price / Sq Ft Time Adj Time Adj Price / Sq Ft Location Adj Frontage Adj Net Adj Adjusted Price/ Sq Ft 2 221-229 Richards St.

Red Hook 74000 $37.16 +2.92% $38.24 0-5%-5% $36.33 5 427 Greenpoint Ave.

Greenpoint 62239 57.04 +2.92% 58.7-5% 0 0 58.7 1 42-62 Ferris St.

Red Hook 50000 51 +3.54% 52.81 0-5%-5% 50.17 3 60 Central Ave.

Bushwick 45400 39.65 +1.88% 40.39 +10% 0 +10% 44.42 4 175 Harrison Ave.

Williamsburgh 29200 106.67 +3.54% 110.45-5%-5%-10% 99.41

In reviewing these sales, the largest parcel, comparable sale number 2, sold for the lowest price, or $36.33, and the smallest, comparable sale number 4, sold for the highest price, or $99.41. Nevertheless, as was the case in analyzing the unadjusted values, the other three sales do not support the conclusion that smaller parcels of property commanded a higher price. Similarly, like Mr. Fields, Ms. Silber fails to offer any other evidence to support her adjustments.

Accordingly, for the remainder of this decision, the value of the comparable sales shall be considered without any adjustment for size being made, so that they are valued as follows:

No Location Time Adj Price/Sq Ft Location Zoning Access Demolition Other Adjustment Adjusted Price/ Sq Ft 1 515 Spencer St. $180.09-15%-25% 0 +6% 0-34% $118.86 2 429 Marcy Ave. 131.03-5%-25% +10% 8 0-12% 115.31 3 73 Walworth St. 126.96 0.05 +15% 0 14-25% 0.09 138.38 4 441 Marcy Ave. 81.21-5%-25% +35% 8 0 0.13 91.76 5 74-86 Spencer St.

90 Spencer St.

88 Spencer St.

Assembled 107.32

108.40

200.30

115.93 0.1-25% +15% 0 0 0 107.32

108.40

200.30

115.93 6 147-59 Classon Ave. 177.25 0.1-25% 0 0 0-15% 150.67 7 175 Harrison Ave. 115.2 0.1 0-2.5% 0 0 0.075 123.84 8 756 Myrtle Ave. 148.5 0.1-25% 0 0 0-15% 126.23 9 133 Classon Ave. 94.54 0.1 +15% 0 0 0 0.25 118.17 10 15-21 Broadway 375-89 Kent Ave. 169.91-15%-25% 0 3

0-37% 107.05

11 415 Flushing Ave. 261.1-25%-25% 5 0 0-45% 143.61 12 386 Wallabout St. 96.75 0.1 +15% +10% 0 0 0.35 130.61

In determining the fair market value of the subject property, Mr. Fields considered the value of the comparable sales to arrive at a unit value of $138 per square foot, which he then reduced by an additional 5%, to $132.50, to reflect the fact that a variance had not been granted, for a total value of $6,350,000. Thus, it is clear that in so doing, Mr. Fields did not value the property as zoned, with an increment added to reflect the increase in value attributable to the fact that a knowledgeable purchaser would be aware of the possibility of obtaining a change in zoning that would increase value ( see generally In re Islip, 49 NY2d at 360-361; Masten, 11 AD2d at 371; Genesee Val. Union Trust Co., 9 NY2d 795). Instead, he looked to the value of properties that were zoned for residential development, properties that had received a variance for residential development and properties that were zoned for manufacturing uses and opined that because the Williamsburg area was in transition, these comparable sales allowed him to value the subject property by adjusting the value of the comparable sales. He accordingly discounted the values of the comparable sales that were zoned for residential development and that had received a variance for such development by 25%, and then 30%, to value the site, since he premised his valuation on his belief that claimant would be able to obtain a variance for residential construction.

To determine if this discount is appropriate, the court must first consider the adjusted values placed on the properties by Mr. Fields; in so doing, and for the remainder of this decision, the court will round the values of the properties to the nearest dollar. Thus, the properties zoned for residential development, comparable sale numbers 1, 5, 8, 10 and 11, sold for $146, $128, $141, $107 and $170, respectively, for a range of $107 to $170 (see Schedule, p 11). Using Mr. Fields' adjustments, but considering each individual sale that comprised comparable sale number 5, the range of values for these properties was $107 to $200 (see Schedule, p 50). The properties that had received variances for residential use, comparable sale numbers 2, 4 and 6, which sold for $135, $108 and $168, respectively, had a range of $108 to $168 (see Schedule, p 11). The properties that were zoned for manufacturing use, comparable sale numbers 3, 9 and 12, sold for $138, $137 and $145, respectively, for a range of $137 to $145 (see id.).

Since the properties that were zoned for residential use, including those that had received a variance for such development, were adjusted by-25%, and the properties that were zoned for manufacturing use were adjusted by +15%, these values do not allow for a comparison of the price that each property would command, as zoned. Accordingly, to determine if the discounts applied by Mr. Fields were appropriate, it is necessary for the court to consider the values placed on the comparable sales, with the adjustments for zoning omitted, so a comparison of values can be made:

No. Location Zoning Time Adj Price/Sq Ft Location Access Demolition Other Adjustment Adjusted Price/Sq Ft 1 515 Spencer St. MX-4 $180.09-15% 0 +6% 0 — 9% $163.89 2 429 Marcy Ave. M3-1/Var 131.03-5% +10% 8 0 +13% 148.06 3 73 Walworth St. M1-1 126.96 +5% 0 14-25%-6% 119.35 4 441 Marcy Ave. M3-1/Var 81.21-5% +35% 8 0 +38% 112.06 5 74-86 Spencer St.

90 Spencer St.

88 Spencer St.

Assembled MX-4

MX-4

MX-4 107.32

108.40

200.30

115.93 +10% +15% 0 0 +25% 134.15

135.50

250.37

144.91 6 147-59 Classon Ave. M1-1/Var 177.25 +10% 0 0 0 +10% 194.97 7 175 Harrison Ave. M1-2/Spec Per 115.2 +10%-2.5% 0 0 +7.5% 123.84 8 756 Myrtle Ave. C1-3/R6 148.5 +10% 0 0 0 +10% 163.35 9 133 Classon Ave. M1-2 94.54 +10% 0 0 0 +10% 103.99 10 15-21 Broadway

375-89 Kent Ave. C4-3

R6 169.91-15% 0 3

0-12% 149.53

11 415 Flushing Ave. R7-1 261.1-25% 5 0 0-20% 208.88 12 386 Wallabout St. M1-2 96.75 +10% +10% 0 0 0.2 116.1

In reviewing the above values, it is clear that the values for the properties that were zoned for residential development, comparable sale numbers 1, 5, 8, 10 and 11, were significantly higher, ranging from $134 to $250. Omitting the highest value, which was attributable to the 2,300 square foot lot assembled into comparable sale number 5, as it was likely that the price reached this level because the parcel was an interior lot needed by the purchaser to acquire a larger, contiguous building lot, the range will be deemed to have been $134 to $209. Similarly, the value of the properties that received variances for residential development, comparable sale numbers 2, 4 and 6, which sales had a range of $112 to $195, was also higher. Further, the properties that were zoned for manufacturing use, comparable sale numbers 3, 9 and 12, similarly had a significantly lower range of values, from $104 to $119. The value of comparable sale number 7, which was purchased with the intent of building a school, or $124, was 10% lower than the value placed on the parcel by Mr. Fields, since the 10% adjustment for size has also been omitted.

In analyzing these values, the court first notes that since the value of residential developments in districts that were zoned for residential use was greater than the value of the properties that received a variance for such development, Mr. Fields should have taken a greater discount for the former than was taken for the latter. These comparable sales will accordingly be afforded little weight in valuing the subject property. The court agrees, however, that Mr. Fields' determination to adjust the comparable sales that received variances was appropriate. Although these comparable sales were similar to the subject property, none of these sales closed before a variance was granted, so that the expense and risk of rezoning remained on the seller, and did not reflect the uncertainty of obtaining the variance. Thus, the values attributable to the properties that received variances for residential development shall be given more weight, since the values of residential developments located in manufacturing districts, where factories and other light manufacturing uses are found, were lower than values of developments located in residential districts. The value of the subject property must therefore be determined by adjusting the values of these comparable sales to reflect the fact that the rezoning was not an accomplished fact ( see generally Schwartz, 72 AD2d at 492; Glennon, 40 AD2d 1072; In re County of Nassau, 49 AD2d 748; Yochmowitz, 25 AD2d 930; Masten, 11 AD2d at 372-373).

Accordingly, if the values of comparable sale numbers 2, 4 and 6 were discounted by 25% to reflect the fact that they had already received variances for residential development, the sales would be valued at $111, $84 and $146, for a range of $84 to $146. If a 30% discount was taken, the values would be $104, $78 and $137, for a range of $78 to $137. Thus, the court finds that the value placed on the subject property by Mr. Fields, or $132.50, being on the high end of this range, is too high in that he fails to take the lower values into account. Instead, the court finds that a value of $124 per square foot is appropriate. In so holding, the court relies most heavily upon the value of comparable sale number 7, as a more persuasive indicator of value, since that property was zoned for manufacturing use, but sold to purchasers who intended to construct a school. Hence, this sale reflects the increment that a prospective purchaser would pay because of the reasonable probability of obtaining a variance. Moreover, the value is within the range of the values of comparable sale numbers 2, 4 and 6, when discounted by 25% to 30%.

In the alternative, if Mr. Fields had begun his analysis of value by starting with the value of the subject property, as zoned for manufacturing use, comparable sale numbers 3, 9 and 12, which were valued at $119, $104 and $116, for a range of $104 to $119, would set the parameters of value. Contrary to Mr. Fields' opinion, however, the court finds comparable sale number 3, which had the highest value, to be the least persuasive indication of value. In this regard, although that parcel was in the immediate vicinity of the subject site and was similar in size, having 47,000 square feet, it was not vacant land; instead, it was improved with warehouse buildings that were subsequently converted for use as a school. In addition, the value of the property was adjusted because the property was generating income, which also serves to distinguish it from the subject property and from all other comparable sales. Accordingly, giving more weight to comparable sale numbers 9 and 12, having adjusted values of $104 and $116, respectively, the court finds that the value the subject property, as zoned for manufacturing use, to be $112, towards the higher end of the range. Since claimants established that there was a reasonable probability that they would have obtained a variance to construct residential housing units, however, they have proven that they are entitled to add an increment to the value of the site to compensate them for this increased value. As determined above, a value of $124 per square foot provides such an increment.

In so holding, it is also noted that when the City's value for comparable sale number 7, 175 Harrison Avenue, is adjusted to exclude the downward adjustment that Ms. Silber made for size, it is valued at $99. The court's valuation at $124 per square foot therefore represents an increment of approximately 25% above the value proffered by the City, which is also found to be reasonable in view of the increased prices that could be realized if a prospective purchaser succeeded in obtaining a variance for residential development.

The fair market value of the subject property is therefore found to be $5,941,708 (47,917 square feet x $124).⁸ Implicit in this holding is the finding that Mr. Fields properly valued the subject property in reliance upon the number of square feet of land on the site. Since the court considered the value of the property as zoned for manufacturing use, plus an increment, the City's argument that this measure of value is improper when used for valuing residential property is unpersuasive. Further, as argued by claimant, until such time as industrial property is rezoned or obtains a variance that allows it to be developed for residential use, the applicable floor area ratio for such development remains unknown.

8 In so valuing the property, the court adopts claimant's determination of the area of the site as 47,917 square feet.

Conclusion

For the above discussed reasons, the court values the property as developed with a school and residential housing, since claimant has established that it is reasonably probable that the Congregation could have obtained a special permit and a variance to permit such development. In reliance upon the comparable sales offered by claimant, since the City chose to value the property only as developed for industrial use, the court finds that the property should be valued at $124 per square foot of buildable area, for a total of $5,941,708.

Settle order on notice.